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

FORM 10-Q

[ x ]
    QUARTERLY REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly three month
    period ended June 30, 2012[    ]
    TRANSITION REPORT UNDER
    SECTION 13 OR 15(d) OF THE EXCHANGE ACTFor the transition period from
    [    ] to [    ]


_______________________________________
Commission File Number: 000-50431

CHINA MEDIA GROUP CORPORATION_______________________________________(Exact name of small business issuer as specified in its charter)

Texas
    7310
    32-0034926_____________
    ________________
    ______________(State or other jurisdiction of incorporation or organization)
    (Primary Standard Industrial Classification Code Number)
    (I.R.S. Employer Identification No.)


1402 Wan Chai Commercial Center, 204 Johnston Road,
    Wanchai, Hong Kong
    ________________________________________________________
    _____________(Address of
    Company's principal executive offices)
    (Zip Code)


Tel: +011 852 3171 1208 Fax: +011 3007
8368
_______________________________________
(Company's Telephone Number, Including Area Code)

Not Applicable
(Former Name, Former Address and Former Fiscal Year if Changed Since Last Report)

Indicate by check
    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 past 12 months (or for such shorter
    period that the registrant was required to file such reports), and (2) has been subject to
    such filing requirements for the past 90 days.


Yes [ x ]    No [  
]

Indicate by check
    mark whether the registrant has submitted electronically and posted on its corporate Web
    site, if any, every Interactive Data File required to be submitted and posted pursuant to
    Rule 405 of Regulation S-T ("232.405 of this chapter) during the preceding 12 months
    (or for such shorter period that the registrant was required to submit and post such
    files).


Yes [ x ] No [ ]

Indicate by check
    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 "small reporting
    company" in Rule 12b-2 of the Exchange Act. (check one)


Large Accelerated Filer [   
]   Accelerated Filer [     ] Non-Accelerated Filer [ ]  Smaller
Reporting Company[ x ]

SEC 1296 (03-10)
    Potential
    persons who are to respond to the collection of information contained in this form are not
    required to respond unless the form displays a currently valid OMB control number.Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2
    of the Exchange Act).


Yes [    ]   No[ x
]

The number of
    common equity shares outstanding as of July 30, 2012 was 1,113,623,296 shares of Common
    Stock, no par value.


---

FORWARD-LOOKING
    STATEMENTSThis quarterly
    report contains forward-looking statements as that term is defined in thePrivate
    Securities Litigation Reform Act of 1995. These statements relate to future events or
    our future financial performance. In some cases, you can identify forward-looking
    statements by terminology such as "may", "will", "should",
    "expects", "plans", "anticipates", "believes",
    "estimates", "predicts", "potential" or "continue"
    or the negative of these terms or other comparable terminology. These statements are only
    predictions and involve known and unknown risks, uncertainties and other factors,
    including the risks in the section entitled "Risk Factors", that may cause our
    or our industry's actual results, levels of activity, performance or achievements to be
    materially different from any future results, levels of activity, performance or
    achievements expressed or implied by these forward-looking statements.Although we
    believe that the expectations reflected in the forward-looking statements are reasonable,
    we cannot guarantee future results, levels of activity, performance or achievements.
    Except as required by applicable law, including the securities laws of the United States,
    we do not intend to update any of the forward-looking statements to conform these
    statements to actual results.Our financial
    statements are stated in United States Dollars and are prepared in accordance with United
    States Generally Accepted Accounting Principles. In this quarterly report, unless
    otherwise specified, all dollar amounts are expressed in United States Dollars.


Definitions and
    ConventionsReferences to "China" or "PRC" refer to the People's Republic of
    China.References to "Common Stock" means the Common Stock, no par value, of China
    Media Group Corporation.References to the "Commission" or "SEC" means the U.S. Securities and
    Exchange Commission.References to "ECE" means ECE Technologies Sdn. Bhd., a company incorporated in
    Malaysia.References to the "ATeam" means A-Team Resources Sdn. Bhd., a company
    incorporated in Malaysia that is engaged in the business of consumer electronics and light
    appliances.References to the "BRR" means Beijing Ren Ren Health Culture Promotion Co.,
    Limited, a company incorporated in China that is a 50% subsidiary of Good World. BRR is
    engaged in advertising sales in China.References to the "ATC Marketing" means ATC Marketing Limited, a company
    incorporated in Hong Kong that is a 50% subsidiary of Good World. ATC Marketing is a joint
    venture company with AdvanceTech Communications Sdn. Bhd. holding the worldwide marketing
    rights, other than certain rights belonging to the Company, of a convergent communication
    device named M.A.G.I.C.References to the "Good World" means Good World Investments Limited, an
    investment holding company incorporated in the British Virgin Islands that is a wholly
    owned subsidiary of CMG.References to the "ATC" means AdvanceTech Communications Sdn. Bhd., a Malaysia
    incorporated company that is developing a convergent communication device named M.A.G.I.C.References to the "RRMG" means Ren Ren Media Group Limited, a company
    incorporated in Hong Kong that is a wholly owned subsidiary of CMG. RRMG is an
    administrative and advertising sales company in Hong Kong and China.References to "Company", "CMG", "we", "our",
    "Group" means China Media Group Corporation and includes, unless the context
    requires or indicate otherwise, the operation of its subsidiaries (all herein defined).References to "33 Act" or "Securities Act" means the Securities Act of
    1933, as amended.References to "34 Act" or "Exchange Act" means the Securities Act of
    1934, as amended.


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PART
    I


Item 1.
    Condensed Consolidated
    Financial Statements


cmg_logo.gif

China Media Group Corporation
Condensed Consolidated Financial Statements
June 30, 2012
(Unaudited)(Expressed In United States Dollars)

Condensed
    Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011


Condensed Consolidated Statements of Operations for the three months and six months period
    ended June 30, 2012 and 2011


Condensed Consolidated Statements of Stockholders' Equity for the years ended December 31,
    2011 and 2010, and for the six months period ended June 30, 2012


Condensed Consolidated Statements of Cash Flows for the six months periods ended June 30,
    2012 and 2011


Notes to Condensed Consolidated Financial Statements


---

CHINA MEDIA GROUP
    CORPORATIONCONDENSED
    CONSOLIDATED BALANCE SHEETSAS OF JUNE 30, 2012
    AND DECEMBER 31, 2011


**June 30
    2012**
    
    **December 31
    2011****Notes**
    
    **(Unaudited)**
    
    **(Audited)**ASSETS
    
    
    **US$**
    
    **US$**Current Assets:Cash
    and cash equivalents
    6
    
    26,740
    
    23,992Restricted cash
    6
    
    67,532
    
    57,395Trade
    receivables
    7
    
    2,681,606
    
    3,017,369Due from related
    parties
    8
    
    319,771
    
    -Prepayments,
    deposit and other receivables
    9
    
    1,596,197
    
    139,055Total current assets
    
    
    4,691,846
    
    3,237,811Non-current
    assets:Property
    and equipments, net
    10
    
    157,869
    
    83,905Advance payment for
    distribution rights
    11
    
    68,932
    
    -Investment
    in shares
    12
    
    81,556
    
    -Goodwill
    
    
    6,323,061
    
    -Total
    non-current assets
    
    
    6,631,418
    
    83,905Total
    assets
    
    
    11,323,264
    
    3,321,716LIABILITIES
    AND STOCKHOLDERS' EQUITYCurrent
    liabilities:Bank
    overdraft
    6
    
    36,724
    
    -Trade payables
    13
    
    763,732
    
    44,197Other
    payables and accruals
    14
    
    826,197
    
    389,273Short term debt
    15
    
    216,400
    
    181,030Due
    to officer and directors
    16
    
    422,692
    
    133,027Due to related
    parties
    17
    
    2,060,980
    
    -Trade
    finance payables
    18
    
    304,500
    
    335,671Obligations under
    finance lease
    19
    
    53,130
    
    24,433Option
    liabilities
    
    
    236,504
    
    -Total current
    liabilities
    
    
    4,920,859
    
    1,107,631Long-term debts:Obligations
    under finance leases
    19
    
    90,560
    
    54,921Term loans
    15
    
    185,020
    
    274,589Shareholder
    loans
    20
    
    2,000,000
    
    -2,275,580
    
    329,510Total liabilities
    
    
    7,196,439
    
    1,437,141Stockholders'equity:Common
    stock, no par value, 85,000,000,000 shares authorized, 1,113,623,296  (2011:
    558,779,837) shares issued and outstanding
    4
    
    2,580,543
    
    583,107Shares to be issued
    
    
    52,510
    
    -Comprehensive
    income
    
    
    98,323
    
    106,458Retained profits
    
    
    1,395,449
    
    1,195,010**Total stockholders' equity**
    
    
    4,126,825
    
    1,884,57511,323,264
    
    3,321,716


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

F-3

---

CHINA MEDIA GROUP
    CORPORATIONCONDENSED
    CONSOLIDATED STATEMENTS OF OPERATIONSFOR THE THREE AND SIX
    MONTHS ENDED JUNE 30, 2012 AND 2011(UNAUDITED)


Three months periods
    Six months periodsended June 30
    
    ended June 302012
    
    2011
    
    2012
    
    2011(Unaudited)
    
    (Unaudited)
    
    (Unaudited)
    
    (Unaudited)US$
    
    US$
    
    US$
    
    US$Net
    revenue
    
    776,608
    
    1,836,524
    
    1,978,044
    
    3,557,909Cost of revenue
    
    (675,204)
    
    (906,233)
    
    (1,485,353)
    
    (1,875,282)Gross
    profit
    
    101,404
    
    930,291
    
    492,691
    
    1,682,627Operating
    expenses:Administration
    expenses
    
    (127,498)
    
    (214,355)
    
    (282,693)
    
    (408,287)Selling
    and distribution expenses
    
    (31,078)
    
    (44,871)
    
    (50,410)
    
    (87,157)Loss from
    operations
    
    (57,172)
    
    671,065
    
    159,588
    
    1,187,183Other income /
    (expenses)Gain on foreign exchange
    
    -
    
    -
    
    16,317
    
    -Gain on disposal of fixed assets
    
    -
    
    4,003
    
    -
    
    11,208Other income
    
    1,769
    
    3,050
    
    46,178
    
    3.056Interest income
    
    13
    
    -
    
    24
    
    -Interest expenses
    
    (15.469)
    
    (25,889)
    
    (21,668)
    
    (47,468)(Loss)/profit
    before taxation
    
    (70,859)
    
    652,229
    
    200,439
    
    1,153,979Taxation
    
    -
    
    -
    
    -
    
    -Net
    (loss)/profit before uncontrolled interest
    
    (70,859)
    
    652,229
    
    200,439
    
    1,153,979Uncontrolled
    interest
    
    -
    
    -
    
    -
    
    -Net (loss)/profit
    
    (70,859)
    
    652,229
    
    200,439
    
    1,153,979Other
    comprehensive incomeForeign currency translation gain
    
    (8,135)
    
    -
    
    (8,135)
    
    -Comprehensive loss
    
    (78,994)
    
    652,229
    
    192,304
    
    1,153,979Basic and diluted
    loss per common share
    
    (0.00)
    
    (0.00)
    
    (0.00)
    
    (0.00)Basic and diluted
    weighted average number of common shares *
    
    692,917,816
    
    558,779,837
    
    625,849,431
    
    558,779,837


*
    Weighted average number of shares used to compute basic and diluted loss per share for the
    three months ended June 30, 2012 and 2011 are the same since the effect of dilutive
    securities are anti-dilutive.The accompanying notes are an integral part of these consolidated financial statements.


