Green Solutions China 10K/A 2009 Annual report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1 to FORM 10-K

(Mark One)

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

For the fiscal year ended June 30, 2009

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

For the transition period from ___________ to ___________

Commission File No. 000-26777

China Green, Inc.

(Name of small business issuer in its charter)

DELAWARE	75-3269053
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
Room 3601, the Centre, Queen’s Road no.99 Central, Hong Kong
(Address of principal executive offices)	(Zip Code)

(852) 3691-8831

(Registrant’s telephone number, including area code)

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

Title of each class registered:	Name of each exchange on which registered:
None	None

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $0.00001 (Title of class)

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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

Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer (Do not check if a smaller reporting company)	o	Smaller reporting company	x

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

Revenues for year ended June 30, 2009: $11,676,141.

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $0.

As of October 13, 2009, the registrant had 12,500,000 shares of its common stock outstanding.

Documents Incorporated by Reference: None.

TABLE OF CONTENTS

		PAGE
	PART I
ITEM 1.	Business	1
ITEM 1A.	Risk Factors	3
ITEM 2.	Properties	3
ITEM 3.	Legal Proceedings	3
ITEM 4.	Submission of Matters to a Vote of Security Holders	3

	PART II
ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	4
ITEM 6.	Selected Financial Data	4
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	4
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	13
ITEM 8.	Financial Statements and Supplementary Data	F-1
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	14
ITEM 9A(T).	Controls and Procedures	14
ITEM 9B.	Other Information


	PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	15
ITEM 11.	Executive Compensation	16
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	16
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	17
ITEM 14.	Principal Accounting Fees and Services	18
		18
	PART IV
ITEM 15.	Exhibits, Financial Statement Schedules	19

SIGNATURES		20

PART I

ITEM 1. BUSINESS

Corporate History and Structure

We were incorporated in the State of Delaware on July 11, 2008, formed as a vehicle to pursue a business combination. On August 13, 2009, we closed a share exchange and stock purchase transaction with the shareholder of Glorious Pie Limited, a British Virgin Islands corporation (“Glorious Pie”), and the representative of the Investors in our private placement in reliance upon the exemption provided by Regulation S promulgated under the Securities and Exchange Act of 1934, as amended. As a result of the closing of the share exchange transaction, we became the 100% holding company of Glorious Pie which in turn is the 100% holder company of Earn Bright Development Limited, a Hong Kong corporation. Effective September 24, 2009, we changed our company name from “China Eco-Hospitality Operations, Inc.” to “China Green, Inc.”

Business Overview

We operate our eco-hospitality business through our Hong Kong subsidiary which developed our business model – ECHOO (an acronym of Eco-Hospitality Operations) in the areas of hospitality investment projects and large-scale landscape architecture and engineering projects in China. We are specialized on providing greenery services to landscaping construction projects in China, including, but not limited to, design advice, trading and quality control of seeds, provision of seedling and performance management of landscaping engineering and plantation.

ECHOO is a business model developed on the basis of Green Theory created by us. The Green Theory is developed on the ground of two green philosophies, namely the Neo Tai Chi Concept and Magic of Duality, and is applied in the form of our innovative approaches, Connected Environmental Betterment Approach (CEBA) and Hospitality Investment and Management Approach (HIMA). The two approaches represent two different ways to market our business vision of building harmonious living environment with greenery services, reflected by providing resource-efficient engineering design, and green hotel investment and consultancy, respectively.

Business Model

HIMA Approach

Our HIMA approach focuses on cooperation with property owners, including hotel, housing estate and commercial building, to construct green accommodation, such as indoor eco-friendly living environment.

Facing strong competition in the hospitality industry in China, hotel owners are actively se

Landscaping plantation absorbs CO2 and improves environmental condition, which enhances the images of the districts where the local governments are based. Better natural environment can attract the flow-ins of investors and people with skills and talents, which are the driving force of regional development.

Marketing Opportunities

Current development driving forces in China are characterized by steady population growth, ongoing urbanization of the former agriculturally-based population, aggressive economic growth and rapid motorization. However, within the backdrop of impetus to fast speed urbanization, there is no comprehensive regional planning, nor national land development approach.

The consequence is a threat of a scattered low-density urbanization in the countryside and fast, uncontrolled and uncoordinated growth of the large city regions. The problem has caught the Chinese government's attention at the highest levels. In order to build a suitable environment for inhabitants, garden city construction is included in local government's agenda. It is also used as one of the measurements to evaluate the local government's performance.

We operate our business in one of the biggest contributor to global warming where has a great demand in environmental protection as the PRC government advocates the importance of environmental protection and the citizen wants more green area in their city. There is a huge market potential in China for ECHOO business model to grow because management believes we are among the few companies that are in meeting this continual demand of cost-efficient environment services through the abovementioned approaches – HIMA and CEBA approaches.

With our experience and expertise, management believes that we can satisfy the market need in green accommodation construction or refurbishment demanded from private sector and China government.

Marketing Strategy

As the Chinese government would increase its financial budget for environmental projects in the coming decades, it is foreseeable that the demand for our services would increases continually and widely spread out with the economic development based on the ground of the environmental policy and the greenery hospitality vision of the government.

We originate and develop our business model in China and aim to expand our business internationally. Domestically, we will expand our market through our local network. With respect to international development, in the near future our management shall explore and develop the Asia-Pacific market, e.g. Japan and Korea.

We will market our brand “ECHOO” as a leading industry benchmark in eco-living area construction to attract business and explore our market potential.

Competition

We are now positioned in a market with comparatively low competition as it is operating in a start-up eco-business market. We are the first company in the industry section engaged in assisting low ranking hotels in building eco-living construction through the HIMA Approach.

For landscape engineering project, even though there are servicer vendors offering similar services in the industry, we are favored by the local governments in the Guangdong province because with years of cooperation, the local governments have recognized our professional landscaping knowledge, international benchmarking and initial investment on the resources and labor via the CEBA approach.

Government Regulation

Our landscape design, construction and maintenance projects are subject to many federal, state and local requirements relating to the protection of the environment and we use environmentally sensitive materials in our maintenance processes. For example, we employ chemical fertilizer to treat some of our plants. We believe that eking partnership in green accommodation construction or refurbishment to improve the quality of their services and the image of their facilities, and to reduce pollution.

We have adopted flexible fee payment method. Instead of charging hotel owners a lump sum upon engagement of our services, we charge monthly installment in an amount equal to certain percentage of the hotel owner’s monthly revenue.

CEBA Approach

Our CEBA approach is related to outdoor eco-friendly landscaping projects financed by various levels of Chinese governments. Since the central Chinese government advocates (1) the importance of environmental protection and (2) CO2 emission reduction after Kyoto Protocol, hence local municipal governments have taken the initiative to improve landscaping in public infrastructure, such as highways. For these government-funded outdoor landscaping projects, we provide professional landscaping knowledge, international benchmarking and initial investment on the resources and labor. The government is only required to pay the full amount after the project is completed.

We operate our business in material compliance with all environmental laws and regulations, do not anticipate any material expenditure in order to meet environmental requirements and do not believe that future compliance with such laws and regulations will have a material adverse effect on our financial condition or results of operations. However, we could incur operating costs or capital expenditures in complying with more stringent environmental requirements in the future or with current requirements if they are applied to our facilities in a way we do not anticipate.

Our operations are also governed by many other laws and regulations covering our labor relationships, the zoning of our facilities, our general business practices and other matters. We believe that we are in material compliance with these laws and regulations and do not believe that future compliance with such laws and regulations will have a material adverse effect on our financial condition or results of operations.

ITEM 1A. RISK FACTORS

Not applicable to smaller reporting companies.

ITEM 1B. UNRESOLVED STAFF COMMENTS

We currently do not have any unresolved comments of issues with the Staff of the Corporation Finance Division of the U.S. Securities and Exchange Commission.

