UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB (Mark One) xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year endedMarch 31, 2006 oTRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from [   ] to [    ] Commission file number000-30299 GLOBAL INNOVATIVE SYSTEMS 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.)  16/F., Hang Seng Mongkok Building, 677 NathanRoad, Mongkok, Kowloon, 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 classNil
        
        Name of each exchange on which registeredNil Securities registered pursuant to Section 12(g) of the Act: Common Shares, par value $0.001(Title of class) 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. Yesx
        No [
        ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not 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. [   ]      - 2 -   Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [
        ]
        Nox State issuers revenues for its most recent fiscal year.  $1,521,232 10,281,359 common shares @ $1.10 (1) = $11,309,494 (1) Average of bid and ask prices on June 29, 2006. (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. 33,612,642 common shares issued and outstanding as of June 29, 2006. Transitional Small Business Disclosure Format (Check one):   Yes [   ];   Nox.     - 3 -   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 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 Global Innovative Systems Inc. and our wholly-owned subsidiaries. Corporate History 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.. On October 2, 2001, we entered into an Acquisition Agreement with Energy Medicine Developments Corp., a Delaware corporation, pursuant to which we agreed to purchase all of the issued and outstanding shares of Energy Medicine Developments.  Energy Medicine Developments owned the world-wide marketing and distribution rights to the Enermed Therapy and the Enermed device. We agreed to sell all of the issued and outstanding shares of our subsidiary, Energy Medicine Developments held by our company to Robert Fletcher and Fraser Lawrie, pursuant to the terms of a share purchase agreement dated September 30, 2003.  On October 22, 2003, our board of directors approved the Sale of Energy Medicine Developments. The agreement for the sale of Energy Medicine Developments was made with Fraser Lawrie and Robert Fletcher, our former directors and officers.  Under the terms of the agreement, the purchase price for the shares of Energy Medicine Developments was $28,400, which consisted of the forgiveness of certain debts owed by us to Messrs. Lawrie and Fletcher or to companies controlled by Messrs. Lawrie and Fletcher. Following the sale of Energy Medicine Developments until the acquisition of Tech Team Holdings Limited, we were a development stage company whose business purpose was to identify and complete a merger or acquisition of a business or business opportunity.  Now that we have completed the acquisition of Tech Team, we have commenced the business of selling energy-saving products through Tech Team, our wholly-owned operating subsidiary.      - 4 -   Acquisition of Tech Team On January 7, 2005, we entered into a share exchange agreement among our company, Tech Team, a company incorporated under the laws of the Territory of the Cayman Islands, Bondy Tan and the shareholders of Tech Team as set out in the share exchange agreement.  The share exchange agreement contemplated our company acquiring all of the issued and outstanding shares of Tech Team. The closing of the transactions contemplated in the share exchange agreement and the acquisition by our company of all of the issued and outstanding ordinary stock of Tech Team was completed as of January 13, 2005.  In accordance with the closing of the share exchange agreement on January 13, 2005, we acquired all of the 354,798,533 issued and outstanding ordinary shares of Tech Team, in exchange for the issuance by our company of 13,000,000 shares of our common stock to the shareholders of Tech Team on the basis of one share of our company for every 27.29219 ordinary shares 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 a result of the acquisition, and as of January 13, 2005, the former shareholders of Tech Team held 13,000,000 shares of our company s common stock, which represented approximately 68.3% of the issued and outstanding shares of our company.  As the former shareholders of Tech Team held 68.3% of our shares as of January 13, 2005, and because the business of Tech Team represented the only business operations of our company, the acquisition of Tech Team was deemed to be a reverse acquisition for accounting purposes.  Starting with the periodic report for the quarter in which the acquisition was consummated, our company commenced filing quarterly and annual reports based on the March 31 fiscal year end of Tech Team.  Such financial statements depict the operating results of Tech Team, including the acquisition of our company, from January 13, 2005. Acquisition of Interest in Beijing Illumination (Hong Kong) Limited Pursuant to the closing of a Sale and Purchase Agreement dated September 27, 2005 (as amended by a letter agreement dated October 3, 2005) among our company, Glory Goal Investments Limited and Ko Yin, our company acquired 26% of the shares of Beijing Illumination on February 27, 2006.  As consideration for the 26% interest in Beijing Illumination, we issued 1,750,000 common shares of our company and paid HK$15,000,000 (approximately US$1,928,021) in cash to Glory Goal. Pursuant to the closing of an Option Deed Agreement dated September 27, 2005 (as amended by a letter agreement dated October 3, 2005) and pursuant to the closing of a Supplemental Deed Agreement dated February 22, 2006, among our company, Admire Fame Investments Limited, Gain Huge Investments Limited, Splendid Fortune Investments Limited and Ko Yin, we acquired an additional 30.8% of the shares of Beijing Illumination on February 27, 2006 in exchange for the issuance of an aggregate 8,856,230 common shares of our company to Admire Fame, Gain Huge and Splendid Fortune. Pursuant to the closing of a Purchase Agreement dated March 29, 2006 between our company and Aeneas Portfolio Company LP, we acquired an additional 5% of the shares of Beijing Illumination on June 29, 2006 in exchange for the issuance of 1,250,000 common shares of our company to Aeneas Portfolio.  We acquired an additional 15% of the shares of Beijing Illumination on June 29, 2006 pursuant to the closing of a subsequent Purchase Agreement dated April 3, 2006 between our company and Aeneas Portfolio.  We issued 1,826,923 common shares of our company to Aeneas Portfolio in consideration for the acquisition of the additional 15% interest in Beijing Illumination. In aggregate, we acquired 960 of the 1,250 issued and outstanding ordinary shares of Beijing Illumination, representing approximately 76.8% of the shares of Beijing Illumination, in exchange for the issuance by our company of 13,683,153 shares of our common stock to shareholders of Beijing Illumination, and payment of HK$15,000,000 (approximately US$1,928,021) in cash to Glory Goal.  As a result of these transactions, Beijing Illumination is now a majority-owned subsidiary of our company.      - 5 -   As a result of the acquisitions, and as of June 29, 2006, our company had 33,612,642 shares of common stock issued and outstanding. As of June 29, 2006, the former shareholders of Beijing Illumination owned 13,683,153 shares of our companys common stock, representing approximately 40.7% of the issued and outstanding shares. Formation of Lightscape Technologies (Macau) Limited On February 6, 2006, we incorporated a joint venture company named Lightscape Technologies (Macau) Limited.  Tech Team Investment Limited, our wholly-owned subsidiary, holds 50.4% of the issued and outstanding shares of Lightscape Technologies and Luminous LED Technologies Ltd., a Hong Kong based researcher, developer, manufacturer and distributor of advanced light emitting diode, or LED, lighting products and technologies holds the remaining 49.6% of the issued and outstanding shares of Lightscape Technologies. Agreement to Acquire Interest in Lightscape Holding Ltd. On March 30, 2006, Tech Team Investment, our wholly-owned subsidiary, entered into a Sale and Purchase Agreement with Yuen Yu Woo as vendor, and Michelle Siu Kwan Lam and Joseph Sui Kei Lam as guarantors.  Pursuant to the terms and conditions of the Sale and Purchase Agreement, our company agreed to purchase six shares, or approximately 60%, of the issued and outstanding shares of Lightscape Holding from Yuen Yu Woo in consideration for the issuance of 3,000,000 common shares by our company to Ms. Woo.  As of June 23, 2006, our company has not closed the transactions contemplated in the Sale and Purchase Agreement.  Lightscape Holding holds all of the issued and outstanding shares of Luminous LED Technologies which, in turn, holds the minority interest in Lightscape Technologies, our joint venture company. CURRENT BUSINESS Following the close of the share exchange agreement with Tech Team in January 2005, our company commenced the business of selling energy-saving products through Tech Team, our wholly-owned operating subsidiary.  Tech Team has developed a proprietary energy-saving technology which is sold under the Eco-Pro Energy Saver brand and includes five different products that utilize the Eco-Pro technology.  Additionally, Tech Team distributes 16 externally-sourced energy-saving products and provides consulting and training services for purchasers of its products. PROPRIETARY BRANDED ECO-PRO ENERGY SAVER PRODUCTS The Eco-Pro Energy Saver is a computer-controlled electronic device which regulates electric power flow and voltage.  It consists of control panels containing electrical parts in a free standing enclosure which is connected between a buildings power line (power input) and its electrical circuits (power output).  Eco-Pro Energy Saver is programmable to regulate the amount of power flowing to energy-using devices, resulting in energy conservation.  The product also acts as a buffer to eliminate negative effects of fluctuations in the power supply, such as voltage surges and sags.  The Eco-Pro Energy Saver has an on-board computer with intelligent software that provides constant self-diagnosis and control.  Tech Team manufactures the Eco-Pro Energy Saver in varying sizes and capacities, as well as specialized units to serve specific applications such as centralized air-conditioning and streetlight illumination. The Eco-Pro Energy Saver reduces the amount of energy a customer requires to power lighting and other electrical equipment by approximately 10-50%, depending on the specific customer and application.  This results in direct electricity cost savings for customers.  The reduced electricity usage also reduces heat damage generated by lighting and other electrical equipment.  This prolongs the operating life of the customers lighting and electrical equipment, which results in savings from capital costs and maintenance costs.  The Eco-Pro Energy Saver also acts as a buffer against distortions and disturbances in the power supply.  This stabilizes and protects customers equipment and operations against uncontrollable and potentially damaging voltage surges, lightening strikes and temporary power interruptions.  The Eco-Pro Energy Saver was also designed to interface directly with existing power lines,
electrical panels and electrical circuits, enabling the unit to be installed either new or as a retrofit without requiring modification to most customers existing components.      - 6 -   The five variations of the Eco-Pro Energy Saver product consist of the Eco-Pro Energy Saver for Centralized Air Conditioning System, Eco-Pro Energy Saver for Streetlight Illumination System, Eco-Pro Energy Saver for Injection Molding Systems, Eco-Pro Variable Speed Drives (VSD) and Efficiency Optimizers, all of which are described below except for the Eco-Pro Energy Saver Universal which is described above under the heading Proprietary Branded Eco-Pro Energy Saver Products. Eco-Pro Energy Saver for Centralized Air Conditioning System This product is a specialized version of the universal Eco-Pro Energy Saver designed specifically for centralized air conditioning applications.  The product collects and analyzes operational data from the air conditioning system and issues command signals to adjust operating parameters to match changing load conditions.  Use of this product reduces total operating time of air conditioning system compressors, thereby increasing cooling capacity, overall operational efficiency and prolonging the life of the component parts of the air conditioning system. Eco-Pro Energy Saver for Streetlight Illumination System This product is a specialized version of the universal Eco-Pro Energy Saver designed specifically for street lighting applications.  The product controls and buffers the power supply of streetlight illumination systems to prevent damage primarily caused by excessive voltage.  Use of this product reduces total energy consumption of streetlight illumination systems, results in the emission of softer, more evenly distributed light and prolongs the lifespan of component parts of the illumination system. Eco-Pro Energy Saver for Injection Molding Systems This product is a specialized version of the universal Eco-Pro Energy Saver designed specifically for injection molding applications.  The product allows for real-time, automated control of injection molding machine flow rates and pressure in response to changes in the duty cycle.  Use of this product optimizes energy consumption and improves the performance of injection molding machines by matching the power supplied to equipment with the precise amount of power that is required. Eco-Pro Variable Speed Drives (VSD) and Efficiency Optimizers This product is a specialized version of the universal Eco-Pro Energy Saver designed specifically for variable speed motor applications.  The product varies the power supplied to electric motors, such as industrial water pumps and fans, in response to changing external conditions.  Use of this product optimizes energy consumption by matching the power that is supplied to a variable speed motor with the precise amount of power that it requires to perform its function under changing conditions. This product also enables customers to automate the control of their variable speed motors. NON-PROPRIETARY ENERGY-SAVING PRODUCTS Apart from the Eco-Pro Energy Saver products, Tech Team distributes 16 other energy-saving products. These products are sourced from third party companies mainly in Europe and North America and sold under distributorship agreements between Tech Team and the other companies. Each of these products is a complementary energy conservation or energy efficiency product which can be integrated with the Eco-Pro Energy Saver, thus enabling our company to offer comprehensive energy management solutions to prospective clients. The 16 energy-saving products that we distribute are as follows: Transient Voltage Surge Suppressors This product is an electronic device which preventsharmful voltage transients and surges, which are short or long periods of excessive voltage, from damaging electrical equipment such as motors. It is installed directly within a customers main electrical panel and sub-panels to detect voltage transients and surges, and to divert them into the ground. The product eliminates both internal and external sources of excessive voltage.      - 7 -   Active Harmonic Filters This product is an electronic device which eliminates harmonics from power sources such as an electric utilitys power generators.  Harmonics are hazardous distortions in voltage and electric current waves. It utilizes adaptive injection mode technology to remove, store and inject voltage and electric current as required to balance out distortions. Use of this product reduces heating and stress on circuit breakers, fuses, transformers, conductors, and wiring within a customers facility, prolonging the life of these components. Use of this product also enables customers to move to higher power loads without exceeding the power load rating of their system. This means that the capacity of the power generator can be utilized to the fullest potential without fear of instability or overheating caused by harmonics. Power Factor Correction & Real Time Factor Correction Systems with or without Detuners This product is an electronic device which enhances the power factor, which is the portion of an electric current that is utilized for its intended purpose for devices such as electric motors and transformers. Use of this product reduces power losses, voltage drops, overheating and premature failure of motors and other devices. It can also directly reduce a customers electricity bill, as many utilities charge penalty fees to customers with low power factors. The real time factor correction is a fully automatic version of the standard power factor correction and provides automatic monitoring and corrective responses in real time. Both types of units can be installed with or without harmonic detuners. Automatic Energy Monitoring and Sequential Switching System for Peak Demand Savings This product is an electronic device which automatically monitors energy consumption and switches electrical equipment off during peak demand times and on during low demand times. Use of this product enables customers to set a maximum monthly electricity charge and ensure that their electricity bill does not exceed the pre-determined maximum. Motor Controller Series This product is an electronic device which delivers controlled release of power specifically for electric motor applications. Use of this product enables smooth, seamless acceleration and deceleration of motors, in turn enabling more frequent starting and stopping. This optimizes energy efficiency and also expands the functionality of motors for the customer. It also reduces noise, vibration, shock load, bearing and belt stress, all of which prolongs the life of the motor and peripheral devices. The motor controller series is also available through the entire low-voltage range of both standard and custom-built motors. Capacitor Bank This product is an electronic device installed at electricity system substations to control the level of voltage supplied to customers. This product provides automatic power factor correction for medium voltage power systems. Use of this product reduces voltage drops and power losses, and avoids overheating and premature failure of motors and other devices. The products standard capacitor banks can be modified for use with various applications, including lighting, motors and switchboards. This product has been designed for environmentally friendly manufacturing. Voltage Stabilizers for Lighting Circuits This product is an electronic device which controls excess voltage levels and delivers controlled release of power specifically for lighting circuit applications. Use of this product reduces power losses and voltage surges, which prolongs the lifespan of lighting circuits and related equipment, and also optimizes the consumption of electricity, which reduces a customers electricity bill. High Performance Fluorescent Lighting Tubes and Luminosity Enhancement Jackets      - 8 -   This product consists of a fluorescent lighting tube combined with a reflector and diffuser jacket. Use of this product reduces energy consumption as a result of the lighting tube and through the ability of the jacket to effectively reflect and evenly diffuse light to intended areas. T5 Lighting System This product is a high-output fluorescent lighting system. Use of this product enhances energy efficiency up to 50% while providing illumination levels equivalent to conventional systems. Use of this product also improves the quality of the emitted light by reducing glare and by enhancing color appearance and rendition. The product design also includes impact-resistant lighting tubes and electronic ballasts, which enhance the lifespan of the system in comparison to conventional systems. This lighting system can be applied within a wide range of applications, including ceiling lights with air grills and tricolor fluorescent lamps. HVAC Heat Recycle System This product is a heat exchanger designed for use by customers such as hotels and factories with both a water-cooled air conditioning system and a hot water system. Use of this product enables customers to pre-cool the air conditioning refrigerant, thereby lowering the refrigerant pressure, the power required by the chiller compressor and the energy usage. At the same time, the heat exchanger also recovers excess heat to heat the water in the hot water system to 50°C, thereby reducing or eliminating the need to operate a boiler or an electrical heater and reducing electricity consumption. Ecogen Energy System Heat Pump Water Heater This product is a heat pump which provides heat and hot water within applications where there is a consistent demand for heat and hot water, such as hotels. Use of this product enhances energy efficiency versus conventional fuel boilers and electric heaters. Solar Boiling System This product is comprised of solar panels and collector tubes which are connected to an existing hot water generation system to serve as its energy source. The product has an efficient solar-to-thermal conversion ratio due to theselective absorbing technology used within the panels of the product. This is a patented technology which was developed at Tsinghua University in China. In comparison with conventional boiling systems, this product provides energy efficiency and worker safety advantages. Ice Thermal Storage System This product is an off-peak cooling system which can be used either as an alternative to, or integrated with, a customers air conditioning system. The product takes advantage of cheaper electricity rates at night to chill water or other refrigerants, which is then stored as ice in storage tanks. During the daytime when both the cooling load demands and electricity rates are high, the system uses the ice as the means to cool the customers facility. This product has lower capital and operating costs than traditional air conditioning systems, and it has been successfully installed at over 2,200 facilities around the world. The system also provides for design flexibility, as units can either be standardized, factory-assembled modules or custom field-assembled units. Ecomaster Comprehensive Water Treatment System This product uses a technology based on molecular surface energy realignment as an alternative method to treat water in cooling tower systems. Use of this product reduces up to 90% of the requirement and cost of water treatment chemicals used by such applications. Use of this product also reduces maintenance requirements and increases the lifespan of cooling tower equipment versus chemical-based systems. Scale Hunter Hard Water Treatment System      - 9 -   This product uses patented technology to remove hard water deposits from water-related equipment such as pipes, boilers, cooling towers and heating elements. The technology removes deposits through a vibration-like process which alters the physical nature of the scale-forming molecules, causing them to loosen and be removed. Use of this product provides a streamlined and manageable alternative to traditional chemical-based systems that require handling of such materials. DryKor Dehumidification & Cooling Systems DryKors range of products use patented technologies to improve indoor air quality by simultaneously dehumidifying and cooling air within commercial, industrial and residential applications.  DryKor products can be installed either alongside conventional air conditioning units or as an alternative to them.  Use of these products enables customers to attain targeted temperature and humidity levels more quickly and to lower the overall electricity usage and energy costs of a clients air conditioning system. CONSULTING AND TRAINING SERVICES Our company offers pre-sale and post-sale services to prospective customers.  These services include: analyzing the customers power system and collecting relevant data; conducting an energy audit; designing and proposing an optimal solution for energy conservation and/or efficiency; delivering and installing the equipment; training customer personnel in the operation and maintenance of the equipment; monitoring the systems performance; and providing site and maintenance visits by our companys personnel. BUSINESS OF NEW SUBSIDIARIES AND JOINT VENTURES Business of Beijing Illumination Following the closing of the acquisition of interests in Beijing Illumination on February 27, 2006 and on June 29, 2006, our company expanded our business into the manufacturing and sale of lighting and speciality lighting source products.  Currently, our company holds 76.8% of the issued and outstanding shares of Beijing Illumination, a Hong Kong company incorporated on October 11, 2002.  Beijing Illumination is an investment holding company which is engaged in the manufacture, sale, research and development of lighting equipment.  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, or HID, related lighting products: (1) metal halide lamps; (2) high-pressure sodium lamps; (3) automobile HID xenon lamps; and (4) special application HID lamps.  Compared to
conventional incandescent and fluorescent lamps, HID lamps produce a much larger quantity of light in a relatively small package.  HID lamps generally offer superior efficiency, reliability and versatility with the additional benefit of low energy consumption in comparison with conventional incandescent or fluorescent lamps.  HID lamps operate with ancillary ballasts and starting gears and have a wide scope of lighting applications including automobile headlights, street lighting, hydroponics, indoor and outdoor lighting of large buildings such as factories, warehouses and industrial plants, and creative color lighting for landmark structures such as hotels and bridges.  Besides HID lamps, Beijing Illumination has expanded its product mix into ultra high-pressure mercury lamps, which are classified as specialty lighting source products and are key components for modern light-weight digital crystal projectors. Business of Lightscape Technologies Following our companys formation of the Lightscape Technologies joint venture on February 6, 2006, our company diversified into the design and production of special lighting effects business.  Our company, through Tech Team Investment, our wholly-owned subsidiary, currently holds 50.4% of the issued and outstanding shares of Lightscape Technologies.  Lightscape Technologies is a full service design and production company specializing in computer-aided interior set design and fabrication, lighting special effects, intelligent lighting, laser lighting and multimedia technologies. Lightscape Technologies provides innovative turnkey designs and solutions for target clients including casinos, trade shows, conventions, motion pictures and video productions, concerts and special events, as well as theaters, disco clubs and shopping malls.      - 10 -   MARKETS Energy-Saving Products and Services The market for our 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. Our target market to date has primarily been large commercial and industrial customers in Hong Kong, China, Macau and Singapore.  All sales to date have been within these four jurisdictions.  The current target market is primarily large commercial, industrial and municipal electricity consumers in Hong Kong, China, Singapore, Indonesia and the Philippines.  Once these markets are developed further, the next stage of geographical expansion is targeted to include commercial, industrial and municipal electricity consumers in Thailand, Taiwan and North America, where our company has initiated preliminary discussions related to direct sales, distributorship agreements, partnership agreements and joint venture agreements.  Our long-term target market includes the Arabian Gulf States. Within the market of mainland China, our companys initial target market is the Guangdong Province and the Pearl River Delta.  Guangdong Province is one of the most affluent provinces in China, is among the top three Chinese provinces in terms of gross domestic product per capita and is a major commercial and manufacturing region in China.  Our ability to penetrate this market is enhanced by the markets proximity to Hong Kong, where Tech Teams operations are based.  Additionally, the Pearl River Delta is one of the major strategic economic regions of China and an area with a large base of potential clients.  We estimate that the mainland China market will account for approximately 70% of our total sales revenue within the next few years. Lighting Products and Services Metal halide lamps, which embrace white light and different color light, are mainly used in different outdoor lighting applications and lighting for factories, stadiums, shopping malls, supermarkets, roads, plazas as well as for night illumination in major cities. High pressure sodium lamps, which embrace yellow light, are lighting products developed in the twentieth century that have features of long life-span, high luminosity and require more complicated manufacturing technology than incandescent lamps, halogen lamps and fluorescent lamps. The markets for our HID lamp products include illumination project companies, luminary wholesalers, lighting source manufacturers, luminary manufacturers and end-users. Ultra high-pressure mercury lamps can be used for almost all projection equipment with lighting sources operating on an alternate current voltage or on a direct current voltage.  They are mainly used for digital liquid crystal projectors and rear screen projection televisions.  The market for ultra high-pressure mercury lamp products include manufacturers of digital liquid crystal projector and rear screen projection televisions, as well as distributors and maintenance centres of projectors. Demand for Products Customer demand for our energy management products and services is primarily cost-savings.  Cost-savings result from the use of our 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     - 11 -  indirect cost savings through decreased production losses, prolonged lifespan of equipment and reduced maintenance costs.  Our products address the demand for both energy conservation and energy efficiency. There are several factors underlying the increasing demand for energy management products and services in our targeted markets in Asia, both at the macro and micro levels.  These factors include the following: 