F-4

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CHINA MEDIA GROUP CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
    STOCKHOLDERS' EQUITYFOR THE YEARS ENDED DECEMBER 31, 2011
    AND 2010AND FOR THE SIX MONTHS ENDED JUNE 30,
    2012(UNAUDITED)


Common
    
    Additional
    
    
    
    
    
    
    
    
    
    TotalStock
    
    Paid-in
    
    Comprehensive
    
    Shares to
    
    Retained
    
    Uncontrolled
    
    Stockholders'Shares
    
    Amount
    
    Capital
    
    Income
    
    be issued
    
    Profits
    
    Interest
    
    EquityUS$
    
    US$
    
    US$
    
    US$
    
    US$
    
    US$
    
    US$Balance
    at December 31,2009 and January 1, 2010
    558,779,837
    
    583,107
    
    -
    
    2,461
    
    -
    
    767,942
    
    -
    
    1,353,510Options granted
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -Comprehensive
    income
    -
    
    -
    
    -
    
    155,439
    
    -
    
    -
    
    -
    
    155,439Issuance of shares for acquisition of subsidiaries
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -Gain
    on disposal of subsidiary
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -Net profit
    -
    
    -
    
    -
    
    -
    
    -
    
    71,390
    
    -
    
    71,390Balance at December 31, 2010 and January 1, 2011
    558,779,837
    
    583,107
    
    -
    
    157,900
    
    -
    
    839,332
    
    -
    
    1,580,339Options
    granted
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -Comprehensive loss
    -
    
    -
    
    -
    
    (51,442)
    
    -
    
    -
    
    -
    
    (51,442)Shares
    to be issued for acquisition of share investments
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -Net profit
    -
    
    -
    
    -
    
    -
    
    -
    
    355,678
    
    -
    
    355,678Balance
    at December 31, 2011
    558,779,837
    
    583,107
    
    -
    
    106,458
    
    -
    
    1,195,010
    
    -
    
    1,884,575Issuance of shares for service
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    -Issuance
    of shares for acquisition of Legal Acquirer
    554,843,459
    
    1,997,436
    
    -
    
    -
    
    -
    
    -
    
    -
    
    1,997,436Share to be issued for acquisition of share investment
    -
    
    -
    
    -
    
    -
    
    52,510
    
    -
    
    -
    
    52,510Comprehensive
    loss
    -
    
    -
    
    -
    
    (8,135)
    
    -
    
    -
    
    -
    
    (8,135)Net profits
    -
    
    -
    
    -
    
    -
    
    -
    
    200,439
    
    -
    
    200,439Balance
    at June 30, 2012
    1,113,623,296
    
    2,580,543
    
    -
    
    98,323
    
    52,510
    
    1,395,449
    
    -
    
    4,126,825


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

F-5

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CHINA MEDIA GROUP
    CORPORATIONCONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE SIX MONTHS
    ENDED JUNE 30, 2012 AND 2011(UNAUDITED)


**For the Six Months ended
    June 30 
    2012**
    
    **For the Six Months ended June 30 
    2011****US$**
    
    **US$**Cash flows from
    operating activities:Net
    profit
    
    
    200,439
    
    1,153,979Adjustment to
    reconcile net loss to net cash used in operating activities:Depreciation
    
    
    17,719
    
    34,786Loss on
    disposal of fixed assets
    
    
    -
    
    8,776(Increase) / decrease in assets:Trade receivable
    
    
    335,763
    
    288,462Prepaid expenses, deposit and other receivables
    
    
    (1,368,787)
    
    (851,188)Due from related parties
    
    
    (8,013)
    
    -(Increase) / decrease in liabilities:Trade payable
    
    
    719,535
    
    (56,888)Other payable and accrued expenses
    
    
    (76,071)
    
    (15,643)Terms loan (short term)
    
    
    35,370
    
    (34,316)Trade financing payables
    
    
    (31,171)
    
    (375,336)Obligation under finance lease (short term)
    
    
    28,697
    
    43,031Tax payables
    
    
    90,675
    
    -Due to directors and officers
    
    
    (133,016)
    
    (34,594)Due to related parties
    
    
    297,717
    
    -Terms loan (long term)
    
    
    (89,569)
    
    -Obligation under finance lease (long term)
    
    
    35,639
    
    (83,804)Net cash provided
    by operating activities
    
    
    54,927
    
    77,265Cash flows from
    investing activities:Acquisition
    of subsidiary, net of cash
    
    
    20,676
    
    -(Purchase) /
    disposal of property and equipment
    
    
    (91,307)
    
    20,864Net
    cash (used in) / provided by investing activities
    
    
    (70,631)
    
    20,864Cash
    flows from financing activities :Issue of shares
    for acquisition of subsidiary
    
    
    -
    
    -Net cash provided
    by financing activities
    
    
    -
    
    -Net (decrease) /
    increase in cash and cash equivalents
    
    
    (15,704)
    
    98,129Effect
    of exchange rate changes on cash and cash equivalents
    
    
    (8,135)
    
    74,436Cash and cash
    equivalents - net, beginning
    
    
    81,387
    
    (120,883)Cash and cash
    equivalents - net, ending
    
    
    57,548
    
    51,682Supplemental
    disclosure of cash flow information:Interests
    paid
    
    
    21,668
    
    47,468Income
    tax paid
    
    
    -
    
    -


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

F-6

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CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1
    ORGANIZATION


China Media Group Corporation (the "Company") ("China Media") is a
    Texas corporation, incorporated on October 1, 2002.


In January 2006, the Company established a wholly owned subsidiary Ren Ren Media Group
    Limited, a company incorporated in Hong Kong, as its operating company in Hong Kong. In
    March 2007, the Company acquired all the outstanding shares of Good World Investments
    Limited, a British Virgin Islands corporation that holds 50% of Beijing Ren Ren Health
    Culture Promotion Limited, a company incorporated in China in the advertising and media
    business in China.


In May 2009, the Company and its subsidiaries ("the Group") established a 50/50
    joint venture company, ATC Marketing Limited, which is to be in the business of marketing
    and distributing of convergent multimedia communication and internet devices.


The Group will be engaged in the media and advertising business, focusing mainly in China,
    and the marketing and distribution of convergent devices and the sale and marketing of
    organic fertilizers and produce. During the period, the Group recorded sales in the
    provision of advertising services.


On June 8, 2012, the Group acquired 100% equity interest of A-Team Resources Sdn. Bhd.
    (A-Team), a distributor of electronics and light appliances, at a consideration price of
    $2,011,607 by the issuance of 558,779,837 shares in the Company. A-Team was treated as the
    acquirer for accounting purpose since the orginal stockholders of A-Team owned a majority
    (51%) of the shares of China Media's common stock immediately following the completion of
    the transaction. A-Team was the legal acquiree but deemed to be the accounting acquirer,
    China Media was the legal acquirer but deemed to be the accounting acquiree in the reverse
    merger. The historical financial statements prior to the acquisition are those of the
    accounting acquirer (A-Team). Historical stockholders' equity of the acquirer prior to the
    merger are retroactively restated (a recapitalization) for the equivalent number of shares
    received in the merger. Operations prior to the merger are those of the acquirer. After
    completion of the transaction, the Company's consolidated financial statements include the
    assets and liabilities, the operations and cash flow of the Company and its subsidiaries.


NOTE 2
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS


General


The accompanying unaudited interim consolidated financial statements have been prepared in
    accordance with accounting principles generally accepted in the United States of America
    and the rules of the U.S. Securities and Exchange Commission, and should be read in
    conjunction with the audited financial statements and notes thereto for the year ended
    December 31, 2011. They do not include all information and footnotes required by
    accounting principles generally accepted in the United States of America for complete
    financial statements. However, except as disclosed herein below, there has been no other
    material change in the information disclosed in the notes to the financial statements for
    the year ended December 31, 2011 included in the Company Form 10-K filed with the
    Securities and Exchange Commission. 
    On June 11, 2012 and June 14, 2012, the Company has filed Form 8-K and Form 8-K/A to
    effect a reversed merger between the Company and A-Team at June 8, 2012. The Company's
    consolidated financial statements include the assets and liabilities, the operations and
    cash flow of A-Team before the transaction and the Company and its subsidiaries after the
    transactions.
    In the opinion of management, all adjustments (consisting of normal recurring accruals and
    the reverse acquisition) considered necessary for a fair presentation of financial
    position and results of operations for the interim period presented have been included.
    Operating results for the interim period are not necessary indicative of the results that
    may be expected for the respective full.


Basis and business presentation


China Media Group Corporation. ("CMG"or the"Registrant"), a public traded and holding company was incorporated under the
    laws of the State of Texas in October 2002.  In connection with the consummation
    of the reverse merger transaction on June 8, 2012 with A-Team Resources Sdn. Bhd., a
    Malaysia corporation ("ATeam"), the accounting acquirer (see below).  The
    historical financial statements are those of ATeam, the accounting acquirer, immediately
    following the consummation of the reverse merger.  All references that refer to
    (the"Company"or"CMG"or"we"or"us"or"our") are to CMG, the Registrant and its wholly or majority owned
    subsidiaries unless otherwise differentiated.  The Company is now engaged in the
    business of distributing electronics and light appliances.The unaudited condensed financial statements for the six months ended June 30,
    2012 include the financial statements of the Company, ATeam, and its wholly owned
    subsidiaries Ren Ren Media Group Limited, Good World Investments Limited, and two 50%
    subsidiaries, namely Beijing Ren Ren Health Culture Promotion Limited and ATC Marketing
    Limited. The Company consolidated all the above subsidiaries including the two 50%
    ownership companies during the period of control because of the sole largest shareholding
    status and/or controlling of the Board of Directors with effect from June 8, 2012 after
    the completion of the reverse merger with A-Team.


The results of subsidiaries acquired or sold during the year are consolidated or
    deconsolidated from their effective dates of acquisition or through their effective dates
    of disposition, respectively.


All significant inter-company transactions and balances have been eliminated on
    consolidation.


F-7

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CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)


Use of estimates


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


Net Income (Loss) per Share


Basic earnings per share were computed by dividing net income (loss) by the weighted
    average number of shares of common stock outstanding during the year. Diluted income
    (loss) per common share for the year ended December 31, 2011 and 2010 are not presented as
    it would be anti-dilutive.


Fair Value Measurements and DisclosuresASC 820 "Fair Value Measurements and Disclosures" codified SFAS No. 107,
    "Disclosures about Fair Value of Financial Instruments". ASC 820 applies to all
    entities, transactions, and instruments that require or permit fair value measurements,
    with specific exceptions and qualifications. The Company is required to disclose estimated
    fair values of financial instruments. Unless otherwise indicated, the fair values of all
    reported assets and liabilities, which represent financial instruments, none of which are
    held for trading purposes, approximate are carrying values of such amounts.


Cash and Cash Equivalents


The Company considers all liquid investments with a maturity of three months or less from
    the date of purchase that are readily convertible into cash to be cash equivalents.


Inventories


Inventories are stated at the lower of cost or market, cost being determined on the
    first-in, first-out method. Inventories are written down if the estimated net realizable
    value is less than the recorded value.