ITEM 2. PROPERTIES

Our executive office is located at Room 3601, the Centre, Queen’s Road no.99, Central, Hong Kong. The rentable space in this office consists of approximately 198 square meters (approximately 2,130 square feet). The lease agreement has a two year term which expires on July 31, 2011. The monthly rental payment is approximately $72,700.

ITEM 3.LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affect on our business, financial condition or operating results. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On August 21, 2009, pursuant to the written consent of our majority shareholders in lieu of a special meeting, we authorized the change of our company name from “China Eco-Hospitality Operations, Inc.” to “China Green, Inc.” (the “Name Change”) Pursuant to Section 14C of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we filed a preliminary statement and a definitive statement to notify our shareholders on August 25, 2009 and September 4, 2009. As a result of the effectiveness of the Name Change, our company name has been changed to “China Green, Inc.”

On August 13, 2009 (the “Closing Date”), we received a written consent in lieu of a special meeting of our shareholders from our shareholders holding 1,812,500 shares which represented 100% of our issued and outstanding voting stock, which authorized us to enter into a share exchange and stock purchase agreement (the “Share Exchange and Stock Purchase Agreement”) with Glorious Pie Limited (“Glorious Pie”), a British Virgin Island company, the sole shareholder of Glorious Pie (the “Glorious Pie Shareholder”) and the Representative of our investors, approved the resignation of Mr. Anthony Wong Wa Kei from our board of directors (the “Board”) and the appointment of Mr. Tai Chi Yip as a member of our Board. On the Closing Date, pursuant to the terms of the Agreement, we acquired all of the issued and outstanding common stock of Glorious Pie from the Glorious Pie Shareholder. In exchange, we issued to the Glorious Pie Shareholder, his designees or assigns, 10,355,000 shares of our common stock, representing approximately 82.84% of our common stock issued and outstanding after the closing of the share exchange transaction contemplated under the Share Exchange and Stock Purchase Agreement (the “Share Exchange”).

PART II

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

There is presently no public market for our shares of common stock. We anticipate applying for trading of our common stock on a national stock exchange or a national quotation system. However, we can provide no assurance that our shares of common stock will be traded on a national stock exchange or a national quotation system or, if traded, that a public market will materialize.

Holders

As of October 13, 2009, we had 300 record holders of our common stock.

Dividends

To date, we have not declared or paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.

Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.

Stock Option Grants

To date, we have not granted any stock options.

ITEM 6. SELECTED FIANANCIAL DATA

Not applicable because we are a smaller reporting company.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-K. The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

Overview

We operate our eco-hospitality business through our business model – ECHOO (an acronym of Eco-Hospitality Operations) in the areas of hospitality investment projects and large-scale landscape architecture and engineering projects in China. We are specialized on providing greenery services to landscaping construction projects in China, including, but not limited to, design advice, trading and quality control of seeds, provision of seedling and performance management of landscaping engineering and plantation.

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HIMA Approach

Facing strong competition in the hospitality industry in China, hotel owners are actively seeking partnership in green accommodation construction or refurbishment to improve the quality of their services and the image of their facilities, and to reduce pollution.

CEBA Approach

Qualitative and Quantitative Disclosure Regarding Market Risk

Credit Risk. We are exposed to credit risk from our cash at bank, fixed deposits and contract receivables. The credit risk on cash at bank and fixed deposits is limited because the counterparts are recognized financial institutions. Contract receivables are subject to credit evaluations. As we are getting more new customers and offering credit terms, financial efficiency, we believe that cash flow and controlling bad debt and late payment become more and more important. We carry out thorough research through public filing records available on our new customers, coupled with the employment of business intelligence information provider, before extending any credit to new customers. Different levels of credit periods and credit limits are granted to different customers according to their size, financial position, business position and payment history, among other factors, in order to offer the right credit terms to our customers to enhance competitiveness yet manage the risk. We have not recorded bad debt since inception.

Country Risk. The substantial portion of our business, assets and operations are located and conducted in Hong Kong and China. While these economies have 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 Hong Kong and 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.

Critical Accounting Policies and Estimates

Basis of presentation and consolidation: The accompanying consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America for consolidated financial information.

The consolidated financial statements are prepared on the basis with assumption the reverse merger was undergone at the beginning of July 1, 2007. The historical consolidated financial statements of the Company will be those of China Green, Inc. and of the consolidated entities from the July 1, 2007, the date of merger, and subsequent.

The consolidated financial statements include the accounts of the Company and its subsidiaries, Significant intercompany transactions have been eliminated in consolidation.

In connection with the reverse acquisition and recapitalization, all share and per share amounts will be retroactively restated.

Use of estimates: In preparing of the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, deferred income taxes and the estimation on useful lives of plant and machinery. Actual results could differ from those estimates.

Cash and Cash Equivalents: We consider all cash and other highly liquid investments with initial maturities of three months or less to be cash equivalents. As of June 30, 2008 and 2009, there were cash and cash equivalents of $364,485 and $849,457, respectively.

Revenue Recognition: Our revenue is generated from providing services in two aspects as follows:

i)	Designing and consultancy services in hotel facilities; and
ii)	Resource-efficient engineering business in greenery projects.

The revenue recognized by us is based on the Design and Consultancy agreement between us and the hotel where we provided the design, consultancy to the hotel and even with certain fixtures and assets provided to that hotel and hence share a certain percentage of gross revenue generated by the hotel facilities for certain years as the consideration.

Revenue from fixed-price and modified fixed-price construction contracts are recognized on the percentage-of-completion method, measured by the percentage of actual cost incurred to date for each contract. We would regularly and frequently reviews the estimated contract cost on each project being accepted and not yet finished to ensure the contract cost estimates is measured with the best knowledge of the personnel involved.

Accounts Receivable: Accounts receivables are recorded at the invoiced amount, net of allowances for doubtful accounts. We recognize an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility. An allowance for doubtful accounts is maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when we become aware of a customer’s inability to meets its financial obligations, such as in the case of bankruptcy filings pr deterioration in the customer’s operating results of financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted.

Accounting for the Impairment of Long-Lived Assets: We adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Live Assets” (“SFAS 144”), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. We periodically evaluate the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal. Based on its review, we believe that, as of June 30, 2009, there were no significant impairments of its long-lived assets.

Plant and Equipment: Plant and equipment, other than construction in progress, are stated at cost less depreciation and amortization and accumulated impairment loss.

Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plan and equipment are as follows:

Equipment and machinery	5 years
Furniture & fixtures	5 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to income as incurred, whereas significant renewable and betterments are capitalized.

Management considers that we have no residual value for plant and equipment.

Fair Value of Financial Instruments: SFAS No. 107, “Disclosures about Fair Values of Financial Instruments”, requires disclosing fair value to the extent practicable for financial instruments that are recognized or unrecognized in the balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement.

The carrying values of the financial instruments, including cash and cash equivalents, accounts and other receivables, approximate their fair values due to the short-term maturity of such instruments. The carrying amounts of borrowings approximate their fair values because the applicable interest rates approximate current market rates.

Cost of Revenue: Regarding the design and consultancy services to the hotel facilities, the respective cost of revenue includes the consultancy expenses in professional staff involved and the design and consultancy fee with other third-party experts, and also the depreciation expenses on those fixtures and movables assets being placed with the hotel by the Company.

Regarding the trading of seeding and provision of greenery engineering projects, the respective cost of revenue consists primarily of material costs, labor cost, subcontracting expenses, and related expenses, which are directly attributable to the greenery construction projects.

Income Taxes: Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax carry-forwards. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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 the consolidated statements of income and comprehensive income in the period that includes the enactment date.

The China Green accounts for income taxes under the liability method in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The China Green adopted the provisions of FASB Interpretation No. 48; “Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The China Green consider many factors when evaluating and estimating our tax positions and tax benefits, which may require yearic adjustments. At June 30, 2009, the China Green did not record any liabilities for uncertain tax position.

Foreign Currency Translation: We maintain our financial statements in the functional currency. The functional currency of us is the Renminbi (RMB). Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination often income for the respective periods.

