UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549

                                  FORM 10-KSB


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

     For the fiscal year ended: JANUARY 31, 2004

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

     For the transition period from________________ to ________________


                        HUBEI PHARMACEUTICAL GROUP, LTD.
             -------------------------------------------------------
             (Exact name of registrant as specified in its charter)


              Nevada                    0-25553                 88-0419476
---------------------------------  ---------------------  ----------------------
  (State or other jurisdiction      (Commission File          (IRS Employer
of incorporation or organization)        Number)            Identification No.)



  410 Park Avenue, 15th Floor
  New York, NY,                                                  10022
-----------------------------------------              -------------------------
(Address of principal executive offices)                       (Zip Code)


       Registrant's telephone number
           (including area code)                             (604) 881-2899
                                      _____

Securities registered pursuant to Section 12(b) of the Act:     None

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

Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the 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 if disclosure of delinquent filers pursuant to Item 405
or Regulation S-K is not contained herein, and no disclosure will be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]

State issuer's revenues for its' most recent fiscal year.         $0.00

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.


<PAGE>
April 30th, 2004 - $0.62. There are approximately 18,815,635 shares of voting
common stock of the Company with an aggregate value $11,667,000 held by
non-affiliates.

    REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

                                Not applicable.


                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

Indicate the number of shares outstanding of each of the registrant's classes of
common equity, as of the latest practicable date:

April 30th, 2004  -  31,430,635 Common Shares

                      DOCUMENTS INCORPORATED BY REFERENCE

A description of "Documents Incorporated by Reference" is contained in Item 13
of this Report.

Transitional Small Business Registrant Format   Yes  [ ]  No  [X]


<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS


<S>                                                                      <C>
PART 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

  ITEM  1  DESCRIPTION OF BUSINESS . . . . . . . . . . . . . . . . . . . . 4
  ITEM  2  DESCRIPTION OF PROPERTY . . . . . . . . . . . . . . . . . . . .12
  ITEM  3  LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . 12
  ITEM  4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . . 12

PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

  ITEM  5  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS . . . 13
  ITEM  6  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. . . 15
  ITEM  7  FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . 16
  ITEM  8  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON DISCLOSURE. . 34
  ITEM  8A CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . . . . . 34

PART III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

  ITEM  9  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS . 34
  ITEM 10  EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . 36
  ITEM 11  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.37
  ITEM 12  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . 38
  ITEM 13  EXHIBITS AND REPORTS . . . . . . . . . . . . . . . . . . . . . 39
  ITEM 14  PRINCIPAL ACCOUNTING FEES AND SERVICES . . . . . . . . . . . . 40
</TABLE>


<PAGE>
PART 1
Item  1  Description of Business
The following discussion may contain forward looking statements with respect to
the company's future financial performance.  Actual results may differ
materially from those currently anticipated and from historical results
depending upon a variety of factors. One can identify these forward looking
statements by the use of words such as "strategy", "expects", "plans",
"anticipates", believes", "will", "continues", "estimates", "intends",
"projects", "goals", "targets" and other words of similar meaning.  One can also
identify them by the fact that they do not relate strictly to historical or
current facts.  These statements are based on our assumptions and estimates and
are subject to risks and uncertainties.  Historical references, particularly to
periods pre-dating the three and a half years subjected to independent review
and included in the notes to the financial statements included in our 10QSB
filing for the second quarter in which we acquired an interest in joint venture
pharmaceuticals company in China, are made to the best of the ability of
management to determine and are believed to be accurate; however, all
enterprises in China were previously state owned, there were no provisions
within Chinese law for the creation of legal corporate entities and no
requirement that operating businesses be subject to independent review.  Sources
of information include historical information available through the State Drug
administration; information available in the public domain; industry sources;
state, local and municipal officials; as well as operational management and
staff in the operating business unit in which we have acquired an interest.
This is not considered by management to be significant as all due diligence and
operational assessments were made based upon recent years history during which
time the business unit operated with a much smaller budget than periods covered
by the historical references and for which documentation is more readily
available.  It is suggested that the reader also review the company's annual
report on Form 10-KSB for the year ended January 31st, 2003 and the quarterly
reports on Form 10-QSB for the quarters ended April 30th, July 31st and October
31st, 2003.

Readers of this annual report are cautioned not to put undue reliance on
"forward  looking" statements that are, by their nature, uncertain as reliable
indicators of future performance.  Hubei Pharmaceutical Group Ltd. disclaims any
intent or obligation to publicly update these "forward looking" statements,
whether as a result of new information, future events, or otherwise.

As used in this annual report, the terms "we", "us", "our", "the Company" and
"Hubei" shall mean Hubei Pharmaceutical Group Ltd. and its subsidiaries unless
otherwise indicated.  References to historical sales figures, market share, and
other operational data refer to the business unit previously operated by the
minority partner to the new joint venture.  Further, unless otherwise indicated,
reference to dollars shall mean United States dollars.


Overview
Hubei  Pharmaceutical  Group  is engaged in the acquisition and consolidation of
pharmaceutical  development,  production  and  distribution facilities in China.
Our  first  joint  venture,  Hubei  Pharmaceutical  Co.,  in  which  we  hold  a
controlling  interest,  involves  a minority partner with a 36-year history.  It
includes  continuity  of  management  and  production  staff  as  well  as  the
operational  business  unit  and  is  licensed  to  produce  a  total  of  120
pharmaceutical  products  approximately  one  third  of  which  are  currently
commercialized.  Subsequent  to  our year end, we announced that the transfer of
production  revenues  from  the operational business unit previously operated by
our  minority  partner  to  the  joint  venture  had been completed making Hubei
Pharmaceutical  Co.  both  operational  and  revenue  producing.  We continue to
explore opportunities with our minority partner to expand the scope of the joint
venture  to include other parts of their core business and are actively pursuing
other  acquisitions and business opportunities complementary to this operational
base.

Corporate  History
Hubei  Pharmaceutical  Group, Ltd. ("the Company") was incorporated in the State
of  Nevada,  U.S.A.  on  December 18, 1998, under the name Explore Technologies,
Inc.  Following  unsuccessful  exploration work the Company's board of directors
determined  that further exploration of its property was not commercially viable
and  on  April  25,  2000  decided  to  abandon  its  interest  in the property.

In  April  2002,  the Company identified a business opportunity and attempted to
acquire  a  business  interest  as a long distance carrier and provider of Voice
over  IP  services.  Concurrent  with  this  it  changed  its  name from Explore
Technologies to Pan Asia Communications Corp.  In September 2002 it entered into
an  agreement  to  rescind  the


<PAGE>
acquisition  agreement  when it became apparent that it would not be possible to
complete  an  audit  of  what  was  contemplated.

On February 26th, 2003, the Company identified a new business opportunity and on
March  18,  2003 entered into an Acquisition Agreement with Red Dot Capital Inc.
("Red  Dot") to acquire 100% of Red Dot's 57.14% joint venture interest in Hubei
Pharmaceutical  Co.,  Ltd. ("HBJV").  HBJV was incorporated as a private Chinese
joint  venture  corporation  in the city of Xiangfan in Hubei province, People's
Republic  of  China  ("China")  on  January 24, 2003 by Red Dot and Hubei Zenith
Airbeck  Pharmaceutical  Co.  Ltd.  ("Airbeck").  It  is  licensed  to engage in
research,  development,  production,  distribution  and  sale  of pharmaceutical
products.  Airbeck  was a Chinese government funded company located in Xiangfan,
involved  in  research,  development, production and sale of bulk pharmaceutical
products  through  its  Bulk  Division  as well as over-the-counter and patented
pharmaceutical products in dosage forms including injections, capsules, tablets,
syrups  and  other  form  through  its  Dosage  Division.

On  April 2nd, 2003 our two current board members were appointed and the company
accepted  the  resignations  of  all members of the previous board of directors.
The  company  announced a name change to Hubei Pharmaceutical Group Ltd. and, on
April  3rd,  its  shares commenced trading on the OTC Bulletin Board under the a
new  trading  symbol, HBEI, following a ten old for one new consolidation of its
capital.