Property & equipment


Property & equipment is stated at costs. Depreciation are computed using the
    straight-line method over the estimated economic useful lives of the related assets as
    follows:Leasehold improvements
    5 yearsFurniture, fixture and equipment
    5 yearsMotor vehicles
    5 - 10 yearsOffice equipment
    2 - 5 yearsMoulds
    5 years


F-8

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO CONSOLIDATED
    FINANCIAL STATEMENTSNOTE 2
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)Impairment of Non-Financial AssetsThe Company evaluates all of its long-lived assets, such as motor vehicles, furniture and
    fittings, office equipment, mould, renovation and other intangibles, for impairment in
    accordance with ASC 360, Property, Plant and Equipment, when events or changes in
    circumstances warrant such a review. If an evaluation is required, the estimated future
    undiscounted cash flows associated with the asset are compared to the asset's carrying
    amount to determine if an adjustment to fair value is required.Borrowing CostsAll borrowing costs are recognised in statement of income when incurred. Borrowing costs
    consist of interest and other costs that the Company incurred in connection with the
    borrowing of funds.Lease(a)
    Finance LeaseFinance leases, which transfer to the Company substantially all the risks and rewards
    incidental to ownership of the leased item, are capitalised at the inception of the lease
    at the fair value of the leased asset or, if lower, at the present value of the minimum
    lease payments. Any initial direct costs are also added to the amount capitalised. Lease
    payments are apportioned between the finance charges and reduction of the lease liability
    so as to achieve a constant rate of interest on the remaining balance of the liability.
    Finance charges are charged to the statement of comprehensive income. Contingent rents, if
    any, are charged as expenses in the periods in which they are incurred.
    Leased assets are depreciated over the estimated useful life of the asset. However, if
    there is no reasonable certainty that the Company will obtain ownership by the end of the
    lease term, the asset is depreciated over the shorter of the estimated useful life and the
    lease term.(b)
    Operating LeaseOperating lease payments are recognised as an expense in statement of income on a
    straight-line basis over the lease term. The aggregate benefit of incentives provided by
    the lessor is amortised as a reduction of rental expense over the lease term on a
    straight-line basis.


F-9

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO CONSOLIDATED
    FINANCIAL STATEMENTSNOTE 2
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)Income Taxes(a)
    Current TaxCurrent tax assets and liabilities are measured at the amount expected to be recovered
    from or paid to the taxation authorities. The tax rates and tax laws used to compute the
    amount are those that are enacted or substantively enacted by the reporting date.
    Current taxes are recognised in the statement of income except to the extent that the tax
    relates to items recognised outside the statement of income, either in other income or
    directly in equity.(b)
    Deferred TaxDeferred tax assets and liabilities are recognised for the future tax consequences
    attributable to differences between the financial statement carrying amounts of existing
    assets and liabilities and their respective tax basis and operating loss and tax credit
    carryforwards. 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 recognised
    in income in the period that includes the enactment date. The Company records a valuation
    allowance for deferred tax assets if, based upon the available evidence, it is more likely
    than not that some or all of the deferred tax assets will not be realised.


Contingent Liabilities


A contingent liability is a possible obligation that arises from past events and whose
    existence will only be confirmed by the occurrence of one or more uncertain future events
    not wholly within the control of the Company. It can also be a present obligation arising
    from past events that is not recognised because it is not probable that an outflow of
    economic resources will be required or the amount of obligation cannot be measured
    reliably.Revenue The Company recognises its revenue
    in accordance with the ASC 605 Revenue Recognition which codified Securities and Exchange
    Commissions ("SEC") Staff Accounting Bulletin No. 104, "Revenue Recognition
    in Financial Statements" ("SAB 104"). Revenue is recognised upon shipment,
    provided that evidence of an arrangement exists, title and risk of loss have passed to the
    customer, fees are fixed or determinable and collection of the related receivable is
    reasonably assured. Revenue is recorded net of estimated product returns, which is based
    upon the Company's return policy, sales agreements, management estimates of potential
    future product returns related to current period revenue, current economic trends, changes
    in customer composition and historical experience.


F-10

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)


**Provision for Doubtful Debts**An impairment loss is recognised when there is objective evidence that a financial asset
    is impaired. Management specifically reviews its receivables financial assets and analyses
    historical bad debts, customer concentrations, customer creditworthiness, current economic
    trends and changes in the customer payment terms when making a judgment to evaluate the
    adequacy of the allowance for impairment losses. Where there is objective evidence of
    impairment, the amount and timing of future cash flows are estimated based on historical
    loss experience for assets with similar credit risk characteristics. If the expectation is
    different from the estimation, such difference will impact the carrying value of
    receivables.**Fair Value Measurements and Disclosure**ASC 820 "Fair Value Measurements and Disclosures" codified SFAS No. 107,
    "Disclosures about Fair Value of Financial Instruments". ASC 820 applies to all
    entities, transactions, and instruments that require or permit fair value measurements,
    with specific exceptions and qualifications. The Company is required to disclose estimated
    fair values of financial instruments. Unless otherwise indicated, the fair values of all
    reported assets and liabilities, which represent financial instruments, none of which are
    held for trading purposes, approximate are carrying values of such amounts.Intangible Assets


The Company evaluates intangible assets for impairment, at least on an annual basis and
    whenever events or changes in circumstances indicate that the carrying value may not be
    recoverable from its estimated future cash flows. Recoverability of intangible assets,
    other long-lived assets and, goodwill is measured by comparing their net book value to the
    related projected undiscounted cash flows from these assets, considering a number of
    factors including past operating results, budgets, economic projections, market trends and
    product development cycles. If the net book value of the asset exceeds the related
    undiscounted cash flows, the asset is considered impaired, and a second test is performed
    to measure the amount of impairment loss.


Income taxes


The Company accounts for income taxes under ASC 740 Income Taxes" which codified SFAS
    109, "Accounting for Income Taxes." Under the asset and liability method of ASC
    740, deferred tax assets and liabilities are recognized for the future tax consequences
    attributable to differences between the financial statements carrying amounts of existing
    assets and liabilities and their respective tax bases. 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. Under ASC 740,
    the effect on deferred tax assets and liabilities of a change in tax rates is recognized
    in income in the period the enactment occurs. A valuation allowance is provided for
    certain deferred tax assets if it is more likely than not that the Company will not
    realize tax assets through future operations.


F-11

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)


Stock-based compensationASC 718 "Compensation - Stock Compensation" codified SFAS No. 123 prescribes
    accounting and reporting standards for all stock-based payments award to employees,
    including employee stock options, restricted stock, employee stock purchase plans and
    stock appreciation rights. , may be classified as either equity or liabilities. The
    Company should determine if a present obligation to settle the share-based payment
    transaction in cash or other assets exists. A present obligation to settle in cash or
    other assets exists if: (a) the option to settle by issuing equity instruments
    lacks commercial substance or (b) the present obligation is implied because of an
    entity's past practices or stated policies. If a present obligation exists, the
    transaction should be recognized as a liability; otherwise, the transaction should be
    recognized as equity.


The Company accounts for stock-based compensation issued to non-employees and consultants
    in accordance with the provisions of ASC 505-50 "Equity - Based Payments to
    Non-Employees" which codified SFAS 123 and the Emerging Issues Task Force consensus
    in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments that
    are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or
    Services". Measurement of share-based payment transactions with non-employees shall
    be based on the fair value of whichever is more reliably measurable: (a) the goods
    or services received; or (b) the equity instruments issued. The fair value of the
    share-based payment transaction should be determined at the earlier of performance
    commitment date or performance completion date.


Employees' benefits and pension obligations


Mandatory contributions of five percent of gross salary payments, subject to certain
    minimum and maximum levels, are made to defined contribution Mandatory Provident Fund
    schemes ("MPF schemes") pursuant to the laws of Hong Kong. These contributions
    are charged to expense in the same period as the related salary cost. Total contributions
    made by the Company to the MPF schemes were $1,628 and $nil for the year December 31, 2011
    and 2010, respectively.


Issuance of shares for service


The Company accounts for the issuance of equity instruments to acquire goods and services
    based on the fair value of the goods and services or the fair value of the equity
    instrument at the time of issuance, whichever is more reliably measurable.


Revenue Recognition


The Company recognizes its revenue in accordance with the Securities and Exchange
    Commissions ("SEC") Staff Accounting Bulletin No. 104, "Revenue Recognition
    in Financial Statements" ("SAB 104"). Revenue is recognized upon shipment,
    provided that evidence of an arrangement exists, title and risk of loss have passed to the
    customer, fees are fixed or determinable and collection of the related receivable is
    reasonably assured. Revenue is recorded net of estimated product returns, which is based
    upon the Company's return policy, sales agreements, management estimates of potential
    future product returns related to current period revenue, current economic trends, changes
    in customer composition and historical experience.


F-12

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)


Foreign Currency Translation


The accounts of the Company's Hong Kong and China subsidiaries are maintained, in the Hong
    Kong dollars (HK) and Chinese Renminbi, respectively. Such financial statements are
    translated into U.S. Dollars (USD) in accordance with ASC 830 "Foreign Currency
    Translation" which codified Statement of Financial Accounts Standards
    ("SFAS") No. 52, "Foreign Currency Translation," with the respective
    currency as the functional currency. According to the Statement, all assets and
    liabilities were translated at the exchange rate on the balance sheet date, stockholder's
    equity are translated at the historical rates and statement of operations items are
    translated at the weighted average exchange rate for the year. The resulting translation
    adjustments are reported under other comprehensive income in accordance with SFAS No. 130,
    "Reporting Comprehensive Income. As of June 30, 2012, the comprehensive income was
    $98,323.


Recent PronouncementsRecently Implemented Standards


ASC 105, Generally Accepted Accounting Principles ("ASC 105") (formerly
    Statement of Financial Accounting Standards No. 168, The FASB Accounting Standards
    Codification and the Hierarchy of Generally Accepted Accounting Principles a replacement
    of FASB Statement No.162) reorganized by topic existing accounting and reporting
    guidance issued by the Financial Accounting Standards Board ("FASB") into a
    single source of authoritative generally accepted accounting principles ("GAAP")
    to be applied by nongovernmental entities. All guidance contained in the Accounting
    Standards Codification ("ASC") carries an equal level of authority. 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. Accordingly, all other accounting literature will be deemed
    "non-authoritative". ASC 105 is effective on a prospective basis for financial
    statements issued for interim and annual periods ending after September 15, 2009. The
    Company has implemented the guidance included in ASC 105 as of July 1, 2009. The
    implementation of this guidance changed the Company's references to GAAP authoritative
    guidance but did not impact the Company's financial position or results of operations.


ASC 855, Subsequent Events ("ASC 855") (formerly Statement of Financial
    Accounting Standards No. 165, Subsequent Events) includes guidance that was issued by the
    FASB in May 2009, and is consistent with current auditing standards in defining a
    subsequent event. Additionally, the guidance provides for disclosure regarding the
    existence and timing of a company's evaluation of its subsequent events. ASC 855 defines
    two types of subsequent events, "recognized" and "non-recognized".
    Recognized subsequent events provide additional evidence about conditions that existed at
    the date of the balance sheet and are required to be reflected in the financial
    statements. Non-recognized subsequent events provide evidence about conditions that did
    not exist at the date of the balance sheet but arose after that date and, therefore; are
    not required to be reflected in the financial statements. However, certain non-recognized
    subsequent events may require disclosure to prevent the financial statements from being
    misleading. This guidance was effective prospectively for interim or annual financial
    periods ending after June 15, 2009. The Company implemented the guidance included in ASC
    855 as of April 1, 2009. The effect of implementing this guidance was not material to the
    Company's financial position or results of operations.


ASC 944, Financial Services Insurance ("ASC 944") contains guidance that was
    previously issued by the FASB in May 2008 as Statement of Financial Accounting Standards
    No. 163, Accounting for Financial Guarantee Insurance Contracts an interpretation of FASB
    Statement No. 60 that provides for changes to both the recognition and measurement of
    premium revenues and claim liabilities for financial guarantee insurance contracts that do
    not qualify as a derivative instrument in accordance with ASC 815, Derivatives and Hedging
    (formerly included under Statement of Financial Accounting Standards No. 133, Accounting
    for Derivative Instruments and Hedging Activities). This financial guarantee insurance
    contract guidance also expands the disclosure requirements related to these contracts to
    include such items as a company's method of tracking insured financial obligations with
    credit deterioration, financial information about the insured financial obligations, and
    management's policies for placing and monitoring the insured financial obligations. ASC
    944, as it relates to financial guarantee insurance contracts, was effective for fiscal
    years beginning after December 15, 2008, except for certain disclosures related to the
    insured financial obligations, which were effective for the third quarter of 2008. The
    Company does not have financial guarantee insurance products, and, accordingly, the
    implementation of this portion of ASC 944 did not have an effect on the Company's results
    of operations or financial position.