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

	2009	2008
Year end RMB: US$ exchange rate	6.825	6.859
Average yearly RMB: US$ exchange rate	6.848	7.235

RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.

Comprehensive Income: SFAS No. 130, "Reporting Comprehensive Income", requires companies to classify items of other comprehensive income in a financial statement. Comprehensive income is defined as the change in equity of a business enterprise during a year from transactions and other events and circumstances from non-owner sources. The Group's comprehensive net income is equal to its net income for all years presented. The Group’s current component of other comprehensive income is the foreign currency translation adjustment.

Commitments and contingencies: Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Segment reporting: The Group uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Group’s reportable segments. Management, including the chief operating decision maker, reviews monthly operating results derived from two types of services and therefore the Group has determined that the Group has two operating segments as defined by SFAS 131, “Disclosures about Segments of an Enterprise and Related Information”.

Earnings per share: The Group reports basic earnings per share in accordance with SFAS 128, “Earnings Per Share”. Basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the year. At June 30, 2009, the Group had no common stock equivalents that could potentially dilute future earnings per share.

Recently Issued Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 168, The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles – a Replacement of FASB Statement No. 162. The Codification will become the source of authoritative U.S. generally accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative. This statement is effective for financial statements issued for interim and annual years ending after June 15, 2009 (our year ended June 30, 2009). We are currently unable to determine what impact the future application of this pronouncement may have on our financial statements.

In June, 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R). This statement is a revision to FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities, and changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. The statement is effective at the start of a company’s first fiscal year beginning after November 15, 2009 (our fiscal year beginning July 1, 2010), or January 1, 2010 for companies reporting on a calendar year basis. We currently are unable to determine what impact the future application of this pronouncement may have on our financial statements.

In June, 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets – an Amendment of FASB Statement No. 140. This statement is a revision to Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and will require more information about transfers of financial assets, including securitization transactions, and where companies have continuing exposure to the risks related to transferred financial assets. It eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures. The statement is effective at the start of a company’s first fiscal year beginning after November 15, 2009 (our fiscal year beginning July 1, 2010), or January 1, 2010 for companies reporting on a calendar year basis. We currently are unable to determine what impact the future application of this pronouncement may have on our financial statements.

In May 2009, the FASB issued SFAS No. 165, "Subsequent Events." This Statement sets forth: 1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; 2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and 3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This Statement is effective for interim and annual periods ending after June 15, 2009. The Company adopted this Statement in the quarter ended June 30, 2009. This Statement did not impact the consolidated financial results.

In May 2008, the FASB issued SFAS No 163, "Accounting for Financial Guarantee Insurance Contracts" ("SFAS 163"), SFAS 163 is intended to correct the inconsistencies in the recognition and measurement of claim liabilities by insurance enterprises. This SFAS 163 statement requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. This will result in increasing comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises. The provisions of SFAS 163 are effective for fiscal years beginning after December 15, 2008. The Company does not expect that the adoption will have a material impact on the Company's consolidated financial position or results of operations.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS 162"). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy). SFAS 162 will become effective 60 days following the SEC's approval of the Public Group Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles." We do not currently expect the adoption of SFAS 162 to have a material effect on our consolidated results of operations and financial condition.

In May 2008, the FASB issued FSP Accounting Principles Board ('APB") 14-1 "Accounting for Convertible Debt instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 requires the issuer of certain convertible debt instruments that may be settled in cash (or other assets) on conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer's non-convertible debt borrowing rate. FSP APB 14_1 is effective for fiscal years beginning after December 15, 2008 on a retroactive basis. As we do not have convertible debt at this time, we currently believe the adoption of FSP APB 14-1 will have no effect on our consolidated results of operations and financial condition.

In March 2008, the FASB issued SFAS No.161, "Disclosures about Derivative Instruments and Hedging Activities" (' SFAS 161"). SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. The provisions of SFAS 161 are effective for the quarter ending February 28, 2009. The Group does not expect that the adoption will have a material impact on the Group's consolidated financial position or results of operations.

In February 2008, the FASB issued FSP FAS 157-2, "Effective Date of FASB Statement No. 157." FSP FAS 157-2 delayed the effective date of SFAS No. 157 "Fair Value Measurements" from 2008 to 2009 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The adoption of the provisions of SFAS No. 157 related to nonfinancial assets and nonfinancial liabilities on January 1, 2009 did not have a material impact on the Consolidated Financial Statements. See Note 3, "Fair Value," on pages 10 and 11 for SFAS No. 157 disclosures.

In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51. SFAS 160 requires that ownership interests in subsidiaries held by parties other than the parent (previously referred to as minority interests), and the amount of consolidated net income, be clearly identified, labeled and presented in the consolidated financial statements. It also requires once a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value. Sufficient disclosures are required to clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners as components of equity. It is effective for fiscal years beginning after December IS, 2008, and requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements are applied prospectively. The Group is currently evaluating the impact of SFAS 160 on the Group's consolidated financial statements.

In December 2007, the FASB issued SFAS 141 (revised 2007), Business Combinations, ("SFAS 141(R)"). SFAS 141(R) retains the fundamental requirements of the original pronouncement requiring that the purchase method be used for all business combinations, but also provides revised guidance for recognizing and measuring identifiable assets and goodwill acquired and liabilities assumed arising from contingencies, the capitalization of in-process research and development at fair value, and the expensing of acquisition-related costs as incurred. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008. The Group will evaluate how the new requirements could impact the accounting for any acquisitions completed beginning in fiscal 2009 and beyond, and the potential impact on the Group's consolidated financial statements.

Results of Operations

Comparison of the fiscal year ended June 30, 2009 to the fiscal year ended June 30, 2008

The following table sets forth our statement of operations for the periods indicated:

	For the year Ended
	June 30, 2009		June 30, 2008
Service income	$	11,676,141	$	9,282,281
Cost of services		(5,416,156)		(3,942,076)
Gross profit		6,259,985		5,340,205
General and administrative expenses		(106,087)		(28,611)
Income before taxation		6,153,898		5,311,594
Income tax		(72,056)		-
Net income		6,081,842		5,311,594
Other comprehensive income
- Foreign currency translation adjustments		46,766		698,890
Total comprehensive income		6,128,608		6,010,484

Gross Profit. For the fiscal year ended June 30, 2009 as compared to the fiscal year ended June 30, 2008, we generated gross profit of $6,259,985 and $5,340,205, respectively, reflecting an increase of approximately 17%. The increase in our gross profit was mainly due to the significant increase of our revenue as a result of the increasing number of greenery projects we were engaged in the fiscal year of 2009.

Cost of Services. Our cost of services for the fiscal year ended June 30, 2009 was $5,416,156 as compared to $3,942,076 for the fiscal year ended June 30, 2008, representing an increase of 37%, which was the result of the increase in seedling costs and sub-contracting charges.

General and Administrative Expenses. We incurred general and administrative expenses of $106,087 for the fiscal year ended June 30, 2009, representing an increase of $77,476 compared to $28,611 for the fiscal year ended June 30, 2008. This increase was mainly due to the increase of legal and professional fees we incurred in operations.

Net Income. We had net income of $6,081,842 for the fiscal year ended June 30, 2009 as compared to net income $5,311,594 for the fiscal year ended June 30, 2008, representing an increase of 15%. The increase in our net income was the result of the significant increase of our revenue generated by the increasing number of greenery projects we were engaged in the fiscal year of 2009.

Liquidity and Capital Resources

We are a development stage company. As of June 30, 2009, we have incurred an accumulated net income of $10,429,937. At June 30, 2009, we had cash and cash equivalents of $849,457 as compared to cash and cash equivalents of $364,485 as of June 30, 2008. Management is trying to raise additional capital through sales of common stock, as well as seeking financing from third parties.