On  July  25th,  the  company completed acquisition of Red Dot's interest in the
joint venture following completion of a vend-in to HBJV, by the minority partner
Airbeck, of intangible assets comprised primarily of 120 pharmaceutical licenses
representing  its  operating  dosage division.  Airbeck continued to operate the
dosage  division  throughout  the  balance  of  this fiscal year under a special
provision  allowing  them  to  deplete inventories and packaging while producing
under  licenses  then  owned  by HBJV.  Revenues and expenses during this period
were  for  the  account of Airbeck.  Hubei Pharmaceutical Group agreed to invest
approximately  4.3  million  dollars  to provide additional working capital on a
schedule  over  three  years.  This  was  subsequently  amended  to  provide for
investment  on  or  before April 23rd, 2006.  HBJV also entered into a long-term
capital  lease agreement to lease two manufacturing facilities from its minority
partner.

On  March  1st,  2004,  subsequent  to  the  fiscal  year  end,  operations  and
operational  revenues  were  transferred  into  HBJV  from  the  dosage division
previously  operated  by Airbeck.  HBJV also agreed to swap the intangible asset
previously  contributed  by  Airbeck  in  the  form  of  production licenses for
tangible  assets  in  the form of two manufacturing facilities while maintaining
the  exclusive  right to produce under the production licenses.  This eliminated
approximately  $1,700,000  in  scheduled  lease  payments over the 20 year lease
term.

Description of Business
Opportunities in China
China's annual per capita medical expenditure has historically been less than
$10.00. This is in sharp contrast to the $250 per capita expenditure in the
United States and Europe. The expenditure is now growing at an annual rate of
more than 15 percent and, with its population base of 1.3 billion people, China
is expected to become the second largest pharmaceuticals market in the world by
2010 and then to surpass the United States as the largest market in the decade
following.

China's entry into the Word Trade Organization has attracted keen interest from
international pharmaceutical companies and investors looking to position
themselves to participate in the growth. There are opportunities to acquire,
form strategic relationships, or build cost effective production capacity
utilizing a large skilled labor force and low manufacturing costs to develop a
center of operations from which to capitalize on the rapidly expanding domestic
market and to aggressively pursue export markets. China's move towards
privatization and favorable tax incentives to joint venture corporations with US
investment and control, along with the expected consolidation of over eight
thousand pharmaceutical enterprises in the 1990's to a thousand or less, present
an array of opportunities for companies that understand how to negotiate and
structure acquisitions in China.

Hubei Pharmaceutical Group is focused on opportunities arising out of China's
entry into the World Trade Organization, the consolidation of Pharmaceutical
producers within China and the privatization of state owned companies. Our
business plan calls for rapid expansion through acquisition and consolidation.
Our initial targets are businesses that have established cash flows and
profitability. Our management, transition and advisory teams have demonstrated
success at structuring and negotiating favorably within the current environment.


<PAGE>
First Acquisition

Hubei Pharmaceutical Group's first acquisition is a controlling interest in
Hubei Pharmaceutical Co. Ltd. (HBJV) located in Hubei Province, China. Hubei
Pharmaceutical Co. Ltd. is a joint venture between Hubei Pharmaceutical Group
and Hubei Zenith Airbeck Pharmaceutical Co. Ltd. (Airbeck) formerly the Hubei
Pharmaceutical Factory.

Hubei Pharmaceutical Factory, a Chinese state owned enterprise, was one of
China's original four largest pharmaceutical production facilities. It has a 36
year legacy of successful operations and strong domestic sales as well as sales
to export markets in the Americas, South-East Asia, Europe and Japan. First
commissioned in 1968, it was a high volume producer of high quality
pharmaceuticals throughout the late 1960's, 70's and 80's and participated with
the United Nation's UNESCO to develop birth control products for use in China
and other 3rd world countries.  It was the last of the big four to undergo
privatization, suffered from a false start on the road to privatization and,
although profitable, is no longer producing at a level comparable to the other
three.

More recently, Airbeck has operated two pharmaceutical divisions: a Bulk
division, producing bulk pharmaceuticals and pharmaceutical ingredients; and a
Dosage division producing generic and patented medicines in dosage formats
including injections, tablets, capsules, syrups and other forms for
over-the-counter sale and use within the healthcare system through prescription
by medical professionals.

Airbeck contributed their operating dosage division to the joint venture at the
end of the 2nd quarter, 2003 including licenses to produce a total of 120
pharmaceutical products. They then produced under the licenses owned by the
joint venture during a transition period to allow them to deplete inventories
and Airbeck branded packaging and allowing the joint venture time to prepare to
transition production and marketing back to the well established and trusted
Hubei Pharmaceutical branding used by the original Hubei Pharmaceutical Factory.
During the transition period, all revenues and expenses related to operating the
dosage division were for the account of Airbeck.  Intangible assets,
representing the value of the licenses, were recorded on the balance sheet of
the joint venture.  HBJV entered into a long term lease agreement to lease the
underlying plant and equipment from its minority partner commencing on the date
of transfer of production revenues to the joint venture under the Hubei
Pharmaceutical trademark.  No liabilities were transferred by Airbeck to the
joint venture.  Under the agreement, Hubei Pharmaceutical Group (HBGroup)
contributed, and will continue to contribute working capital, additional
management expertise and a more aggressive Western approach to market
penetration and expansion. An audit of the new joint venture was completed and
filed as part of the quarterly report for the third quarter.

Subsequent to the audit, Airbeck unexpectedly received approval to submit a
proposal to privatize its remaining business unit. This was originally expected
to have taken several years.  Airbeck management have expressed interest and we
continue to work with them to explore ways of expanding the scope of the joint
venture once their privatization process is complete. Out of these discussions,
their Chairman Mr. Gui Hou Ying has consented and now sits as Chairman of the
Joint Venture providing management continuity through to the executive level.
Another development, to assist them with their complex privatization
negotiations and very much in favor of the Joint Venture, was the announcement
in the first quarter of 2004 that the Joint Venture had recorded an exchange of
the intangible assets in the form of licenses originally contributed by Airbeck
for fixed assets in the form of the underlying manufacturing facilities. For
production purposes, the licenses remain registered with the SFDA for the
exclusive use of the Joint Venture.  The transaction also eliminates $294,000 in
annual lease payments that would have been made to the minority partner for use
of the manufacturing facilities. Production revenues were transferred to HBJV
and product began shipping under the new trademark, a return to the well
established Hubei Pharmaceutical branding, on March 1st, 2004.

Management believes that the joint venture may be best viewed as a continuation
and expansion of established business rather than as a start-up.  There is
continuity of management and of the skilled labor force, as well as established
business relationships and government contracts supplemented by considerable
additional experience and expertise contributed by HBGroup.

HBJV's production facilities are located in the Southern suburbs of Xiangfan
City, North-West Hubei Province.  They are surrounded by natural and strategic
resources including an abundance of water, coal, electricity, facilities for
higher education, and a direct link to modern, high-capacity rail and highway
systems.  Xiangfan is frequently referred to as the hub between the North and
South and as the thoroughfare between seven provinces.  It is a city of Science
and Technology as well as home to very large scale automobile production
supporting a substantial base of high technology companies producing a variety
of products from spare parts to complex machinery and supporting a large base of
skilled labor and management expertise.  Hubei province is a center of
pharmaceutical production


<PAGE>
and research within China.  Xiangfan City is an ideal location for
pharmaceutical research, production and distribution.

HBJV's principal pharmaceutical product categories include:

     Psychoactive drugs
     Contraceptive drugs
     Anti-parasitic drugs
     Sustained -release non-steroidal anti-inflammatory drugs
     Clindamycin based anti-bacterial drugs
     OTC Generic Drugs
     General Powder Injection Drugs
     General Tablet Form Drugs

Products are sold through a staff of 100 sales agents and a growing network of
regional and national distributors.

Psychoactive Drugs
HBJV is one of two original producers of psychoactive drugsIts Estazolam series
of products are well respected and a significant cornerstone in recognition for
the Hubei branding.  The Estazolam series' major competition comes from a
competitor producing an inferior but cost-effective product based on Dizepam.
The Estazolam series is respected in the market as a higher-end product having
twice won Silver Medals for its efficacy and reduced addictive properties and,
as a result, affords significantly higher profit margins than common generic
drugs.  We are developing an injectable form of Estazolam we expect will be
effective in treating addiction to narcotics and also used as a pre-operative
sedative and for womb relaxation during child birth.  The World Health
Organization estimates that one in four individuals will suffer from some form
of mental disorder at some point in their life.  Statistics for China indicate
that psychological diseases have replaced respiratory, cardiovascular and
cerebrovascular diseases, and cancer to be the biggest threat to the health of
Chinese people.  Experts say that the high incidence of psychiatric and
psychological diseases can be attributed to excessive pressure from work and
study, the fast pace of life and complicated human relations.  Currently there
are over 16 million patients treated for a variety of mental disorders in China
representing 20% of the total health care burden.  As a result, we expect two
new products, Lorazepam and Nefazodone to add significantly to our Psychoactive
product line.  Subsequent to the end of the fiscal year, we announced in April
that we have completed clinical trials for Lorazepam and have applied to the
SFDA for production licenses.