F-13

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)


Recent Pronouncements (Continued)Recently Implemented Standards (Continued)


ASC 805, Business Combinations ("ASC 805") (formerly included under Statement of
    Financial Accounting Standards No. 141 (revised 2007), Business Combinations) contains
    guidance that was issued by the FASB in December 2007. It requires the acquiring entity in
    a business combination to recognize all assets acquired and liabilities assumed in a
    transaction at the acquisition-date fair value, with certain exceptions. Additionally, the
    guidance requires changes to the accounting treatment of acquisition related items,
    including, among other items, transaction costs, contingent consideration, restructuring
    costs, indemnification assets and tax benefits. ASC 805 also provides for a substantial
    number of new disclosure requirements. ASC 805 also contains guidance that was formerly
    issued as FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a
    Business Combination That Arise from Contingencies which was intended to provide
    additional guidance clarifying application issues regarding initial recognition and
    measurement, subsequent measurement and accounting, and disclosure of assets and
    liabilities arising from contingencies in a business combination. ASC 805 was effective
    for business combinations initiated on or after the first annual reporting period
    beginning after December 15, 2008. The Company implemented this guidance effective January
    1, 2009. Implementing this guidance did not have an effect on the Company's financial
    position or results of operations; however it will likely have an impact on the Company's
    accounting for future business combinations, but the effect is dependent upon
    acquisitions, if any, that are made in the future.


ASC 810, Consolidation ("ASC 810") includes new guidance issued by the FASB in
    December 2007 governing the accounting for and reporting of noncontrolling interests
    (previously referred to as minority interests). This guidance established reporting
    requirements which include, among other things, that noncontrolling interests be reflected
    as a separate component of equity, not as a liability. It also requires that the interests
    of the parent and the noncontrolling interest be clearly identifiable. Additionally,
    increases and decreases in a parent's ownership interest that leave control intact shall
    be reflected as equity transactions, rather than step acquisitions or dilution gains or
    losses. This guidance also requires changes to the presentation of information in the
    financial statements and provides for additional disclosure requirements. ASC 810 was
    effective for fiscal years beginning on or after December 15, 2008. The Company
    implemented this guidance as of January 1, 2009. The effect of implementing this guidance
    was not material to the Company's financial position or results of operations.


ASC 825, Financial Instruments ("ASC 825") includes guidance which was issued in
    February 2007 by the FASB and was previously included under Statement of Financial
    Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial
    Liabilities Including an amendment of FASB Statement No. 115. The related sections within
    ASC 825 permit a company to choose, at specified election dates, to measure at fair value
    certain eligible financial assets and liabilities that are not currently required to be
    measured at fair value. The specified election dates include, but are not limited to, the
    date when an entity first recognizes the item, when an entity enters into a firm
    commitment or when changes in the financial instrument causes it to no longer qualify for
    fair value accounting under a different accounting standard. An entity may elect the fair
    value option for eligible items that exist at the effective date. At that date, the
    difference between the carrying amounts and the fair values of eligible items for which
    the fair value option is elected should be recognized as a cumulative effect adjustment to
    the opening balance of retained earnings. The fair value option may be elected for each
    entire financial instrument, but need not be applied to all similar instruments. Once the
    fair value option has been elected, it is irrevocable. Unrealized gains and losses on
    items for which the fair value option has been elected will be reported in earnings. This
    guidance was effective as of the beginning of fiscal years that began after November 15,
    2007. The Company does not have eligible financial assets and liabilities, and,
    accordingly, the implementation of ASC 825 did not have an effect on the Company's results
    of operations or financial position.


F-14

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)


Recent Pronouncements (Continued)Recently
    Implemented Standards (Continued)


ASC 820, Fair Value Measurements and Disclosures ("ASC 820") (formerly included
    under Statement of Financial Accounting Standards No. 157, Fair Value Measurements)
    includes guidance that was issued by the FASB in September 2006 that created a common
    definition of fair value to be used throughout generally accepted accounting principles.
    ASC 820 applies whenever other standards require or permit assets or liabilities to be
    measured at fair value, with certain exceptions. This guidance established a hierarchy for
    determining fair value which emphasizes the use of observable market data whenever
    available. It also required expanded disclosures which include the extent to which assets
    and liabilities are measured at fair value, the methods and assumptions used to measure
    fair value and the effect of fair value measures on earnings. ASC 820 also provides
    additional guidance for estimating fair value when the volume and level of activity for
    the asset or liability have significantly decreased. The emphasis of ASC 820 is that fair
    value is the price that would be received to sell an asset or paid to transfer a liability
    in an orderly transaction between willing market participants, under current market
    conditions. ASC 820 also further clarifies the guidance to be considered when determining
    whether or not a transaction is orderly and clarifies the valuation of securities in
    markets that are not active. This guidance includes information related to a company's use
    of judgment, in addition to market information, in certain circumstances to value assets
    which have inactive markets.


Fair value guidance in ASC 820 was initially effective for fiscal years beginning after
    November 15, 2007 and for interim periods within those fiscal years for financial assets
    and liabilities. The effective date of ASC 820 for all non-recurring fair value
    measurements of nonfinancial assets and nonfinancial liabilities was fiscal years
    beginning after November 15, 2008. Guidance related to fair value measurements in an
    inactive market was effective in October 2008 and guidance related to orderly transactions
    under current market conditions was effective for interim and annual reporting periods
    ending after June 15, 2009.


The Company applied the provisions of ASC 820 to its financial assets and liabilities upon
    adoption at January 1, 2008 and adopted the remaining provisions relating to certain
    nonfinancial assets and liabilities on January 1, 2009. The difference between the
    carrying amounts and fair values of those financial instruments held upon initial
    adoption, on January 1, 2008, was recognized as a cumulative effect adjustment to the
    opening balance of retained earnings and was not material to the Company's financial
    position or results of operations. The Company implemented the guidance related to orderly
    transactions under current market conditions as of April 1, 2009, which also was not
    material to the Company's financial position or results of operations.


Recently Issued Standards


In June 2011, the Financial Accounting Standard Board ("FASB") issued Accounting
    Standard Update ("ASU") 2011-05, Presentation of Comprehensive Income,
    which requires an entity to present the total of comprehensive income, the components of
    net income, and the components of other comprehensive income either in a single continuous
    statement of comprehensive income, or in two separate but consecutive statements. ASU
    2011-05 eliminates the option to present components of other comprehensive income as part
    of the statement of equity. ASU 2011-05 will be effective for the Company beginning after
    December 15, 2011. The Company does not expect the adoption of ASU 2011-05 to have a
    material effect on its operating results or financial position. However, it will impact
    the presentation of comprehensive income.


In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820):
    Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S.
    GAAP and International Financial Reporting Standards ("IFRS").ASU 2011-04
    clarifies some existing concepts, eliminates wording differences between U.S. GAAP and
    IFRS, and in some limited cases, changes some principles to achieve convergence between
    U.S. GAAP and IFRS. ASU 2011-04 results in a consistent definition of fair value and
    common requirements for measurement of and disclosure about fair value between U.S. GAAP
    and IFRS. ASU 2011-04 also expands the disclosures for fair value measurements that are
    estimated using significant unobservable (Level 3) inputs. ASU 2011-04 will be effective
    for the Company beginning after December 15, 2011. The Company does not expect the
    adoption of ASU 2011-04 to have a material effect on its operating results or financial
    position.


F-15

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)


Recent Pronouncements (Continued)


Recently Issued Standards (continued)


In April 2011, the FASB issued ASU 2011-03, Consideration of Effective Control on
    Repurchase Agreements, which deals with the accounting for repurchase agreements and
    other agreements that both entitle and obligate a transferor to repurchase or redeem
    financial assets before their maturity. ASU 2011-03 changes the rules for determining when
    these transactions should be accounted for as financings, as opposed to sales. The
    guidance in ASU 2011-03 is effective for the first interim or annual period beginning on
    or after December 15, 2011. The guidance should be applied prospectively to transactions
    or modifications of existing transactions that occur on or after the effective date. Early
    adoption is not permitted. The adoption of ASU 2011-03 is not expected to have a material
    impact on the Company's financial condition or results of operation.


In April 2011, the FASB issued ASU 2011-02, "A Creditor's Determination of Whether a
    Restructuring is a Troubled Debt Restructuring", which clarifies when creditors
    should classify loan modifications as troubled debt restructurings. The guidance is
    effective for interim and annual periods beginning on or after June 15, 2011, and applies
    retrospectively to restructurings occurring on or after the beginning of the year. The
    guidance on measuring the impairment of a receivable restructured in a troubled debt
    restructuring is effective on a prospective basis. A provision in ASU 2011-02 also ends
    the FASB's deferral of the additional disclosures about troubled debt restructurings as
    required by ASU 2010-20. The adoption of ASU 2011-02 is not expected to have a material
    impact on the Company's financial condition or results of operations.


In 2010, the FASB issued ASC Update ("ASU") No. 2010-01, Equity (Topic 505):
    Accounting for Distributions to Shareholders with Components of Stock and Cash.This
    update clarify that the stock portion of a distribution to shareholders that allows them
    to elect to receive cash or stock with a potential limitation on the total amount of cash
    that all shareholders can elect to receive in the aggregate is considered a share issuance
    that is reflected in earnings per share prospectively and is not a stock dividend. This
    ASU codified the consensus reached in EITF Issue No. 09-E "Accounting for Stock
    Dividends, Including Distributions to Shareholders with Components of Stock and
    Cash". ASU 2010-01 is effective for interim and annual periods ending on or after
    December 15, 2009, and should be applied on a retrospective basis. The adoption of this
    update did not have any impact on the Company's financial statements.


In 2010, the FASB issued ASC Updated ("ASU") No. 2010-02, Consolidation
    (Topics 810) - Accounting and Reporting for Decreases in Ownership of a Subsidiary - A
    Scope Clarification This updated provides guidance for noncontrolling interests and
    changes in ownership interests of a subsidiary. An entity is required to deconsolidate a
    subsidiary when the entity ceases to have a controlling financial interest in the
    subsidiary. Upon deconsolidation of a subsidiary, an entity recognizes a gain or loss on
    the transaction and measures any retained investment in the subsidiary at fair value. The
    gain or loss includes any gain or loss associated with the difference between the fair
    value of the retained investment in the subsidiary and its carrying amount at the date the
    subsidiary is deconsolidated. In contrast, an entity is required to account for a decrease
    in its ownership interest of a subsidiary that does not result in a change of control of
    the subsidiary as an equity transaction. The adoption of this update did not have any
    impact on the Company's financial statements.


F-16

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)


Recent Pronouncements (Continued)


Accounting Standards Issued But Not Yet Effective


In 2010, the FASB issued ASC Update ("ASU") No. 2010-13, Compensation Stock
    Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based
    Payment Award in the Currency of the Market in Which the Underlying Equity Security
    Trades.This update is to codify the consensus reached in EITF Issue No. 09-J,
    "Effect of Denominating the Exercise Price of a Share-Based Payment Award in the
    Currency of the Market in Which the Underlying equity Security Trades" The amendments
    to the Codification clarify that an employee share-based payment award with an exercise
    price denominated in the currency of a market in which a substantial portion of the
    entity's equity shares trades should not be considered to contain a condition that is not
    a market, performance, or services condition. Therefore, an entity would not classify such
    an award as a liability if it otherwise qualifies as equity. The adoption of this update
    did not have any impact on the Company's financial statements.