	For the year ended June 30, 2009		For the year ended June 30, 2008

Net Cash by Operating Activities		1,952,828		3,267,721

Net Cash used in Investment Activities		(11,098)		(90,245)

Net Cash used in Financing Activities		(1,460,240)		(3,177,476)

Net Increase in Cash		481,490		-

Effect of Foreign Currency Transaction		3,482		36,056

Cash, Beginning of Period		364,485		328,429

Cash, End of Period	$	849,457		364,485

Off-Balance Sheet Arrangements

As of the date hereof, we do not have any off-balance sheet debt, nor do we have any transactions, arrangements or relationships with any special purpose entities.

Inflation and Seasonality

Inflation and seasonality have not had a significant impact on our operations during the last two fiscal years.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOUSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

CHINA GREEN, INC.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

CHINA GREEN, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS

Page(s)


REPORT OF INDEPENDENT REGISTERED PUBLIC	F-2
ACCOUNTING FIRM

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME	F-3

CONSOLIDATED BALANCE SHEETS	F-4

CONSOLIDATED STATEMENTS OF CASH FLOWS	F-5

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	F- 6-7

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	F-8-F-29

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To: The Board of Directors and Stockholders of China Green, Inc.

We have audited the accompanying consolidated balance sheets of China Green, Inc. (the “Company”) and its subsidiaries as of June 30, 2009 and 2008, and the related consolidated statements of income, stockholders' equity and cash flows for the year ended June 30, 2009 and 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company and its subsidiaries as of June 30, 2009 and 2008 and the results of their operations and their cash flows for the year ended June 30, 2009 and 2008 in conformity with accounting principles generally accepted in the United States of America.

/s/ Parker Randall CF

Parker Randall CF (H.K.) CPA Limited

Certified Public Accountants

Hong Kong

October 13, 2009

F-2

CHINA GREEN, INC.

CONSOLIDATED STATEMENTS OF INCOME AND

OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)


	Year			Year
	ended			ended
	June 30,			June 30,
	2009			2008
	$			$

Service income		11,676,141			9,282,281

Cost of services		(5,416,156	)		(3,942,076	)

Gross profit		6,259,985			5,340,205

General and administrative expenses		(106,087	)		(28,611	)

Income before taxation		6,153,898			5,311,594

Income tax		(72,056	)		-

Net income		6,081,842			5,311,594

Other comprehensive income - Foreign currency translation adjustments		46,766			698,890

Total comprehensive income		6,128,608			6,010,484

Net income per share – basic and diluted		0.58			0.51

Weighted average number of shares outstanding during the year – basic and diluted		10,455,000			10,455,000

The annexed notes form an integral part of these financial statements.

F-3

CHINA GREEN, INC.

CONSOLIATED BALANCE SHEETS

AS OF JUNE 30, 2009 AND 2008

(Stated in US dollars)

	As of		As of
	June 30,		June 30,
	2009		2008
ASSETS	$		$
Current assets
Cash and cash equivalents		849,457		364,485
Accounts receivables		5,036,977		4,275,736
Deposit paid for labour services		2,028,713		77,837
Deposit for contract procurements		1,413,879		-
Deposit paid for hotel investment negotiation		1,025,677		291,588

Total current assets		10,354,703		5,009,646

Plant and equipment, net		1,083,011		1,593,601

TOTAL ASSETS		11,437,714		6,603,247

LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities
Amount due to a director		64,499		-
Amount due to a shareholder		23,899		-
Accrued expenses		10,411		-
Tax payable		72,303		-

TOTAL LIABILITIES		171,112		-

STOCKHOLDERS’ EQUITY
Preferred stock ($0.00001 par value, 100,000,000 share		-		-
shares authorized, none issued and outstanding)
Common Stock ($0.00001 par value, 500,000,000 shares;		105		105
shares authorized, 10,455,500 shares issued and outstanding)

Accumulated other comprehensive income		836,560		789,794
Retained earnings		10,429,937		5,813,348

		11,266,602		6,603,247


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		11,437,714		6,603,247

The annexed notes form an integral part of these financial statements.

F-4

CHINA GREEN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)


	Year			Year
	ended			ended
	June 30,			June 30,
	2009			2008
Cash flows from operating activities	$			$
Net income before taxation		6,153,898			5,311,594
Depreciation		527,909			497,585
Increase in accounts receivables		(737,263	)		(1,332,143	)
Increase in deposit paid for labour service		(3,360,155	)		(34,470	)
Increase in deposit paid for hotel investment negotiation		(730,120	)		(276,434	)
Increase in accrued expenses		10,411			-
Increase in amount due to a shareholder		23,870			-
Increase / (decrease) in amount due to a director		64,278			(898,411	)

Net cash from operating activities		1,952,828			3,267,721

Cash flows from investment activities
Investment in a subsidiary		-			(100	)
Purchase of plant and equipment		(11,098	)		(90,145	)

Net cash used in investment activities		(11,098	)		(90,245	)


Cash flows from financing activities
Proceeds from issuance of common stock		-			105
Repayment of short-term loan		-			(218,694	)
Dividend paid		(1,460,240	)		(2,958,887	)

Net cash used in financing activities		(1,460,240	)		(3,177,476	)


Net increase in cash and cash equivalents	481,490	-
Effect of foreign currency translation on cash and
cash equivalents	3,482	36,056
Cash and cash equivalents - beginning of year	364,485	328,429

Cash and cash equivalents - end of year	849,457	364,485

The annexed notes form an integral part of these financial statements.

F-5

CHINA GREEN, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

AS OF JUNE 30, 2009 AND 2008

(Stated in US dollars)


	Year			Year
	ended			ended
	June 30,			June 30,
	2009			2008
Cash flows from operating activities	$				$
Net income before taxation		6,153,898			5,311,594
Depreciation		527,909			497,585
Increase in accounts receivables		(737,263	)		(1,332,143	)
Increase in deposit paid for labour service		(3,360,155	)		(34,470	)
Increase in deposit paid for hotel investment negotiation		(730,120	)		(276,434	)
Increase in accrued expenses		10,411			-
Increase in amount due to a shareholder		23,870			-
Increase / (decrease) in amount due to a director		64,278			(898,411	)

Net cash from operating activities		1,952,828			3,267,721

Cash flows from investment activities
Investment in a subsidiary		-			(100	)
Purchase of plant and equipment		(11,098	)		(90,145	)

Net cash used in investment activities		(11,098	)		(90,245	)


Cash flows from financing activities
Proceeds from issuance of common stock		-			105
Repayment of short-term loan		-			(218,694	)
Dividend paid		(1,460,240	)		(2,958,887	)

Net cash used in financing activities		(1,460,240	)		(3,177,476	)

Net increase in cash and cash equivalents		481,490			-
Effect of foreign currency translation on cash and
cash equivalents		3,482			36,056
Cash and cash equivalents - beginning of year		364,485			328,429

Cash and cash equivalents - end of year		849,457			364,485

The annexed notes form an integral part of these financial statements.

F-6

CHINA GREEN, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

AS OF JUNE 30, 2009 AND 2008

(Stated in US dollars)

	Common Stock				Accumulated other comprehensive		Retained
	Shares		Amount($)		income($)		earnings($)			Total($)

Balance, July 1, 2007		100,000		1		-		-			1
Share issued for takeover a subsidiary		10,355,000		104		-		-			104
Retained earnings contributed from a subsidiary		-		-		-		3,622,843			3,622,843
Net income		-		-		-		5,311,594			5,311,594
Accumulated other comprehensive income contributed from a subsidiary		-		-		90,904		-			90,904
Foreign currency translation adjustment		-		-		698,890		-			698,890

		10,455,000		105		789,794		8,934,437			9,724,336
Dividend paid		-		-		-		(3,121,089	)		(3,121,089	)

Balance, June 30, 2008		10,455,000		105		789,794		5,813,348			6,603,247
Balance, July 1, 2008		10,455,000		105		789,794		5,813,348			6,603,247
Net income		-		-		-		6,081,842			6,081,842
Foreign currency translation adjustment		-		-		46,766		-			46,766

		10,455,000		105		836,560		11,895,190			12,731,855
Dividend paid		-		-		-		(1,465,253	)		(1,465,253	)

Balance, June 30, 2009		10,455,000		105		836,560		10,429,937			11,266,602

The annexed notes form an integral part of these financial statements.