Contraceptive Drugs
With China's "one child" policy, recently adopted in law as the Law on
Population and Family Planning, 2002 under which there has been significantly
increased access to reproductive health services, particularly contraception, we
continue to focus on the product area as key component to our strategic product
mix.  With the aid of the United Nations Educational, Scientific, and Cultural
Organization (UNESCO) Airbeck developed one of the most modern and high capacity
production facilities for Levonorgestrel meeting CP2000, USP24 and BP98
standards.  HBJV is designated as a Selected Purchase Enterprise by the National
Birth Control and Planning committee with orders from the state expected to
account for approximately 60% of sales.  This, combined with the recent
introduction of Noutinyou, a long term contraceptive,  the introduction of
Luoshuang, a morning after pill, earlier in the year and our conventional
short-term contraceptive products is key to developing relationships with a
broader base of national distributors.

Anti-parasitic drugs
Intestinal eelworm infection is very high amongst China's population of
approximately 1.3 billion.  The average infection rate is about 30% with some
areas, especially in the countryside, reporting infection rates as high as 65%.
In total it is estimated that approximately 400 million people are infected with
the eelworm parasite and there is national interest in a 10 year plan to reduce
the infection rate through education and availability of anti-parasitic drugs.
Anti-parasitics are high-margin products and under the current market conditions
it is expected that manufacturers will be largely responsible for developing
markets for the products in the regions they serve, recouping the costs of
promoting the products through increased sales.  At the same time, health and
epidemic prevention departments in many regions have chosen to get involved
allowing us to lever our strong relationships, lengthy history and brand
recognition to attract partnering to increase market share for Albendazole which
we produce in granule and tablet forms.  It is a large market with several
strong competitors.  Our major competitors are ShanXi Han River Pharmaceutical
Factory, SiChuan DengDa Pharmaceutical Factory, ZheJiang NingBo Beidifurt,
HangZhou Pharmaceutical Factory and, our most powerful competitor in the OTC
market, Sino-American Smith Kline.  One manufacturer of an Albenzdazole product
sells a less effective product with some unpleasant side effects at a
considerably lower price posing strong competition but an exploitable weakness.
Another produces in a form not as


<PAGE>
easily administered to children and several others use an alternate approach
including a liniment which discolors clothing and requires that the individual
refrain from bathing for several days.  Smith Kline produce a comparable
Albendazole product at much higher price than HBJV lowering their market share
in regional health departments but increasing the demand for Albendazole as a
result of their strong market presence.  We expect to compete effectively in
several major key markets regionally capturing a little more than 3% of an
estimated 37 million dollar market with good profit margins in the first year.
We will then evaluate the effectiveness of our approaches and look for
opportunities to partner or expand our distribution in other regions.

Sustained -release non-steroidal anti-inflammatory drugs
     Similar to most Western populations, the average age of China's population
is increasing and people are living longer.  Our lead product in this area is
Parodin our new, patented Naproxen sustained release tablet which is included in
China's list of the top four new pharmaceuticals.  It is extremely effective at
increasing mobility and controlling pain associated with arthritis, muscular or
joint injury and all other conditions for which the prescription of an
anti-inflammatory is indicated.  The market for this type of product is very
strong and growing rapidly as the population ages.  The main competition comes
from similar products.  Competitive products include Ibuprofen sustained release
capsules and Ruo Shong sustained release tablets as well as other common drugs
such as Aminophenazone Phenacetin tablets, our own Ibuprofen based products and,
for less intense discomfort, Acetylsalicylic Acid (Asprin).  Our market
advantages include the superior efficacy of Naproxen, its qualification as an
over-the-counter pharmaceutical, and its inclusion in China's basic healthcare
insurance product coverage list.  Our patented time-release format is also
superior at 24 hours compared to that offered by our two major competitors
Beinanlute, a Chlorzoxazone based product from Lunan, Shandong and Fenbid an
Ibuprofen based product from Sino-American Smith Kline both at 12 hours.  In
addition to the strong market for Parodin though our sales force and existing
distribution channels in Hubei and neighboring provinces, the strong OTC demand
for a superior anti-inflammatory in an aging population creates an ideal
situation to use the product to break into new markets into which to level our
other OTC products based upon the brand name recognition that will be gained
through strong sales of Parodin.  We are formulating a five year plan to lever
Parodin to develop additional OTC product distribution in all five national
sales districts - East China, Middle China, South China, North China and West
China.

OTC Generic Drugs
Eighty percent of the products produced by HBJV are included in China's basic
healthcare insurance product coverage list and, among them thirty-two products
are approved for over-the-counter (OTC) sales without prescription.  Product
diversity, large production and packaging capacity and excellent brand
recognition following the return to the trusted Hubei Pharmaceutical branding
provide a significant opportunity for growth through expanded market share.  At
the same time, the OTC market in China is currently growing at double digit
percentages and is expected to grow by 50 to 60% over the next five years.  By
2010 it is expected that China may become the world's largest market with OTC
drugs representing 32 percent of the overall domestic market.  The consolidation
of pharmaceutical enterprises, heavy concentration of major populations and
Western style marketing practices introduced by competitors such as
Sino-American Smith Kline create an environment in which we believe there is
significant potential to grow.  The challenge ahead of us is to lever extremely
cost-effective production with a larger product diversity than most of our
competitors to secure new markets with cost effective distribution to maintain
profitability in what will become a very competitive OTC market.

New Products
In the coming fiscal year, the company expects to release three new products:
Nefazodone tablets, Lorazepam tablets and Lorazepam Injections.  Nefazodone is a
national class II antidepressant commonly used for treatment of anxiety a
growing problem in the China's larger population centers.  Subsequent to the
fiscal year end, HBJV announced that it had completed clinical trials for the
new national class IV drug Lorazepam and made application for production
licenses.  Although successful in other markets, including the US where it ranks
in the top sixth among the 200 most prescribed drugs, the formulation is new to
the Chinese market. Development was partially funded through a grant from the
Hubei Province Biotechnology and New Pharmaceutical Industry Development Fund.
Hubei Pharmaceutical is the only pharmaceutical enterprise to have won this
special honor and required sponsorship from the Xiangfan city government.  It is
a benzodiazepine with CNS depressant, anxiolytic and sedative properties used
for the relief of anxiety, nervous tension, agitation, irritability, insomnia,
to calm people with mania / schizophrenia, and to relieve anxiety prior to
surgery. It has less of an effect on the liver than other benzodiazepines,
making it better suited for patients taking birth control pills, anti-abuse
drugs, propranolol, ulcer medications, and other drugs that affect the liver. It
may also be used to help in the prevention of severe alcohol withdrawal
symptoms, to treat serial seizures in children, to promote amnesia, or in
patients who are undergoing


<PAGE>
chemotherapy and have severe vomiting.  Product is expected to begin shipping in
the second quarter and is expected to reach 100 million tablets per year over
three years contributing over six million dollars in additional annual
profitability.  Work is underway on the injectable form and expected to be
completed in the 2004 fiscal year.

Staffing, Facilites and Licenses
In total, HBJV employs approximately 400 people including 100 sales
representatives, manufacturing personnel, management, pharmacists and technology
specialists.  Its production facilities include and injection plant certified to
the latest GMP standards and a building that is undergoing refitting and
certification to the latest GMP standards which will be used for production in
tablet, capsule, granule and other formats.


The current annual production capacity is:

     -    3 billion tablets
     -    300 million injections
     -    100 million capsules
     -    50 million granule packs, and
     -    30 million tinctures.