In 2010, the FASB issued ASC Update ("ASU") No. 2010-21, Accounting for
    Technical Amendments to Various SEC Rules and Schedules.This update amends various
    SEC paragraphs in the FASB Accounting Standards Codification pursuant to SEC Final Rule,
    "Technical Amendments to Rules Forms, Schedules and Codification of Financial
    Reporting Policies". The adoption of this update did not have any impact on the
    Company's financial statements.


In 2010, the FASB issued ASC Update ("ASU") No. 2010-22, Accounting for
    Various Topics.This update amends various SEC paragraphs in the FASB Accounting
    Standards Codification based on external comments received and the issuance of Staff
    Accounting Bulletin (SAB) No. 112 which amends or rescinds portion of certain SAB topics.
    SAB 112 was issued to being existing SEC guidance into conformity with ASC 805
    "Business Combination" and ASC 810 "Consolidation". The adoption of
    this update did not have any impact on the Company's financial statements.


Reclassifications


Certain comparative amounts have been reclassified to conform to the current period's
    presentation.


F-17

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3
    UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN


The Company's financial statements are prepared using the generally accepted accounting
    principles applicable to a going concern, which contemplates the realization of assets and
    liquidation of liabilities in the normal course of business. As of June 30, 2012, the
    Company has incurred a retained earning totalling $1,395,449 and its current liabilities
    exceed its current assets by $229.013. In view of the matters described above,
    recoverability of a major portion of the recorded asset amounts shown in the accompanying
    balance sheets is dependent upon continued operations of the Company, which in turn is
    dependent upon the Company's ability to raise additional capital, obtain financing and to
    succeed in its future operations. The financial statements do not include any adjustments
    relating to the recoverability and classification of recorded asset amounts or amounts and
    classification of liabilities that might be necessary should the Company be unable to
    continue as a going concern.


Management has taken the following steps to revise its operating and financial
    requirements, which it believes are sufficient to provide the Company with the ability to
    continue as a going concern. The Company is actively pursuing additional funding and
    potential merger or acquisition candidates and strategic partners, which would enhance
    stockholders' investment. Management believes that the above actions will allow the
    Company to continue operations through the next fiscal year.


NOTE 4
    STOCKHOLDERS' EQUITY


Common Stock


On June 8, 2012, the Company issued 558,779,837 shares in the Company in consideration of
    the acquisition of 100% equity interests in A-Team.


NOTE 5
    STOCK OPTIONS AND WARRANTS


Stock Options


The Company adopted ASC 718 "Compensation Stock Compensation" codified SFAS No.
    123 (Revised 2004), Share Based Payment ("SFAS No. 123R"), under the
    modified-prospective transition method on April 1, 2006. SFAS No. 123R requires companies
    to measure and recognize the cost of employee services received in exchange for an award
    of equity instruments based on the grant-date fair value.


2002 Stock Option PlanEffective on October 11,
    2002, the Company adopted the 2002 Stock Option Plan (the "2002 Plan") allowing
    for the awarding of options to acquire shares of common stock. This plan provides for the
    grant of incentive stock options to key employees and directors. Options issued under this
    plan will expire over a maximum term of ten years from the date of grant.


On May 18, 2007, the board of directors approved to issue 12,300,000 stock options to
    employees to purchase shares of our Common Stock under the 2002 Stock Option Plan, at
    exercise price of $0.038 for a vesting period of 3 years. The 12,300,000 stock options
    expired on May 17, 2010.


On April 16, 2010, the board of directors approved to issue 19,000,000 stock options to
    employees to purchase shares of our Common Stock under the 2002 Stock Option Plan, at
    exercise price of $0.010 for an option period of 5 years, and for these options 50% of the
    entitlement is vested immediately to option holders and the remaining 50% shall be vested
    in one year from the date of issue of the option.


As of June 30, 2012, the Company has 19,000,000 stock options outstanding and the option
    liability is $236,504.


F-18

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5
    STOCK OPTIONS AND WARRANTS (Continued)


Following is a summary of the activities of the 2002 Stock Option Plan for the period
    ended June 30, 2012:


Options outstandingOutstanding,
    December 31, 2011
    19,000,000Granted during the
    period
    -Forfeited/lapsed
    during the period
    -Exercised during the
    period
    -Outstanding,
    June 30, 2012
    19,000,000


Following is a
    summary of the status of options outstanding at June 30, 2012:Outstanding Options
    
    Exercisable
    Options___________________
    
    _____________________________Grant
    Date
    Exercise
    Price
    Number
    Average
    Remaining
    Contractual Life
    Average
    Exercise Price
    Number
    Intrinsic
    Price4/16/2010
    $0.010
    19,000,000
    2.79
    $0.010
    19,000,000
    $0.00


On April 16, 2010, the Company granted 19,000,000 stock options to 5 qualified persons. As
    of June 30, 2012, there were 19,000,000 outstanding stock options.


The assumptions used in calculating the fair value of options granted using the
    Black-Scholes option pricing model are as follows:


i) The outstanding 19,000,000 stock options granted on April 16, 2010 and will expire on
    April 16, 2015:Grant date:
    4/16/2010Risk-free interest rate
    3.25%Expected life of the options
    5.00 yearsExpected volatility
    250%Expected dividend yield
    0


F-19

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5
    STOCK OPTIONS AND WARRANTS (Continued)


2007 Stock Incentive Plan


On February 19, 2007, the Company adopted the 2007 Stock Incentive Plan (the "2007
    Plan") allowing for the awarding of options to acquire shares of common stock. This
    plan provides for the grant of incentive stock options to key employees, directors and
    consultants. Options issued under this plan will expire over a maximum term of ten years
    from the date of grant. The Company had not issued any stock options under this scheme.


On March 8, 2007, we registered 38,400,000 shares underlying stock options under the 2007
    Stock Incentive Plan with the SEC pursuant to a registration statement on Form S-8.


During the year 2007, the Company had issued a total of 5,811,300 shares to its staff and
    consultants for their service provided.No shares were issued under the registration statement on Form S-8 during the year
    2008-2010.In May 2012, the company issued 711,009 shares to it consultant for this services.


No shares were issued under the registration statement on Form S-8 during the year 2009
    and 2008. As at June 30, 2012 there were 31,877,681 shares available underlying stock
    options under the 2007 Stock Incentive Plan.


**NOTE 6**
    CASH AND CASH EQUIVALENTS


Cash and cash equivalents are summarized as follows:


(a)     The fixed deposits with licensed banks bear interest rate at
    3% per annum.
    (b)     Cash and cash equivalents comprise of the following as at the
    end of the reporting period:


**June
    30
    2012**
    
    **December
    31
    201**1**US$**
    
    **US$**Cash
    and bank balances
    
    26,740
    
    15,600Fixed
    deposits with licensed banks
    (a)
    67,532
    
    67,58094,272
    
    81,387Less:
    Restricted cash
    (b)
    (67,532)
    
    (57,395)Bank overdraft
    
    (36,724)
    
    -(9,984)
    
    23,992








F-20

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


**NOTE 7**
    TRADE RECEIVABLES


**June 30
    2012**
    
    **December
    31 2011****US$**
    
    **US$**Trade receivables
    
    2,660,847
    
    1,819,683Trade
    receivables owed by a corporation in which a Director has a financial interests
    
    20,759
    
    1,197,6862,681,606
    
    3,017,369Less: Allowance
    for impairment losses
    
    -
    
    -2,681,606
    
    3,017,369


Trade receivables are non-interest bearing and
    the normal credit terms range from 30 to 90 days (2011: 30 to 90 days) terms. Other credit
    terms are assessed and approved on a case-by-case basis.The Company has no significant concentration of credit risk that arises from
    exposure to a single debtor or to groups of debtors.


NOTE 8
    DUE FROM RELATED PARTIES


Due from related parties are summarized as follows:


**June 30
    2012**
    
    **December 31
    2011****US$**
    
    **US$**Advance to
    supplier
    (a)
    255,355
    
    -Due
    from investment company
    (b)
    56,439
    
    -Due from director
    of  subsidiary company
    
    7,977
    
    -319,771
    
    -


a)
    Advance to suppliers is the deposit for the purchases of M.A.G.I.C. phone paid to
    AdvanceTech Communications Sdn. Bhd. ("ATC"), a minority shareholder of our
    subsidiary company.


b)
    Due from investment company is an amount due from a company in which our director Mr. Con
    Unerkov is a shareholder.


F-21

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 9
    PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES


**June 30
    2012**
    
    **December 31
    2011****US$**
    
    **US$**Other receivables
    
    1,445,525
    
    372Deposits
    
    37,371
    
    25,302Prepayments
    
    113,301
    
    113,3811,596,197
    
    139,055


NOTE 10
    PROPERTY AND EQUIPMENT, NET


Property and equipment is summarized as follows:


**June
    30****2012**
    
    **December
    31****2011****US$**
    
    **US$**CostLeasehold
    improvements
    
    79,298
    
    79,298Furniture,
    fixtures and equipment
    
    149,934
    
    149,934Computers
    
    -
    
    -Motor
    vehicles
    
    181,778
    
    181,778Moulds
    
    4,225
    
    4,225415,235
    
    415,235Additional cost:Leasehold
    improvements
    
    -
    
    -Furniture, fixtures
    and equipment
    
    5,707
    
    -Computers
    
    100,278
    
    -Motor vehicles
    
    47,951
    
    -Moulds
    
    -
    
    -569,171
    
    415,235Accumulated
    depreciation
    
    (411,302)
    
    (331,330)Balance
    at end of period
    
    157,869
    
    83,905


F-22

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 11
    ADVANCE PAYMENT FOR DISTRIBUTION RIGHTS


On January 25, 2006, the Company entered into an agreement with Fleming Assets Limited
    ("Fleming") to acquire the distribution rights for the M.A.G.I.C. Convergent
    Communications Device for the territories of China and Hong Kong. Under the agreement the
    Company will issue the following shares to Fleming:


*
    Within one month of signing the agreement, one million shares of the Company;*
    Within one month of receiving the
    prototype devices, one million shares of the Company;*
    Within one month of receiving the
    product from commercial production, two million shares of the Company; and*
    A royalty payment of 100,000
    shares of the Company for every 5,000 devices sold for the next 3 years.


The Company issued 1,000,000 shares of common stock in 2006 upon signing the agreement.


NOTE 12
    INVESTMENT IN SHARES


Investment in shares relates to acquisition of 5% interests in AdvanceTech Communications
    Sdn. Bhd. ("ATC") for US$81,556 as announced in Form 8K filed on February 22,
    2011. Pursuant to the agreement, the Company shall issue the 2,205,376 shares as part of
    the consideration within two months from the completion date. As at the date of this
    report, the Company still has not issued the shares as it is pending the delivery of the
    ATC shares, which has been extended to October 2012.


NOTE 13
    TRADE PAYABLES


**June 30****2012**
    
    **December 31 2011****US$**
    
    **US$**Trade payables
    
    763,732
    
    44,197Trade payables owed by a
    corporation in which a Director has a financial interests
    
    -
    
    -763,732
    
    44,197


These amounts are non-interest bearing. Trade payables are normally settled on 30 to 90
    days (2011: 30-90 days) terms..


NOTE 14
    OTHER PAYABLES AND ACCRUALS


Other payables and accruals are summarized as follows:**June 30****2012**
    
    **December 31****2011****US$**
    
    **US$**Accruals
    
    72,802
    
    170,165Accrued salaries
    and wages
    
    134,210
    
    -Accrued accounting, legal and
    consulting fee
    
    243,926
    
    -Other payables
    (a)
    143,024
    
    128,369Tax payables
    
    90,675
    
    90,739Other creditors
    (b)
    59,705
    
    -Sundry creditors
    (b)
    62,223
    
    -Deposit from
    customers
    
    19,632
    
    -Balance at end
    of period / year
    
    826,197
    
    389,273


a)
    Other payables are Company expenses such as postage, sundries, etc., and advanced on
    behalf of the Company from various parties.b)
    These amounts are non-interest bearing.  Other payables are normally settled on an
    average terms of 6 months.