        Economic globalization is intensifying competition, leading firms to seek greater operating efficiency and greater cost control through savings in energy costs.  In China, firms face escalating competition both from domestic entities, as Chinas economic reforms continue, and from foreign entities as China opens its market to foreign investment as a result of its entry into the World Trade Organization; 
        Increasing global energy prices are driving net energy importers to conserve foreign exchange reserves while ensuring an adequate supply of energy to sustain development.  Most of the nations in our target market are net energy importers.  This, in turn, leads governments to seek and implement technologies and products which reduce energy consumption and enhance energy efficiency; 
        Rapid urbanization and industrialization in our target markets has led to a major increase in electricity consumption.  There has, however, been a lag in electricity production to meet the growing demand.  As a result of this supply and demand imbalance, governments and electricity consumers seek ways to enhance energy conservation and energy efficiency; 
        Due to the continued increase and cost of environmental regulations in our target markets, demand for cost savings and for environmentally-friendly products and services has increased; 
        Distortions, disturbances and voltage surges in the electricity flow are increasing due to outdated power-generation equipment being used at ever-increasing output levels in Asia.  This has led to a greater risk and frequency of electricity wastage and damage to electrical equipment and operational downtime, all of which drive the demand for products that enhance electricity efficiency; 
        Government marketing initiatives are increasing the awareness among electricity consumers in Asia of the benefits associated with energy conservation and efficiency, resulting in enhanced demand for energy management products and services; and 
        In terms of energy conservation, a 10% reduction in consumption can translate into significant savings in costs for a major energy importer such as China.  Likewise, energy efficient technologies and systems that boost the efficiency of existing electricity supplies can serve as a lower-cost alternative to the conventional capital-intensive solution of building additional power plants. SALES AND MARKETING STRATEGY Overview In business development, our priority is seizing opportunities in the market for energy management products and services.  Given the market demand and the pre-emptive nature of energy management technologies, our primary objective in the short-to-medium term is seizing maximum market share.  The broad geographic span of our target market and emphasis on expansion has resulted in our focus on developing distribution alliances and partnerships as the preferred means of business development.   Our company intends to leverage external resources to minimize overhead and to seek market development by tapping into existing client pools of distributors and marketing partners.  These arrangements may take the form of commercial agreements or joint ventures.  While expanding our direct sales, we have also entered into non-exclusive distribution and marketing agreements with a number of partners in order to increase our
market share. Sales Channels      - 12 -   Marketing, sales and distribution of our products are accomplished through the following three main channels: 
        Direct Marketing:  We market and sell our 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. In the year ended March 31, 2006, approximately 50% of total sales revenue was derived from direct marketing efforts. 
        Distributorships:  We market and sell our products in Hong Kong, China, Macau and Singapore through non-exclusive distributorship agreements.  We currently have distributorship agreements within these regions with five private companies and one quasi-governmental organization. The Hong Kong Productivity Council has endorsed our products, and the council introduces our energy management solutions to its affiliates and members via seminars and exhibitions.  The council intends to spread market awareness of our company, initially targeting nine Productivity Centers in China. We have 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 our company to access the distributors existing clientele and relationship network, which allows for market penetration with minimal overhead expenses.  In the year ended March 31, 2006, approximately 50% of total sales revenue was derived from sales through distributorship agreements. 
        Partnerships and Joint Ventures:  Our company seeks to enter into partnerships and joint venture agreements with facility developers, power authorities, banks, and other large companies in our current target market.  Through such agreements, we intend to sell our products directly to our partners. Sales Agreements Our company utilizes the following three types of sales agreements: service contracts, direct sales contracts and 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 our companys obligations are met upon completion and fulfilment in accordance with the service contracts.  Revenue from direct sales is obtained from sales of our hardware sales or sales-type leases.  Such sales are recognized when the product is delivered and installed and all outstanding obligations of our company pursuant to the sales contract are completed.  Revenue from trading contracts is also obtained from hardware sales but represents sales to our distributors and agents and is recognized when the
product is delivered and title is transferred.  In general, 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 sale price is fixed or determinable, and collectively is reasonably assured. Financing Option Our company has established relationships with several financial institutions which may provide a financing option to our companys clients.  Through such financing arrangements, up to 100% of the purchase price of our products may be financed by clients.  These financial institutions include Inchroy Credit Corporation Limited, HSBC Limited, Hang Seng Bank and CIT Financial (Hong Kong) Limited.  These arrangements may enable our company to offer customers the ability to implement energy management solutions with little or no up-front capital investment.  Our company may introduce our customers to these financial institutions.  Our company does not guarantee the payments of such customers to pay for the energy management solutions and our company does not have any obligations to these financial institutions. COMPETITION      - 13 -   Energy-Saving Products and Services Our companys primary competitors are other energy management services companies providing similar products in our target market. There are approximately 50 companies that do business in our target market which are engaged in the sales of energy saving products.  Our management, however, is not aware of any competitor doing business in our target market that offers an entire product line comparable to our 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. Lighting Products and Services 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 People's Republic of China.  Beijing Illumination is the first and only domestic manufacturer in the People's Republic of China equipped with the production facilities for ultra high pressure mercury lamps. RAW MATERIALS AND PRINCIPAL SUPPLIERS Raw Materials Suppliers Our companys principal supplier of component parts 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 our company to assemble and create our trademark Eco-Pro Energy Saver products.  We have established our own product assembly facility in Zhuhai, Peoples Republic of China, where the component parts are assembled into finished products.  Our company relies on Guilin Electrical Equipment Scientific Research Institute for the manufacture of our companys component parts, and a sudden change in the business affairs of this entity would have a material effect on our company. The principal components of our 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 our control.  The prices for these components have varied significantly in the past and may vary significantly in the future. Products Suppliers Our company also sources finished goods from external vendors on a case by case basis.  Excel Plus International Ltd., a non-affiliate of our company, supplied us with finished goods that accounted for more than 10% of the total goods purchased by our company during the years ended March 31, 2006 and March 31, 2005 respectively. 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 Neither our company nor our companys products or services are regulated by the government of any of our markets and no permits specific to our industry are required in order for our company to operate or to sell our products and services.  Our company is not subject to any legislation specific to our industry, company or products and services.      - 14 -   RESEARCH AND DEVELOPMENT Our companys research and development efforts are focused on enhancing the Eco-Pro Energy Saver products including: (i) periodic re-design of products and incorporation of new technologies to improve performance and manufacturability; (ii) design of new product lines for additional specialized applications; and (iii) expansion and adaptation of existing products to accommodate the requirements of larger and smaller electricity consumers.  Research and development efforts are conducted in-house, as well as through an agreement with Guilin Electrical Equipment Scientific Research Institute, a leading governmental research institute in China under the Ministry of Mechanical Industry. INTELLECTUAL PROPERTY Patent Applications In China, our company, through our indirect wholly-owned subsidiary, Grandplex Development Limited, has applied for a patent of the underlying technology used in the Eco-Pro Energy Saver products, which patent is currently pending.  The patent application, Application No. 02106678.7, for an energy saving device has successfully undergone preliminary examination and the application has been published in No. 37, Vol. 19 of the Chinese Patent Gazette for Invention.  The patent is now undergoing examination by the Patent Office of the Peoples Republic of China.  In Hong Kong, Tech Team has applied for a patent based on the patent application in China.  This patent (Application No. 04101357.1) is also pending, and its approval rests on the prior approval of the patent application in China.  Tech Team has also recently filed the initial patent application form for a United States patent covering
the technology underlying the Eco-Pro Energy Saver. Trademarks The Eco-Pro name and logo are registered trademarks in China, Hong Kong, Macau, Thailand and the 25 nations of the European Community Union.  We intend to file for trademark registration of the Eco-Pro name and logo in the United States and Canada in the near future. Domain Names We own and operate the following duly registered internet domain names: www.gistt.com, www.techteam.com.hk. and www.ttzh.com.  The information contained in our websites does not form part of this annual report.  Our company does not make 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.  However, a copy of our 2006 annual report on Form 10-KSB for the fiscal year ended March 31, 2006 and our quarterly report on Form 10-QSB for the fiscal quarter ended December 31, 2005, which have been filed with the Securities and Exchange Commission, including the financial statements, will be provided without charge to any shareholder or beneficial owner of our common stock upon written request to our Chief Executive
Officer, Bondy Tan at Global Innovative Systems Inc., 16/F., Hang Seng Mongkok Building, 677 Nathan Road, Mongkok, Kowloon, Hong Kong. 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, 450 Fifth Street, N.W., 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. Certifications Our company, through our indirect wholly-owned subsidiaries Grandplex Development and Tech Team Development Limited, holds ISO 9001:2000 certification for the sales and maintenance service of electrical energy-saving equipment.  This is an internationally-recognized standard denoting quality management systems.  The ISO 9001:2000 re-certification audit was conducted in May 2006, and the certification was renewed to February 2008.     - 15 -  The Eco-Pro Energy Saver product has received certification for technical performance as an energy saving product from the China Certification Center for Energy Conservation Product.  It has also received certification of safety compliance with International Electrotechnical Commission standards for electrical equipment.  Various independent product tests have been completed and additional non-critical industry and governmental certifications related to the Eco-Pro Energy Saver product have been obtained, primarily within mainland China. EMPLOYEES As of March 31, 2006, Bondy Tan was the sole employee of Global Innovative Systems.  Mr. Tan is the President and Chief Executive Officer of Global Innovative Systems. As of March 31, 2006, Tech Team, our wholly-owned subsidiary, had 33 employees, of which 30 were full-time and 3 were part-time employees.  Of these employees, 12 were managerial, administrative, finance and accounting staff, 10 were engineers and technicians engaged in engineering, consulting and training service, 9 were engaged in sales and marketing, and 2 were engaged in manufacturing and other operational activities. As of March 31, 2006, Beijing Illumination, our majority-owned subsidiary, had 236 employees, of which 3 were senior management, 32 were managerial, administrative, finance and accounting staff, 5 were engineers and technicians engaged in research and development, 26 were engaged in sales and marketing , and 170 were engaged in manufacturing and other operational activities. Of those employees, none are covered by collective bargaining agreements.  We plan to hire a chief financial officer before the end of the second quarter of our 2007 fiscal year. SUBSIDIARIES / CORPORATE JOINT VENTURE The names of our wholly-owned and majority-owned subsidiaries / corporate joint venture, their dates of incorporation and the jurisdictions in which they are incorporated are as follows: Name
        Jurisdiction
        Date IncorporatedTech Team Holdings Limited
        Territory of the Cayman Islands
        February 15, 2002Tech Team Investment Limited(1)
        British Virgin Islands
        March 24, 2000Grandplex Development Limited(2)
        Hong Kong
        January 18, 1999Tech Team Development Limited(2)
        Hong Kong
        October 22, 1999Tech Team Engineering Limited(2)
        Hong Kong
        August 23, 2000Tech Team (China) Limited(2)
        British Virgin Islands
        May 22, 2002Tomi Fuji Energy Management Services Consultants Limited(2)
        Hong Kong
        March 10, 2004Powerland Technology Limited(2)
        British Virgin Islands
        September 8, 2005Tomi Fuji Energy Pte. Ltd.(3)
        Singapore
        December 17, 2004Tech Team Development (Zhuhai) Limited(4)
        The Peoples Republic of China
        August 23, 2002Beijing Illumination (Hong Kong) Limited(5)
        Hong Kong
        October 11, 2002       - 16 -    Beijing Aihua New Enterprise Lighting  Appliance Company Ltd.(6)
        The Peoples Republic of China
        July 26, 1999Lightscape Technologies (Macau) Limited(7)
        Macau
        February 6, 2006(1)
        Wholly-owned subsidiary of Tech Team Holdings Limited.(2)
        Wholly-owned subsidiary of Tech Team Investment Limited.(3)
        80% majority-owned subsidiary of Tomi Fuji Energy Management Services Consultants Limited.(4)
        Wholly-owned subsidiary of Tech Team (China) Limited.(5)
        56.8% majority-owned subsidiary of Powerland Technology Limited as of March 31, 2006.(6)
        Wholly-owned subsidiary of Beijing Illumination (Hong Kong) Limited.(7)
        50.4% owned corporate joint venture of Tech Team Investment Limited. 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 We will 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 necessary to continue the development of our products and expand our position in the market.  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 have not yet achieved sustainable positive cash flows.  As such, we will 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     - 17 -  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, will 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. 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 which compete directly with our products and some of the companies developing these similar products have greater financial, technical and marketing resources, larger distribution networks, and generate greater revenue and have greater name recognition than us.  These companies may develop products 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, global expansion, 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 the convenience of one-stop shopping or because of international operations or arrangements, 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 line from those of our competitors and build our international partnerships.  To achieve this we may have to substantially increase marketing and research and development in order to compete effectively. 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 electrical energy-saving products.  We have recently entered into the business of selling specialty lighting products from which we have generated modest revenue.  Both the electrical energy-saving industry and the specialty lighting products and services industry are characterised 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 electrical energy-saving technology may reduce demand for our Eco-Pro
Energy Saver brand.  In addition, the rapid technological advancements in HID lighting products may render our current specialty lighting 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.  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 registered trademark invaluable to our ability to continue to develop and maintain the goodwill and recognition associated with our brand.  The measures we take to protect the proprietary technology, and other intellectual property rights, which presently are based upon a combination of 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.     - 18 -  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 hold no patents on our products and may not be able to protect our proprietary technology. Although we have not obtained patent protection for any of our products, we have sought to protect our proprietary technology through a combination of trademark and trade secret laws and other forms of intellectual property protection.  We have filed patent applications in China, Hong Kong and the United States and have patents pending for the Eco-Pro Energy Saver product as an energy saving device.  There is no assurance that these patents will be granted. We own trademark registrations for the name and logo for Eco-Pro in China, Hong Kong, Macau, Thailand and the European Community.  There can be no assurance that our operations do not or will not violate the intellectual property rights of others, that they would be upheld if challenged or that we, would, in such an event, not be prevented from using such companys intellectual property rights, any of which could have a material adverse effect on our business, financial condition and results of operations. In addition, our failure to obtain licenses required from third parties for other technology and intellectual property could delay or prevent the development, manufacture or sale of our products.  Although we rely, in part, on contractual provisions to protect our trade secrets and proprietary know-how, there is no assurance that these agreements will not be breached, that we would have adequate remedies for any breach or that our trade secrets will not otherwise become known or be independently developed by competitors.  Although no lawsuits against us regarding infringement of any existing patents or other intellectual property rights are pending, nor have any claims been asserted, there can be no assurance that such infringement claims will not be asserted by third parties in the future.  There also can be no assurance in the event of such claims of infringement that we will be able to obtain licenses on
reasonable terms. Our involvement in any intellectual property dispute or action to protect trade secrets and know-how, including actions brought by us, could result in a material adverse effect on our business.  Adverse determinations in litigation in which we may become involved could subject us to liabilities to third parties, require us to grant licenses to or seek licenses from third parties and prevent us from manufacturing and selling our products.  Any of these situations could have a material adverse effect on our business, financial condition and results of operations. 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 engineering and energy management consulting.  We have encountered competition for these personnel.  We may not be able to find or retain qualified personnel, which would have a material adverse impact on our business. Our growth could be impaired if we are not able to develop and maintain the relationships we need to implement our international strategy. Our growth will depend, in large part, on the success of our international strategy.  We have limited experience in marketing and selling our products outside of Hong Kong, China and Macau.  We will depend on partnerships and/or joint ventures in international markets to help us build our international operations and sales.  We depend upon each of our international partners to provide marketing and relationship building expertise, and a base of     - 19 -  existing customers.  If we are unable to develop and maintain these relationships, or to develop additional relationships in other countries, our ability to penetrate, and successfully compete in foreign markets would be materially affected in an adverse manner.  To fully implement our international strategy, we will need to expand our current relationships with international partners.  These partners may not agree to expand these relationships. 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, one of which accounts for more than 10% of our purchases for the year ended March 31, 2006.  If this vendor terminates its 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. 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. 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 electrical energy-saving products and specialty lighting products in China.  Accordingly, our business, results of operations and financial conditions 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 have 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 electrical energy-saving products 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 electrical energy-saving products 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. Chinas current and future economic, political and social conditions, as well as government policies could have an adverse effect on our companys overall financial condition and ability to generate revenues and profits.      - 20 -   We expect that a substantial portion of our business, assets and operations of our company will be located and conducted in China.  The economy of China differs from the economies of most developed countries in many respects, including: - government involvement; - level of development; - growth rate; - control of foreign exchange; and - allocation of resources. While Chinas economy has experienced significant growth in the past twenty years, growth has been uneven, both geographically and among various sectors of the economy.  The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources.  Some of these measures benefit the overall economy of China, but may also have a negative effect on us.  For example, our operating results and financial condition may be adversely affected by government control over capital investments or changes in tax regulations applicable to us.  If there are any changes in any policies by the Chinese government and our business is negatively affected as a result, then our financial results, including our ability to generate revenues and profits, will also be negatively affected.  Our company is subject to foreign exchange rate risk, particularly fluctuations in the exchange rate between Chinese Renminbi and United States dollars.  Our company may enter sales transaction denominated in Chinese Renminbi.  The Peoples Republic of China 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 Peoples Republic of China 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 peg 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. Our companys success largely relies on the ability of our agents and distributors to sell our products, and on our ability to effectively monitor the activities of such persons and the failure to establish and maintain productivity from our agents and distributors may have a material adverse effect on our operations.      - 21 -   Our company relies on agents and distributors to earn revenue by means of selling our products directly to end users with installation (Direct Sales Contracts) and through distributors (Trading Contracts), with a majority of revenues generated by the latter.  The current over-dependence on external distributors requires an effective and efficient monitoring system to ensure our success in delivering products to customers.  Our company monitors the activities of our agents and distributors but there can be no assurance that our monitoring efforts are successful in achieving a productive and efficient distribution network.  Failure to establish and maintain high levels of productivity and efficiency from our distribution network may have a material adverse effect on our operations. The future success of our company is largely dependent upon our ability to obtain or generate sufficient cash flow and the failure to obtain sustainable levels of cash flow will have a material adverse effect on our operating results. Our company generally extends a 120-day credit period to customers within our hardware sales trading contracts.  For direct sales contracts with installation, our company offers financing terms of up to 60 months to new customers.  Our company, however, is required to pay our vendors for the cost of supplies and hardware in accordance with credit terms ranging from cash on delivery to payment within 30 days.  Such financing arrangements create a time lag between the payment for inventory and the collection of revenue from sales contracts, which has placed working capital restraints on our company.  Our company has established relationships with several financial institutions to provide financing options directly to our customers for the purchase of our equipment which may assist in alleviating these working capital restraints on our company.  There can be no assurance, however, that any financial institutions