HBJV is licensed to produce 120 pharmaceuticals including:

<TABLE>
<CAPTION>
PRODUCT                           DOSAGE FORM    SPECIFICATION  Rx/OTC
<S>                             <C>              <C>            <C>
Acetylspiramycin                Tablet           100mg          Rx
Acetylsalicylice Acid           Capsule          300mg          Rx
Aimkacin Sulfate                Injection        2ml:200mg      Rx
Albendazol                      Tablet           200mg          OTC
Albendazol                      Tablet           100mg          OTC
Albendazoles                    Granule          200mg          OTC
Amidipyrini Composita           Injection        2ml            Rx
Aminophenazoniet Phenacetin     Tablet                          Rx
Aminophylline                   Tablet           100mg          Rx
Amiodarone                      Capsule                         Rx
Anrethidrane Dipropionate       Tablet                          Rx
Aspirin                         Tablet           500mg          OTC
Atropine Sulfate                Injection        1ml:0.5mg      Rx
Atropine Sulfate                Injection        1ml:1mg        Rx
Atropine Sulfate                Injection        1ml:2mg        Rx
Atropine Sulfate                Injection        1ml:5mg        Rx
Atropine Sulfate                Tablet           300mg          Rx
Berberine Hydrochloride         Tablet           100mg          OTC
Breviscapine                    Tablet           20mg           Rx
Captopril                       Tablet           25mg           Rx
Chloramphenicol                 Tablet           250mg          Rx
Chloramphenicoli                Injection        2ml:250mg      Rx
Chlorphenamin Maleate           Injection        1ml:10mg       Rx
Chlorphenamin Maleate           Tablet           4mg            Rx
Cimetidine                      Capsule          200mg          OTC
Cimetidine                      Tablet           200mg          OTC
Clindamycin Hydrochloride       Capsule          150mg          Rx
Compositae                      Tablet                          Rx
Compound Hydroxyprogesterone    Injection                       Rx
  Caproate
Compound Levonorgestrel         Tablet                          Rx
Compound Miconazole Unguentum                    10g            Rx
Compound Reserpin               Tablet           150mg          Rx
Compound Sulfamethoxazole       Tablet           568mg          Rx
Compound Vitamin B Tablets      Tablet           88mg           Rx
Dexamethasone Sodium            Injection        1ml:2mg        Rx
  Phosphate
Dexamethasone Sodium            Injection        1ml:5mg        Rx
  Phosphate
Dizepam                         Tablet           2.5mg          Rx
Ephedrine Hydrochloride         Tablet           25mg           Rx
Erythromycin Enteric            Coated Tablet    12.5           Rx
Estazolam                       Injection        1ml:2mg        Rx
Estazolam                       Tablet           1mg            Rx
Etamsvlate                      Injection        2ml:500mg      Rx


<PAGE>
Ethambutol Hydrochloride        Capsule          250mg          Rx
Ethambutol Hydrochloride        Tablet           250mg          Rx
Fosfomycine Calcice             Capsule          125mg          Rx
Fukangsong Ding                                  6%             Rx
Furazolidone                    Tablet           100mg          Rx
Gentamycin Sulfate              Injection        1ml:4          Rx
Gentamycin Sulfate              Injection        1ml:8          Rx
Glucurolactone                  Tablet           100mg          OTC
Griseofulvin                    Tablet           100mg          Rx
Hydrocortisone                  Injection        2ml:10mg       Rx
Hydrocortisone                  Injection        2ml:25mg       Rx
Hydrocortisone Acetate          Ointment         10g            OTC
Hydroxyprogesterone Caproate    Rx
Ibuprofen                       Tablet           100mg          OTC
Ibuprofen                       Tablet           200mg          OTC
Inosine                         Injection        2ml:100mg      Rx
Inosine                         Tablet           200mg          OTC
Inositol Nicotinate             Tablet           200mg          Rx
Iodine Tincture                                  2%             OTC
Isoniazid                       Tablet           100mg          Rx
Jiere Zhitong San               Rx
Kanamycin Sulfate               Injection        2ml:0.5mg      Rx
Levamisole Hydrochloride        Tablet           25mg           Rx
Levonorgestrel                  Tablet                          Rx
  (morning after pill)
Levonorgestrel and Quinestrol   Tablet                          Rx
Lincomycin Hydrochloride        Capsule          25mg           Rx
Lincomycin Hydrochloride        Injection        2ml:60         Rx
Lu Yao Gao                                       10g            Rx
Metamizole Sodium               Tablet           500mg          Rx
Metamizole Sodium               Injection        2ml:500mg      Rx
Moroxydini Hydrochloride        Tablet           100mg          Rx
Naproxen                        Capsule          200mg          OTC
Naproxen                        Injection        2ml:100mg      Rx
Naproxen Sustained Release      Tablet           500mg          OTC
Naproxen                        Tablet           100mg          OTC
Nitrazepam                      Tablet           5mg            Rx
Nitrofurantoin                  Tablet           50mg           Rx
Nyseungine                                       50             Rx
Oxytetracycline                 Tablet           25             Rx
Paracetamol                     Tablet           500mg          OTC
Pentoxyverine Citrate           Tablet           25mg           OTC
Phenylbutazone                  Tablet           100mg          Rx
Pipemidie Acid                  Tablet           250mg          Rx
Piracetami                      Capsule          200mg          Rx
Prednisolone Acetate            Injection        5ml:125mg      Rx
Prednison Acetate               Tablet           5mg            Rx
Proglumide                      Tablet           200mg          Rx
Propantheline Bromide           Tablet           150mg          OTC
Qing Liang Run Hou Pian                          500mg          Rx
Ranitidine Hydrochloride        Capsule          150mg          OTC
Ranitidine Hydrochloride        Tablet           150mg          OTC
Ribavirin                       Injection        1ml:100mg      Rx
Rifampicin                      Capsule          150mg          Rx
Rifampicin                      Tablet           150mg          Rx
Saccharomytite Sicce            Tablet           300mg          OTC
Sodium Aminosalicylate          Enteric Coated   500mg          Rx
                                Tablet
Sodium Bicarbonate              Tablet           500mg          OTC
Sulfadiazine                    Tablet           500mg          Rx
Suxiao Shangfeng                Capsule          100mg          Rx
Tetracycline                    Tablet           25             Rx
Trimethoprim                    Tablet           100mg          Rx
Trimethoprime                   Tablet           500mg          Rx
  Solphamethox Azole
Vitamin B1                      Injection        2ml:100mg      Rx
Vitamin B1                      Tablet           10mg           OTC
Vitamin B12                     Injection        1ml:0.5mg      Rx
Vitamin B2                      Tablet           5mg            OTC
Vitamin B6                      Injection        1ml:25mg       Rx
Vitamin B6                      Injection        1ml:50mg       Rx
Vitamin B6                      Tablet           10mg           OTC


<PAGE>
Vitamin C                       Injection        2ml:250mg      Rx
Vitamin C                       Injection        2ml:500mg      Rx
Vitamin C                       Injection        5ml:500mg      Rx
Vitamin C                       Injection        5ml:1000mg     Rx
Vitamin C                       Tablet           100mg          OTC
</TABLE>

Risks Associated With Doing Business in China
There are certain risks associated with doing business in China including, but
not limited to, the following:

Our business is being conducted in China and is subject to its political, social
and economic environment.  China is controlled by the Communist Party of China.
Under its current leadership, China has been pursuing economic reform policies,
including the encouragement of private economic activity and greater economic
decentralization.  However, the Chinese central government continues to exercise
substantial control over virtually every sector of the Chinese economy.
Accordingly, the Chinese governments' actions in the future, including any
decision not to continue to support current economic reform programs and to
return to a more centrally planned economy, or regional or local variations in
the implementation of economic reform policies, could have a significant effect
on economic conditions in China or regions within it.  Economic reforms and
growth in China have been more successful in certain provinces than others, and
the continuation or increase of such disparities could affect the political or
social stability of the country.  Economic development may be further limited by
the imposition of measures intended to reduce inflation; the inadequate
development or maintenance of infrastructure; interruption to the availability
of adequate power and/or water supplies, transportation, raw materials and
parts; or, a deterioration of the general political, economic or social climate;
any of which could have a material adverse effect on our business, financial
condition and/or results of operations.

If we were required to move our manufacturing operations outside of China, our
potential profitability, competitiveness and market position could be materially
jeopardized, and there could be no assurance that we could continue our
operations.  Our business is dependent upon agreements with various entities
controlled by Chinese governmental instrumentalities.  The failure of such
entities to honor these contracts, or the inability to enforce these contracts
in China could adversely affect our business operations.  There can be no
assurance that assets and business operations in China will not be nationalized,
which could result in the total loss of our investment in China.