F-7

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

1.	ORGANIZATION AND DESCRIPTION OF BUSINESS

China Green Group (the “Group”) consists of China Green, Inc. (the “China Green” or the “Company”), Glorious Pie Limited (the “Glorious Pie”) and Earn Bright Development Limited (the “Earn Bright”). China Green, Inc. was incorporated in the State of Delaware on July 11, 2008. Glorious Pie Limited was incorporated in the British Virgin Islands on 12 June, 2006, under the International Business Companies Act, British Virgin Islands. Earn Bright Development Limited, a wholly owned subsidiary of Glorious Pie, was incorporated in Hong Kong on December 17, 2008.

On August 13, 2009, the Company closed a share exchange and stock purchase transaction by issuing 10,355,000 shares of its common stock in exchange for 100% of the outstanding common stock of Glorious Pie. This transaction was accounted for as a reverse acquisition and resulted in Glorious Pie becoming the accounting acquirer, whereby the historical financial statements of China Green have become those of Glorious Pie.

In conjunction with the merger and recapitalization of Glorious Pie, Glorious Pie’s 100 issued and outstanding common stock were reclassified into common stock of China Green.

The Group is engaged in developing its model in the areas of hospitality facilities and large scale landscape architecture and engineering. The group is specialized on providing greenery services to greenery construction projects in China, including, but not limited to, design advice, trading and quality control service of seed, provision of seedling and performance arrangement of greenery engineering and plantation.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of presentation and consolidation

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

The consolidated financial statements for the Company for the year ended June 30, 2009 and 2008, include the financial statements of China Green, Inc., its 100% owned subsidiary, Glorious Pie Limited, and its wholly owned subsidiary, Earn Bright Development Limited. Intercompany transactions and balances are eliminated in consolidation.

F-8

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

a) Basis of presentation and consolidation (continued)

In connection with the reverse acquisition and recapitalization, all share and per share amounts will be retroactively restated.

In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the year ended June 30, 2009 and 2008 have been made. Results for the year ended June 30, 2009 and 2008 presented are not necessarily indicative of the results that might be expected for the entire fiscal year. These financial statements should be read in conjunction with the consolidated financial statements and the notes included in the 2008 and 2009 annual report filed with the Securities and Exchange Commission.

As of June 30, 2009, the particulars of the subsidiaries are as follows:

Name of company	Place of incorporation	Date of incorporation	Attributable equity interest	Issued capital

Glorious Pie Limited	British Virgin Islands	June 12, 2006	100%	US$100

Earn Bright Development Limited	Hong Kong	December 17, 2008	100%	US$0.128 (HK$1)

b) Use of estimates

In preparing of the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, deferred income taxes and the estimation on useful lives of plant and machinery. Actual results could differ from those estimates.

F-9

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

c) Cash and Cash Equivalents

The Group considers all cash and other highly liquid investments with initial maturities of year or less to be cash equivalents. As of June 30, 2009 and 2008, there were cash and cash equivalents of $849,457 and $364,485 respectively.

d) Accounts Receivable

Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The Group recognizes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility. An allowance for doubtful accounts is maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Group becomes aware of a customer’s inability to meet its financial obligations, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted.

e) Accounting for the Impairment of Long-Lived Assets

The Group adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Live Assets” (“SFAS 144”), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Group yearically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal. Based on its review, the Group believes that, as of June 30, 2009 and 2008, there were no significant impairments of its long-lived assets.

f) Plant and Equipment

Plant and equipment, other than construction in progress, are stated at cost less depreciation and amortization and accumulated impairment loss.

Equipment and machinery	5 years
Furniture & fixtures	5 years

F-10

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

f) Plant and Equipment (continued)

Management considers that we have no residual value for plant and equipment.

g) Fair value of Financial Instruments

SFAS No. 107, “Disclosures about Fair Values of Financial Instruments”, requires disclosing fair value to the extent practicable for financial instruments that are recognized or unrecognized in the balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement.

h) Foreign Currency Translation

The Group maintains its financial statements in the functional currency. The functional currency of the Group is the Renminbi (RMB). Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective years.

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

	2009		2008
Month end RMB : US$ exchange rate		6.825		6.859
Average year RMB : US$ exchange rate		6.848		7.235

F-11

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

h) Foreign Currency Translation (continued)

i) Revenue Recognition

The Group revenue is generated from providing services in two aspects as follows:

ii)

Designing and consultancy services in hotel facilities; and

Resource-efficient engineering business in greenery projects.

The revenue recognized by the Group is based on the Design and Consultancy agreement between the Group and the hotel where the Group has provided the design, consultancy to the hotel and even with certain fixtures and assets provided to that hotel and hence share a certain percentage of gross revenue generated by the hotel facilities for certain years as the consideration.

Revenue from fixed-price and modified fixed-price construction contracts are recognized on the percentage-of-completion method, measured by the percentage of actual cost incurred to date to estimated total cost for each contract. The Group would regularly and frequently reviews the estimated contract cost on each project being accepted and not yet finished to ensure the contract cost estimate is measured with the best knowledge of the personnel involved.

j) Cost of revenue

Regarding the design and consultancy services to the hotel facilities, the respective cost of revenue includes the consultancy expenses in professional staff involved and the design and consultancy fee with other third-party experts, and also the depreciation expenses on those fixtures and movable assets being placed with the hotel by the Group.

Regarding the trading of seeding and provision of greenery engineering projects, the respective cost of revenue consists primarily of material costs, labour cost, subcontracting expenses, and related expenses, which are directly attributable to the greenery construction projects.

F-12

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

k) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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 the consolidated statements of income and comprehensive income in the year that includes the enactment date.

l) Comprehensive Income

SFAS No. 130, "Reporting Comprehensive Income", requires companies to classify items of other comprehensive income in a financial statement. Comprehensive income is defined as the change in equity of a business enterprise during a year from transactions and other events and circumstances from non-owner sources. The Group's comprehensive net income is equal to its net income for all years presented. The Group’s current component of other comprehensive income is the foreign currency translation adjustment.

F-13

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

m) Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

n) Segment reporting

The Group uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Group’s reportable segments. Management, including the chief operating decision maker, reviews monthly operating results derived from two types of services and therefore the Group has determined that the Group has two operating segments as defined by SFAS 131, “Disclosures about Segments of an Enterprise and Related Information”.

o) Earnings per share

The Group reports basic earnings per share in accordance with SFAS 128, “Earnings Per Share.” Basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the year. At June 30, 2009, the Group had no common stock equivalents that could potentially dilute future earnings per share.

F-14

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(STATED IN US DOLLARS)

3.	CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of the following:

	As of		As of
	June 30,		June 30,
	2009		2008
	$		$

Cash at bank		458,729		-
Cash on hand		390,728		364,485

		849,457		364,485

4.	ACCOUNTS RECEIVABLES

Accounts receivables consist of the following:

	As of		As of
	June 30,		June 30,
	2009		2008
	$		$
Accounts receivables related to:

Hotel facilities		522,113		210,566
Greenery construction projects		3,909,385		3,013,869
Greenery maintenance projects		605,479		1,051,301

		5,036,977		4,275,736

At the balance sheet date, most of the accounts receivables were related to greenery construction projects and their credit year is usually ranged from 90 days to 180 days.

5.	DEPOSIT PAID FOR CONTRACT PROCUREMENTS

Main contractors require the company to put escort money during negotiation of contract. Once the contract is successfully bade, the escort money will be kept by the contractors until the contract has been completed. If the bid is fail, the escort money will be refunded immediately.