will agree to provide such a financing option, and if our company is unable to arrange such financing options for our customers, the working capital restraints on our company would be expected to continue, which could have a material adverse effect on the financial condition and operations of our company. New or changing government policies or regulations related to the energy savings industry or the specialty lighting industry in our markets may have an adverse effect on our operations and may further 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.  Both short and long-term changes in governmental policies or regulations affecting the energy savings industry 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. Risks Related to Our Industry A drop in the retail price of electrical energy may have a negative effect on our business. A customers decision to purchase our companys energy saving products is primarily driven by the payback on the investment resulting from the increased energy savings.  Although management believes that current retail energy prices support a reasonable return on investment for our products, there can be no assurances that future retail pricing of electrical energy will remain at such levels. 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     - 22 -  declines, there can be no assurance that we can 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 do 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. 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 Over-the-Counter Bulletin Board quotation system.  Trading of stock through the Over-the-Counter 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. 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     - 23 -  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 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 National Association of Securities Dealers Inc., or NASD, 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, the NASD 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, the NASD believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers.  The NASD 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. 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. ITEM 2.
        DESCRIPTION OF PROPERTY. Our principal office is located at 16/F., Hang Seng Mongkok Building, 677 Nathan Road, Mongkok, Kowloon, Hong Kong.  The 3,652 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 April 16, 2005, to April 15, 2007.  The monthly fixed rent is $4,694, plus a monthly service charge of $1,596.  Upon expiration of the lease, we intend to renew our lease, or move to a larger office space in Hong Kong if additional space is required. Our company, through Tech Team Development (Zhuhai), also leases a facility at 1st Floor, Block B, Cui Wei Industrial Building, 668 Cui Xei Road West, Zhuhai, Guangdong, the Peoples Republic of China.  Zhuhai, a Special Economic Zone, is located in Guangdong Province in southern China.  The 6,086 square feet space serves as a base for research, development and assembly of the Eco-Pro Energy Saver line of products, as well as sales and marketing activity within China.  Our company, through our indirect wholly-owned subsidiary, Tech Team Development (Zhuhai), has leased the facility for the period from July 1, 2005 to June 30, 2007.  The monthly fixed rent is $1,493, plus a monthly service charge of $208.      - 24 -   Our company, through Tech Team Development (Zhuhai), has leased staff quarters located at Room 209-210, 2nd Floor, Cui Wei Complex Building, 668 Cui Xei Road West, Zhuhai, Guangdong, the People's Republic of China, at a monthly cost of $105 for the period from August 6, 2005 to August 5, 2007. Our company, through Beijing Illumination, has leased an office at Rooms 1108-9, 11th Floor, Tower II, Enterprise Square, 9 Sheung Yuet Road, Kowloon Bay, Kowloon, Hong Kong. The 4,058 square feet office space serves as the base of operations for the corporate, accounting, sales and marketing functions of Beijing Illumination. The term of the lease is for the period from September 1, 2005 to August 31, 2006. The monthly fixed rent is $3,856, plus a monthly service charge of $1,565. Upon the expiration of the lease, we intend to renew our lease, or move to a larger office space in Hong Kong if additional space is required. Our company, through Beijing Aihua, has leased a facility at 1st to 4th floor, No. 7 Shuang-qiao Xili Chaoyang District, Beijing, the Peoples Republic of China. The 34,183 square feet space serves as the base for manufacturing, research and development of lighting and speciality 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, active, or pending legal proceeding against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation where such claim or action involves damages for more than 10% of our current assets as of March 31, 2006.  There are no proceedings in which any of our companys directors, officers, or affiliates, or any registered or beneficial shareholders, is an adverse party or has a material interest adverse to our companys interest. ITEM 4.
        SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. PART II ITEM 5.
        MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS PURCHASES OF EQUITY SECURITIES Our stock is listed for quotation on the Over-the-Counter Bulletin Board under the trading symbol GBSY.  Pacific Stock Transfer Company is the registrar and transfer agent for our common shares.  Their address is 500 E. Warm Springs Road, Suite 240, Las Vegas, Nevada, Telephone: 702.361.3033, Facsimile: 702.433.1979.  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, 2006 and the interim period ended June 30, 2006 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. Quarter  Ended
        High
        LowJune 30, 2006
        $1.20
        $0.70March 31, 2006
        0.85
        0.40December 31, 2005
        0.80
        0.35September 30, 2005
        1.50
        0.65June 30, 2005
        2.65
        1.25March 31, 2005
        2.47
        1.00December 31, 2004
        1.75
        0.90       - 25 -    September 30, 2004
        0.98
        0.90June 30, 2004
        1.07
        0.98 On June 29, 2006, the closing price for the common stock as reported by the quotation service operated by the OTC Bulletin Board was $1.10. As of June 29, 2006, there were 175 holders of record of our common stock.  As of such date, 33,612,642 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. 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, 2006 that were not otherwise disclosed in a quarterly report on Form 10-QSB or in a current report on Form 8-K. ITEM 6.
        MANAGEMENTS DISCUSSION AND ANALYSIS 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. SELECTED FINANCIAL DATA  Five Years Consolidated Balance SheetsMarch 31,2006
        2005
        2004
        2003
        2002Total current assets
        7,294,429
        2,484,694
        677,568
        799,199
        1,364,614Total non current assets
        14,603,890
        5,305,976
        1,324,525
        1,212,867
        778,624Total current liabilities
        (10,305,927)
        (4,389,581)
        (3,235,769)
        (1,414,630)
        (1,125,474)Total non-current liabilities
        (1,851)
        (2,468)
        (60,462)
        (720,997)
        (173,653)Minority interest
        (2,633,652)
        (364)
        -
        -
        -Total shareholders' equity/(deficit)
        8,956,889
        3,398,257
        (1,294,138)
        (123,561)
        844,111       - 26 -    Five Years Consolidated Statements Of OperationsYear ended March 31,2006
        2005
        2004
        2003
        2002Total net revenues
        1,521,232
        2,603,865
        392,092
        274,544
        895,990Total cost of revenues
        (1,144,608)
        (1,035,939)
        (272,902)
        (143,424)
        (412,370)Management fee income from a related company
        -
        -
        -
        61,697
        -Amortization of intangible assets
        (528,923)
        (125,874)
        -
        -
        -Impairment loss on intangible assets
        (1,928,021)
        -
        -
        -
        -Selling and marketing expenses
        (659,901)
        (576,268)
        (150,193)
        (171,766)
        (92,772)General and administrative expenses
        (1,769,430)
        (1,140,670)
        (957,472)
        (827,831)
        (255,825)Research and development expenses
        -
        -
        -
        (20,112)
        -(Loss)/Profit from operations
        (4,509,651)
        (274,886)
        (988,475)
        (826,892)
        135,023Interest expense
        (141,363)
        (136,088)
        (195,274)
        (98,906)
        (44,252)Interest income
        17,843
        14,420
        2,931
        1,641
        -Gain on disposal of investments
        -
        -
        11,253
        4,773
        -Unrealized holding loss on other investments
        -
        -
        -
        -
        (16,992)Gain on dilution of interest in a subsidiary
        -
        -
        -
        2,851
        -Other income
        898,959
        2,818
        8,385
        8,350
        17,241Equity share of the result of Joint Venture
        (780)
        -
        -
        -
        -(Loss)/Profit before income tax
        (3,734,992)
        (393,736)
        (1,161,180)
        (908,183)
        91,020Income tax
        (45,508)
        (136,246)
        -
        18,236
        (21,143)Minority interests
        59,361
        -
        5,457
        16,650
        -Net (loss)/profit
        (3,721,139)
        (529,982)
        (1,155,723)
        (873,297)
        69,877  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.  Following the sale of Energy Medicine Developments in September 2003, our company was a development stage company whose business purpose was to identify and complete a merger or acquisition of a business or business opportunity.  Upon the acquisition of Tech Team on January 13, 2005, we commenced the business of selling energy-saving products through Tech Team, our wholly-owed operating subsidiary. Acquisition of Tomi Fuji Energy Management Services Consultants In October 2004, Tech Team, through one of its subsidiaries, Tech Team Investment Limited, entered into share purchase agreement with Tomi Fuji Corporation Limited which became a shareholder of our company on     - 27 -  January 13, 2005.  Pursuant to the terms of the share purchase agreement, Tech Team acquired 100% of the issued and outstanding shares in the capital of Tomi Fuji Energy Management Services Consultants, a non-operating company that held certain intangible assets.  In exchange for acquiring all of the issued and outstanding shares of Tomi Fuji Energy Management Services Consultants, Tech Team issued 4,284 ordinary shares of Tech Team Investment Limited to Tomi Fuji Corporation on October 4, 2004.  On the same date, Tech Team entered into another share purchase agreement with Tomi Fuji Corporation and issued 85,285,713 ordinary shares at a deemed issue price of $0.02 per share to Tomi Fuji Corporation in exchange for its entire interest in Tech Team Investment Limited arising from first share purchase agreement in October 2004.  The closing of the share exchange occurred on October 4, 2004. Acquisition of Tech Team On January 7, 2005, we entered into a share exchange agreement among our company, Tech Team, Bondy Tan and the shareholders of Tech Team as set out in the share exchange agreement.  The share exchange agreement contemplated our company acquiring all of the issued and outstanding shares of Tech Team. The closing of the transactions contemplated in the share exchange agreement and the acquisition by our company of all of the issued and outstanding ordinary stock of Tech Team was completed as of January 13, 2005.  In accordance with the closing of the share exchange agreement on January 13, 2005, we acquired all of the 354,798,533 issued and outstanding ordinary shares of Tech Team, in exchange for the issuance by our company of 13,000,000 shares of our common stock to the shareholders of Tech Team on the basis of one share of our company for every 27.29219 ordinary shares 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 a result of the acquisition on January 13, 2005, the former shareholders of Tech Team owned 13,000,000 shares of our companys common stock, which represented approximately 68.3% of the issued and outstanding shares of our company.  As the former shareholders of Tech Team held 68.3% of our shares as of the acquisition date, and because the business of Tech Team represented the only business operations of our company, the acquisition of Tech Team was deemed to be a reverse acquisition for accounting purposes.  Starting with the periodic report for the quarter in which the acquisition was consummated, our company commenced filing quarterly and annual reports based on the March 31 fiscal year end of Tech Team.  Such financial statements depict the operating results of Tech Team, including the acquisition of our company, from January 13, 2005. BUSINESS OF TECH TEAM Tech Team is a developer, manufacturer and integrator of energy-saving products and technologies.  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 distributes complementary energy-efficiency products which can be integrated with the Eco-Pro Energy Saver system.  Tech Team also provides consulting and customer training services which enables Tech Team to offer comprehensive energy management solutions to prospective clients.  Following the acquisition of a majority interest in Beijing
Illumination and the formation of a joint venture involving Lightscape Technologies, our company commenced the business of offering speciality lighting products and services. RECENT DEVELOPMENTS Beijing Illumination As a result of the closing of several agreements described on page 3 under the heading Acquisition of Interest in Beijing Illumination (Hong Kong) Limited, we acquired 960 of the 1,250 issued and outstanding ordinary shares of Beijing Illumination, representing approximately 76.8% of the shares of Beijing Illumination.  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, our company expanded our business into the manufacturing and sale of     - 28 -  lighting and speciality lighting source products.  Beijing Illumination is an investment holding company which is engaged in the manufacture, sale, research and development of lighting equipment.  Beijing Illumination, through its wholly-owned subsidiary Beijing Aihua, manufactures and sells the following four main categories of HID related lighting products: (1) metal halide lamps; (2) high-pressure sodium lamps; (3) automobile HID xenon lamps; and (4) special application HID lamps. Besides HID lamps, Beijing Illumination has expanded its product mix into ultra high-pressure mercury lamps, which are classified as specialty lighting source products and are key components for modern light-weight digital crystal projectors. Lightscape Technologies On February 6, 2006, we incorporated a joint venture company named Lightscape Technologies (Macau) Limited.  Tech Team Investment Limited, our wholly-owned subsidiary, holds 50.4% of the issued and outstanding shares of Lightscape Technologies and Luminous LED Technologies Ltd., a Hong Kong based researcher, developer, manufacturer and distributor of advanced LED lighting products and technologies holds the remaining 49.6% of the issued and outstanding shares of Lightscape Technologies.  Lightscape Technologies is a full service design and production company specializing in computer-aided interior set design and fabrication, lighting special effects, intelligent lighting, laser lighting and multimedia technologies.  Lightscape Technologies provides innovative turnkey designs and solutions for target clients including casinos, trade shows, conventions, motion pictures and video productions, concerts and
special events, as well as theaters, disco clubs and shopping malls. Lightscape Holding On March 30, 2006, Tech Team Investment, our wholly-owned subsidiary, entered into a Sale and Purchase Agreement with Yuen Yu Woo as vendor, and Michelle Siu Kwan Lam and Joseph Sui Kei Lam as guarantors.  Pursuant to the terms and conditions of the Sale and Purchase Agreement, our company agreed to purchase six shares, or approximately 60%, of the issued and outstanding shares of Lightscape Holding from Yuen Yu Woo in consideration for the issuance of 3,000,000 common shares by our company to Ms. Woo.  As of June 29, 2006, our company has not closed the transactions contemplated in the Sale and Purchase Agreement.  Lightscape Holding holds all of the issued and outstanding shares of Luminous LED Technologies which, in turn, holds the minority interest in Lightscape Technologies, our joint venture company. 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. The trends, events, and uncertainties set out in the remainder of this section have been identified by our company as those we believe are reasonably likely to materially affect the comparison of historical operating results reported herein to either past period results or to future operating results. Following the acquisition of Beijing Illumination and formation of the Lightscape Technologies (Macau) joint venture, our company diversified our business into the lighting and LED markets.  The future performance of this business may materially affect the future performance of our company. Summary of Key Results      - 29 -   Total net revenue for the year ended March 31, 2006 was $1,521,232, which represents a 42% decrease from the total net revenue of $2,603,865 for the year ended March 31, 2005. Operating expenses, including selling and marketing expenses and general and administrative expenses, for the year ended March 31, 2006 were $2,429,331, which represents a 41% increase in operating expenses of $1,716,938 for the year ended March 31, 2005. Our company incurred amortization of intangible asset expense of $528,923 during the year ended March 31, 2006 as compared to $125,874 during the year ended March 31, 2005.  Amortization expense included the amortization of intangible assets acquired through the acquisition of Tomi Fuji Energy Management Services Consultants in January 2005.  These intangible assets consisted of a trademark, a customer base and an order backlog.  Amortization expense of these assets for the year ended March 31, 2006 was $495,270 as compared to $125,874 for the year ended March 31, 2005.  Amortization expense also included the amortization of intangible assets acquired through the acquisition of Beijing Illumination in February 2006.  These intangible assets consisted of completed technology for the production of Aihua Ultra-High Pressure Mercury lamps, commonly referred to as AHP lamps, as well as HID lamps, trademarks, a
customer list and a distributor list.  Amortization expense of these assets for the year ended March 31, 2006 was $33,653. Our company incurred impairment loss in value of the intangible assets of $1,928,021 during the year ended March 31, 2006 in relation to intangible assets acquired through the acquisition of Tomi Fuji Energy Management Services Consultants. Interest expense for the year ended March 31, 2006 was $141,363, which represents a 4% increase from $136,088 for the year ended March 31, 2005. Results of Operations  Fiscal Year Ended March 31, 2006 Our companys loss before taxes and minority interest for the year ended March 31, 2006 was $3,734,992, as compared to a loss before taxes and minority interest of $393,736 for the year ended March 31, 2005. The loss was mainly attributable to the unsatisfactory performance of Tomi Fuji Energy Management Services Consultants.  Our Company incurred amortization of intangible assets expenses of $495,270 and suffered impairment loss in value of $1,928,021 in relation to intangible assets acquired through the acquisition of Tomi Fuji Energy Management Services Consultants in January 2005. Revenues and Cost of Revenues Total net revenues for the year ended March 31, 2006 was $1,521,232, which represents a 42% decrease from the total net revenue of $2,603,865 for the year ended March 31, 2005.  The decrease in net revenues was primarily attributable to the decreased sale of energy saving products. Specifically, sales of energy saving products related to energy-saving systems for the year ended March 31, 2006 decreased to $1,355,942, which represents a decrease of $1,041,774 or 43% from the year ended March 31, 2005.  The higher revenue for the year ended March 31, 2005 was due to a large sale contract of $1,546,683 earned by Tomi Fuji Energy Management Services. For the year ended March 31, 2006, a sale contract of similar size was absent, leading to the decrease in revenue as compared with the year ended March 31, 2005.  Sales of lighting source products earned by our newly acquired subsidiary, Beijing Illumination, represented 6% of our companys total revenue for the year ended March 31, 2006. Cost of revenues for the year ended March 31, 2006 was $1,144,608, which represents an increase of $108,669 as compared with cost of revenues of $1,035,939 for the year ended March 31, 2005.  Cost of revenues for the year ended March 31, 2006 was 75% of total revenues compared with 40% of total revenues for the year ended March 31, 2005.  The increase in our cost of revenues as a percentage of revenues was due to the absence of long term contracts during the year ended March 31, 2006.  Such long term contracts typically generate higher profit margins.      - 30 -   Our company acquired certain intangible assets through the acquisitions of Tomi Fuji Energy Management Services and Beijing Illumination.  These intangible assets are comprised of completed technology for the production of AHP and HID lamps, trademarks, a customer base and a distributors list.  Amortization of intangible assets incurred for the year ended March 31, 2006 was $528,923 as compared to $125,874 for the year ended March 31, 2005. Operating Expenses Operating expenses for the year ended March 31, 2006 were $2,429,331, which represents a 41% increase in operating expenses of $1,716,938 for the year ended March 31, 2005.  Selling and marketing expenses as well as general and administrative expenses constitute the major components of our companys operating expenses. Selling and marketing expenses for the year ended March 31, 2006 increased approximately 15% to $659,901 from $576,268 for the year ended March 31, 2005.  The increase reflects increased costs as a result of the salaries of sales personnel of Tomi Fuji Energy Management Services and increased advertising expenses associated with marketing campaigns and promotional activities during the period.  This increase was partially offset by a decrease in commission expenses payable to agents for the year ended March 31, 2006. Our company intends to continue to actively promote our products in existing markets in addition to penetrating new markets in the Asia Pacific region. As a result of these efforts, our company expects selling and marketing expenses to increase in the future. During the years ended March 31, 2006 and 2005, our company expanded our distribution network through a joint venture and through strategic alliances which allowed our company to leverage external resources and market expansion while minimizing overhead and avoiding the expenses of new facilities and sales staff.  Management intends to continue to expand through distribution agreements and strategic alliances, and does not intend to expand in new markets through the establishment of new company owned facilities. General and administrative expenses increased 55% during the year ended March 31, 2006 to $1,769,430 from $1,140,670 for the year ended March 31, 2005.  The increase was mainly due to increased salaries, rental fees, legal and professional fees incurred as a result of the expansion of our companys operations, including the acquisition of Beijing Illumination.  Our company anticipates that these costs will increase in the future as our companys operations continue to expand. Interest expense increased to $141,363 for the year ended March 31, 2006 as compared to $136,088 for the year ended March 31, 2005.  The increase of 4%, or $5,275, reflects interest rate increases in Hong Kong. Other Income Other income for the year ended March 31, 2006 was $898,959 as compared to $2,818 for the year ended March 31, 2005.  The increase was attributable to a recovery of other receivables previously written off by Beijing Illumination and assignment income of $800,000 earned from the assignment of an energy saving consultancy project by Tomi Fuji Energy Management Services to a third party during the year ended March 31, 2006. Liquidity and Capital Resources Our companys principal cash requirements are for operating expenses, including staff costs, funding costs of inventory and accounts receivable, and net investment in sales-type leases. As of March 31, 2006, our company had a net working capital deficit of $3,011,498 compared with a deficit of $1,904,887 as of the same date in 2005, which represents an increase in the deficit of approximately $1,106,611.  The cash and cash equivalents of our company increased to $158,832 as at March 31, 2006 as compared to $32,694 as of March 31, 2005.  As of March 31, 2006, our company had total credit facilities of $2,037,662 and had utilized $2,045,803 on the same date.   The over-utilized amount of $8,141 represented bank overdraft interest and our company had repaid the overdraft principle amount together with the accrued interest of total $411,311 in May 2006 already.      - 31 -   The ability of our company to meet our financial commitments is primarily dependent upon the continued extension of credit by our creditors, the continued financial support of our directors and shareholders, the continued issuance of equity to new shareholders, and our ability to achieve and maintain profitable operations. Our company has raised and received additional capital of $1,344,589 by allotting and issuing 896,393 common shares in the capital of our company at an issue price of $1.50 each by way of private placements during the year ended March 31, 2006. Management believes that our companys cash and cash equivalents, cash provided by operating activities, if any, and our unused credit facilities will not be sufficient to meet our working capital requirements for the next twelve months. Our company plans to raise the capital required to satisfy our immediate short-term needs and additional capital required to meet our estimated funding requirements for the next twelve months primarily through the private placement of equity securities. The issuance of additional equity securities by our company may result in a significant dilution in the equity interests of our current shareholders. There is no assurance that our company will be able to obtain further funds required for our continued working capital requirements. These factors, among others, indicate that the Company may be unable to continue as a going concern. Cash Flow Used in Operating Activities Operating activities used cash of $1,473,721 for the year ended March 31, 2006 as compared to $1,335,203 for the year ended March 31, 2005.  The net cash used in operating activities was mainly for the payment of inventories, prepaid expenses and other current assets. Cash Flow Used in Investing Activities Our company increased the cash used in investing activities to $26,971 during the year ending March 31, 2006 from $9,467 during the year ended March 31, 2005.  The increase in investing activities was largely due to the purchase of equipment.  Net cash inflow from the acquisition of a subsidiary was offset by the net repayment to a shareholder. Cash Flow Provided by Financing Activities Financing activities provided cash of $1,631,772 for the year ended March 31, 2006, which represents an increase of $257,486 as compared to cash of $1,374,286 for the year ended March 31, 2005.  Our company received net proceeds from the issuance of share capital and common stock warrants of $1,320,829 through private placements of 896,393 shares of our common shares to twelve shareholders for the year ended March 31, 2006.  Net advance from a director of $237,257 was recorded during the year ended March 31, 2006 as compared to  $2,068,379 in the corresponding period in 2005. Capital Expenditures Our company incurred capital expenditures of $38,110 during the year ended March 31, 2006 and $2,536 for the year ended March 31, 2005.  The increase in capital expenditures in fiscal 2006 was mainly attributable to the purchase of office equipment and a motor vehicle.  As of March 31, 2006, 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. Contractual Obligations Operating leases include commitments for office space of $127,461.  Our companys principal business office is located at 16/F., Hang Seng Mongkok Building, 677 Nathan Road, Mongkok, Kowloon, Hong Kong.  The 3,652 square feet office space serves as the base of our corporate, managerial, accounting, financial, administrative, sales     - 32 -  and marketing functions.  The monthly fixed rent is $4,694 plus a monthly service charge of $1,596.  Our company also leases an office at Rooms 1108-9, 11th Floor, Tower II, Enterprise Square, 9 Sheung Yuet Road, Kowloon Bay, Kowloon, Hong Kong. The 4,058 square feet office space serves as the base of the corporate, accounting, sales and marketing functions of Beijing Illumination. Our company also leases a facility at 1st Floor, Block B, Cui Wei Industrial Building, 668 Cui Xei Road West, Zhuhai, Guangdong, the Peoples Republic of China.  It serves as a base for research, development and assembly of the Eco-Pro Energy Saver line of products, as well as sales and marketing activity within China. Our Company also leases a facility at 1st to 4th floor, No. 7 Shuang-qiao Xili Chaoyang District, Beijing, the Peoples Republic of China. It serves as the base
for manufacturing, research and development of the lighting and speciality lighting source products, as well as sales and marketing activity within China.  The obligations of these leases are set out as follows:  Obligations by PeriodContractual Obligations
        