The legal system of China relating to foreign investments is relatively new and
continues to evolve creating uncertainty as to the application of its laws and
regulations in particular instances.  Definitive regulations and policies with
respect to such matters as the allowable percentage of foreign investment and
rates of equity returns have not yet been published.  Statements regarding these
evolving policies have been conflicting.  Any such policies are likely to be
subject to broad interpretation, discretion or modification and to be modified,
perhaps on a case-by-case basis.  As a legal system in China develops with
respect to these new types of enterprises, foreign investors may be adversely
affected by new laws, changes to or interpretation of existing laws and the
preemption of provincial or local laws by national laws.  In circumstances where
adequate laws exist, it may not be possible to obtain timely and equitable
enforcement thereof.

Risks associated with investing in Hubei Pharmaceutical Group
There are certain risks associated with an investment in Hubei Pharmaceutical
Group including, but not limited to, the following:

We may need additional capital to finance our operations, to develop new
products and to complete additional acquisitions.  We cannot fund all of our
objectives with our current working capital. We have relied in the past year on
the sale of common stock to meet our operational and capital requirements.
Additional equity financing would result in dilution to our existing
stockholders. Debt financing would result in interest expense, and if
convertible into equity, could also dilute then-existing stockholders.  If we
were unable to obtain financing in the amounts and on terms deemed acceptable,
our business and future success may be adversely affected.


<PAGE>
The exercise of outstanding warrants and options may dilute existing
stockholders and could substantially increase the number of shares which may be
sold into the market.  As of January 31st, 2004 there were warrants outstanding
to purchase 1,030,299 shares at prices ranging from $0.80 to $1.50 per share.
Further, we have granted options to purchase an additional 1,725,000 shares of
common stock with a weighted average exercise price of $0.3012 per share.  Given
the limited existing market in our common stock, the sale into the market of
significant amounts of additional common stock may have the effect of depressing
our stock share price.


Item  2  Description of Property
Through our interest in HBJV we own an interest in two manufacturing plants.
The first is referred to as an injection plant and produces pharmaceuticals for
sale in injectable form.  It is GMP certified to current standards.  The second
is a four story concrete building is in the process of renovation from a
warehouse facility to a "clean" medical product (dosage) production facility.
The building renovations commenced on March 1, 2004 and are expected to be
completed by June 20, 2004. This plant will produce pharmaceuticals in tablet,
capsule, syrup, powder and other forms.  Both facilities are located in Xiangfan
City, Hubei Province, China

Item  3  Legal Proceedings
Hubei Pharmaceutical Group has nothing to report.

HBJV is being sued and has counter sued a former employee of the joint venture
in Xiangfan city.  We believe this to be incidental and, as it does not directly
involve the Company, exempt from disclosure; however, we did initially agree to
allow the courts to freeze a small sum with respect to the case and accordingly
have provided additional detail in footnote 16 to the financial statements.
Subsequent to that agreement the other party and affiliates have been arrested
and are currently incarcerated with respect to these and other matters.  We have
been asked by the police to refrain from commenting on the details.  We do
believe that pending criminal action will, in and of itself, disprove the
allegations in the civil action allowing HBJV to prevail and at the same time
disprove a number of misleading allegations made by this individual and
affiliates in China and abroad.

Item  4  Submission of Matters to a Vote of Security Holders
Nothing to report.


<PAGE>
PART II

Item  5  Market for Common Equity and Related Stockholder Matters
The Company was first quoted on the Bulletin Board on October 19th 1999.  Our
common stock began quotation on the OTC Bulletin Board under the trading symbol
"HBEI" on April 3rd, 2003.  In addition, our shares of common stock are listed
on the Frankfurt Stock Exchange under the trading symbol HUQ.  The OTC Bulletin
Board  represents our primary market.  The following quotations reflect the high
and low bids for our common stock on a quarterly basis for the past two fiscal
years as quoted with OTC Bulletin Board.  Data prior to April 3rd 2003 when the
company consolidated its capital on a 10 old for 1 new share basis have been
adjusted to reflect the consolidation.  These quotations are based on
inter-dealer prices, without retail mark-up, mark-down or commission and  may
not represent actual transactions.

<TABLE>
<CAPTION>
     Quarter Ending  High Bid   Low Bid
     --------------  ---------  --------
<S>                  <C>        <C>
     April 2002      $    1.00  $   0.90
     July 2002       $    4.80  $   2.50
     October 2002    $    0.70  $   0.30
     January 2003    $    0.40  $   0.20
     April 2003      $   0.625  $   0.13
     July 2003       $    0.52  $   0.16
     October 2003    $    0.70  $   0.20
     January 2004    $    0.59  $   0.71
</TABLE>

Holders
As of January 31st, 2004, there were approximately 149 registered holders of our
common stock.  As many of the shares of common stock are held in street name,
there may be additional beneficial holders of our common stock.

Dividend Policy
We have paid no dividends on our common stock since our inception and may not do
so in the future. For the foreseeable future, we expect earnings, if any, would
be retained to finance the growth of the Company.

<TABLE>
<CAPTION>
          =============================================================
                        EQUITY COMPENSATION PLAN INFORMATION
          -------------------------------------------------------------
                                                           NUMBER OF
                                                           SECURITIES
                                                           REMAINING
                                                         AVAILABLE FOR
                           NUMBER OF                         FUTURE
                           SECURITIES      WEIGHTED-        ISSUANCE
                          TO BE ISSUED      AVERAGE       UNDER EQUITY
                         UPON EXERCISE      EXERCISE      COMPENSATION
                               OF           PRICE OF         PLANS
                          OUTSTANDING     OUTSTANDING      (EXCLUDING
                            OPTIONS,        OPTIONS,       SECURITIES
                          WARRANTS AND    WARRANTS AND    REFLECTED IN
                             RIGHTS          RIGHTS       COLUMN (a))
          PLAN CATEGORY       (a)             (b)             (c)
          -------------------------------------------------------------
<S>                      <C>             <C>             <C>
          Equity
          compensation
          plans
          approved by
          security
          holders             1,725,000  $       0.3012       2,500,000
          -------------------------------------------------------------
          Equity
          compensation
          plans not
          approved by
          security
          holders
          -------------------------------------------------------------
          TOTAL               1,725,000  $       0.3012       2,500,000
          =============================================================
</TABLE>

Recent Sales of Unregistered Securities


<PAGE>
On  April  3, 2003, the Company issued 3,000,000 shares of common stock pursuant
to  an  agreement  entered  into  with Red Dot Capital, Inc. to acquire a 57.14%
interest  in  a  joint venture located in China. This issue has been recorded at
par  value.  The  shares  were issued in reliance of exemption from registration
under  Regulation  S  of  the  Securities  Act  of 1933 as amended, and carry an
appropriate  restrictive  legend.

On  July  6th,  2003  the  Company  issued 80,000 shares of common stock for the
private placement subscription tendered by an accredited investor and closed May
30th, 2003.  The investor subscribed for 80,000 units consisting of one share at
$0.15  and  2.5  purchase warrants to purchase an additional share, on or before
November  30th,  2003,  at  a price of $0.20.  Gross proceeds were $12,000.   An
additional  12,000  units  consisting  of 1 share and 2.5 purchase warrants were
recorded  as  a finders' fee with respect to this private placement.  The shares
were issued in reliance of exemption from registration under Regulation S of the
Securities  Act of 1933 as amended, and carry an appropriate restrictive legend.
A  summary  of outstanding warrants appears as Note 11 in the accompanying notes
to  the  financial  statements.

On July 6th, 2003 the Company issued 2,366,324 shares of common stock at a price
of  $0.15  per share, for the private placement subscription tendered by a group
of  accredited  investors  closed May 30th, 2003.  Gross proceeds were $354,949.
The company recorded payment of $16,895 and issued 43,500 shares of common stock
as  finders' fees with respect to this private placement. The shares were issued
in  reliance of exemption from registration under Regulation S of the Securities
Act  of 1933 as amended, and carry an appropriate restrictive legend.  A summary
of  outstanding  warrants  appears  as  Note 11 in the accompanying notes to the
financial  statements.

On July 25, 2003, the Company issued 19,000,000 common shares of common stock
from the treasury pursuant to an agreement entered into with Red Dot Capital,
Inc. to acquire a 57.1% interest in a joint venture located in China.  This
issue has been recorded at par value.  The shares were issued in reliance of
exemption from registration under Regulation S of the Securities Act of 1933 as
amended, and carry an appropriate restrictive legend.