F-15

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(STATED IN US DOLLARS)

6.	DEPOSIT PAID FOR HOTEL INVESTMENT NEGOTIATION

The Group has placed the following amount of deposit being held in escrow by the counter-party for the negotiation for acquiring certain equity interest of the hotel facilities located hereunder as at June 30, 2009 and 2008 which gives comfort to the negotiating party that the Group shows its financial strength and capability to get the acquisition closed if the acquisition deal is reached:

	As of		As of
	June 30,		June 30,
Deposit for hotel investment negotiation	2009		2008
	$		$
Location:
(1) Dongguan City, Changan Town,
Xin Min Administration Region,		293,051		291,588
Jianan Road Section

(2) Chang An Di Ying Hotel
Dongguan City, Changan Town,
Zhenan Road and Xiabian Road Section		293,051		-

(3) Jin Ye Hotel
Guangzhou City, Huan Shi Dong Road,
Section No. 422		439,575		-

		1,025,677		291,588

F-16

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

7.	PLANT AND EQUIPMENT, NET

Plant and equipment and being part of hotel facilities and consist of the following:

	As of		As of
	June 30,		June 30,
	2009		2008
At cost	$		$
Balance at beginning of year		2,624,306		2,279,023
Acquisition during the year		11,136		90,145
Exchange difference		13,167		255,138

Balance at end of year		2,648,609		2,624,306

Less: Accumulated depreciation
Balance at beginning of year		1,030,705		455,805
Charge for the year		527,909		497,585
Exchange difference		6,984		77,315

Balance at end of year		1,565,598		1,030,705


Net book value
As at June 30, 2009 and 2008		1,083,011		1,593,601

Management considers that there are no residual value for plant and equipment.

8.	AMOUNT DUE TO A DIRECTOR / SHAREHOLDER

The amounts represent unsecured, interest free and have no fixed repayment terms.

F-17

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

9.	STOCKHOLDERS’ EQUITY

On the date of inception, the China Green, Inc. issued its President and Director 100,000 shares of common stock at par value USD0.00001 as the founder shares as compensation for the services that he rendered in connection with the Company’s incorporation.

On the date of merger, China Green, Inc. acquired all of the issued and outstanding common stock of Glorious Pie Limited by issuing 10,355,000 common shares at par value USD0.00001 to the Glorious Pie Limited shareholder under a Share Exchange and Stock Purchase Agreement with Glorious Pie Limited.

Stockholders’ equity is as follows:

	Common Stock
	Shares		Amount($)
					Total($)
As of date of Inception		100,000		1		1
Share issued for takeover a subsidiary		10,355,000		104		104

As of June 30, 2009 and 2008		10,455,000		105		105

As of June 30, 2009, the Company has 500,000,000 shares of common stock authorized and 10,455,000 shares of common stock issued and outstanding.

F-18

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

10.	BUSINESS SEGMENT

The Group is engaged in provision of designing and consultancy services in hotel facilities and also involved in provision of engineering services to greenery construction projects, which include, but is not limited to, provision of seedling and skillful workers to those construction projects.

Segment information is disclosed in accordance to FAS 131, “Disclosures about Segments of an Enterprise and Related Information” as below:

	Greenery		Greenery
	Construction Project		Maintenance Works		Hotel Facilities		Total

	Year ended		Year ended		Year ended		Year ended
	Jun 30,		Jun 30,		Jun 30,		Jun 30,
	2009	2008	2009	2008	2009	2008	2009	2008
	$	$	$	$	$	$	$	$
Revenue from
external customers	6,355,401	4,420,439	2,413,630	2,029,751	2,907,110	2,832,091	11,676,141	9,282,281

Gross profit	2,554,433	1,561,541	1,384,761	1, 444,158	2,320,791	2,334,506	6,259,985	5,340,205


	As of		As of		As of		As of
	Jun 30,		Jun 30,		Jun 30,		Jun 30,
	2009	2008	2009	2008	2009	2008	2009	2008
	$	$	$	$	$	$	$	$
Segment non-
current assets	-	-	-	-	1,083,011	1,593,601	1,083,011	1,593,601

Segment current assets
(excluding cash and
cash equivalents)	6,825,404	2,800,114	1,132,052	1,051,305	1,547,790	793,742	9,505,246	4,645,161

F-19

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

11.	COST OF SERVICES

Details of cost of services are summarized as follows:

	Year		Year
	ended		ended
	June 30,		June 30,
	2009		2008
	$		$

Depreciation		527,909		497,585
Repair and maintenance		58,410		-
Sub-contracting charges		1,640,308		1,046,151
Material cost		2,769,008		2,132,713
Professionals and related costs		39,208		-
Other construction costs		381,313		265,627

		5,416,156		3,942,076

12.	GENERAL AND ADMINISTRATIVE EXPENSES

Details of general and administrative expenses are summarized as follows:

	Year		Year
	ended		ended
	June 30,		June 30,
	2009		2008
	$		$

Audit fee		16,500		-
Computer expenses		3,780		3,456
Electricity and water		1,506		-
Filing fee		2,605		968
Legal and professional fee		48,426		-
Preliminary expenses		-		2,764
Sundry expenses		6,967		-
Travelling		5,672		2,764
Telephone		3,108		2,073
Wages and salaries		17,523		16,586

		106,087		28,611

F-20

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

13.	INCOME TAXES

The enterprise income tax is reported on a separate entity basis.

United States Tax

SFAS 109 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry forwards. SFAS 109 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.

The China Green has a net operating loss carry forward at June 30, 2009 for tax purposes totaling $24,281, expiring through the year 2028. Internal Revenue Code Section 382 places a limitation on the amount of taxable income that can be offset by carry forwards after a change in control (generally greater than a 50% change in ownership). Temporary differences, which give rise to a net deferred tax asset, are as follows:

	As of			As of
	June 30,			June 30,
	2009			2008
	$			$
Gross deferred tax assets:
Net operating loss carry forwards		8,255			-

Total deferred tax assets		8,255			-
Less: valuation allowance		(8,255	)		-

Net deferred tax asset recorded		-			-

The valuation allowance at June 30, 2008 was $Nil. The net change in valuation allowance during the year ended June 30, 2009, was an increase of $8,255. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the years in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of June 30, 2009.

The actual tax benefit differs from the expected tax benefit for the year ended June 30, 2009 (computed by applying the U.S. Federal Corporate tax rate of 34% to income before taxes) as follows:

F-21

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

13.	INCOME TAXES (CONTINUED)

	Year			Year
	ended			ended
	June 30,			June 30,
	2009			2008
	$			$
Expected tax expense (benefit) – Federal		(8,255	)		-
Change in valuation allowance		8,255			-

Actual tax expense (benefit)		-			-

BVI Tax

Glorious Pie Limited is subjected to British Virgin Island (BVI) tax law. The Management of Glorious Pie Limited determined that the company did not operate in BVI and therefore is not subject to BVI tax. Therefore, Glorious Pie Limited did not incur any BVI tax during the years presented.

Hong Kong Tax

Earn Bright Development Limited has not been carrying out any business activity in Hong Kong and Earn Bright Development Limited is not subjected to Hong Kong profit tax as there is no assessable profit for the year ended June 30, 2009.

PRC Tax

PRC’s legislative body, the National People’s Congress, adopted the unified Enterprise Income Tax (“EIT”) Law on March 16, 2007. This new tax law replaces the existing separate income tax laws for domestic enterprises and foreign-invested enterprises and became effective on January 1, 2008. Under the new tax law, a unified income tax rate is set at 25% for both domestic enterprises and foreign-invested enterprises. However, there will be a transition year for enterprises, whether foreign-invested or domestic, that are currently receiving preferential tax treatments granted by relevant tax authorities. Enterprises that are subject to an enterprise income tax rate lower than 25% may continue to enjoy the lower rate and will transit into the new rate over a five year beginning on the effective date of the EIT Law. Enterprises that are currently entitled to exemptions for a fixed term may continue to enjoy such treatment until the exemption term expires. Preferential tax treatments may continue to be granted to industries and projects that qualify for such preferential treatments under the new law.