        Total
        
        Less ThanOne Year
        
        2-3 Years
        
        4-5 Years
        
        After5 YearsOperating Leases
        $
        511,343
        $
        201,810
        $
        200,831
        
        168,702
        
        - Our company has entered into a capital lease arrangement for leasing equipment used in our operations.  The contractual obligations as of March 31, 2006 were: Obligations  by PeriodContractualObligations(1)
        
        Total
        
        Less ThanOne  Year
        
        2-3 Years
        
        4-5 Years
        
        After5  YearsCapital Lease Obligations
        $
        2,591
        $
        740
        $
        1,481
        $
        370
        $
        -Total Contractual Obligations
        $
        2,591
        $
        740
        $
        1,481
        $
        370
        $
        -  (1)Other than as disclosed in the off-balance sheet arrangements section, set out above, there have been no material changes to the contractual obligations of our company subsequent to March 31, 2006. ITEM 7.
        FINANCIAL STATEMENTS. The following consolidated financial statements and the notes thereto are filed as part of this annual report: Report of Independent Registered Public Accounting Firm, dated July 14, 2006; Report of Independent Registered Public Accounting Firm, dated July 15, 2005; Consolidated balance sheets as of March 31, 2006 and 2005; Consolidated statements of operations for the years ended March 31, 2006 and 2005; Consolidated statements of shareholders equity and comprehensive loss for the years ended March 31, 2006 and 2005; Consolidated statements of cash flows for the years ended March 31, 2006 and 2005; and Notes to Consolidated Financial Statements.     - 33 -            GLOBAL INNOVATIVE SYSTEMS INC.  CONSOLIDATED FINANCIAL STATEMENTS  For the years ended March 31, 2006 and 2005 (Stated in U.S. Dollars) and Report of Independent Registered Public Accounting Firm        - 34 -   GLOBAL INNOVATIVE SYSTEMS INC.  CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2006 AND 2005 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    CONTENTS
        PAGE(S)   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
        35   CONSOLIDATED BALANCE SHEETS
        37 - 38   CONSOLIDATED STATEMENTS OF OPERATIONS
        39   CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
        40 AND COMPREHENSIVE LOSS   CONSOLIDATED STATEMENTS OF CASH FLOWS
        41 - 42   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        43 - 65       - 35 -   Report of Independent Registered Public Accounting Firm  To the Board of Directors and shareholders of Global Innovative Systems Inc.  We have audited the accompanying consolidated balance sheet of Global Innovative Systems Inc. as of March 31, 2006 and the related consolidated statement of operations, shareholders equity and cash flows for the year ended March 31, 2006. These financial statements are the responsibility of the Companys management.  Our responsibility is to express an opinion on these financial statements based on our audit.  We conducted our audit in accordance with 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.  The 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 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 audit provides a reasonable basis for our opinion.  In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Global Innovative Systems Inc. as of March 31, 2006 and the results of its consolidated operations and cash flows for the year ended March 31, 2006, in conformity with generally accepted accounting principles in the United States of America.  The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the recurring losses and negative cash flows from operations of the Company raises substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.  /s/ BDO McCabe Lo Limited BDO McCabe Lo Limited  Hong Kong, July 14, 2006      - 36 -    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF GLOBAL INNOVATIVE SYSTEMS, INC.  We have audited the accompanying consolidated balance sheet of Global Innovative Systems, Inc. and its subsidiaries (the "Company") as of March 31, 2005 and the related consolidated statements of operations, shareholders' equity and comprehensive loss, and cash flows for the year ended (except for the revisions made in connection with the Company change to the United States dollar as its reporting currency).  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audit.  We conducted our audit 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 audit provides a reasonable basis for our opinion.  In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2005, and the result of its operations and its cash flow for the year then ended in conformity with accounting principles generally accepted in the United States of America.  The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the recurring losses and negative cash flows from operations of the Company raises substantial doubt about its ability to continue as a going concern.  Management's plans concerning these matters are also described in Note 1.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.   /s/ Deloitte Touche Tohmatsu Deloitte Touche Tohmatsu Hong Kong July 15, 2005             - 37 -    GLOBAL INNOVATIVE SYSTEMS INC.  CONSOLIDATED BALANCE SHEETS
Expressed in US dollars  March 31,
        March 31,2006
        2005$
        $ASSETSCurrent assets:Cash and cash equivalents
        158,832
        32,694Restricted deposits
        224,092
        220,253Other investments
        31,516
        -Trade receivables, net of allowance for doubtful accounts
        1,312,775
        1,819,808of $210,096 on March 31, 2006 and nil on March 31, 2005Net investment in sales-type leases
        174,828
        148,478Prepaid expenses and other current assets
        1,314,014
        153,956Amount due from a shareholder
        160,243
        -Amounts due from related companies
        385,527
        15,501Inventories
        3,532,602
        94,004Total current assets
        7,294,429
        2,484,694Intangible assets
        3,669,275
        3,750,476Goodwill
        4,086,888
        -Investment in corporate joint venture
        839
        -Investments  restricted
        679,396
        670,184Equipment, net
        3,714,367
        332,798Construction in progress
        1,937,360
        -Net investment in sales-type leases
        515,765
        552,51814,603,890
        5,305,976TOTAL ASSETS
        21,898,319
        7,790,670LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Short-term borrowings
        2,077,878
        1,323,086Current portion of long-term debts
        -
        119,551Trade payables
        2,093,053
        826,187Amounts due to a director
        3,375,283
        1,210,006Amounts due to directors of a subsidiary
        1,028,178
        -Amount due to a minority shareholder of a subsidiary
        517,962
        -Amounts due to shareholders
        64,420
        167,850Amount due to a related company
        26,992
        -Accrued expenses and other current liabilities
        943,522
        545,456Current portion of obligations under capital leases
        740
        61,199Income tax payable
        177,899
        136,246Total current liabilities
        10,305,927
        4,389,581Non-current liabilities:Obligations under capital leases
        1,851
        2,468Total non-current liabilities
        1,851
        2,468Total liabilities
        10,307,778
        4,392,049Minority interest
        2,633,652
        364       - 38 -    GLOBAL INNOVATIVE SYSTEMS INC.  CONSOLIDATED BALANCE SHEETS  (continued)
Expressed in US dollars  March 31,
        March 31,2006
        2005$
        $Shareholders' equity:Common stockAuthorized:800,000,000 common shares, par value $0.001 per share100,000,000 preferred shares, par value $0.001 per shareIssued and outstanding:30,535,719 common shares at March 31, 2006 and19,033,096 common shares at March 31, 2005
        30,535
        19,033Common stock warrants
        573,692
        -Additional paid-in capital
        14,667,387
        5,977,080Accumulated other comprehensive loss
        (40,339)
        (44,609)Accumulated deficit
        (6,274,386)
        (2,553,247)Total shareholders' equity
        8,956,889
        3,398,257TOTAL LIABILITIES ANDSHAREHOLDERS' EQUITY
        21,898,319
        7,790,670  See notes to consolidated financial statements.      - 39 -   GLOBAL INNOVATIVE SYSTEMS INC.  CONSOLIDATED STATEMENTS OF OPERATIONS
Expressed in US dollars  Twelve Months Ended
March 31,2006
        2005$
        $Revenues:Sale of energy saving products
        1,355,942
        2,397,716Sale of lighting source products
        97,616
        -Rental income
        3,856
        3,856Commission and service income
        45,795
        191,951Sales-type lease income
        18,023
        10,342Total net revenues
        1,521,232
        2,603,865Cost of revenues:Sale of energy saving products
        1,049,867
        1,021,255Sale of lighting source products
        90,334
        -Rental income
        1,895
        1,895Commission and service income
        2,512
        12,789Total cost of revenues
        1,144,608
        1,035,939Gross profit
        376,624
        1,567,926Amortization of intangible assets
        (528,923)
        (125,874)Impairment loss on intangible assets
        (1,928,021)
        -Selling and marketing expenses
        (659,901)
        (576,268)General and administrative expenses
        (1,769,430)
        (1,140,670)Loss from operations
        (4,509,651)
        (274,886)Interest expense
        (141,363)
        (136,088)Interest income
        17,843
        14,420Other income
        898,959
        2,818Equity share of the result of joint venture
        (780)
        -Loss before income tax and minority interests
        (3,734,992)
        (393,736)Income tax
        (45,508)
        (136,246)Net loss
        (3,780,500)
        (529,982)Minority interests
        59,361
        -Net loss attributable to shareholders of the Company
        (3,721,139)
        (529,982)Basic and diluted loss per share
        (0.18)
        (0.05)Weighted average number of commonshares outstanding, basic and diluted
        20,742,409
        11,308,256  See notes to consolidated financial statements.         - 40 -   GLOBAL INNOVATIVE SYSTEMS INC.  CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (DEFICIT) AND COMPREHENSIVE LOSS
Expressed in US dollars  Accumulated other comprehensive income (loss)Common Shares

Number           Amount
        Common
Stock
Warrants
        Additional Paid-In
Capital
        Unrealized
Loss on Investments
        Foreign Currency Translation Adjustment
        Accumulated
Deficit
        Total Shareholders'
Equity
(Deficit)
        Total Comprehensive
LossBalance at April 1, 2004
        7,291,462
        7,292
        -
        739,899
        (19,263)
        1,200
        (2,023,265)
        (1,294,137)Issuance of shares for amount due to a director
        2,583,626
        2,583
        -
        1,411,298
        -
        -
        -
        1,413,881
        -Issue of shares for the acquisition of subsidiaries
        3,124,912
        3,125
        -
        3,871,532
        -
        -
        -
        3,874,657
        -Share of stock held by Global Innovative Systems Inc.'s shareholders
        6,033,096
        6,033
        -
        -
        -
        -
        -
        6,033
        -Recapitalization in connection with the Share Exchange Transaction
        -
        -
        -
        (45,649)
        -
        -
        -
        (45,649)
        -Net loss
        -
        -
        -
        -
        -
        -
        (529,982)
        (529,982)
        (529,982)Other comprehensive loss:
Unrealized loss on    investments
        -
        -
        -
        -
        (26,546)
        -
        -
        (26,546)
        (26,546)Balance at March 31, 2005
        19,033,096
        19,033
        -
        5,977,080
        (45,809)
        1,200
        (2,553,247)
        3,398,257
        (556,528)Issuance of shares in private placements
        896,393
        896
        -
        1,319,933
        -
        -
        -
        1,320,829
        -Issuance of shares for the acquisition of a subsidiary
        10,606,230
        10,606
        -
        7,944,066
        -
        -
        -
        7,954,672
        -Common stock warrants
        -
        -
        573,692
        (573,692)
        -
        -
        -
        -
        -Foreign currency translation adjustment
        -
        -
        -
        -
        -
        (4,942)
        -
        (4,942)
        (4,942)Net loss
        -
        -
        -
        -
        -
        -
        (3,721,139)
        (3,721,139)
        (3,721,139)Other comprehensive gain:
Unrealized gain on investments
        -
        -
        -
        -
        9,212
        -
        -
        9,212
        9,212Balance at March 31, 2006
        30,535,719
        30,535
        573,692
        14,667,387
        (36,597)
        (3,742)
        (6,274,386)
        8,956,889
        (3,716,869)  See notes to consolidated financial statements.            - 41 -   GLOBAL INNOVATIVE SYSTEMS INC.  CONSOLIDATED STATEMENTS OF CASH FLOWS
Expressed in US dollars  Twelve Months Ended
March 31,2006
        2005$
        $Cash flows from operating activities:Net loss
        (3,780,500)
        (529,982)Adjustment to reconcile net (loss) tonet cash used in operating activities:Amortization of intangible assets
        528,923
        125,874Impairment loss on intangible assets
        1,928,021
        -Depreciation expense
        83,908
        81,705Tax paid
        (3,855)
        -Equity share of the result of corporate joint venture
        780
        -Write-off of equipment
        5,227
        -Write-off of bad debts
        166,597
        7,044Write-off of inventories
        -
        23,679Changes in operating assets and liabilities, net of acquisitions:Trade receivables
        1,897,871
        (1,794,336)Net investment in sales-type leases
        10,403
        (658,750)Prepaid expenses and other current assets
        (928,576)
        (9,834)Inventories
        (1,437,734)
        (12,955)Trade payables
        215,594
        826,187Amount due from minority shareholder
        -
        185,703Amount due from a related company
        (385,527)
        -Accrued expenses and other current liabilities
        179,639
        284,216Income tax payable
        45,508
        136,246Net cash used in operating activities
        (1,473,721)
        (1,335,203)Cash flows from investing activities:Purchase of equipment
        (38,110)
        (2,536)Increase in construction in progress
        (335)
        -Advance to related companies
        -
        (8,980)Cash paid for acquisition of a joint venture
        (1,620)
        -Net cash inflow from acquisition of subsidiaries
        280,606
        2,007Advance from a shareholder
        64,420
        -Repayment to shareholders
        (328,093)
        -Net cash inflow from share exchange transaction
        -
        94Increase in restricted deposits
        (3,839)
        (52)Cash used in investing activities
        (26,971)
        (9,467)       - 42 -   GLOBAL INNOVATIVE SYSTEMS INC.  CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
Expressed in US dollars  Twelve Months Ended
March 31,2006
        2005$
        $Cash flows from financing activities:Proceeds from short-term borrowings and short-term debts
        427,409
        -Repayment of short-term borrowings and long-term debts
        (348,326)
        (620,215)Repayment of capital lease obligations
        (61,076)
        (73,878)Net proceeds from issuance of share capital and common stock warrants
        1,320,829
        -Advances from  directors of a subsidiary
        55,679
        -Advance from a director
        1,761,425
        3,228,462Repayment to a director
        (1,524,168)
        (1,160,083)Net cash provided by financing activities
        1,631,772
        1,374,286Effect of foreign exchange rates change
        (4,942)
        -Net increase in cash and cash equivalents
        126,138
        29,616Cash and cash equivalents at beginning of the year
        32,694
        3,078Cash and cash equivalents at end of the year
        158,832
        32,694Supplemental disclosure of cash flows informationCash paid for:Bank interest expenses
        136,695
        128,523Interest on capital lease obligations
        4,668
        7,565Supplemental schedules of non-cash investing and financing activitiesCapital lease obligations incurred
        -
        3,393Amount due to a director capitalized
        -
        1,413,882Sales of certain receivables to a director in settlement for directors loan
        -
        326,492Reclassification of inventories to equipment
        -
        34,537Cash consideration on acquisition of a subsidiary
        1,928,021
        -Payment of cash consideration on acquisition of a subsidiary by a director
        (1,928,021)
        -  See notes to consolidated financial statements.               - 43 -   GLOBAL INNOVATIVE SYSTEMS INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED MARCH 31, 2006  NOTE 1.  ORGANIZATION AND NATURE OF OPERATIONS  Global Innovative Systems Inc., (the "Parent") and its subsidiaries (collectively referred to as the "Company") is principally engaged as a developer, manufacturer and integrator of energy saving products and technologies and the provision of consulting and customer training services.  In addition, the Company engaged in the manufacture and distribution of lighting source products as well as the provision of LED lighting effect services following the acquisition of Beijing Illumination (Hong Kong) Limited and the formation of the Lightscape Technologies (Macau) Ltd. joint venture.  The principal subsidiaries / corporate joint ventures of the Company as of March 31, 2006 include the following:  Date of
        Place of
        Percentage ofName of subsidiary / corporate joint venture
        incorporation
        incorporation
        effective ownershipTech Team Holdings Limited (TTHL)
        February 15, 2002
        The Cayman Islands
        100Tech Team Investment Limited (TTIL)
        March 24, 2000
        The British Virgin
        100IslandsTech Team Development (Zhuhai) Limited
        August 23, 2002
        The People's Republic
        100(TT (Zhuhai))
        