On August 15th, 2003, the Company issued 1,500,000 common shares of common stock
as finders' fees relating to the acquisition of Red Dot's interest in HBJV.  The
finders'  fee  was  re-negotiated  and  reduced from the 2,000,000 common shares
originally  approved  by  the  shareholders. This issue has been recorded at par
value.  The  shares were issued in reliance of exemption from registration under
Regulation  S of the Securities Act of 1933 as amended, and carry an appropriate
restrictive  legend.  Subsequent to the year end the board of directors accepted
a  recommendation  from  its  President  and  approved a resolution to return an
additional  1,000,000 finders fee shares to treasury following the arrest of one
of  the  finders and pending criminal charges relating to a long term conspiracy
to  undermine  the  project,  discredit  the  joint venture partners and falsely
incriminate  the  president  of  the  company through forgery of documents.  The
company  is  seeking a legal opinion regarding the appropriateness of re-issuing
some  or  all  of  the cancelled shares to other members of the original finders
group who worked hard to overcome the attempts to undermine the project and were
instrumental  in  successfully  completing  it.  No decision has been made as to
whether  additional  shares  would  be  issued  if  deemed  appropriate.

On  July  25,  2003,  the Company accepted private placement subscription offers
from  a  group of accredited investors to subscribe for 728,999 units at a price
of  $0.30  each.  Each  unit  consisted  of  one  share  of common stock and one
purchase  warrant  to purchase an additional share of common stock at a price of
$0.80  if  exercised  on  or  before  July  31,  2004  or at a price of $1.50 if
exercised  after  July  31,  2004  and before July 31, 2005.  The Company issued
693,333  common  shares on August 21, 2003, and 35,666 common shares on December
11,  2003.  Gross  proceeds  were  $218,700.  The  company  recorded  payment of
$19,500 as finders' fees with respect to this private placement. The shares were
issued  in  reliance  of  exemption  from registration under Regulation S of the
Securities  Act of 1933 as amended, and carry an appropriate restrictive legend.
A  summary  of outstanding warrants appears as Note 11 in the accompanying notes
to  the  financial  statements.

On  December 1, 2003, the Company accepted private placement subscription offers
from  a  group of accredited investors to subscribe for 301,300 units at a price
of $0.45 each. Each unit consisted of one share of common stock and one purchase
warrant  to  purchase an additional share of common stock at a price of $0.80 if
exercised  on  or  before  November 14, 2004 or at a price of $1.50 if exercised
after  November  14,  2004,  and  before November 14, 2005.  Gross proceeds were
$135,585.  The  company recorded payment of $9,000 as finders' fees with respect
to  this private placement. The shares were issued in reliance of exemption from
registration  under  Regulation  S of the Securities Act of 1933 as amended, and
carry  an  appropriate  restrictive  legend.  A  summary of outstanding warrants
appears as Note 11 in the accompanying notes to the financial statements.


<PAGE>
On  December 1, 2003, a total of 104,400 warrants were exercised with respect to
private  placement  shares  issued  July  6th,  2003.  The shares were issued in
reliance of exemption from registration under Regulation S of the Securities Act
of  1933 as amended, and carry an appropriate restrictive legend.  The remaining
warrants  expired  and  will  not  be  exercised.

Item  6  Management's Discussion and Analysis or Plan of Operation

Plan of operation
Managements focus for the first two quarters of the 2004 fiscal year with
respect to HBJV will be to complete renovations and GMP certification of the
tablet factory.  It is essential that certification be completed by the end of
the second quarter to comply with government regulations and to move beyond the
limitations the renovations place on production capacity.  Concurrent with this
we will continue to make improvements within our sales force and distribution
network and to solicit orders and plan for the increased production capacity
available in the second half of the fiscal year.  HBJV will also continue its
discussion with its minority partner regarding expanding the scope of the joint
venture operation to include other aspects of Airbeck's core business once
privatization is complete.

While there is no contractual obligation to provide additional working capital
in the 2004 fiscal year, renovations and certification of the tablet factory tax
available working capital.  We will continue to discuss financing with
interested parties and expect to provide additional working capital through debt
or equity.

Concurrent with this we continue to search for additional acquisition targets or
joint venture opportunities and are considering several possibilities.  Our near
term goal would be to complete the acquisition of an additional revenue
producing interest within the next twelve months.  Ideally this would complement
the product mix produced by HBJV rather than compete with it.  We view HBJV as a
solid foundation on which to grow based upon a range of low risk patented and
generic pharmaceuticals with established markets and as a high quality
production base with an existing distribution pipe and established branding.  At
the same time we see opportunities similar to those present in the Western world
for pharmaceuticals to treat diabetes, certain types of advanced dementia,
cancer and other diseases associated with an aging population, more stressful
lifestyle and obesity.  We believe there may opportunities to license or acquire
an interest in products nearing the end of their development cycle at a fraction
of the cost associated with new biotech development and without the risks
associated with commencing long term research and development projects in an
extremely dynamic market.

The company has no off-balance sheet arrangements to report.


<PAGE>
<TABLE>
<CAPTION>
Item  7  Financial  Statements

                           HUBEI PHARMACEUTICAL GROUP, LTD.
                            (A DEVELOPMENT STAGE COMPANY)
                             CONSOLIDATED BALANCE SHEETS
                       AT JANUARY 31, 2004 AND JANUARY 31, 2003
                              (EXPRESSED IN US DOLLARS)
                                      (AUDITED)

                                                                 2004         2003
                                                              -----------  ----------
<S>                                                           <C>          <C>
                                     ASSETS
CURRENT ASSETS
  Cash and cash equivalents (Note 3)                          $  243,804   $       66
  Prepaid expenses (Note 6)                                      352,278           --
  Inventory (Note 4 & Note 5)                                    678,785           --
                                                              -----------  ----------
TOTAL CURRENT ASSETS                                           1,274,867           66
                                                              -----------  ----------

CASH RESTRICTED AS TO USE BY COURT ORDER (NOTE 3 & NOTE 16)       82,056           --
                                                              -----------  ----------

PROPERTY, PLANT AND EQUIPMENT, AT COST (NOTE 3 & NOTE 4)       2,975,487           --
  LESS: ACCUMULATED DEPRECIATION                                  (1,333)          --
                                                              -----------  ----------
NET PROPERTY, PLANT AND EQUIPMENT                              2,974,154           --
DEFERRED CHARGES (NOTE 9)                                         78,492           --
                                                              -----------  ----------
TOTAL ASSETS                                                  $4,409,569   $       66
                                                              ===========  ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                            $  303,202   $  141,477
                                                              -----------  ----------

MINORITY INTEREST IN JOINT VENTURE CORPORATION (NOTE 15)       3,622,500           --
                                                              -----------  ----------

STOCKHOLDERS' EQUITY

  Capital stock (Note 10)
    Par value - 30,744,507 common shares (2003 - 15,828,762)      30,745       15,829
    Additional paid in capital                                 2,538,276    1,345,163
    Advances on proposed subscriptions                            22,000           --
  Contributed surplus                                             12,075           --
  Retained earnings (deficit) during development stage                 0            0
  Cumulative currency translation adjustments (Note 3)              (623)          --
                                                              -----------  ----------
TOTAL STOCKHOLDERS' EQUITY                                     2,602,473    1,360,992
                                                              -----------  ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $6,528,175   $1,502,469
                                                              ===========  ==========
<FN>
                                                            COMMITMENTS - NOTES 4, 16
                                                            -------------------------
APPROVED ON BEHALF OF THE BOARD:                          SUBSEQUENT EVENTS - NOTE 16
                                                          ---------------------------

____________________, Director and Chief Executive Officer

____________________, Director and Chief Financial Officer
</TABLE>


            See Accompanying Notes and Independent Auditors' Report


<PAGE>
<TABLE>
<CAPTION>
                                            HUBEI PHARMACEUTICAL GROUP, LTD.
                                             (A DEVELOPMENT STAGE COMPANY)
                                           CONSOLIDATED STATEMENTS OF INCOME
                                               (EXPRESSED IN US DOLLARS)
                                                       (AUDITED)

                                                 Cumulative From          Twelve Months
                                                Inception Date of             Ended                  Quarter Ended
                                                December 18, 1998           January 31                 January 31
                                                 To January 31,     -------------------------  ------------------------
                                                      2004              2004         2003          2004         2003
                                               -------------------  ------------  -----------  ------------  ----------
<S>                                            <C>                  <C>           <C>          <C>           <C>