F-23

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 15
    TERM LOANS


**June
    30
    2012**
    
    **December
    31
    2011****US$**
    
    **US$**Current
    portion:Not
    later than one (1) year
    
    216,400
    
    181,030Non-current
    portion:later
    than one (1) year and not later than two (2) years
    
    185,020
    
    194,788later
    than two (2) years and not later than five (5) years
    
    -
    
    79,801185,020
    
    274,589401,420
    
    455,619


The term loan  provided by Alliance Bank Malaysia Berhad is secured by the followings
    : -(i)
    Pledged of Company's fixed deposit;(ii)
    Guarantee by a third
    party corporation in which the Directors have financial interest;(iii)
    Notice of assignment
    and receivables finance agreement; and(iv)
    Joint and several
    guarantee by the Directors of the Company.The interest rates to the facility is fixed at 1.00 percentage points above the lenders'
    base lending rates.The term loan is repayable by 36 equal monthly installment of USD17,971 (RM 57,000)
    per month.


NOTE 16
    DUE TO OFFICERS AND DIRECTORS


The amounts due to directors and officers are interests free, unsecured and repayable on
    demand. The balance of due to directors and officers is $422,692 as of June 30, 2012
    (December 31, 2011: $133,027).


NOTE 17
    DUE TO RELATED PARTIES


Due to related parties are summarized as follows:


**June 30****2012**
    
    **December
    31****2011****US$**
    
    **US$**Due to shareholders
    (a)
    897,555
    
    -Due to directors
    of subsidiary companies
    (b)
    289,841
    
    -Due to former directors of the
    company
    (c)
    873,584
    
    -2,060,980
    
    -


(a)
    The amounts due
    to beneficial shareholders are unsecured, repayable on demand and are interest free except
    for the $50,000 which bears interests at 6% per annum.(b)
    The amount due to directors of subsidiary companies is interest free, unsecured and
    repayable on demand.(c)
    The amount due to former directors of the company is interest free, unsecured and
    repayable on demand.


F-24

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 18
    TRADE FINANCING PAYABLES


Trade financing payables for the financial period ended June 30, 2012 and December 31,
    2011 which bear interest at 2.0 percentage points above the lender's base lending rates
    are secured as follows:-(i)
    Acceptance of the Facility Offer Letter;(ii)
    Execution of the Receivables
    Finance Agreement; and(iii)
    Jointly and severally guaranteed
    by a Director of the Company and a third party.Trade financing payables are normally settled on 30 to 90 days (2011 : 30 to 90 days)
    terms.


NOTE 19
    OBLIGATIONS UNDER FINANCE LEASES


**June
    30
    2012**
    
    **December
    31
    2011****US$**
    
    **US$**Minimum
    lease payments:Not
    later than one (1) year
    
    63,140
    
    30,332Later
    than one (1) year but not later than five (5) years
    
    108,028
    
    68,512Total
    minimum lease payments
    
    171,168
    
    98,844Less:
    Future interest charges
    
    (27,478)
    
    (19,490)Present
    value of minimum lease payments
    
    143,690
    
    79,354


Repayable
    as follows:Not
    later than one (1) year
    
    53,130
    
    24,433Later
    than one (1) year and not later than five (5) years
    
    90,560
    
    54,921143,690
    
    79,354


The effective rates implicit in the lease is range between 4.76% to 7.30% (2011 : 4.76% to
    7.30%) per annum.


F-25

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 20
    SHAREHOLDER LOAN


**June 30****2012**
    
    **December 31****2011****US$**
    
    **US$**Shareholder Loan
    
    2,000,000


The long term shareholder loan of $2,000,000 is unsecured, bears interest at 8% per annum,
    repayable on November 25, 2013.


NOTE 21
    RELATED COMPANY TRANSACTIONS


During the six months ended June 30, 2012 the Group had purchased USD1,449,246 of good and
    storage services of USD3,031 from a company that the shareholders has financial interests.


F-26

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 22
    INCOME TAXES


No provision was made for income tax for the year ended December 31, 2011 and 2010, since
    the Company and its subsidiaries had significant net operating loss. In the year ended
    December 31, 2011 and 2010, the Company and its subsidiaries incurred net operating losses
    for tax purposes of approximately $99,304 and $5,597,741, respectively. Total net
    operating losses carry forward at December 31, 2011 and 2010, (i) for Federal and State
    purpose were $11,228,165 and $11,063,748, respectively and (ii) for its entities outside
    of the United States were $1,730,470 and $1,707,655, respectively for the two years. The
    net operating loss carry-forwards may be used to reduce taxable income through the year
    2025. The availability of the Company's net operating loss carry-forwards are subject to
    limitation if there is a 50% or more change in the ownership of the Company's stock.There was no significant difference between reportable income tax
    and statutory income tax. The gross deferred tax asset balance as of December 31, 2011 and
    2010 was approximately $4,694,677 and $4,624,137, respectively. A 100% valuation allowance
    has been established against the deferred tax assets, as the utilization of the loss
    carry-forwards cannot reasonably be assured.
    A reconciliation between the income tax computed at
    Malaysia, Hong Kong and PRC China statutory rate and the Group's provision for income tax
    is as follows:


**2011**
    
    **2010**Malaysia statutory
    rate
    
    25%
    
    25%Valuation
    allowance - Malaysia rate
    
    25%
    
    25%Hong Kong statutory
    rate
    
    16.5%
    
    16.5%Valuation
    allowance - Hong Kong rate
    
    (16.5%)
    
    (16.5%)PRC China Enterprise
    Income Tax
    
    25%
    
    25%Valuation
    allowance - PRC rate
    
    (25%)
    
    (25%)Provision
    for income tax
    
    -
    
    -


F-27

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 23
    SEGMENT REPORTING


Business SegmentsFor management purposes, the
    Group currently organized into two operating units - Trading of electronics and light
    appliances and advertising. Turnover represents the net amounts received and receivable
    for goods sold or services provided by the Group during the period. These units are the
    basis on which the Group reports its primary segment information.
    Segment information about these businesses is presented
    below.


Trading of Electronics and Light Appliances
    
    Advertising
    
    
    ConsolidatedFor the six months
    ended June 30,
    
    For the six months 
    ended June 30,
    
    
    For the six months 
    ended June 30,**2012**
    
    **2011**
    
    **2012**
    
    **2011**
    
    
    **2012**
    
    **2011**US$
    
    US$
    
    US$
    
    US$
    
    
    US$
    
    US$Turnover
    1,978,044
    
    3,557,909
    
    0
    
    0
    
    
    1,978,044
    
    3,557,909Segment
    results
    492,691
    
    1,682,627
    
    0
    
    0
    
    
    492,691
    
    1,682,627Unallocated
    corporate income
    
    
    
    
    
    
    
    
    
    62,519
    
    14,264Unallocated
    corporate expenses
    
    
    
    
    
    
    
    
    
    (333,103)
    
    (495,444)Loss from
    operations
    
    
    
    
    
    
    
    
    
    222,107
    
    1,201,447Finance
    costs
    
    
    
    
    
    
    
    
    
    (21,668)
    
    (47,468)Loss
    for the period
    
    
    
    
    
    
    
    
    
    200,439
    
    1,153,979As at June 30**2012**
    
    **2011**ASSETSSegment assets
    10,652,815
    
    3,803,655
    
    425,689
    
    0
    
    
    11,078,504
    
    3,803,655Unallocated
    corporate assets
    
    
    
    
    
    
    
    
    
    244,760
    
    91,766Consolidated total
    assets
    
    
    
    
    
    
    
    
    
    11,323,264
    
    3,895,421LIABILITIESSegment
    liabilities
    2,037,986
    
    1,015,789
    
    577,169
    
    0
    
    
    2,615,155
    
    1,015,789Unallocated
    corporate liabilities
    
    
    
    
    
    
    
    
    
    4,581,284
    
    70,878Consolidated
    total liabilities
    
    
    
    
    
    
    
    
    
    7,196,439
    
    1,086,667Depreciation
    of fixed assets
    17,694
    
    34,786
    
    24
    
    0
    
    
    17,718
    
    34,786


F-28

---

CHINA MEDIA GROUP
    CORPORATIONNOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


NOTE 24
    COMMITMENTS AND CONTINGENCIES


(a)
    The Company leases office premises for its operations in United States and Hong Kong under
    operating leases. Rental expenses under operating lease for the six months ended June 30,
    2012 was $32,105.Future minimum rental payments
    under non-cancelable operating leases for the three month ended June 30, 2012 are $62,254.


(b)
    Under the Distribution Rights Agreement for M.A.G.I.C. Convergent Device, the Company is
    committed to issue shares under certain conditions as set out in Note 9.


(c)
    As disclosed in Note 16 above, the Company has agreed to issue 2,205,376 shares for the
    acquisition of 5% of ATC. As at the date of this report, the Company still has not issued
    the shares as it is pending the delivery of the ATC shares, which has been extended to
    October 2012.


NOTE 25
    SUBSEQUENT EVENTS


(a)
    The Group has evaluated all subsequent events through August 20, 2012, the date these
    consolidated financial statements were issued, and determined that, other than as
    disclosed below, there were no subsequent events or transactions that require recognition
    or disclosures in the financial statements.


F-29

---

Item 2.
    Management's Discussion and
    Analysis of Financial Condition and Results of Operations.


Forward Looking Statements


THIS FOLLOWING INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF MANAGEMENT OF
    THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE THE HAPPENING OF
    FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT. FORWARD-LOOKING STATEMENTS MAY BE
    IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, SUCH AS "MAY",
    "SHALL", "COULD", "EXPECT", "ESTIMATE",
    "ANTICIPATE", "PREDICT", "PROBABLE", "POSSIBLE",
    "SHOULD", "CONTINUE", OR SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR
    THE NEGATIVE OF THOSE TERMS. THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING
    INFORMATION HAVE BEEN COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY
    MANAGEMENT AND CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS,
    HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY IS TO BE
    INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.THE
    ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING
    INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT TO UNCERTAINTY AS TO
    POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND OTHER CIRCUMSTANCES. AS A RESULT,
    THE IDENTIFICATION AND INTERPRETATION OF DATA AND OTHER INFORMATION AND THEIR USE IN
    DEVELOPING AND SELECTING ASSUMPTIONS FROM AND AMONG REASONABLE ALTERNATIVES REQUIRE THE
    EXERCISE OF JUDGMENT. TO THE EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY
    VARY SUBSTANTIALLY FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS
    EXPRESSED ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. WE CANNOT GUARANTY
    THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE
    FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE ANY SUCH
    FORWARD-LOOKING STATEMENTS.


Critical Accounting Policy and Estimates


Our Management's Discussion and Analysis of Consolidated Financial Condition and Results
    of Operations section discusses our consolidated financial statements, which have been
    prepared in accordance with accounting principles generally accepted in the United States
    of America. The preparation of these consolidated financial statements requires management
    to make estimates and assumptions that affect the reported amounts of assets and
    liabilities at the date of the consolidated financial statements and the reported amounts
    of revenues and expenses during the reporting period. On an on-going basis, management
    evaluates its estimates and judgments, including those related to revenue recognition,
    accrued expenses, financing operations, and contingencies and litigation. Management bases
    its estimates and judgments on historical experience and on various other factors that are
    believed to be reasonable under the circumstances, the results of which form the basis for
    making judgments about the carrying value of assets and liabilities that are not readily
    apparent from other sources. Actual results may differ from these estimates under
    different assumptions or conditions. The most significant accounting estimates inherent in
    the preparation of our consolidated financial statements include estimates as to the
    appropriate carrying value of certain assets and liabilities which are not readily
    apparent from other sources. These accounting policies are described at relevant sections
    in this discussion and analysis and in the notes to the consolidated financial statements
    included in our Quarterly Report on Form 10-Q for the period ended June 30, 2012.