        of ChinaTech Team Development Limited (TTDL)
        October 22, 1999
        Hong Kong
        100Tech Team Engineering Limited (TTEL)
        August 23, 2000
        Hong Kong
        100Grandplex Development Limited (GDL)
        January 18, 1999
        Hong Kong
        100Tech Team China Limited (TTCL)
        May 22, 2002
        The British Virgin Island
        100Tomi Fuji Energy Management
        March 10, 2004
        Hong Kong
        100Services Consultants Limited (TFEMS)Beijing Illumination (Hong Kong) Limited (Beijing Illumination)
        October 11, 2002
        Hong Kong
        56.8Beijing Aihua New Enterprise Lighting
        July 26, 1999
        The People's Republic
        56.8Appliance Company Limited (Beijing Aihua)
        
        of ChinaTomi Fuji Energy Pte. Limited (TFEPL)
        December 17, 2004
        Singapore
        80Powerland Technology Limited (PTL)
        September 8, 2005
        The British Virgin Island
        100Lightscape Technologies (Macau) Limited (Lightscape Macau)
        February 6, 2006
        Macau
        50.4  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. As shown in the consolidated financial statements, the Company has a net working capital deficit of $3,011,498 as of March 31, 2006 and used cash in its operations of $1,473,721 during the year ended March 31, 2006. The continuation of the Company is dependent upon the continuing financial support of its directors and shareholders, and obtaining     - 44 -   long-term financing, as well as achieving and maintaining a profitable level of operations through successful product development and sales.  These factors, among others, indicate that the Company may be unable to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  Management recognizes that the Companys continuation as a going concern is dependent upon its ability to generate sufficient cash flow to allow the Company to satisfy its obligations on a timely basis.  The Company commenced a discussion which included negotiating credit arrangements with certain bankers, raising new equity financing sufficient to retire all outstanding liabilities and to fund the restructuring.  Upon successful completion of the discussion, management has determined the Company will be better positioned to fund its current obligations and obtain new financing.  While the Company is expending its best efforts to achieve the restructuring and new acquisitions, there is no assurance that any such activity will be successful and will generate funds necessary for continued operation of the Company.  NOTE 2. ACQUISITIONS OF BUSINESS Acquisition of Interest in TFEMS  In October 2004, TTIL entered into an agreement with Tomi Fuji Corporation Limited TFCL), a third party, to acquire its 100% interest in TFEMS, a non-operating shell company which holds certain intangible assets.  The Company intends to utilize TFEMS to engage in the trading of energy savers.  The consideration for this acquisition was satisfied by the issuance of 4,284 new ordinary shares of TTIL to TFCL on October 4, 2004, as agreed pursuant to an arms length negotiation.  On the same date, TTHL entered into another agreement with TFCL to issue 3,124,912 new shares of its common stock of USD0.001 each to TFCL in exchange for its entire interest in TTIL arising from the aforesaid transaction.  This share exchange was completed on the same date.  The common stock issued in exchange was valued at $3,874,657 based on the fair value of the net assets of TFEMS determined with the assistance of an independent appraiser.  The acquisition was recorded using the purchase method of accounting and was completed in early January 2005.  The following table summarizes the fair value of the assets acquired and liabilities assumed at the date of acquisition.  $
        
        Amortization
periodNet tangible liabilities assumed
        (1,693)
        
        N/AIntangible assets:Trademark
        1,404,113
        
        N/ACustomer lists and relationships
        2,468,124
        
        5 yearsUnfulfilled purchase orders
        4,113
        
        5 monthsTotal
        3,874,657   Acquisition of Interest in Beijing Illumination Pursuant to a Sale and Purchase Agreement dated September 27, 2005 (as amended by a letter agreement dated October 3, 2005) by and among the Company, Glory Goal Investments Limited (Glory Goal) and Ko Yin, the Company acquired 26.0% of the shares of Beijing Illumination on February 27, 2006. As consideration for the 26.0% interest in Beijing Illumination, the Company issued to Glory Goal 1,750,000 common shares of the Company and paid to Glory Goal $1,928,021 (approximately HK$15,000,000) in cash.  Pursuant to an Option Deed Agreement dated September 27, 2005 (as amended by a letter agreement dated October 3, 2005) and pursuant to a Supplemental Deed Agreement dated February 22, 2006, both by and among     - 45 -   the Company, Admire Fame Investments Limited (Admire Fame), Gain Huge Investments Limited (Gain Huge), Splendid Fortune Investments Limited (Splendid Fortune) and Ko Yin, the Company acquired an additional 30.8% of the shares of Beijing Illumination on February 27, 2006 in exchange for the issuance of an aggregate 8,856,230 common shares of the Company to Admire Fame, Gain Huge and Splendid Fortune.  Following the closing of the acquisition of interests in Beijing Illumination on February 27, 2006, our company expanded our business into the manufacturing and sale of lighting and speciality lighting source products.  Twelve months Ended
March 31, 2006
$Shares allotted (based on market value on February 27, 2006)
        7,954,672Cash consideration
        1,928,021Professional fees paid on acquisition
        120,272Total consideration
        10,002,965The purchase price has been allocated based on the estimated fair values of the assets acquired and liabilities assumed as of the date of acquisition.  The following represents the allocation of the purchase price:Net assets in Beijing Illumination at date of acquisition:Other investment
        31,516Property, plant and equipment
        3,432,595Construction in progress
        1,937,025Inventories
        2,000,863Trade receivables
        1,477,667Prepayment and other receivables
        288,193Tax recoverable
        7,555Bank balances and cash
        280,606Trade payables
        (1,051,271)Accrued expenses and other payables
        (125,146)Loan from a shareholder
        (517,962)Loan from directors
        (972,499)Short-term bank loans
        (556,160)Minority shareholders interests
        (2,692,648)Net assets
        3,540,334Intangible assets:     Completed technology  AHP
        878,137-      Completed technology  HID
        917,780-      Trademark
        409,062-      Customer lists and relationships
        34,167-      Distributor list
        136,597Total intangible assets
        2,375,743Goodwill
        4,086,888Total consideration
        10,002,965   The following table sets forth the unaudited pro forma results of operations of the Company as if the acquisition had occurred at the beginning of the fiscal year.  These pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition occurred as of the beginning of the periods presented or that not be obtained in the future.  Unaudited Pro Forma Results       - 46 -    Twelve months ended
March 31, 2006
$Revenue
        6,712,976Net loss attributable to shareholders of the Company
        (3,367,529)  Acquisition of Interest in Lightscape Holding Ltd.  On March 30, 2006, TTIL, our wholly-owned subsidiary, entered into a Sale and Purchase Agreement with Yuen Yu Woo as vendor, and Michelle Siu Kwan Lam and Joseph Sui Kei Lam as guarantors.  Pursuant to the terms and conditions of the Sale and Purchase Agreement, the Company agreed to purchase six shares, or approximately 60%, of the issued and outstanding shares of Lightscape Holding Ltd. from Yuen Yu Woo in consideration for the issuance of 3,000,000 common shares by the Company to Ms. Woo.  As at the balance sheet date, the Company has not closed the transactions contemplated in the Sale and Purchase Agreement.  Lightscape Holding Ltd. holds all of the issued and outstanding shares of Luminous LED Technologies Limited which, in turn, holds the minority interest in Lightscape Macau, our joint venture company.  NOTE 3.  SUMMARY OF PRINCIPAL ACCOUNTING POLICIES  Basis of Presentation  The 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.  Investment in Corporate Joint Venture  Corporate joint venture refers to a corporation owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. The purpose of a corporate joint venture frequently is to share risks and rewards in developing a new market, product or technology;  to combine complementary technological knowledge ; or to pool resources in developing production or other facilities. The Company accounts for its investment in corporate joint venture using the equity method of accounting.  Investments - Restricted  The Company classifies investments in mutual funds as available-for-sale securities and carries them at market value. The unrealized holding gains and losses on these securities are excluded from earnings and are reported as a separate component of other comprehensive income or loss until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis and are reflected in consolidated statement of operations.      - 47 -   The Company assesses declines in the value of individual investments to determine whether such decline is other-than-temporary and thus the investment is impaired. This assessment is made by considering available evidence including changes in general market conditions, specific industry and individual company data in which the guaranteed mutual funds are invested in, the length of time and the extent to which the market value has been less than cost, the financial condition and near-term prospects of the individual company in which the guaranteed mutual funds are invested in, and the Companys intent and ability to hold the investment.  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 subsidiary of Beijing illumination which is, in turn, an indirect 56.8% owned subsidiary 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.  Trade 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 TFEMS in January 2005.  These intangible assets are comprised of trademark, customer lists and relationships, and unfulfilled purchase orders.  The Company also acquired certain intangible assets through the acquisition of Beijing Illumination in February 2006.  These intangible assets consisted of completed technology for the production of Aihua Ultra-High Pressure Mercury (AHP) lamps and HID lamps, trademark, 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     - 48 -   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 the Company will be adversely affected.  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.  Equipment and Construction in Progress  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 yearsOffice equipment
        3 - 4 yearsFurniture and fixtures
        3 - 4 yearsLeasehold improvements
        shorter of 4 years or the remaining terms of the leasesMotor vehicles
        5 - 7 yearsEnergy savers
        10 yearsFactory 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.  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 amortized 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.      - 49 -   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.  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.  -
        Commissions earned from customer marketing services, where the Company is acting as an agent for petroleum distribution companies, are recorded upon notification by the petroleum distribution companies for the amount earned, which is based on a pre-determined amount, per unit of gasoline sold to referred customers.  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.  Foreign Currency Translation  The functional currency of the Company is in 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 condensed consolidated statements of operations as a component of current period earnings.  The Company changed its reporting currency from HKD to United States Dollar (USD) during the ended March 31, 2006.  However, HKD is pegged to USD and hence there is no translation adjustment impact on the Companys financial statements.      - 50 -    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.   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.  Assignment income was earned by TTFEMS from an assignment of an energy saving consultancy project by TFEMS to a third party.  This commission income represents 33% of the Companys total revenue for the year ended March 31, 2006. The Company relies on supplies from numerous vendors. For the year ended March 31, 2006, the Company had one vendor that accounted for more than 82% of total supply purchases for the period.  If the vendor terminates its relationship with the Company or if the Companys supply from a vendor is interrupted or terminated for any reason, the Company may not have sufficient time to replace the supply of products from the remaining vendors.  Any such interruption would negatively impact the Company's ability to sell and distribute its products.  The Companys business, assets and operations is currently focused on the sale of electrical energy-saving products in China, and accordingly, is affected to a significant degree by any economic, political and legal developments in China.  Fair Value of Financial Instruments  The carrying amounts of cash and cash equivalents, trade receivables, short-term borrowings 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. The Company reports its comprehensive income (loss) in the consolidated statement of shareholders' equity (deficit).  Net Loss per Share  Basic net loss per share is based on the weighted average number of shares of common stock outstanding for the period.  The effects of warrants have not been included in the 2006 and 2005 net loss per share computation as their effect would have been anti-dilutive.  Recent Accounting Pronouncements  In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of APB No. 43, Chapter 4.   SFAS No. 151 requires that abnormally high vacancy, wasted material, freight and processing costs not be part of recognizable production costs.   Such cost must instead be expensed as incurred.  Accordingly fixed costs shall henceforth be allocated to inventory based on normal production capacity.  The standard is effective for the fiscal     - 51 -   year beginning January 1, 2006.  It is not expected that SFAS No. 151 will have a material effect on the Companys consolidated financial statements.  In December 2004, the FASB issued SFAS No. 123 (Revised 2004) Share-Based Payment that will require the Company to expense costs related to share-based payment transactions with employees.  With limited exception, SFAS No. 123 (R) requires that the fair value of share-based payments to employees be expensed over the period service is received.  SFAS No. 123 (R) becomes mandatory effective for the Company on January 1, 2006.  The Company intends to adopt this standard using the modified retrospective method of transition with effect from January 1, 2006.  SFAS No. 123 (R) allows the use of both closed form models (e.g., Black-Scholes Model) and open form models (e.g., lattice models) to measure the fair value of the share-based payment as long as that model is capable of incorporating all of the substantive characteristics unique to share-based awards.  In accordance with the transition provisions of SFAS No. 123 (R), the expense attributable to an award will be measured in accordance with the Companys measurement model at that awards date of grant.  The Company believes that the total expense recorded in future periods will depend on several variables, including the number of share-based awards that vest and the fair value of those vested awards.  In March 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections, which was a replacement of APB Opinion No. 20 and FAS No. 3 effective for accounting changes made in fiscal periods beginning after December 15, 2005. SFAS 154 requires retrospective application to prior periods financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. It also requires that retrospective application of a change in accounting principle be limited to the direct effects of the change. SFAS also requires that a change in depreciation, amortization, or depletion method for long-lived, nonfinancial assets be accounted for as a change in accounting estimate effected by a change in accounting principle. The Group is currently assessing the impact of this statement on our results of
operations, financial position and cash flows upon adoption and has not yet completed that assessment.  In February 2006, FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments. SFAS No. 155 amends SFAS No 133, Accounting for Derivative Instruments and Hedging Activities, and SFAF No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. SFAS No. 155, permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133, establishes a requirement to evaluate interest in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, clarifies that concentrations of credit risk in the form of
subordination are not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition on the qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. This statement is effective for all financial instruments acquired or issued after the beginning of the Groups first fiscal year that begins after September 15, 2006. The Group management has not evaluated the impact of this pronouncement on the Groups financial statements.  In March 2006 FASB issued SFAS 156 Accounting for Servicing of Financial Assets this Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities. This Statement:  - Requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract.  - Requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable.  - Permits an entity to choose 'Amortization method' or Fair value measurement method for each class of separately recognized servicing assets and servicing liabilities.      - 52 -   At its initial adoption, permits a one-time reclassification of available-for-sale securities to trading securities by entities with recognized servicing rights, without calling into question the treatment of other available-for-sale securities under Statement 115, provided that the available-for-sale securities are identified in some manner as offsetting the entity's exposure to changes in fair value of servicing assets or servicing liabilities that a servicer elects to subsequently measure at fair value.  - Requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the statement of financial position and additional disclosures for all separately recognized servicing assets and servicing liabilities. An entity should adopt this Statement as of the beginning of its first fiscal year that begins after September 15, 2006.  The Groups management believes that this statement will not have a significant impact on the Groups financial statements.  In June 2005, the FASB ratified the Emerging Issues Task Force (EITF) consensus to amend EITF No. 96-16, Investors Accounting for an Investee When the Investor Has a Majority of the Voting Interest but the Minority Shareholders Have Certain Approval or Veto Rights. The EITF agreed to amend the Protective Rights section of this consensus, as well as Example of Exhibit 96-16A, to be consistent with the consensus reached in Issue No. 04-5, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similarly Entity When the Limited Partners Have Certain Rights. The provisions of this amendment should be applied prospectively to new investments and to investment agreements that are modified after June 29, 2005. The Groups management believes the adoption of this pronouncement will not have a material effect on the
Groups consolidated financial statements. In June 2005, the EITF reached consensus on Issue No. 05-6, Determining the Amortization Period for Leasehold Improvements (EITF 05-6.) EITF 05-6 provides guidance on determining the amortization period for leasehold improvements acquired in a business combination or acquired subsequent to lease inception. The guidance in EITF 05-6 will be applied prospectively and is effective for periods beginning after June 29, 2005. EITF 05-6 is not expected to have a material effect on the Groups consolidated financial position or results of operations.  NOTE 4.  NET INVESTMENT IN SALES-TYPE LEASES  Net investment in sales-type leases is for leases that relate to the Company's hardware sales and are generally for terms ranging from three to five years.  Interest rates range from 2.5% to 5% and the leases are secured by the respective leased assets.  The details of net investment in sales-type leases are as follows:  March 31,
2006
$
        
        March 31,
2005
$Total minimum lease payments to be received
        727,431
        
        746,653Less: Unearned income
        (36,838)
        
        (45,657)Net investment in sales-type leases
        690,593
        
        700,996Current portion
        (174,828)
        
        (148,478)Net investment in sales-type leases, less current portion
        515,765
        
        552,518  Contracted maturities of the sales-type leases as of March 31, 2006 are as follows:  Year ending March 31,
        
        $2007
        
        174,8282008
        
        179,3672009
        
        151,9092010
        
        125,4702011
        
        59,019690,593  NOTE 5. INVESTMENTS  RESTRICTED      - 53 -   Investments comprise available-for-sale securities carrying at estimated market value and consist of the following:  March 31,
2006
$
        
        March 31,
2005
$Mutual funds maturing from June 2007 through December 2007:Cost basis
        715,993
        
        715,993Gross unrealized losses
        (36,597)
        