Revenue                                        $               --   $        --   $       --   $        --   $      --
                                               -------------------  ------------  -----------  ------------  ----------

General and Administration Costs
  Bank charges and interest                               120,069         1,783       12,277           331      12,200
  Contract cancellation costs                              34,000            --           --            --          --
  Depreciation                                              1,333         1,333           --           593          --
  Finders' fee                                             69,140        69,140           --        12,640          --
  Foreign exchange loss                                     8,906         8,708        1,780         8,708       1,780
  Investor communications                                  29,740        29,740                     27,501
  Joint Venture organization costs                        160,743       160,743                    160,743
  Management fees                                         256,496       115,496      135,000        39,496      45,000
  Mineral property maintenance
    and exploration expenditures                           11,201            --           --            --          --
  Office expenses                                          40,431         8,943       17,771           997      16,079
  Professional fees                                       304,960       236,598        9,872        87,423
  Stock transfer and filing fees                           37,225        11,087        6,072         2,817       1,959
  Stock-based compensation                                 25,000        25,000           --            --          --
  Travel and promotion                                     26,447        17,632           --                        --
  Write-off of accounts payable                           (70,000)      (70,000)          --            --          --
                                               -------------------  ------------  -----------  ------------  ----------
                                                        1,055,691       616,203      182,772       341,249      77,018
                                               -------------------  ------------  -----------  ------------  ----------

Net profit (loss) from operations                      (1,055,691)     (616,203)    (182,772)     (341,249)    (77,018)
  Abandonment of mineral property                          (3,500)           --           --            --          --
  Loss on terminated acquisition                       (1,059,415)           --     (701,781)           --          --
                                               -------------------  ------------  -----------  ------------  ----------
Net profit (loss) for the period                       (2,118,606)    ($616,203)   ($884,553)    ($341,249)   ($77,018)
                                               ===================  ============  ===========  ============  ==========

Basic earnings (loss) per common share                                   ($0.04)      ($0.98)       ($0.02)     ($0.09)
                                                                    ============  ===========  ============  ==========
Diluted earnings (loss) per common share                                 ($0.04)      ($0.98)       ($0.02)     ($0.09)
                                                                    ============  ===========  ============  ==========
Weighted average number of shares outstanding
  Basic                                                              17,451,747      903,824    20,468,805     903,824
                                                                    ============  ===========  ============  ==========
  Diluted                                                            20,207,046      923,824    23,224,104     923,824
                                                                    ============  ===========  ============  ==========
</TABLE>


                    See Accompanying Notes and Independent Auditors' Report


<PAGE>
<TABLE>
<CAPTION>
                                      HUBEI PHARMACEUTICAL GROUP, LTD.
                                        (A DEVELOPMENT STAGE COMPANY)
                                CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
                                          (EXPRESSED IN US DOLLARS)
                                                  (AUDITED)

                                   Cumulative From            Nine  Months
                                  Inception Date of              Ended                     Quarter Ended
                                  December 18, 1998            January 31                   January 31
                                    To January 31,    --------------------------  --------------------------
                                         2004             2004          2003          2004          2003
                                  ------------------  ------------  ------------  ------------  ------------
<S>                               <C>                 <C>           <C>           <C>           <C>


Net profit (loss) for the period         (2,118,606)    ($616,203)    ($884,553)    ($341,249)     ($77,018)
Retained earnings (deficit),
  beginning of period                            --    (1,502,403)     (617,850)   (1,777,357)   (1,425,385)
                                  ------------------  ------------  ------------  ------------  ------------
Retained earnings (deficit),
  end of period                         ($2,118,606)  ($2,118,606)  ($1,502,403)  ($2,118,606)  ($1,502,403)
                                  ==================  ============  ============  ============  ============
</TABLE>


            See Accompanying Notes and Independent Auditors' Report


<PAGE>
<TABLE>
<CAPTION>
                                               HUBEI PHARMACEUTICAL GROUP, LTD.
                                                (A DEVELOPMENT STAGE COMPANY)
                                             CONSOLIDATED STATEMENT OF CASH FLOWS
                                                  (EXPRESSED IN US DOLLARS)
                                                          (AUDITED)

                                                         Cumulative From
                                                        Inception Date of        Twelve Months
                                                        December 18, 1998            Ended                  Quarter Ended
                                                         To January 31,             January 31                January 31
                                                                            ------------------------  -----------------------
                                                              2004             2004         2003         2004         2003
                                                       -------------------  -----------  -----------  -----------  ----------
<S>                                                    <C>                  <C>          <C>          <C>          <C>
CASH DERIVED FROM (APPLIED TO)
  OPERATING ACTIVITIES
    Net profit (loss) for the period                          ($2,118,606)   ($616,203)   ($884,553)   ($341,249)   ($77,018)
    Items not requiring use of cash
      Depreciation                                                  1,333        1,333           --          593          --
      Stock issued for bonus                                       10,000       10,000           --           --          --
      Stock issued for finders' fees                               18,395       18,395           --           --          --
      Stock issued for consulting fees                            515,000      515,000           --           --          --
      Stock issued for the Joint Venture Corporation               22,000       22,000           --           --          --
      Stock issued for debt                                       131,577     (105,000)     135,459                  135,459
      Loss on terminated acquisition                            1,059,415           --      701,781           --          --
      Abandonment of mineral property                               3,500           --           --           --          --
      Cumulative currency translation adjustments                    (623)        (623)          --           18          --
   Changes in non-cash working capital items
      Prepaid expenses                                           (352,278)    (352,278)          --       89,902          --
      Inventory                                                      (542)        (542)          --           --          --
      Accounts payable                                            303,202      161,725       47,162      (67,118)    (58,515)
                                                       -------------------  -----------  -----------  -----------  ----------
        Net cash applied to operating activities                 (407,627)    (346,193)        (151)    (317,854)        (74)
                                                       -------------------  -----------  -----------  -----------  ----------
CASH RESTRICTED AS TO USE BY COURT ORDER                          (82,056)     (82,056)          --      (82,056)         --
                                                       -------------------  -----------  -----------  -----------  ----------
FINANCING ACTIVITIES
  Capital stock issued for cash                                   812,634      747,634           --      172,685          --
  Contributed surplus                                              12,075       12,075           --     (100,829)         --
  Advances on proposed subscriptions                               22,000       22,000           --       (2,220)         --
                                                       -------------------  -----------  -----------  -----------  ----------
        Net cash provided by financial activities                 846,709      781,709            0       69,636          --
                                                       -------------------  -----------  -----------  -----------  ----------
INVESTING ACTIVITIES
  Fixed assets purchased                                          (31,230)     (31,230)          --       (1,034)         --
  Deferred charges                                                (78,492)     (78,492)          --      153,789          --
  Mineral property                                                 (3,500)          --           --           --          --
                                                       -------------------  -----------  -----------  -----------  ----------
        Net cash (used in) provided by investing
        activities                                               (113,222)    (109,722)          --      152,755          --
                                                       -------------------  -----------  -----------  -----------  ----------
CASH AND CASH EQUIVALENTS,
  INCREASE (DECREASE) DURING THE PERIOD                           243,804      243,738         (151)    (177,519)        (74)
CASH AND CASH EQUIVALENTS,
  BEGINNING OF PERIOD                                                  --           66          217      421,323         140
                                                       -------------------  -----------  -----------  -----------  ----------
CASH AND CASH EQUIVALENTS,
  END OF PERIOD                                        $          243,804   $  243,804   $       66   $  243,804   $      66
                                                       ===================  ===========  ===========  ===========  ==========

SUPPLEMENTARY DISCLOSURE OF NON-CASH
TRANSACTIONS:
Inventory transferred to the Joint Venture
  Corporation as the investment from the
  minority party                                                            $  678,243                $  678,243
Property, plant and equipment transferred
  to the Joint Venture Corporation as the
  investment from the minority party                                        $2,944,257                $2,702,757
                                                                            -----------               -----------
Minority interest in Joint Venture Corporation                              $3,622,500                $3,381,000
                                                                            ===========               ===========
</TABLE>