---

Overview


DESCRIPTION OF BUSINESS.


OUR BACKGROUND. The Company was incorporated in Texas on October 1, 2002 and in 2005
    changed its business focus to advertising and media in the emerging China market. Under
    new management, the Company commenced to position the Company to capitalize on the growth
    of the Chinese advertising market where global companies are rushing into China to try to
    grab and hold the attention of its 1.3 billion citizens.The Company conducts its advertising business through Ren Ren Media Group
    Limited, its wholly owned subsidiary company in Hong Kong. For its trading in mobile
    convergent devices, it will trade through a 50/50 joint venture subsidiary company ATC
    Marketing Limited. For the Millennium Development Goals Program, we conduct this business
    through our 50% owned subsidiary company Beijing RenRen Health Culture Promotion Co.,
    Limited.
    On June 8, 2012, Good World, CMG and ECE Technologies Sdn.
    Bhd. closed the sales and purchase agreement for Good World to acquire 100% equity
    interests in A-Team Resources Sdn. Bhd. ("Acquisition"), a privately held
    Malaysian corporation ("ATeam") that is in the consumer electronics and light
    appliances businesses for 558,779,837 shares in the Company, representing 51% of the then
    enlarged share capital of the Company. Immediately after the transaction closed, ECE
    transferred 200,000,000 shares in the Company to independent third parties, and ECE then
    held 358,779,837 shares representing about 31.62% equity interests in the Company.
    The transaction has been accounted for in substance as a
    reverse acquisition of the Company by ATeam since the stockholders of ATeam owned a
    majority of the Company's voting
    power immediately following the Acquisition and ATeam management has assumed operational,
    management and governance control.  For accounting purposes, ATeam shall be the
    accounting acquirer and or the surviving entity.  Accordingly, the historical
    financial statements are those of Ateam, the accounting acquirer, immediately following
    the consummation of the reverse merger.


OUR BUSINESS. Prior to the acquisition of the consumer electronics and light appliances
    business, our mission was to become one of China's new age media companies through the use
    of new technologies and devices combined with traditional media of TV, Newspapers,
    Magazines, Billboards and Internet to reach today's mobile society. Today, with the
    acquisition of the consumer electronics and light appliances businesses which will bring
    us the major revenue source to the Company now, our business focus will be on the
    development of this business segment to further strengthen our Products and Services
    business unit.We have now reorganized our business
    units to two business units mainly "Products and Services" and
    "Telecommunications and Mobile Computing" business units and with less focus on
    the "Advertising" business unit unless we have the necessary resources to pursue
    opportunities in this business segment.


As discussed above in June 2012, the Group acquired 100% equity interests in ATeam, a
    distributor of electronics and light appliances. This acquisition will strengthen the
    Products and Services division by providing for sale a range of products in the electronic
    and light appliance segment and possibly extending the marketing to new markets in China
    and India. ATeam will also provide a steady revenue base and operations to the Group.


ATeam was established in 2001 specialized in the manufacturing and assembling of home
    appliances products (white goods). Currently ATeam is operating from Selangor, which is
    located in the central part of Western Malaysia. Their main markets are in North America,
    Southeast Asia, Africa, Oceania, Mid East and Eastern Asia.


2012 Products & Services OverviewAlthough we
    have established 4 business units, going forward, we will only focus activities in two of
    them; those are "Telecommunication and Mobile" and "Product Services".
    A brief review and description of these two business units' strategies and operations are
    described below.


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Products
    Services UnitsOur goal is to build brand recognition on our product range and to take advantage of our
    contacts networks, distribution channels and trading partners. We will leverage on our
    advertising platform, if and when available, to develop our own brand names for select
    products. This will uniquely position our product and services for brand awareness as well
    as develop a long term business unit that will serve both consumers and industrial
    markets.In June 2012, we completed the acquisition
    of ATeam, a company that trades and distributes consumer electronics and light appliances.
    ATeam has a range of products and some under its own brand name of ECE, Maco and ATech.
    ATeam's products are currently being sold and distributed in Malaysia, Indonesia,
    Thailand, Vietnam, Singapore, Sri Lanka, South Africa, Middle East countries, and in India
    Sub-Continent. The growth of ATeam will be in the developing countries and we will look
    for opportunities to sell ATeam's range of products to China.
    ATeam trades and distributes washing machines, chest
    freezers, wine and display chillers, and refrigeration-based products.
    ATeam was established in 2001 specialised in the trading and distribution of home
    appliances products (white goods). Currently, the Group is operating from Selangor, which
    is located in the central part of Malaysia
    During the period of review, products and services division
    soldwashers, freezers and chillers to South East Asia,, India, Africa and Middle East 
    markets.Telecommunications Unit


On or about January 23, 2006, the Company announced the establishment of the
    Telecommunications and Mobile Computing Division to focus on the new media advertising
    where we would take advantage of new convergent devices for telecommunications
    advertising. The business of selling advertising through telecommunications media and
    devices is still at an early stage as we are developing strategies to effectively enter
    the market. No revenue has been generated from advertising through telecommunications
    media and devices at the date of this report.


We have secured the distribution rights for M.A.G.I.C. Convergent Device for the territory
    of China and Hong Kong. M.A.G.I.C. is a next generation convergent device that has the
    full capabilities of a notebook computer shrink to a size of a PDA phone. In 2009, we have
    also entered into a joint venture with AdvanceTech Communications Sdn. Bhd.
    ("ATC") to market and distribute the devices developed by ATC worldwide other
    than the countries already under distribution by the Group. The current device under
    development, M.A.G.I.C. W3 is being positioned as the high end convergent device for
    professionals running special applications. We expect the M.A.G.I.C. W3 to enter the
    information and advertising sector of the mobile phone market. We expect to receive the
    final prototype for M.A.G.I.C. W3 by Q3, 2012. Subject to satisfactory technical review,
    we expect to launch the commercial product in second half of 2012. There has been no other
    significant update for the M.A.G.I.C. W3.Marketing & Sales OverviewPRODUCTS SERVICES
    UNIT
    For our Products Services unit, we will focus on building
    on ATeam's existing products, markets and distribution channels. We also plan to focus on
    opening the India and China markets and develop additional products. We expect our major
    revenue generation will be from this business unit in the coming future.


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TELECOMMUNICATION
    UNITThere are many competitors in the market place
    offering a variation of the M.A.G.I.C W3, however very few that offers full computer
    operability in full Windows 7 OS with phone functionality. With the emergence of newer
    convergent device technologies, there is an opportunity for us to offer convergent devices
    and applications and solutions that have more functionality than traditional mobile
    devices. The new devices are easier to integrate with existing data and video applications
    and systems, and are easier to maintain and administer. We believe that the rate of
    adoption of convergent device and its applications and solutions by corporate executives
    and innovative applications will accelerate the adaptation of our M.A.G.I.C. Convergent
    device is going to deliver more secure, and more functional in internet-based
    applications. We believe mobile executives will recognize the benefit of having notebook
    functionality in a handheld device combined with video and data capabilities.
    For our M.A.G.I.C. Convergent devices, we will sell through
    distribution channels, network operators and small enterprises. We will approach
    distribution channels and network operators in Hong Kong and China, initially and then in
    other territories to sell the M.A.G.I.C. Device. We will also sell to certain enterprises
    that will take advantage of the special functions in M.A.G.I.C. Device and customize to
    their operational needs. Select firms that we will target are transportation and logistic
    companies, courier companies, and direct sales companies. We will also target corporate
    and financial executives to customize the M.A.G.I.C. Device to their requirements. To sell
    this high value product with innovative applications, we plan to employ business
    development teams focused on creating high-value strategic customers and business
    alliances.
    ADVERTISING UNIT
    Our plan is to work with advertising agents in Hong Kong
    and Guangdong initially to work on a plan to secure some outdoor media boards with the
    limited resources available to the Group. We will discuss with our contacts in Hong Kong
    and China regarding securing outdoor media boards. We plan to co-operate with
    international advertising firms to place out the advertising on ad/sign placements on
    either an agent or outsourced basis. We will recruit a team to manage the 10 largest
    cities in China where we would secure, manage and administer ad/sign placements for these
    cities. For the other cities we will look for partners or agents to work with us to secure
    ad/sign placements. Once we have certain ad/sign placements network for the second-tier
    cities, we will approach advertising agencies to sell these ad/sign placements to their
    customers.  This will require resources commitments and the Group will only pursue
    business in this unit if the right opportunities arise where our commitment is not onerous
    but strategically synergistic.
    For our M.A.G.I.C. Convergent devices, we will sell through
    distribution channels, network operators and small enterprises. We will approach
    distribution channels and network operators in Hong Kong and China, initially and then in
    other territories to sell the M.A.G.I.C. Device. We will also sell to certain enterprises
    that will take advantage of the special functions in M.A.G.I.C. Device and customize to
    their operational needs. Select firms that we will target are transportation and logistic
    companies, courier companies, and direct sales companies. We will also target corporate
    and financial executives to customize the M.A.G.I.C. Device to their requirements. To sell
    this high value product with innovative applications, we plan to employ business
    development teams focused on creating high-value strategic customers and business
    alliances.


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For our Products
    Services unit, we will work with our advertisers to cross promote and sell their products
    on our advertising platform, once we have built up. In some cases, we will look to develop
    our own brands. We will employ a small team to handle enquires and to provide support to
    our advertising customers. For our recently announced potential acquisition of A-Team
    Resources, the organization has an existing marketing and sales department / channels. We
    also plan to take much more of a focus on the China market and work together to open up
    additional growing markets. The potential acquisition is currently generating revenues and
    these revenues will be used to grow into additional markets.StrategyAs stated above, our strategy is to
    build a business that takes advantage of the advertising platform for our products. We
    have acquired a product line of consumer electronics and light appliances to enter the
    emerging markets like India and the Middle East and China. Our strategy will be to utilize
    our advertising platform to build our brand and our name in these markets for quality
    products. Continued development and innovation will ensure our relevance far into the
    future. Both our brand and our products will continue to evolve becoming more known for
    quality products as these emerging markets develops will recognize the benefit of having
    notebook functionality in a handheld device combined with video and data capabilities.Plan of operationsOUR PLAN OF OPERATION FOR THE
    NEXT TWELVE MONTHS.
    We hope to generate additional revenues in the next twelve
    months by engaging business operations through internal growth and through strategic
    acquisitions and cooperative advertising agreements, as described more fully under
    "Overview" above.


We have cash and cash equivalents of $57,548 as of June 30, 2012; decrease from the
    previous period end of December 31, 2011. In the opinion of management, these funds will
    not satisfy our working capital requirements to operate at our current level of activity
    for the next twelve months. To effectuate our business plan, during the next twelve
    months, we must arrange for adequate funding to implement our plans of increasing our
    advertising offerings and promote our advertising services, through cooperation agreements
    and otherwise.


Financing and funding


Management intends to continue to raise additional financing through debt and equity
    financing or other means and interests that it deems necessary, with a view to
    implementing our business plan and building a revenue base. We plan to use the proceeds of
    such financings to provide working capital to our operations and increase our capital
    expenditure for marketing and working with our co-operative partners. There can be no
    assurances that sufficient financing will be available on terms acceptable to us or at
    all. Our forecast for the period for which financial resources will be needed to support
    our operations involves risks and uncertainties and actual results could fail as a result
    of a number of factors.