        (45,809)Estimated market value
        679,396
        
        670,184  As of March 31, 2006, the Companys investments represented investments in three mutual funds and all of them have been in a continuous unrealized loss position for a period longer than 12 months. As of March 31, 2005, the Companys investments represented investments in three mutual funds and all of them have been in a continuous unrealized loss position for a period of 12 months or longer.  The Companys unrealized loss on investments in mutual funds related to capital-guaranteed mutual funds with underlying equity investments in Europe, Asia and the United States of America. These mutual funds also guarantee the unit holder with initial capital invested at maturity of the funds. The unrealized loss was primarily caused by volatility of the equity markets resulting from investors concerns over increasing energy prices, political instability in the Middle-East, rising interest rates and a potential overheating and slow down of the economy in China. Because the Company has the ability and intent to hold these investments until a recovery of fair value, which may be maturity, it does not consider the investments in these funds to be other-than-temporarily impaired at March 31, 2006.  These investments have been collateralized to a bank to secure banking facilities granted to the Company (Note 12).  NOTE 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS  Prepaid expenses and other current assets consist of the following:  March 31,
2006
$
        
        March 31,
2005
$Trade deposits
        634,681
        
        -Rental, utilities and other deposits
        73,942
        
        63,772Prepaid expenses
        334,225
        
        72,301Tax recoverable
        31,945
        
        -Staff advances
        73,915
        
        17,523Other receivable
        123,591
        
        -Others
        41,715
        
        3601,314,014
        
        153,956  NOTE 7.  INVENTORIES  Inventories by major categories are summarized as follows:  March 31,
2006
$
        
        March 31,
2005
$Raw materials
        519,621
        
        23,844Work in progress
        954,310
        
        8,540Finished goods
        2,058,671
        
        61,6203,532,602
        
        94,004  NOTE 8.  EQUIPMENT, NET      - 54 -   Equipment, net consists of the following:  March 31,
2006
$
        
        March 31,
2005
$Testing equipment
        83,715
        
        83,109Office equipment
        479,265
        
        70,510Furniture and fixtures
        97,317
        
        39,600Leasehold improvements
        30,247
        
        14,291Motor vehicles
        99,632
        
        14,690Energy savers
        360,723
        
        359,609Factory machinery and equipment
        3,667,055
        
        -Total
        4,817,954
        
        581,809Less: Accumulated depreciation
        (1,103,587)
        
        (249,011)Equipment, net
        3,714,367
        
        332,798  Equipment, net held under capital leases are summarized as follows:  March 31,
2006
$
        
        March 31,
2005
$Office equipment
        3,702
        
        3,702Motor vehicles
        -
        
        14,690Energy savers
        -
        
        237,581Total
        3,702
        
        255,973Less: Accumulated depreciation
        (1,028)
        
        (49,852)Equipment, net held under capital leases
        2,674
        
        206,121  Equipment, net leased under operating leases to customers is summarized as follows:  March 31,
2006
$
        
        March 31,
2005
$Energy savers
        18,953
        
        18,953Less: Accumulated depreciation
        (8,845)
        
        (6,949)Equipment, net leased under operating leases to customers
        10,108
        
        12,004  NOTE 9.  CONSTRUCTION IN PROGRESS  Construction in progress consists of the following: March 31,
2006
$
        
        March 31,
2005
$Production facilities for Xenon lights
        1,064,062
        
        -Production facilities for AHP lamps
        453,183
        
        -Others
        420,115
        
        -1,937,360
        
        -  NOTE 10.  INTANGIBLE ASSETS  Intangible assets arise from the acquisitions of interests in TFEMS and Beijing Illumination as stated in Note 2 above.  Acquired intangible assets consist of the following:       - 55 -    March 31,
2006
$
        
        March 31,
2005
$Completed technology  AHP
        878,137
        
        -Completed technology  HID
        917,780
        
        -Trademark
        1,813,175
        
        1,404,113Customer lists and relationships
        2,502,291
        
        2,468,124Distributors list
        136,597
        
        -Unfulfilled purchase orders
        4,113
        
        4,113Total
        6,252,093
        
        3,876,350Less: Accumulated amortization
- completed technology - AHP
- completed technology - HID
- customer lists and relationships
- distributors list
- unfulfilled purchase orders
Impairment loss on trademark
Impairment loss on customer lists and relationships
        (10,454)
(19,120)
(617,316)
(3,794)
(4,113)
(771,209)
(1,156,812)
        
        -
-
(123,407)
-
(2,467)
-
-Total
        3,669,275
        
        3,750,476   Amortization expenses charged to net income from operations for the year ended March 31, 2006 and 2005 were $528,923 and $125,874, respectively.  Anticipated amortization expense on intangible assets for each of the next five years is as follows:  Year ending March 31,
        
        $2007
        
        897,4672008
        
        897,4672009
        
        893,6732010
        
        709,4082011
        
        128,8653,526,880  NOTE 11.  INVESTMENT IN CORPORATE JOINT VENTURE On February 6, 2006, the Company incorporated a joint venture company named Lightscape Macau.  TTIL, a wholly-owned subsidiary of the Company, holds 50.4% of the issued and outstanding shares of Lightscape Macau and Luminous LED Technologies Ltd., a Hong Kong based researcher, developer, manufacturer and distributor of advanced light emitting diode, or LED, lighting products and technologies, holds the remaining 49.6% of the issued and outstanding shares of Lightscape Macau.  Financial statements of Lightscape Macau are summarized as follows:  Balance Sheet
        March 31,2006$Current assetsCash at bank and on hand
        135Amounts due from related companies
        3,213Prepayment and other current assets
        385,604Total current assets
        388,952Current liabilities       - 56 -    Amount due to a related company
        (387,147)Amount due to a director
        (141)Total current liabilities
        (387,288)Total net assets
        1,664Shareholders equity:Common stock
        3,213Accumulated deficit
        (1,549)Total shareholders equity
        1,664   Profit and loss account March 31,2006
$General and administrative expenses
        1,549(Loss) for the period
        (1,549)   NOTE 12.  SHORT-TERM BANK BORROWINGS  The Company's short-term borrowings consist of the following:  March 31,
2006
$
        
        March 31,
2005
$Bank loans
        
        1,370,872
        
        938,303Bank overdrafts
        
        707,006
        
        384,7832,077,878
        
        1,323,086Weighted average interest rate on borrowings at end of year
        
        7.82%
        
        7.25%At end of year:Bank credit facilities
        
        2,037,662
        
        1,571,993Utilized
        
        (2,045,803)
        
        (1,442,636)Bank credit facilities overutilized
        
        (8,141)
        
        129,357  Interest rates are generally based on the bank's best lending rate plus certain percentage and the credit lines are normally subject to periodic review.  In accordance with certain bank covenants, TTHL needs to maintain a net worth of not less than $1,092,545 from July 2003 onwards and to release the existing floating charge on all assets of TTDL; however, these financial covenants have not been fulfilled by TTHL.  Other than the aforesaid requirements, there are no other significant covenants or other financial restrictions relating to the Companys short-term borrowings that the Company did not comply with.  As of March 31, 2006, the above facilities are secured by the following:  (a)
        All assets of TTDL amounting to $3,724,593 as of March 31, 2006; (b)
        Investments of the Company of $679,396; (c)
        Cash deposits of the Company of $224,092; (d)
        A personal guarantee from a director of the Company for $257,069;      - 57 -   (e)
        A subordination agreement from a director of the Company to subordinate the advance of $16,710 to TTDL; (f)
        The residual value on the legal charge over a property belonged to a director of the Company; (g)
        Joint and several personal guarantee from two directors of the Company and a director of one of the subsidiaries of the Company; (h)
        A personal guarantee from an independent third party of$899,743; (i)
        A letter of undertaking from TTDL in pledging 5% of its export bills proceeds; (j)
        Net investment in sales-type leases and all proceeds associated with certain Direct Sales Contracts of the Company amounting to approximately $245,388; (k)
        Cross Corporate Guarantee for $3,856,041 amongst TTHL, TTDL and GDL.; (l)
        Corporate guarantee executed by TTHL for $257,069; (m)
        Corporate guarantee executed by a third party for the bank loan of Beijing Aihua amounting to $432,569.; and (n)
        Pledging 45% of Beijing Aihuas machinery with fair value $1,235,911.  Other than the investments and restricted cash deposits, there is no restriction on the use of the assets collateralized for the above facilities and bank loans.  NOTE 13. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES  Accrued expenses and other current liabilities consist of the following:  March 31,
2006
$
        
        March 31,
2005
$Deposits received
        78,280
        
        9,717Accrued professional fees
        367,076
        
        351,066Other accrued expenses
        498,166
        
        184,673943,522
        
        545,456   NOTE 14. OBLIGATIONS UNDER CAPITAL LEASES  March 31,
2006
$
        
        March 31,
2005
$Total minimum lease payments
        2,591
        
        65,542Less: Amounts representing interests
        -
        
        (1,875)Present value of minimum lease payments
        2,591
        
        63,667Less: Current portion of obligations under capital leases
        (740)
        
        (61,199)Long-term portion of obligations under capital leases
        1,851
        
        2,468  The following is a summary of future minimum lease payments under capital leases as of March 31, 2006.  Year ending March 31,
        $2007
        7402008
        7402009
        7402010
        3712,591  The Company entered into capital lease arrangements for leasing equipment used in its operations. The lease is for a term of 3 years. For the year ended March 31, 2006, 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.      - 58 -    The interest expenses incurred on these capital leases were $3,615 and $7,565 for the years ended March 31, 2006 and 2005, respectively.  NOTE 15. GENERAL AND ADMINISTRATIVE EXPENSES  March 31,
2006
$
        
        March 31,
2005
$Bad debts expense
        166,597
        
        7,044Consultancy fee
        133,446
        
        31,672Depreciation
        83,908
        
        70,649Professional fees
        393,209
        
        315,076Rental, rates and management fees
        130,618
        
        72,184Staff costs
        460,859
        
        207,745Others
        400,793
        
        436,3001,769,430
        
        1,140,670   NOTE 16. FOREIGN CURRENCY TRANSACTION GAIN OR LOSS  Aggregate foreign currency transaction (loss) and gain of $(2,148) and of $1,421 for the years ended March 31, 2006 and 2005 were included in determining net loss, for the respective years.  NOTE 17.  INCOME TAX  The components of loss before income tax and minority interests are as follows:  March 31,
2006
$
        
        March 31,
2005
$Hong Kong
        (3,567,574)
        
        (200,112)Mainland, the Peoples Republic of China (PRC)
        (167,418)
        
        (193,624)(3,734,992)
        
        (393,736)  Taxes laws applicable to the Company are as follows:  -
        TTHL is a tax-exempted company incorporated in the Cayman Islands. -
        Under the current BVI law, TTCs, TTILs and PTLs income are not subject to taxation. -
        Global Innovative Systems Inc. and TFEPL also had no assessable profits earned during the periods presented. 
        No provision for PRC income tax has been made as TT(Zhuhai) had no assessable profits earned during the year ended March 31, 2006 and year ended March 31, 2005.  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 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. 
        Other companies are dormant and had no assessable profits earned during the periods presented.  Income tax expense for the year ended March 31, 2006 and 2005 represents the provision for current income tax of the subsidiaries operating in Hong Kong and has been calculated at 17.5% of the estimated assessable profit for the period.      - 59 -   A reconciliation of income tax expense to the amount computed by applying the Hong Kong statutory tax rate to the loss before income tax in the consolidated statements of operations is as follows:  March 31,
2006
$
        
        March 31,
2005
$Loss before income tax
        (3,734,992)
        
        (393,736)Tax at the Hong Kong Profits Tax rate of 17.5% (2005: 17.5%)
        (653,623)
        
        (68,904)Tax effect of expenses not deductible for tax purposes
        472,297
        
        161,562Tax effect of income not taxable for tax purposes
        (2,951)
        
        (16)Utilization of tax losses previously not recognized
        49,586
        
        (10,299)Adjustment of previous years tax loss as disallowable item
        3,236
        
        -Change in valuation allowance
        142,078
        
        (14,640)Effect of the different income tax rate in other taxjurisdictions
        35,503
        
        67,905Income tax overprovided in previous year
        (618)
        
        -Others
        -
        
        638Income tax expense
        45,508
        
        136,246  Temporary differences and carry forwards that give rise to deferred tax assets and liabilities are as follows:  March 31,
2006
$
        
        March 31,
2005
$Deferred tax assets- tax losses
        495,635
        
        333,805- temporary difference
        23,599
        
        -Valuation allowance
        (451,707)
        
        (311,311)Net deferred tax assets
        67,527
        
        22,494Deferred tax liabilities - equipment
        (67,527)
        
        (22,494)Net deferred tax
        -
        
        -  In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or the entire amount of deferred tax assets will not be realized. The ultimate realization of the deferred tax asset is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible and credit carryforwards are available. Management considers scheduled reversal of deferred tax liabilities, and projected future taxable income in making this assessment. Based upon the lack of historical taxable income, scheduled reversal of deferred tax liabilities, and projections for future taxable income over the periods in which the temporary differences are deductible and tax credits are available to reduce taxes payable, the Company has established a valuation allowance of $451,707 and $311,311 as of March 31, 2006 and 2005, respectively.  The net change in the valuation allowance for the years ended March 31, 2006 and 2005 was an increase and a decrease of approximately $140,396 and $14,640, respectively. For the operating loss carry forwards of approximately $2,926,726 as of March 31, 2006, $118,337, $198,308, $180,645 and $133,944 will expire in 2007, 2008, 2009 and 2010, respectively, and the remainder may be carried forward indefinitely.  NOTE 18. COMMITMENTS  The Company as Lessor  Energy saver rental income earned was $3,856 and $3,856 for the years ended March 31, 2006 and 2005, respectively.      - 60 -   The following is a schedule by years of minimum future rentals on non-cancelable operating leases as of March 31, 2006: Year ending March 31,
        $2007
        1,285Total
        1,285  The Company as Lessee  The Company has operating lease agreements principally for its office facilities. Such leases have remaining terms of 5 to 57 months. The following is a summary of future minimum lease payments under operating leases as of March 31, 2006. Rental expense was $130,850 and $61,192 for the years ended March 31, 2006 and 2005, respectively.  Year ending March 31,  $2007
        201,8102008
        104,4302009
        96,4012010
        96,4012011
        72,301571,343  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.  Capital Commitment  Beijing Aihua has a capital commitment for office decoration works of $16,376 as at March 31, 2006.  NOTE 19.  RELATED PARTY BALANCES AND TRANSACTIONS  Related Party Transactions  TFCL, a shareholder of the Company, paid certain expenses totalling $879,343 on behalf of the Company and the Company repaid $1,101,432 during the year ended March 31, 2006.  The Company received advances from a shareholder for its operating expenses, amounting to $25,853 and the Company repaid $67,437 during the year ended March 31, 2006.  A director of the Company advanced loans of $3,689,446 to the Company, which included the payment by the director of the deposit for the acquisition of Beijing Illumination of $1,928,021. The loans are non-interest bearing and payable on demand. In addition, the Company repaid to a director $1,524,168 for the year ended March 31, 2006.  As of March 31, 2006, net investment in sales-type leases amounting to approximately $515,295 was collateralized for credit facilities granted to a shareholder of the Company.  During the year ended March 31, 2006, the Company paid office rent of $3,856 to a third party which was beneficially owned by the family members of a director of a subsidiary.      - 61 -   The Company incurred interest expense of $8,776 payable to a minority shareholder of a subsidiary for the year ended March 31, 2006.  Lightscape Macau had placed an order to purchase equipment of $1,712,532 for Galaxy Starworld Hotel project and paid a deposit of $385,604 in respect of the project to its minority shareholder for the year ended March 31, 2006.  Pursuant to the terms of the agreements in relation to the acquisition of interest in TFEMS as mentioned in Note 2 above, a beneficial owner of TFCL has guaranteed to pay the shortfall to the Company should the net profit of TFEMS for the period from the date of acquisition to June 30, 2005   (the guaranteed period) fall below a warranted sum. The profits for the guaranteed period fell short of $604,546 and the Company is currently pursuing the guarantor for the enforcement of this guarantee.  Related Party Balances  As of March 31, 2006, the amounts due from/to related companies, directors and shareholders represent cash advances to or from them and are unsecured and have no fixed repayment terms. Except for an amount of $526,448 due to a director of a subsidiary, Mr. Ko Yin, carried interest at 9.6% per annum and another amount of $517,962 due to a minority shareholder of a subsidiary, Aeneas Portfolio Company LP, carried interest at 20% per annum, others are non-interest bearing.  The balances related to such advances are as follows: March 31,
2006
$
        
        March 31,
2005
$Amounts due from related companiesLightscape Macau
        385,527
        
        -Mission Hill Golf Club
        -
        
        15,501385,527
        
        15,501A director of the Company is also the Group Chief Executive and Executive Deputy Chairman of Mission Hills Group.Amount due from a shareholderTFCL
        160,243
        
        -Amounts due to a directorBondy Tan
        3,375,283
        
        1,210,006Amounts due to directors of a subsidiaryKo Yin
        988,333
        
        -Lam So Ying
        39,845
        
        -1,028,178
        
        -Amount due to a minority shareholder of a subsidiaryAeneas Portfolio Company LP (Aeneas)
        517,962
        
        -Amounts due to shareholdersTFCL
        -
        
        61,846David Yu
        64,420
        
        106,00464,420
        
        167,850Amounts due to a related companyPalun Development Limited
        26,992
        
        - Palun Development Limited was beneficially owned by the family members of a director of a subsidiary.  NOTE 20.  SEGMENT INFORMATION      - 62 -    (i) The Company operates in two segments, namely energy savings and sales of lighting source products. The Company is engaged as a developer, manufacturer and integrator of energy saving products and technologies and provision of consulting and customer training services related to such products.  In addition, the Company has expanded its business into the manufacturing and sale of lighting and speciality lighting source products.  The accounting policies of the operating segments are the same as those described in the Summary of Principal Accounting Policies (see Note 3). We evaluate performance based on profit or loss from operations, excluding corporate, general and administrative expenses.  March 31,
        March 31,2006
$
        
        2005
$Net revenues:Energy saving business
        1,423,616
        
        2,603,865Lighting source business
        97,616
        
        -1,521,232
        
        2,603,865Interest expensesEnergy saving business
        128,420
        
        136,088Lighting source business
        12,943
        
        -141,363
        
        136,088Amortization of intangible assets:Energy saving business
        495,269
        
        125,874Lighting source business
        33,654
        
        -528,923
        
        125,874Depreciation:Energy saving business
        82,835
        
        81,705Lighting source business
        1,073
        
        -83,908
        
        81,705Other incomeEnergy saving business
        898,959
        
        2,818Income tax expensesEnergy saving business
        45,508
        
        136,246Significant non cash itemsEnergy saving businessCapital lease obligations incurred
        -
        3,393Amount due to a director capitalized
        -
        1,413,882Sales of certain receivables to a director in settlement for directors loan
        -
        326,492Reclassification of inventories to equipment
        -
        34,537Lighting source businessCash consideration on acquisition of a subsidiary
        1,928,021
        -Payment of cash consideration on acquisition of a subsidiary by a director
        (1,928,021)
        --
        
        1,778,304Impairment loss on intangible assets:       - 63 -    Energy saving business
        1,928,021
        
        -Lighting source business
        -
        
        -1,928,021
        
        -Goodwill:Lighting source business
        4,086,888
        
        -  (ii) Geographical Information: March 31,
        March 31,2006
$
        
        2005
$Total sales:Mainland, the PRC
        
        1,097,439
        
        57,374Hong Kong
        
        421,017
        
        2,337,167Macau
        
        -
        
        205,289Thailand
        
        2,776
        
        -Singapore
        
        -
        
        4,0351,521,232
        
        2,603,865   (iii) The location of the Companys long-lived assets excluding restricted investments is as follows:  March 31,
2006
$
        