The Earn Bright Development Limited is subjected to PRC tax law. The Management of Earn Bright Limited considered that the Company did operate in PRC and is subject to PRC tax since 2 January 2009. As all the business are operated through Earn Bright Development Limited, under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), the Company is entitled to 5% of business tax and 7% of profit tax.

F-22

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

13.	INCOME TAXES (CONTINUED)

Income tax at applicable tax rates of 5% of business tax and 7% of profit tax:

	Year			Year
	ended			ended
	June 30,			June 30,
	2009			2008
	$			$

Turnover from January 2, 2009 to June 30, 2009		6,122,205			-
Deductable greenery consultancy turnover		(4,830,984	)		-
Deductable hotel consultancy turnover		(516,488	)		-

Chargeable turnover under business tax		774,733			-

Income before tax from January 2, 2009 to June 30, 2009		3,044,143			-
Deductible greenery consultancy income		(2,092,570	)		-
Deductable hotel consultancy income		(516,489	)		-
General and administrative expense		40,902			-

Chargeable profit under profit tax		475,986			-


Tax for the period from January 2, 2009 to June 30, 2009 at the statutory tax rate of applicable in jurisdictions:
- Business tax at 5% of turnover		38,737			-
- Profit tax at 7% of profit		33,319			-

Income tax		72,056			-

F-23

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

13.	INCOME TAXES (CONTINUED)

Tax payable in the balance sheet represents:

	As of		As of
	June 30,		June 30,
	2009		2008
	$		$

Tax for the period from January 1, 2009 to June 30, 2009 at the statutory tax rate of applicable in
jurisdictions:
- Business tax at 5% of turnover		38,737		-
- Profit tax at 7% of profit		33,319		-

		72,056		-
Balance brought forward		-		-
Foreign exchange translation		247		-

Tax payable		72,303		-

The deferred tax asset and liability has not been recognized because no valuation allowance to be established for the year ended June 30, 2009.

14.	COMMITMENTS AND CONTINGENCIES

There is no foreseeable commitments or contingencies for the year ended June 30, 2009.

F-24

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

15.	SIGNIFICANT CONCENTRATIONS

Customers and credit concentrations

The Group’s revenue derived from major customers for the year ended June 30, 2009 and 2008 are as follows:

		2009		2008
	Note	$	%	$	%

Dongguan Carnival City Hotel	15a	2,907,038	25	2,832,091	30

Note 15a:
The Group has a Design and Consultancy Agreement with the above hotel in June 19, 2006 with a tenure of seven years, with sharing of 35% of its gross revenue which attributes to all the segmental revenue derived from its Hotel design and Consultancy Agreement. The Group is now negotiating with other hotels for potential business opportunities to further diversify this risk of overconcentration in one hotel.
Dongguan City Xin Yue An Garden Greenery Co. Limited	15b	1,336,778	11	1,265,937	14
Dongguan City Bi Man Yuan Garden Greenery Engineering Co. Limited	15b	393,740	3	1,141,242	12
Dongguan City Lu Yi Garden Greenery Engineering Co. Limited	15b	222,275	2	834,377	9
Changan Town Construction Engineering Limited		-	-	645,860	7
Dongguan City Jia Ye Garden Greenery Engineering Limited	15b	183,668	2	624,109	7
Dongguan City Urban District Garden Greenery Engineering Limited		-	-	571,285	6
Dongguan City Garden Greenery Engineering Limited	15b	1,076,926	9	1,367,380	15
Henam District Huanghe River Garden Greenery Engineering Co. Ltd	15b	1,931,576	17	-	-
Mu Dan Jiang City Civil Engineering Contruction Co. Limited	15b	3,624,140	31	-	-

F-25

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

15.	SIGNIFICANT CONCENTRATIONS (CONTINUED)


Note 15b:
The whole list of top customers on greenery construction projects and seed trading has provided the Group with 9 contracts with an aggregate Contract Revenue of RMB60,051,992 (US$8,769,103) for year ended June 30, 2009. The Group has considered there is no single customer being dominant in the provision for such revenue to the Group and the Group would continue to diversify its greenery projects source from any other sources to mitigate any possible overconcentration risk in certain customers.


	11,676,141	100	9,282,281	100

16.	RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

F-26

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

16.	RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events.” This Statement sets forth: 1) the year after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; 2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and 3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This Statement is effective for interim and annual years ending after June 15, 2009. The Group adopted this Statement in the year ended June 30, 2009. This Statement did not impact the consolidated financial results.

In May 2008, the FASB issued SFAS No 163, “Accounting for Financial Guarantee Insurance Contracts” (“SFAS 163”), SFAS 163 is intended to correct the inconsistencies in the recognition and measurement of claim liabilities by insurance enterprises. This SFAS 163 statement requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. This will result in increasing comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises. The provisions of SFAS 163 are effective for fiscal years beginning after December 15, 2008. The Group does not expect that the adoption will have a material impact on the Group’s consolidated financial position or results of operations.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS 162”). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy). SFAS 162 will become effective 60 days following the SEC’s approval of the Public Group Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” We do not currently expect the adoption of SFAS 162 to have a material effect on our consolidated results of operations and financial condition.

F-27

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

16.	RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In May 2008, the FASB issued FSP Accounting Principles Board (‘APB”) 14-1 “Accounting for Convertible Debt instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB 14-1”). FSP APB 14-1 requires the issuer of certain convertible debt instruments that may be settled in cash (or other assets) on conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. FSP APB 14-1 is effective for fiscal years beginning after December 15, 2008 on a retroactive basis. As we do not have convertible debt at this time, we currently believe the adoption of FSP APB 14-1 will have no effect on our consolidated results of operations and financial condition.

In March 2008, the FASB issued SFAS No.161, “Disclosures about Derivative Instruments and Hedging Activities” (‘SFAS 161”). SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. The provisions of SFAS 161 are effective for the quarter ending February 28, 2009. The Group does not expect that the adoption will have a material impact on the Group’s consolidated financial position or results of operations.

In February 2008, the FASB issued FSP FAS 157-2, “Effective Date of FASB Statement No. 157.” FSP FAS 157-2 delayed the effective date of SFAS No. 157 “Fair Value Measurements” from 2008 to 2009 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The adoption of the provisions of SFAS No. 157 related to nonfinancial assets and nonfinancial liabilities on January 1, 2009 did not have a material impact on the Consolidated Financial Statements. See Note 3, “Fair Value,” on pages 10 and 11 for SFAS No. 157 disclosures.

In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51. SFAS 160 requires that ownership interests in subsidiaries held by parties other than the parent (previously referred to as minority interests), and the amount of consolidated net income, be clearly identified, labeled and presented in the consolidated financial statements. It also requires once a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value. Sufficient disclosures are required to clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners as components of equity. It is effective for fiscal years beginning after December 15, 2008, and requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements are applied prospectively. The Group is currently evaluating the impact of SFAS 160 on the Group’s consolidated financial statements.

F-28

CHINA GREEN, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009 AND 2008

(Stated in US dollars)

16.	RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In December 2007, the FASB issued SFAS 141 (revised 2007), Business Combinations, (“SFAS 141(R)”). SFAS 141(R) retains the fundamental requirements of the original pronouncement requiring that the purchase method be used for all business combinations, but also provides revised guidance for recognizing and measuring identifiable assets and goodwill acquired and liabilities assumed arising from contingencies, the capitalization of in-process research and development at fair value, and the expensing of acquisition-related costs as incurred. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008. The Group will evaluate how the new requirements could impact the accounting for any acquisitions completed beginning in fiscal 2009 and beyond, and the potential impact on the Group’s consolidated financial statements.