Specifically, we hope to accomplish the steps listed below to implement our business plan.
    We estimate that we will require approximately $1,500,000 to commence operations as
    envisioned below during the next twelve months. The figures and steps outlined below are
    estimates only, and our actual progress and cost may vary from these estimates and is
    subject to our ability to obtain adequate funding. Such additional capital may be raised
    through public or private equity financing, borrowings, or other sources, such as
    contributions from our officers and directors. If we are unable to obtain funds necessary
    to implement our business plan, we may revise or scale back our business plan.


We are not currently conducting any research and development activities, other than the
    continual development of our website in both English and Chinese. We do not anticipate
    conducting such activities in the near future. In the event that we expand our business
    scope, then we may need to hire additional employees or independent contractors as well as
    purchase or lease additional equipment.


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Results of
    operation.


FOR THE THREE MONTHS AND SIX MONTHS PERIOD ENDED JUNE 30, 2012 COMPARED TO THE THREE
    MONTHS AND SIX MONTHS PERIOD ENDED JUNE 30, 2011


REVENUES.For the three months period ended June 30,
    2012, the Group has realized revenue of $776,608 and a cost of revenue of $675,204,
    achieving a gross profit of $101,404. For the three month period ended June 30, 2011, the
    Group has realized revenue of $1,836,524 and a cost of revenue of $906,233 achieving a
    gross profit of $930,291. We hope to generate additional revenues when we begin to receive
    contracts from clients or through acquisitions. Depending upon the availability of
    operating capital, we intend to expand our operations in the next 12 months.
    For the six months period ended June 30, 2012, the Group
    has realized revenue of $1,978,044 and a cost of revenue of $1,485,353, achieving a gross
    profit of $492,691. For the six month period ended June 30, 2011, the Group has realized
    revenue of $3,557,909 and a cost of revenue of $1,875,282 achieving a gross profit of
    $1,682,627. We hope to generate additional revenues when we begin to receive contracts
    from clients or through acquisitions.


OPERATING EXPENSES.For the three months period ended
    June 30, 2012, our gross profit was $101,404 and our total operating expenses were
    $158,576, all of which were selling, general and administrative expenses. We also had
    $15,469 in interest expenses, $13 in interest income and $1,769 in other income, so that
    the net loss to our shareholders for the three months period ended June 30, 2012 was
    $70,859. This is in comparison to the same period ended June 30, 2011, where our gross
    profit was $930,291 and our total operating expenses were $259,226, all of which were
    selling, general and administrative expenses. We also had $25,889 in interest expenses,
    $4,003 in gain on disposal of fixed assets and $3,050 in other income , so that the net
    profit to our shareholders for the three months period ended June 30, 2011 was $652,229.
    For the six months period ended June 30, 2012, our gross
    profit was $492,691 and our total operating expenses were $333,103, all of which were
    selling, general and administrative expenses. We also had $21,668 in interest expenses,
    $24 in interest income and $16,317 in gain of foreign exchange and $46,178 in other
    income, so that the net profit to our shareholders for the six months period ended June
    30, 2012 was $200,439. This is in comparison to the same period ended June 30, 2011, where
    our gross profit was $1,682,627 and our total operating expenses were $495,444, all of
    which were selling, general and administrative expenses. We also had $47,468 in interest
    expenses $11,208 in gain on disposal of fixed assets and $3,056 in other income, so that
    the net profit to our shareholders for the six months period ended June 30, 2011 was
    $1,153,979.


Liquidity and Capital Resources


As at June 30, 2012, the Company had cash and cash equivalents totaling $94,272, other
    current assets of $4,597,574 and non-current assets totaling $6,631,418 which were
    represented by $157,869 in fixed assets, $68,932 in distribution rights and $81,556 in
    investment in shares and $6,323,061 in goodwill. The total assets of the Company were
    $11,323,264 as of June 30, 2012. We also had current liabilities of $4,920,859 which were
    represented by $36,724 in cash and cash equivalents, $826,197 in other payables and
    accruals, $763,732 in trade payables, $422,692 due to directors and officers, $2,060,980
    due to related parties, $236,504 in option liabilities, $304,500 in trade financing
    payables, $53,130 in obligation under finance lease, $216,400 in fixed loan as of June 30,
    2012. We also had $2,000,000 in long-term shareholders loan and $185,020 in fixed loan,
    $90,560 in obligation under finance lease as of June 30, 2012, made our total liabilities
    $7,196,439.At present the Company does not have
    sufficient cash resources to provide for all general corporate operations in the
    foreseeable future. The Company will be required to raise additional capital in order to
    continue to operate in fiscal 2012.


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Going Concern


The Company's financial statements are presented on a going concern basis, which
    contemplates the realization of assets and satisfaction of liabilities in the normal
    course of business. The Company has experienced significant losses from operations in
    recent periods. For the three months ended June 30, 2012 the Company incurred net losses
    of $70,859 and has retained earnings of $1,395,449 as at June 30, 2012. The Company's
    ability to continue as a going concern must be considered in light of the problems,
    expenses and complications frequently encountered in developing markets and the
    competitive environment in which the Company operates. The Company is pursuing financing
    for its operations and seeking additional investment. In addition, the Company is seeking
    to expand its revenue base by adding new customers and to start out its advertising
    business. Failure to secure such financing, to raise additional equity capital and to
    expand its revenue based may result in the Company depleting its available funds and not
    being able to pay its obligations. These financial statements do not include any
    adjustments to reflect the possible future effects on the recoverability and
    classification of assets or the amounts and classification of liabilities that may result
    from the possible inability of the Company to continue as a going concern.


Off Balance Sheet Arrangements


As of June 30, 2012, there were no off balance sheet arrangements. The Company has no off
    balance sheet obligations nor guarantees and has not historically used special purpose
    entities for any transactions.


Item 3.
    Quantitative and Qualitative Disclosures About Market Risk.


Quantitative and Qualitative Disclosures about Market Risk:


The Company is exposed to various market risks, including changes in interest rates.
    Market risk is the potential loss arising from adverse changes in market rates and prices,
    such as interest rates and foreign currency exchange rates. The Company does not enter
    into derivatives or other financial instruments for trading or speculative purposes. The
    Company also has not entered into financial instruments to manage and reduce the impact of
    changes in interest rates and foreign currency exchange rates, although we may enter into
    such transactions in the future.


Item 4.
    Controls and Procedures.


Evaluation of Disclosure Controls and Procedures:


Our disclosure controls and procedures are designed to ensure that information required to
    be disclosed in reports that we file or submit under the Securities Exchange Act of 1934
    is recorded, processed, summarized and reported within the time periods specified in the
    rules and forms of the United States Securities and Exchange Commission. Our principal
    executive and financial officer have reviewed the effectiveness of our "disclosure
    controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules
    13a-14(c) and 15d-14(c)) within the end of the period covered by this Quarterly Report on
    Form 10-Q and have concluded that the disclosure controls and procedures are effective to
    ensure that material information relating to the Company is recorded, processed,
    summarized, and reported in a timely manner. There were no significant changes in our
    internal controls or in other factors that could significantly affect these controls
    subsequent to the last day they were evaluated by our principal executive and financial
    officers.


Changes in Internal Controls over Financial Reporting:


There have been no changes in the Company's internal control over financial reporting
    during the last quarterly period covered by this report that have materially affected, or
    are reasonably likely to materially affect, the Company's internal control over financial
    reporting.


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PART
    II - OTHER INFORMATION


Item 1.
    Legal Proceedings


None.


Item 1A.
    Risk FactorsNot applicableItem 2.
    Unregistered Sales of Equity Securities and Use of Proceeds


None.


Item 3.
    Defaults Upon Senior Securities


None.


Item 4.
    Mine Safety Disclosures


Not applicable


Item 5.
    Other Information


None.


Item 6.
    Exhibits


Exhibit No.
    Description
    of Exhibit


2.1
    Shareholders' Agreement between Good World
    Investments Limited, Advance Tech Communications Sdn. Bhd. And ATC Marketing Limited(6)2.2
    Sale and Purchase Agreement between Good World
    Investments Limited, Tidewell Limited and the Company(7)2.3
    Sale and Purchase Agreement entered by Good
    World Investments Limited to acquire 5% equity interest in Advance Tech Communications
    Sdn. Bhd. (9)2.4
    Sale and Purchase Agreement between Good World
    Investments Limited and Keen Star International (HK) Limited(8)2.5
    Sale and Purchase Agreement between Good World
    Investments Limited and ECE Technologies Sdn. Bhd.(10)3.1
    Articles of Incorporation (1)3.1.1
    Certificate of Amendment to Articles of
    Incorporation (2)3.1.2
    Certificate of Amendment to Articles of
    Incorporation, as amended.(5)3.2
    Bylaws (1)10.3
    2002 Stock Option Plan (3)10.4
    2007 Stock Incentive Plan(4)31.1*
    Certification of Chief Executive Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    Certification of Chief Financial Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    Certification of Chief Executive Officer
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2*
    Certification of Chief Financial Officer
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


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1.
    Incorporated by reference to
    our Registration Statement on Form SB-2 as filed with the SEC on April 15, 2003.2.
    Incorporated by reference to
    our Current Report on Form 8-K as filed with the SEC on February 3, 2005.3.
    Incorporated by reference to
    our Registration Statement on Form SB-2 as filed with the SEC on April 15, 2003.4.
    Incorporated by reference to
    our Registration Statement on Form S8 as filed with the SEC on March 8, 2007.5.
    Incorporated by reference to
    our Registration Statement on Form SB-2 as filed with the SEC on March 16, 2007.6.
    Incorporated by reference to
    our Current Report on Form 8-K as filed with the SEC on May 26, 2009.7.
    Incorporated by reference to
    our Current Report on Form 8-K as filed with the SEC on September 22, 2010.8.
    Incorporated by reference to
    our Current Report on Form 8-K as filed with the SEC on April 14, 2011.9.
    Incorporated by reference to
    our Current Report on Form 8-K as filed with the SEC on February 22, 2011.10.
    Incorporated by reference to
    our Current Report on Form 8-K as filed with the SEC on March 16, 2012..


* Filed herewith.


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SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 34,
    the registrant has duly caused this report to be signed on its behalf by the undersigned,
    thereunto duly authorized.


China Media Group Corporationa Texas corporation/s/ Mohd Mahyudin bin Zainal---------------------------------------Mohd Mahyudin bin ZainalChief Executive OfficerChina Media Group Corporationa Texas corporation/s/Mohd Suhaimi bin Rozali---------------------------------------Mohd Suhaimi bin RozaliChief Financial Officer


In accordance with the Exchange Act, this report has been signed below by the following
    persons on behalf of the registrant and in the capacities and on the dates indicated.


By:
    /s/ MohdMahyudin bin Zainal
    August 20, 2012--------------------------------------------Mohd Mahyudin bin ZainalIts:
    Principal executive officer,President, Director


By:
    /s/ Norlizah binti Zainal
    August 20, 2012--------------------------------------------Norlizah binti ZainalIts:
    Chief technology officer,Director


By:
    */s/ Con Unerkov*
    August 20, 2012--------------------------------------------Con UnerkovIts:
    Director


By:
    /s/ Mohd Suhaimi bin Rozali
    August 20, 2012--------------------------------------------Mohd Suhaimi bin RozaliIts:
    Chief Financial Officer, Company
    Secretary,TreasurerBy:
    /s/ Mohd Khairudin Bin Ramli
    August 20, 2012--------------------------------------------Mohd Khairudin Bin RamliIts:
    DirectorBy:
    /s/ Lam Pui Kit
    August 20, 2012--------------------------------------------/s/ Lam Pui KitIts:
    Director


---