        March 31,
2005
$Hong Kong
        8,450,664
        
        4,518,417Macau
        839
        
        -Mainland, the PRC
        5,472,991
        
        117,37513,924,494
        
        4,635,792  NOTE 21.  SHARE CAPITAL AND WARRANTS  Share Capital  On May 17, 2005, the Company closed a private placement consisting of 153,333 units at a price of $1.50 per unit for gross proceeds of $229,999.50.  Each unit consists of one share and one share purchase warrant exercisable for a period of twelve months from the date of closing at an exercise price of $2.00.  The Company issued the securities to three non U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.  On May 26, 2005, the Company closed a private placement consisting of 20,000 units at a price of $1.50 per unit for gross proceeds of $30,000.  Each unit consists of one share and one share purchase warrant exercisable for a period of twelve months from the date of closing at an exercise price of $2.00.  The Company issued the securities to two non U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.  On May 27, 2005, the Company closed a private placement consisting of 723,060 units at a price of $1.50 per unit for gross proceeds of $1,084,590.  Each unit consists of one share and one share purchase warrant exercisable for a period of twelve months from the date of closing at an exercise price of $2.00.  The Company issued the securities to seven non U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.  For each transaction, the unit price was determined based on arms-length negotiation with the investors.      - 64 -   Pursuant to a Sale and Purchase Agreement dated September 27, 2005 (as amended by a letter agreement dated October 3, 2005) by and among the Company, Glory Goal and Ko Yin, the Company acquired 26.0% of the shares of Beijing Illumination on February 27, 2006. As consideration for the 26.0% interest in Beijing Illumination, the Company issued to Glory Goal 1,750,000 common shares of the Company and paid to Glory Goal HK$15,000,000 (approximately US$1,928,021) in cash. Pursuant to an Option Deed Agreement dated September 27, 2005 (as amended by a letter agreement dated October 3, 2005) and pursuant to a Supplemental Deed Agreement dated February 22, 2006, both by and among the Company, Admire Fame, Gain Huge, Splendid Fortune and Ko Yin, the Company acquired an additional 30.8% of the shares of Beijing Illumination on February 27, 2006 in exchange for the issuance of an aggregate 8,856,230 common shares of the Company to Admire Fame, Gain Huge and Splendid Fortune.  Non-Employees Warrants  As a result of the private placements mentioned above, there were outstanding warrants to purchase 896,393 shares of common stock at $2.00 per share as of March 31, 2006 that are exercisable within a one-year period ending May 17, 2006 through May 27, 2006.  The exercise price of the warrants may be adjusted in the event that the Company pays a stock dividend, subdivides or combines outstanding shares of common stock into a greater or lesser number of shares, any capital reorganization or of any reclassification of the capital of the Company or in the case of the consolidation, merger or amalgamation of the Company with or into any other Company.  The following table summarizes the changes in warrants outstanding and the related prices for the shares of the Companys common stock issued to non-employees of the Company as of March 31, 2006:  Warrants Outstanding
        Warrants ExercisableNumber Outstanding
        Weighted Average Remaining Contractual Life (Years)
        Exercise Price
        Number Exercisable
        Exercise Price896,393
        0.17
        $2.00
        896,393
        $2.00  Transactions involving warrants issued to non-employees are summarized as follows:  Number of Shares
        Price Per Share$Outstanding at April 1, 2005
        -
        -Granted
        896,393
        2.00Cancelled or expired
        -
        -Exercised
        -
        -Outstanding at March 31, 2006
        896,393
        2.00  The common stock warrants were stated at fair market value.  Upon the expiry of the common stock warrants, the remaining balance will be transferred to additional paid in capital.  NOTE 22. CONCENTRATIONS  Major Customers  The Company has the following customers each of which accounts for more than 10% of its total revenues:  March 31,
2006
$
        
        March 31,
2005
$A
        -
        
        1,546,683B
        -
        
        472,759C
        385,604
        
        -       - 65 -    385,604
        
        2,019,442  The above customers represent nil and 61.4% of the trade receivables and net investment in sales-type leases balance of the Company as of March 31, 2006 and 2005, respectively.  Major Suppliers  The Company has the following supplier which accounts for more than 10% of its total purchases:  March 31,
2006
$
        
        March 31,
2005
$A
        1,697,799
        
        670,8431,697,799
        
        670,843  The above supplier represents 55.7% and 81.2% of the trade payables as of March 31, 2006 and 2005, respectively.  NOTE 23. EMPLOYEE BENEFIT PLANS  Certain employees of the Company in the PRC are entitled to retirement benefits calculated with reference to their salaries upon retirement and their length of service in accordance with a PRC government-managed retirement plan. The PRC government is directly responsible for the payments of the benefits to these retired employees. The Company is required to make contributions to the government-managed retirement plan at 10% of the monthly basic salaries of certain employees. The expense of such arrangements to the Company for the years ended March 31, 2006 and 2005 were $67,846 and $4,368, respectively.  The Company operates a Mandatory Provident Fund Scheme for all qualifying employees in Hong Kong. The assets of the scheme are held separately from those of the Company by trustees. The Company contributes at the lower of 5% of relevant payroll costs or $129 each month per employee to the scheme, which contribution is matched by employees. The contributions paid by the Company for the years ended March 31, 2006 and 2005 were $15,318 and $9,474, respectively.  NOTE 24.  SUBSEQUENT EVENTS  Acquisition of Interest in Beijing Illumination Pursuant to a Purchase Agreement dated March 29, 2006 by and among the Company and Aeneas, the Company acquired 5.0% of the shares of Beijing Illumination on June 29, 2006 in exchange for the issuance of 1,250,000 common shares of the Company to Aeneas. Pursuant to a Purchase Agreement dated April 3, 2006 by and among the Company and Aeneas, the Company acquired an additional 15.0% of the shares of Beijing Illumination on June 29, 2006 in exchange for the issuance of 1,826,923 common shares of the Company to Aeneas. In aggregate, the Company owns 960 of the 1,250 issued and outstanding ordinary shares of Beijing Illumination, representing approximately 76.8% of the shares of Beijing Illumination as of June 29, 2006.  Formation of Pro Shing Construction Team Macau Limited  On June 19, 2006, we incorporated a joint venture company named Pro Shing Construction Team Macau Limited (Pro Shing). TTIL, our wholly-owned subsidiary, holds 80% of the share capital of Pro Shing and Proficiency Macau Construction Company Limited, a Macau based construction company holds the remaining 20% of the share capital of Pro Shing.  Award of Tender to Lightscape Macau      - 66 -   On April 19, 2006, Lightscape Macau received a Letter of Award (LOA) amounting to approximately $2,250,000 for the design, supply, installation, testing and commissioning of tailor-made lighting solutions for the outside facade wall of the Galaxy StarWorld Hotel in Macau. Pursuant to the terms of the LOA, TTDL has executed a joint and several guarantees together with the other joint venture partner to cover all of the obligations and liabilities of Lightscape Macau under and arising out of the domestic sub-contract contemplated in the LOA.     - 67 -   ITEM 8.
        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.  None. ITEM 8A.
        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, 2006, we have 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 has identified certain weaknesses in internal controls which the management are in the process of rectifying the weaknesses.  There have been no significant changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting. 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. ITEM 8B.
        OTHER INFORMATION None. PART III ITEM 9.
        DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; 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 executive officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office.  Our directors, executive officers and the executive officers of our operating subsidiaries, as well as the positions held, age and duration of appointment for such persons are as follows: Name
        Position Held with our Company  and/or our Operating Companies
        AgeBondy Tan
        Director, President, Secretary, Treasurer and Chief Executive Officer of our company from January 13, 2005, and President and Chief Executive Officer of Tech Team and Tech Team Development
        39Richard Wong
        Director of our company from January 13, 2005
        55Charles Ming
        Director of our company from January 13, 2005
        71Charles Cheung
        Director of our company from January 13, 2005
        70Carrie Cheng
        Director of our company from January 13, 2005
        41Cheuk Lap Chow
        Director of our company from June 5, 2006
        54Edmand Yuk Man Wong
        Director of our company from June 5, 2006
        49       - 68 -    Kwok Tin Tang
        Director of our company from June 5, 2006
        55 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.  From October 1999 to present, Mr. Tan has served as the Chief Executive Officer and a director of Tech Team Development.  Mr. Tan incorporated Tech Team Development 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 & 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. RICHARD WONG Richard Wong is a director of our company.  From 1997 to present, Mr. Wong has served as a consultant with Asian Fund Consultants and Cyril Fung Associates.  In these positions, Mr. Wong provides capital-raising, strategic planning and corporate development services to Asian companies in a variety of industries including financial services, environmental technology, energy and information technology.  Mr. Wongs experience includes an additional 15 years of finance, investment management, capital raising and consulting roles in the Asia Pacific region.  His former positions include Regional Representative for State Street Bank of Boston in Singapore, where he was responsible for promoting mutual funds, commercial banking services and global custodian services in Asian markets.  Mr. Wong also served as Managing Director for a wholly-owned subsidiary of Union Bank of Switzerland in Hong Kong, where he
established a China private equity fund.  Mr. Wong holds a Bachelor of Arts degree from Princeton University, as well as a Juris Doctor degree from Cornell Law School. CHARLES MING Charles Ming is a director of our company.  From 1989 to present, Mr. Ming has served as owner and director of Charles Ming & Associates Ltd., an architectural and project development consulting company based in Hong Kong.  In this role as principle, Mr. Ming provides overall strategic direction and planning, management leadership and relationship development.  Mr. Mings experience includes an additional 10 years of financial and corporate development experience within the gaming and mining businesses.  He has previously served as Chairman of Gold Rush Gaming & Mining Corp. and as a Director of Great Canadian Casino Corp., both public companies.  Mr. Ming also currently serves as a Director of Magnum dOr Resources Inc., a U.S. public company with a class of securities subject to the requirements of section 15(d) of the Securities Exchange Act.  Mr. Ming is a qualified architect within Hong
Kong, Australia, Great Britain and Canada. CHARLES CHEUNG Dr. Charles Cheung Wai Bun, Justice of Peace (J.P.) is a director of our company.  Dr. Cheung is also Group Chief Executive and Executive Deputy Chairman of Mission Hills Group which is engaged in luxurious property development, golfing resort and hotel business in Mainland, China.  He is also an independent Non-executive Director and Chairman of Audit Committee of five publicly listed companies in Hong Kong,  K. Wah International Holdings Limited, Galaxy Entertainment Group Limited, Pioneer Global Group Limited, Prime Investments Holdings Limited and Shanghai Electric Group Company Limited which is one of the largest state-owned     - 69 -   corporations in China.   Dr. Cheung is also a Senior Adviser to the Metropolitan Bank & Trust Company, the largest commercial bank in the Philippines.  He has over 30 years experience in the senior management of companies in various industries including over 22 years experience of banking business in senior management positions.   He holds an honorary doctorate degree, a master degree and a bachelor of science degree in business administration from New York University. He was a former director and adviser of the Tung Wah Group of Hospitals, the largest charitable organization in Hong Kong.  Dr. Cheung was a member of a number of government committees of the Hong Kong Government.  He was re-appointed by the Hong Kong Government as a member of the Estate Agents Authority in November 2004.  Dr. Cheung was awarded Listed Company Non-Executive Director Award at the Hong Kong Directors of the Years Awards 2002. CARRIE CHENG Carrie Cheng is a director of our company.  From 1996 to 2002, Ms. Cheng served as Sales and Marketing Controller, Hong Kong Branch for Asia Pulp and Paper Co. Ltd., the largest pulp and paper manufacturer in Asia and among the ten largest in the world.  In this role, Ms. Cheng managed sales teams and distributor relationships, developed and implemented marketing plans, public relations campaigns and pricing strategies, and led the development of group business in Hong Kong and China.  From 2002 to present, Ms. Cheng has served as a Consultant to Tomi Fuji Corporation Limited, a diversified trading company active in power supply, pulp and paper. In this role, Ms. Cheng is leading the creation and management of an energy management services team targeting the Chinese and Indonesian markets.  Ms. Chengs experience includes an additional 8 years of sales and marketing experience within the pulp and paper
industry.  Ms. Cheng holds a Bachelor of Business Studies with a major in marketing from University of Hong Kong Polytechnic. CHEUK LAP CHOW Cheuk Lap Chowis a non-executive director of our company. Mr. Chow is a solicitor in Hong Kong and a senior partner of Messrs. C.L. Chow & Macksion Chan, Solicitors. Mr. Chow has extensive legal advisory experience, and holds a Bachelor of Science in Economics from the University of London. EDMAND YUK MAN WONG Edmand Yuk Man Wong is a non-executive director of our company. Mr. Wong has held various senior positions in communications departments of government agencies, the Hong Kong Jockey Club, a major international non-profit charity, and two of the top post-secondary educational institutions in Hong Kong. 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 a non-executive director of our company. Mr. Tang is an associate member of The Hong Kong Institute of Company Secretaries. For the past 20 years, Mr. Tang has operated as the General Manager of Martin Tang Accountants which provides accounting, company secretarial and business consultancy services to companies in Hong Kong. Significant Employees Our significant employees are appointed by our executive officers and hold office until their death, resignation or removal from office.  Our significant employees and the significant employees of our operating subsidiaries, as well as the positions held, age and duration of appointment for such persons are as follows: Name
        Position Held with our Company  and/or our Operating Companies
        AgeBo Wu
        Chief Engineer of Tech Team Development (Zhuhai)
        46Augustine Cheung
        Associate Director of Tech Team Development
        56Kam Wah Lee
        Associate Director of Tech Team Development
        54       - 70 -    Pete Tin
        Technical Advisor of Tech Team Development
        39 Business Experience of our Significant Employees The following is a brief account of the education and business experience of each significant employee of our company or our companys wholly-owned operating subsidiaries 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. BO WU Bo Wu is the Chief Engineer of Tech Team Development (Zhuhai), our wholly-owned subsidiary and operating company.  During 1999, Mr. Wu was an independent consultant in Zhuhai, China, where he provided engineering, project management and technical design consultancy services to a variety of clients.  From 2000 to 2002, Mr. Wu served as Technical Director with Onex Co. Limited, where he led research and development initiatives related to electrical and electronic engineering, and systems automation.  From 2002 to present, Mr. Wu has served as Chief Engineer with Tech Team Development (Zhuhai).  In this role, Mr. Wu is responsible for leading the research, design and product development activities for the Tech Team group.  Mr. Wus other experience include 10 years of electrical and electronic engineering research and development with the University of Guangxi, including Director of the Research &
Development Centre where he oversaw the activities of 20 research laboratories.  Mr. Wu has also held research and development positions with Philips Corporation and Fu Hua Electrical Equipment Limited.  Mr. Wu also served for three years as Chief Advisor and Committee Member of the Provincial Council of Electronic Engineering in Zhuhai.  Mr. Wu holds a Bachelor of Engineering with a major in Electronics and Automation from the University of Guangxi, and he is a Registered Engineer in China. AUGUSTINE CHEUNG Augustine Cheung is an Associate Director of Tech Team Development, our wholly-owned subsidiary and operating company.  From 1998 to 2000, Mr. Cheung served as Director and General Manager of Mansion Holding Limited, a Hong Kong listed company providing energy management services and other building engineering and maintenance services.  In this role, Mr. Cheung was responsible for the day-to-day management and business development functions for the company.  From 2000 to 2001, Mr. Cheung served as the principal consultant for Honeywell Limiteds Home and Building Control unit, where he provided strategic marketing services related to the development of the units business in Greater China.  From 2000 to 2003, Mr. Cheung also served as Director and General Manager of Northcroft Management Consultants Limited, where he developed the firms facilities management consultancy business in China and
Hong Kong.  From early 2004 to present, Mr. Cheung has served as Associate Director with Tech Team Development Limited.  In this role, Mr. Cheung is responsible for planning, relationship building and business development.  Mr. Cheungs experience also includes 26 years as an architect, project manager and construction manager for major property development projects in Hong Kong, China, Macau and Thailand.  Mr. Cheung holds a Bachelor of Architecture from the University of Hong Kong, a Master of Arts (Architecture) from the City University of Hong Kong, is a Registered Architect in Hong Kong and a member of the International Facilities Management Association. KAM WAH LEE Kam Wah Lee is an Associate Director of Tech Team Development, our wholly-owned subsidiary and operating company.   From 1996 to 2000, Mr. Lee served as Managing Director of Parsons Brinkerhoff (Asia) Ltd., one of the worlds leading engineering, project and construction management firms.  In this role, Mr. Lee was responsible for establishing and growing the Parsons Brinkerhoff Engineering Technology and Parsons Brinkerhoff Constructors (Asia) subsidiary offices in China.  From 2000 to 2002, Mr. Lee served as Chairman of Parsons Brinkerhoff (Asia) and its China and Korea subsidiaries, where he was responsible for the overall operations and performance of the group.  From 2002 to 2003, Mr. Lee served as Director of Northcroft Management Consultants Ltd., where he provided project, construction and facility management consulting services.  From early 2004 to present, Mr. Lee has served as Associate
Director of Tech Team Development Limited.  In this role, Mr. Lee is responsible for planning, relationship building and business development.  Mr. Lees experience also includes 25 years of engineering and managerial positions related to property development projects throughout East Asia.  Mr. Lee holds a Master of Science (Mechanical Engineering) from Aston University in the United Kingdom and is a Fellow of the Hong Kong Institution of Engineers.      - 71 -   PETE TIN Pete Tin is the Technical Advisor of Tech Team Development, our wholly-owned subsidiary and operating company.  From 1997 to 2001, Mr. Tin served as Senior Engineering Manager for Industrial Design Corporation (Asia) Pte. Ltd., an industrial design and construction management subsidiary of CH2M HILL based in Singapore. In this role, Mr. Tin designed and managed a wide variety of industrial projects including thermal energy storage systems, district cooling systems and facilities management systems for major clients such as Motorola and Hewlett Packard.  From 2001 to present, Mr. Tin has served as Senior Energy Consultant with Jurong Consultants Pte. Ltd. based in Singapore.  In this role, Mr. Tin designed and managed installation of a variety of district cooling, thermal energy storage and energy management systems for large industrial clients in Singapore, India, Vietnam and China. Mr. Tins experience
includes an additional 6 years of engineering and project management positions in the United Kingdom and Singapore.  Mr. Tin holds a Bachelor of Engineering (Electronics) degree and a Bachelor of Engineering (Mechanical) degree from the University of Manchester Institute of Technology, and a Master of Science (Engineering) degree from the University of Wales.  He is a member of the society of Instrumentation and Control Engineers (United States) and the Energy Engineers Association (United Kingdom). 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. Audit Committee Effective June 6, 2006, our companys board of directors adopted an Audit Committee Charter and approved the formation of an Audit Committee.  Our Audit Committee undertakes an independent review of our companys financial statements, and meets with management and our independent auditors to determine the adequacy of internal controls and other financial reporting matters.  The members of the Audit Committee are Richard Wong, Cheuk Lap Chow and Kwok Tin Tang.  Our board of directors has determined that each member of the Audit Committee is independent as the term is used in Rule 10A-3 of the Securities Exchange Act of 1934, as amended, and the definition of independent director as defined in section 4200 of the Marketplace Rules of the NASD.  We will provide a copy of the Audit Committee Charter to any person without charge, upon request.  Requests can be sent to: Global Innovative
Systems Inc., 16/F., Hang Seng Mongkok Building, 677 Nathan Road, Mongkok, Kowloon, Hong Kong.      - 72 -   Audit Committee Financial Expert Our board of directors has determined that Richard Wong qualifies as an Audit Committee financial expert as defined in Item 401(e)(2) of Regulation S-B. 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: Global Innovative Systems Inc., 16/F., Hang Seng Mongkok Building, 677 Nathan Road, Mongkok, Kowloon, 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, 2006, we are not aware of any director, executive officer or beneficial owner of more than 10% of the outstanding common stock who or which has not timely filed reports required by Section 16(a) of the Exchange Act during or in respect of such fiscal year, except Initial Statement of Beneficial Ownership of Securities on Form 3 that was not filed by Ko Yin, who became a shareholder holding more than 10% of our common stock on February 27,
2006.  Ko Yin corrected this omission by filing a Form 3 with the Securities and Exchange Commission on March 15, 2006.      - 73 -    ITEM 10.
        EXECUTIVE COMPENSATION. Executive Compensation No executive officer of our company received annual salary and bonus in excess of $100,000 for our fiscal years ended March 31, 2006 or 2005.  As of the date of this annual report, we have no compensatory plan or arrangement with respect to any officer that results or will result in the payment of compensation in any form from the resignation, retirement or any other termination of employment of such officers employment with our company, from a change in control of our company or a change in such officers responsibilities following a change in control. Bondy Tan, as Chief Executive Officer of Tech Team, our wholly-owned operating subsidiary, was paid a salary of $107,692 for each of our fiscal years ended March 31, 2006, 2005 and 2004.  Other than Bondy Tan, there were no executive officers of any of our wholly-owned subsidiaries serving as of March 31, 2006, and no executive officers who served as such during the fiscal years 2006, 2005 and 2004, whose total salary and bonus exceeded $100,000 per year.  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 three most recently completed fiscal years ended 2006, 2005 and 2004. Employment/Consulting Agreements Tech Team, our wholly-owned subsidiary entered into an employment contract with executive officer Bondy Tan. 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 with our company or any of our subsidiaries. Our compensation program for our executive officers is administered and reviewed by our board of directors.  Historically, executive compensation consists of a combination of base salary and bonuses.  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, acquisition of assets, development of corporate opportunities and completion of financing. Stock Option Plan Currently, our company does not have a stock option plan in favor of any director, officer, consultant or employee of our company. Stock Options/SAR Grants There were no grants of stock options or stock appreciation rights during our fiscal year ended March 31, 2006. Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Values There were no options exercised by any officer or director of our company during our fiscal year ended March 31, 2006. Long-Term Incentive Plan Currently, our company does not have a long-term incentive plan in favor of any director, officer, consultant or employee of our company. Directors Compensation 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     - 74 -   committees may be allowed like reimbursement and compensation for attending committee meetings.  During our fiscal year ended March 31, 2006, William McGinty was paid $6,000, as a director of our company, to attend director meetings. ITEM 11.
        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The following table sets forth, as of June 29, 2006, certain information with respect to the beneficial ownership of our companys 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 and the directors and executive officers of our operating subsidiaries.  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 of Beneficial Owner
        Percent of Class (1)Kwok, Chiu FaiRoom 1512, Yuk Ping House, Long Ping Estate, Yuen Long, New Territories, Hong Kong
        N/A
        3,124,913(2)
        9.3%Ho, Tai KwanFlat D, 3/F, Tower 3, 19 Homantin Hill Road, Kowloon, Hong Kong
        N/A
        3,124,913(3)
        9.3%Aeneas Portfolio Company LPWalker House, Mary Street, Georgetown, Grand Cayman, Cayman Islands, British West Indies
        N/A
        3,076,923(4)
        9.2%Ko, Yin1108-9, 11/F, Tower 2, Enterprise Square, 9 Sheung Yuet Road, Kowloon Bay, Kowloon
        Director of Beijing Illumination (Hong Kong) Limited
        10,606,230
        31.6%Bondy TanFlat E, 39/F., Tower 2, Kornville, 38 Yau Man Street, Quarry Bay, Hong Kong
        Director, President and Chief Executive Officer of our company and President and Chief Executive Officer of Tech Team and Tech Team Development
        4,335,778 (5)
        12.9%Richard WongFlat 3A, 71 Lyttelton Road, Mid-Levels, Hong Kong
        Director of our company
        Nil
        NilCharles MingUnit 707, New World Tower, Tower 1, 16-18 Queens Rd., Central, Hong Kong
        Director of our company
        729,146 (6)
        2.2%Charles CheungA2, 6/F Evergreen Villa, 43 Stubbs Road, Hong Kong
        Director of our company
        1,458,293 (7)
        4.3%       - 75 -    Carrie ChengHouse 30, Phase I, Marina Cove, Sai Kung, Hong Kong
        Director of our company
        Nil
        NilCheuk Lap ChowRooms 501-503, 5/F., Hang Seng Building, 77 Des Voeux Road Central, Hong Kong
        Director of our company
        Nil
        NilEdmand Yuk Man WongCommunity College of City University,
6/F., Mong Man-wai Building,
Kowloon Tong,
Kowloon,
Hong Kong
        Director of our company
        Nil
        NilKwok Tin TangRoom B, Block A, 1/F., Hoi Tao Building, 11 Belchers Street, Sai Wan, Hong Kong
        Director of our company
        Nil
        NilDirectors and Executive Officers as a Group
        