F-29

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

Our accountant is Parker Randall CF (H.K.) CPA Limited, independent certified public accountants. We do not presently intend to change accountants. At no time have there been any disagreements with such accountants regarding any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

ITEM 9A (T). CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as June 30, 2009. Based on this evaluation, our principal executive officer and principal financial officers have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act over the registrant. The Company’s internal control over financial reporting is designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements in accordance with United State’s generally accepted accounting principles (US GAAP), including those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting. Based on this assessment, Management concluded the Company maintained effective internal control over financial reporting as of June 30, 2009.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Set forth below are the names of our directors, officers and significant employees, their ages, all positions and offices that they hold with us, the period during which they have served as such, and their business experience during at least the last five years. The directors will serve until the next annual meeting of the stockholders or until their successors are elected or appointed and qualified. Executive officers will serve at the board's discretion.

Name		Age		Position
Tai Chi Yip		27		President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director

The following summarizes the occupation and business experience for our officers, directors, key employees and advisory board:

Tai Chi Yip, 27, Director, Chief Executive Officer and Chief Financial Officer

Mr. Tai is the Chief Executive Officer and founder of Glorious Pie. He is primarily in charge of day to day corporate strategy, corporate planning and overall management of Glorious Pie. Mr. Tai has profound experience in the finance industry including experience in HSBC and Procter & Gamble (P&G) as a Financial Analyst. He holds a bachelor’s degree in Economics and Finance from the Hong Kong University of Science and Technology.

Committees

We do not have a standing audit, nominating or compensation committee or any committee performing a similar function, although we may form such committees in the near future.

Audit Committee and Audit Committee Financial Expert

We do not currently have an audit committee financial expert, nor do we have an audit committee. Our Board which is currently composed of only one member handles the functions that would otherwise be handled by an audit committee. We are in the process of searching for a qualified independent expert who would be willing to serve on our board and who would be willing to act as an audit committee financial expert. Before retaining any such expert, our board would make a determination as to whether such person is independent.

Independent Directors

No member of our Board qualifies as an "independent director" under the listing requirements of NASDAQ.

As we increase the membership of our Board of Directors, we may add directors who qualified as "independent directors," establish Board committees on which such independent directors may serve and adopt written Board committee charters, as appropriate, to assist in corporate governance.

Director Compensation

No cash compensation was paid to any member of our Board of Directors for services as a director during the fiscal year ended June 30, 2009 and 2008. We have no standard arrangement pursuant to which our board of directors is compensated for their services in their capacity as directors. The Board may award special remuneration to any director undertaking any special services on behalf of our company other than those services ordinarily required of a director. All authorized out-of-pocket expenses incurred by a director on our behalf will be subject to reimbursement upon our receipt of required supporting document of such expenses. No director received and/or accrued any compensation for his services as a director, including committee participation and/or special assignments.

Family Relationships

There are no family relationships among our directors or officers.

Code of Ethics

On August 13, 2009, our Board adopted a Code of Ethics to which our Chief Executive Officer, Chief Financial Officer, and any person who may perform similar functions are subject. Currently, Mr. Tai is our only officer subject to the Code of Ethics. If we retain additional officers in the future to act as our principal financial officer, principal accounting officer, controller or persons serving similar functions, they would become subject to our Code of Ethics.

The Code of Ethics does not indicate the consequences of a breach of the code. If there is a breach, the Board would review the facts and circumstances surrounding the breach and take action that it deems appropriate, which action may include dismissal of the employee who breached the code. Currently, since Mr. Tai serves as a director and since he is a controlling stockholder, he is largely responsible for evaluating his own conduct under the Code of Ethics and determining what action to take in the event of his own breach of the Code of Ethics.

Item 11. Executive Compensation

Summary Compensation Table

The following table shows for the periods ended June 30, 2009 and June 30, 2008, compensation awarded to or paid to, or earned by, our officer and director.

Name

Year

Salary

($)

Bonus

($)

Stock

Awards

($)

Option

Awards

($)

Non-Equity

Incentive Plan

Compensation

($)

Nonqualified

Deferred

Compensation

Earnings

($)

All Other

Compensation

($)

Total

($)

Tai Chi Yip

2009

Chief Executive Officer

2008

Outstanding Equity Awards

Our officer and director do not have unexercised options, stock that has not vested, or equity incentive plan awards.

Compensation of Directors

Our director does not receive compensation for their services as directors.

Employment Contracts, Termination of Employment, Change-in-Control Arrangements

There is no employment or other contracts or arrangements with officer or director. There are no compensation plans or arrangements, including payments to be made by us, with respect to our officers, directors or consultants that would result from the resignation, retirement or any other termination of such directors, officers or consultants from us. There are no arrangements for directors, officers, employees or consultants that would result from a change-in-control.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information regarding our common stock beneficially owned on October 6, 2009, for (i) each stockholder known to be the beneficial owner of 5% or more of our outstanding common stock, (ii) each executive officer and director, and (iii) all executive officers and directors as a group.

Name	Number of Shares Beneficially Owned		Percent of Shares (1)
Tai Chi Yip		10,355,000		82.84	%
Wong Pak Fai, Phillip		625,000		5	%
Officer and Directors as a Group		10,355,000		82.84	%

(1)	Based upon 12,500,000 shares of common stock issued and outstanding as of November 24, 2009

Item 13. Certain Relationships and Related Transactions, and Director Independence

Related Transactions

On August 13, 2009, we entered into a Share Exchange and Stock Purchase Agreement with Glorious Pie, the Glorious Pie shareholder (the “Glorious Pie Shareholder”) and the representative of our investors. At the closing of the share exchange and stock purchase (the “Share Exchange”), and pursuant to the terms of the Share Exchange and Stock Purchase Agreement, we acquired all of the issued and outstanding common stock of Glorious Pie from the Glorious Pie Shareholder in exchange for our issuance of 10,355,000 common shares to the Glorious Pie Shareholder (the “Exchange Shares”). The Exchange Shares represent approximately 82.84% of our common stock issued and outstanding after the closing of the Share Exchange. Concurrently with the Share Exchange, we issued 332,000 shares of our common stock to 296 Investors who purchased our shares in the Regulation S Offering. The 332,000 common shares constitute 2.66% of our issued and outstanding common stock at the Closing. As a result of the Share Exchange, Glorious Pie became our wholly-owned subsidiary.

On August 12, 2009, we issued Mr. Wong, our then President and Director, 254,166 shares of our common stock, at par value $0.00001 per share, as compensation for services that he rendered as our then President, Treasurer and Secretary.

Director Independence

Our Board has determined that the sole member of our Board does not qualify as an "independent director" in accordance with the listing requirements of NASDAQ.

Item 14. Principal Accounting Fees and Services.

Effective August 25, 2009, we changed our fiscal year end from July 31 to June 30. Berman & Company, P.A. (“Berman”) was our independent registered public accounting firm engaged to examine our consolidated financial statements for the fiscal year ended July 31, 2008. Parker Randall CF (H.K.) CPA Limited (“Parker Randall”) was our independent registered public accounting firm engaged to examine our financial statements for the fiscal years ended June 30, 2009.

Fees for the fiscal years ended July 31, 2008 and June 30, 2009

Audit Fees. Berman was paid fees of approximately $Nil for the fiscal years ended July 31, 2008, for professional services rendered for the audit of our annual financial statements. Parker Randall was paid fees of approximately $16,500 for the fiscal years ended June 30, 2009 for professional services rendered for the audit of our annual financial statements and review of our quarterly financial statements.

Tax Fees. The aggregate fees billed in the fiscal years ended July 31, 2008 and June 30, 2009 for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning were approximately $2,764 and $10,000, respectively.

All Other Fees: We did not incur any other fees related to services rendered by our principal accountant for the fiscal years ended July 31, 2008 and June 30, 2008.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

a) Documents filed as part of this Annual Report

1. Financial Statements

2. Financial Statement Schedules

3. Exhibits

Exhibit No.	Title of Document


31.1	Certification of Tai Chi Yip pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Tai Chi Yip pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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.

	CHINA GREEN, INC.

Date: November 30, 2009	By:	/s/ Tai Chi Yip
		Tai Chi Yip Chief Executive Officer Chief Financial Officer

Green Solutions China Inactive 10-K/A2009 FY Annual report (amended)