        17,129,447
        51%  (1)
        Based on 33,612,642 shares of common stock issued and outstanding as of June 29, 2006.  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 includes voting or investment power with respect to securities.  Shares of common stock subject to options or warrants currently exercisable or exercisable within 60 days are deemed outstanding for purposes of computing the percentage ownership of the person holding such options or warrants, but are not deemed outstanding for purposes of computing the
percentage ownership of any other person.   (2)
        Kwok, Chiu Fai indirectly beneficially owns 3,124,913 shares of our company held by Tomi Fuji Corporation Limited. Kwok, Chiu Fai directly owns 50% of the issued and outstanding shares of Tomi Fuji Corporation Limited.   (3)
        Ho, Tai Kwan indirectly beneficially owns 3,124,913 shares of our company held by Tomi Fuji Corporation Limited.  Ho, Tai Kwan owns all of the issued and outstanding shares of Forward Trade Limited, a company which directly owns 50% of the issued and outstanding shares of Tomi Fuji Corporation Limited.   (4)
        The beneficial owner and general partner of Aeneas Portfolio Company, LP is Aeneas Global Partners, LP.   (5)
        Bondy Tan indirectly beneficially owns 2,730,685 shares of our company held by Glory Hill Holdings Limited, a company which he solely owns.  Bondy Tan indirectly beneficially owns 1,033,501 shares of our company held by Full Scope Group Limited, a company which he solely owns.  Bondy Tan indirectly beneficially owns 571,592 shares of our company held by Excel Means Limited, a company which he solely owns.   (6)
        Charles Ming indirectly beneficially owns 729,146 shares of our company held by Sure Vantage Enterprise Limited.  Charles Ming owns 50% of the issued and outstanding shares of Sure Vantage Enterprise Limited.   (7)
        Charles Cheung indirectly beneficially owns 1,458,293 shares of our company held by Leisure Assets Limited, a company which he solely owns.  ITEM 12.
        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.      - 76 -   Other than as described below, we have not been a party to any transaction, proposed transaction, or series of transactions during the last two years in which the amount involved exceeds $60,000, and in which, to our knowledge, any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons has had or will have a direct or indirect material interest: - During our companys fiscal year ended March 31, 2006, Bondy Tan, a director and the Chief Executive Officer of our company, made a loan of $3,689,446 to our company.  The loan is an oral, unsecured and non-interest bearing loan which has no fixed terms of repayment and has no terms for the conversion of the loan into shares.  The amount of the loan outstanding as of March 31, 2006 was $3,375,283. - Our company sold goods amounting to Nil and $57,063 during the years ended March 31, 2006 and 2005 to Tomi Fuji Corporation, a shareholder holding over 5% of our companys common shares.  Additionally, Tomi Fuji Corporation paid on behalf of our company certain purchases, operating expenses, including salaries, amounting to $879,343 and $75,390 during the years ended March 31, 2006 and 2005. Our company repaid $1,101,432 to Tomi Fuji Corporation during the year ended March 31, 2006. During the year ended March 31, 2005, Tomi Fuji Corporation had provided assistance through Bondy Tan, a director and Chief Executive Officer of our company, to our company in the amount of $478,700.  As such, our company assigned certain account receivables to Tomi Fuji Corporation for factoring the same to a financial institution to release the obligation of our company to the director. - Tech Team Development and Tomi Fuji Energy Management Consultants, Bondy Tan, a director and the chief executive officer of our company, and Ho Tai Kwan, an affiliate of our company, have guaranteed the rent payments of Tomi Fuji Corporation to lease our office premises for the period from April 16, 2005 to April 15, 2007.  Our company obtained more favourable leasing terms including a longer rent free period through this guarantee arrangement. - Our company charged sundry income of Nil and $679 for the years ended March 31, 2006 and 2005 to Tech Team Media Limited, a company in which Bondy Tan, a director and Chief Executive Officer of our companyhas a controlling interest. As of March 31, 2006, the amounts due from or to related companies and directors represent cash advances to or from them and are unsecured and have no fixed repayment terms. Except for an amount of $526,448 due to a director of a subsidiary, Mr. Ko Yin, carried interest at 9.6% per annum and another amount of $517,962 due to a minority shareholder of a subsidiary, Aeneas Portfolio Company LP, carried interest at 20% per annum, others are non-interest bearing.  The balances related to such advances are as follows: March 31,
2006
$
        
        March 31,
2005
$Amount due from a related companyLightscape Technology (Macau) Limited
        385,527
        
        -Mission  Hill Golf Club
        -
        
        15,501385,527
        
        15,501ITEM 13.
        EXHIBITS.Exhibit Number
        Description(2)
        Plan of Purchase, Sale, Reorganization, Arrangement, Liquidation or Succession2.1
        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) Bylaws3.1
        Charter (incorporated by reference from our Registration Statement on Form 10-SB filed on April 11, 2000).       - 77 -    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)(10)
        Material Contracts10.1
        Share Purchase Agreement, dated September 30, 2003, between Global Innovative Systems Inc., Fraser Lawrie and Robert Fletcher (incorporated by reference from our Current Report on Form 8-K filed on November 7, 2003).10.2
        Acquisition Agreement, dated January 22, 2003, between Ken Bergestad, Walter Niemi, Lloyd Olson, Fraser Lawrie, Robert M. Fletcher and Global Innovative Systems Inc. (incorporated by reference from our Annual Report on Form 10-KSB filed on December 23, 2003).10.3
        Letter of Intent, dated September 21, 2004, between Global Innovative Systems Inc. and the shareholders of Tech Team Holdings Limited (incorporated by reference from our Annual Report on Form 10-KSB filed on December 30, 2004)10.4
        Amendment to Letter of Intent, dated October 20, 2004, between Global Innovative Systems Inc. and the shareholders of Tech Team Holdings Limited (incorporated by reference from our Annual Report on Form 10-KSB filed on December 30, 2004)10.5
        Sales Agreement dated March 27, 2002, between Tech Team Development Limited and Macau Jockey Club (incorporated by reference from our Current Report on Form 8-K filed on January 18, 2005)10.6
        Sales Agreement dated June 10, 2003, between Tech Team Development Limited and Dongguan Guan Lan Golf Club Company Limited.10.7
        Sales Agreement dated March 31, 2004, between Tech Team Development Limited and K. Wah Concrete Co. Ltd. (incorporated by reference from our Current Report on Form 8-K filed on January 18, 2005)10.8
        Assignment Agreement dated February 11, 2004, between Tech Team Development Limited and Southern Cross Technologies Limited (incorporated by reference from our Current Report on Form 8-K filed on January 18, 2005)10.9
        Assignment Agreement dated February 11, 2004, between Grandplex Development Limited and Scnider Limited (incorporated by reference from our Current Report on Form 8-K filed on January 18, 2005)10.10
        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)10.11
        Management Contract between Tech Team Development Limited and Victor Chang (incorporated by reference from our Current Report on Form 8-K filed on January 18, 2005)10.12
        Management Contract between Grandplex Development Limited and Ronny Lau (incorporated by reference from our Current Report on Form 8-K filed on January 18, 2005)10.13
        Management Contract between Tech Team Development Limited and Mandy Kee (incorporated by reference from our Current Report on Form 8-K filed on January 18, 2005)       - 78 -    10.14
        Management Contract between Tech Team Development Limited and Raymond Ho (incorporated by reference from our Current Report on Form 8-K filed on January 18, 2005)10.15
        Proposal on Sales and Marketing Services to Tech Team Development Ltd. (incorporated by reference from our Current Report on Form 8-K filed on January 18, 2005)10.16
        Sales Agreement dated February 7, 2005, between Tomi Fuji Energy Management Services Consultants Limited and Versatech Group Limited (incorporated by reference from our Quarterly Report on Form 10-QSB filed on February 14, 2005)10.17
        Subscription Agreements of the following private placements that were issued to non-U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in offshore transactions relying on Regulation S and/or Section 4(2) of the Securities Act of 1933 (incorporated by reference from our Annual Report on Form 10-KSB filed on July 18, 2005):Name
Volitans LimitedSin Mei YanPhilip Yu-Hong WongSiu Hung ChanHo Sum YeungForever Success Company LimitedChun Hok YeungYin Mee Ho
        Date ofAgreement
May 17, 2005May 27, 2005May 27, 2005May 27, 2005May 27, 2005May 27, 2005May 27, 2005May 27, 2005
        Numberof Units
133,333200,000106,393100,000100,000100,00066,66750,000
        GrossProceeds
$200,000$300,000$159,590$150,000$150,000$150,000$100,000$75,000Each unit consists of one share and one share purchase warrant exercisable for a period of twelve months at an exercise price of $2.0010.18
        Subscription Agreements of the following private placements that were issued to non-U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in offshore transactions relying on Regulation S and/or Section 4(2) of the Securities Act of 1933 (incorporated by reference from our Annual Report on Form 10-KSB filed on July 18, 2005):NameRonald ChongRonco Family Holdings LimitedAllan WattThomas N. Bell
        Date ofAgreementMay 17, 2005May 17, 2005May 26, 2005May 26, 2005
        Numberof Units12,0008,00010,00010,000
        GrossProceeds$18,000$12,000$15,000$15,000Each unit consists of one share and one share purchase warrant exercisable for a period of twelve months at an exercise price of $2.0010.19
        Sales Agreement dated June 8, 2005, between Tomi Fuji Energy Management Services Consultants Limited and Geopower Corporation (incorporated by reference from our Quarterly Report on Form 10-QSB filed on August 22, 2005)10.20
        Addendum to Sales Agreement dated June 16, 2005, between Tomi Fuji Energy Management Services Consultants Limited and Geopower Corporation (incorporated by reference from our Quarterly Report on Form 10-QSB filed on August 22, 2005)       - 79 -    10.21
        Assignment Agreement dated June 16, 2005, between Tomi Fuji Energy Management Services Consultants Limited and GD Inet Electric Construction Co. Ltd. (incorporated by reference from our Quarterly Report on Form 10-QSB filed on August 22, 2005)10.22
        Sale and Purchase Agreement dated September 27, 2005, between Glory Goal Investments Limited, Global Innovative Systems Inc., and Ko Yin (incorporated by reference from our Current Report on Form 8-K filed on October 3, 2005)10.23
        Option Deed dated September 27, 2005, between Admire Fame Invests Limited, Gain Huge Investments Limited, Splendid Fortune Investments Limited, Global Innovative Systems Inc. and Ko Yin (incorporated by reference from our Current Report on Form 8-K filed on October 3, 2005)10.24
        Amendment to Sale and Purchase Agreement and Option Deed dated October 3, 2005, between Glory Goal Investments Limited, Admire Fame Investments Limited, Gain Huge Investments Limited, Splendid Fortune Investments Limited, Ko Yin and Global Innovative Systems Inc. (incorporated by reference from our Current Report on Form 8-K filed on October 3, 2005)10.25
        Supplemental Deed Agreement dated February 22, 2006 between Admire Fame Investments Limited, Gain Huge Investments Limited, Splendid Fortune Investments Limited, Ko Yin and Global Innovative Systems Inc. (incorporated by reference from our Current Report on Form 8-K filed on February 28, 2006)10.26
        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)10.27
        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)10.28
        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)10.29
        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)10.30
        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)(14)
        Code of Ethics14.1
        Code of Ethics (incorporated by reference from our Annual Report on Form 10-KSB filed on December 30, 2004)(31)
        Rule 13a-14(a)/15d-14(a) Certifications31.1*
        Certification of Principal Executive Officer and Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(32)
        Section 1350 Certifications32.1*
        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      - 80 -    ITEM 14.
        PRINCIPAL ACCOUNTANT FEES AND SERVICES Fees Paid to Independent Accountant 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.  On March 30, 2005, our company retained Deloitte Touche Tohmatsu, an independent registered public accounting firm, to provide audit services during our prior fiscal year ended March 31, 2005.  Our company paid the following fees to our independent accountants during the fiscal years ended March 31, 2006 and March 31, 2005: Fiscal year ended March31,2006
        Fiscal year ended March31,2005Audit Fees
- Deloitte Touche Tohmatsu
- Clancy and Co., PLLC
- BDO McCabe Lo
        $74,583
$19,683
$120,000
        $315,076
-
-Audit Related Services
        Nil
        NilTax Fees
- Deloitte Touche Tohmatsu
- Clancy and Co., PLLC
        -
$10,500
        $25,812
-All Other Fees
        Nil
        NilTotal
        $224,766
        $340,888 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 BDO McCabe Lo Limited for professional services rendered for the audit of our annual financial statements for the fiscal year ended March 31, 2006 were $120,000.  For the fiscal year ended March 31, 2006, Clancy and Co., PLLC and Deloitte Touche Tohmatsu billed our company an aggregate fee of $94,266 for assurance or services relating to our quarterly financial statements.  Our audit fees for our prior fiscal year ended March 31, 2005 were $315,076. Audit Related Services.We did not incur any audit related services billed by BDO McCabe Lo Limited, Clancy and Co., PLLC or by Deloitte Touche Tohmatsu during the fiscal year ended March 31, 2006.  Our audit related services for our prior fiscal year ended March 31, 2005, 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 Clancy and Co., PLLC of $10,500 during the fiscal year ended March 31, 2006.  The aggregate fees billed during our prior fiscal year ended March 31, 2005, for products and services provided by our former auditor for tax compliance, tax advice and tax planning, were $25,812. All Other Fees.We did not incur any additional fees billed by BDO McCabe Lo Limited, Clancy and Co., PLLC or by Deloitte Touche Tohmatsu other than the fees listed above during the fiscal year ended March 31, 2006 and we did not incur any additional fees billed by our former auditor other than the fees listed above during our prior fiscal year ended March 31, 2005.      - 81 -   Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before BDO McCabe Lo Limited 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 board of directors, who acted as our audit committee prior to the appointment of our audit committee on June 6, 2006, pre-approved all services provided by our independent accountant.  Our board of directors 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 board of directors before or after the respective services were rendered. Our board of directors has considered the nature and amount of the fees billed by BDO McCabe Lo Limited and believes that the provision of the services for activities unrelated to the audit is compatible with maintaining the independence of BDO McCabe Lo Limited. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GLOBAL INNOVATIVE SYSTEMS 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, 2006 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 and Chief Executive Officer and Director(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
        
        July 14, 2006/s/ Richard Wong
Richard Wong
        
        Director
        
        July 14, 2006/s/ Charles Ming
Charles Ming
        
        Director
        
        July 14, 2006/s/ Charles Cheung
Charles Cheung
        
        Director
        
        July 14, 2006/s/ Carrie Cheng
Carrie Cheng
        
        Director
        
        July 14, 2006/s/ Cheuk Lap Chow
Cheuk Lap Chow
        
        Director
        
        July 14, 2006/s/ Edmand Yuk Man Wong
Edmand Yuk Man Wong
        
        Director
        
        July 14, 2006/s/ Kwok Tin Tang
Kwok Tin Tang
        
        Director
        
        July 14, 2006