                    See Accompanying Notes and Independent Auditors' Report


<PAGE>
<TABLE>
<CAPTION>
                                              HUBEI PHARMACEUTICAL GROUP, LTD.
                                               (A DEVELOPMENT STAGE COMPANY)
                                       CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                              FROM DATE OF INCEPTION ON DECEMBER 18, 1998 TO JANUARY 31, 2004
                                                 (EXPRESSED IN US DOLLARS)
                                                         (AUDITED)

                                                                                  Additional    Advances on
                                                         Number of       Par       Paid-in        Proposed     Contributed
                                                           Shares       Value      Capital     Subscriptions     Surplus
                                                        ------------  ---------  ------------  --------------  ------------
<S>                                                     <C>           <C>        <C>           <C>             <C>
Shares issued for cash at $0.01                             600,006   $    600   $    59,400
Shares issued for cash at $0.10                               5,000          5         4,995
Net loss for the period
                                                        ------------  ---------  ------------  --------------  ------------
Balance, January 31, 1999                                   605,006        605        64,395                0
Net loss for the year
                                                        ------------  ---------  ------------  --------------  ------------
Balance, January 31, 2000                                   605,006        605        64,395                0
Shares issued for convertible debt                          917,500        918       457,832
Net loss for the year
                                                        ------------  ---------  ------------  --------------  ------------
Balance, January 31, 2001                                 1,522,506      1,523       522,227                0
Net loss for the year
                                                        ------------  ---------  ------------  --------------  ------------
Balance, January 31, 2002                                 1,522,506      1,523       522,227                0             0
Shares issued for
acquisition of business                                  14,000,000     14,000     1,246,000
Shares issued for debt                                   17,629,136     17,629       747,756
Shares issued for services                                5,950,000      5,950       529,550
Shares cancelled on rescission of
  acquisition agreement                                 (23,272,880)   (23,273)   (1,700,370)
Net loss for the year
                                                        ------------  ---------  ------------  --------------  ------------
Balance, January 31, 2003                                15,828,762     15,829     1,345,163                0             0
Shares issued for consulting fee                          1,500,000      1,500        13,500
Shares issued for debt                                    1,500,000      1,500        13,500
Shares issued for bonus                                   1,000,000      1,000         9,000
Cancellation of issuance for debt                        (4,000,000)    (4,000)     (116,000)
                                                        ------------  ---------  ------------  --------------  ------------
                                                         15,828,762     15,829     1,265,163                0             0
                                                        ------------  ---------  ------------  --------------  ------------
1:10 consolidation, April 2, 2003                         1,582,884     15,829     1,265,163                0             0
Shares issued for the deposit on assignment of
  acquisition agreement for 57.1% interest of
  Hubei Pharmaceutical Co., Ltd.
  (Total of 22,000,000 shares),
  recorded at par value                                   3,000,000      3,000
Shares issued for cash @$0.15
Issued on July 6, 2003                                    2,446,324      2,446       364,503
Shares issued for finders' fees
Issued on July 6, 2003                                       55,500         56        16,839
Balance of Shares issued for the deposit on assignment
  of acquisition agreement for 57.1% interest of HuBei
  Pharmaceutical Co., Ltd. (Total of 22,000,000
  shares) recorded at par value                          19,000,000     19,000                              0
Adjustment of Paid in Capital                                          (14,246)       14,246
Shares issued for finders' fees
  Issued on August 15, 2003                               1,500,000      1,500
Shares issued for cash @$0.30
  Issued on August 21, 2003                                 693,333        693       207,307
Shares issued for Consultants
  fees, issued on August 29, 2003                         2,000,000      2,000       498,000
Shares issued for cash @$0.45/unit,
  issued on December 1, 2003                                301,300        301       135,284
Shares issued for cash @$0.30/unit,
  issued on December 11, 2003                                35,666         36        10,664
Warrants exercised @$0.20/share                             104,500        105        20,795
Option exercised @$0.22/share                                25,000         25         5,475
Advances on proposed subscriptions                                                                     22,000
Contributed Surplus                                                                                                  12,075
Cumulative translation adjustments
Net loss for the year ended
January 31, 2004
                                                        ------------  ---------  ------------  --------------  ------------
Balance, January 31, 2004                                30,744,507   $ 30,745   $ 2,538,276   $       22,000  $     12,075
                                                        ============  =========  ============  ==============  ============


                                                                       Cumulative
                                                          Retained      Currency
                                                          Earnings    Translation
                                                         (Deficit)    Adjustments      Total
                                                        ------------  ------------  ------------
<S>                                                     <C>           <C>           <C>
Shares issued for cash at $0.01                                                     $    60,000
Shares issued for cash at $0.10                                                           5,000
Net loss for the period                                      (7,401)                     (7,401)
                                                        ------------  ------------  ------------
Balance, January 31, 1999                                    (7,401)                     57,599
Net loss for the year                                       (46,422)                    (46,422)
                                                        ------------  ------------  ------------
Balance, January 31, 2000                                   (53,823)            0        11,177
Shares issued for convertible debt                               --                     458,750
Net loss for the year                                      (547,038)                   (547,038)
                                                        ------------  ------------  ------------
Balance, January 31, 2001                                  (600,861)            0       (77,111)
Net loss for the year                                       (16,989)                    (16,989)
                                                        ------------  ------------  ------------
Balance, January 31, 2002                                  (617,850)            0       (94,100)
Shares issued for
acquisition of business                                                               1,260,000
Shares issued for debt                                                                  765,385
Shares issued for services                                                              535,500
Shares cancelled on rescission of                                                             0
  acquisition agreement                                                              (1,723,643)
Net loss for the year                                      (884,553)                   (884,553)
                                                        ------------  ------------  ------------
Balance, January 31, 2003                                (1,502,403)            0      (141,411)
Shares issued for consulting fee                                                         15,000
Shares issued for debt                                                                   15,000
Shares issued for bonus                                                                  10,000
Cancellation of issuance for debt                                                      (120,000)
                                                        ------------  ------------  ------------
                                                         (1,502,403)            0      (221,411)
                                                        ------------  ------------  ------------
1:10 consolidation, April 2, 2003                        (1,502,403)            0      (221,411)
Shares issued for the deposit on assignment of                                                0
  acquisition agreement for 57.1% interest of                                                 0
  Hubei Pharmaceutical Co., Ltd.
  (Total of 22,000,000 shares),                                                               0
  recorded at par value                                                                   3,000
Shares issued for cash @$0.15                                                                 0
Issued on July 6, 2003                                                                  366,949
Shares issued for finders' fees                                                               0
Issued on July 6, 2003                                                                   16,895
Balance of Shares issued for the deposit on assignment                                        0
  of acquisition agreement for 57.1% interest of HuBei                                        0
  Pharmaceutical Co., Ltd. (Total of 22,000,000                                               0
  shares) recorded at par value                                                          19,000
Adjustment of Paid in Capital                                                                 0
Shares issued for finders' fees
  Issued on August 15, 2003                                                               1,500
Shares issued for cash @$0.30                                                                 0
  Issued on August 21, 2003                                                             208,000
Shares issued for Consultants                                                                 0
  fees, issued on August 29, 2003                                                       500,000
Shares issued for cash @$0.45/unit,
  issued on December 1, 2003                                                            135,585
Shares issued for cash @$0.30/unit,                                                           0
  issued on December 11, 2003                                                            10,700
Warrants exercised @$0.20/share                                                          20,900
Option exercised @$0.22/share                                                             5,500
Advances on proposed subscriptions                                                       22,000
Contributed Surplus                                                                      12,075
Cumulative translation adjustments                                           (623)         (623)
Net loss for the year ended                                                                   0
January 31, 2004                                           (616,203)                   (616,203)
                                                        ------------  ------------  ------------
Balance, January 31, 2004                               ($2,118,606)        ($623)  $   483,867
                                                        ============  ============  ============
</TABLE>


            See Accompanying Notes and Independent Auditors' Report


<PAGE>
NOTES  TO  THE  FINANCIAL  STATEMENTS

NOTE  1.  ORGANIZATION  AND  NATURE  OF  BUSINESS

Hubei  Pharmaceutical  Group, Ltd. ("the Company") was incorporated in the State
of  Nevada, U.S.A. on December 18, 1998, under the name of Explore Technologies,
IncIn  the  exploration  stage,  the  Company  was  engaged in the acquisition,
exploration  and  development of mineral properties. The Company had intended to
carry out exploration work on the Miranda Property in order to ascertain whether
the  Miranda  Property possessed commercially developable quantities of gold and
other  precious  minerals.  The  Company's  board  of  directors determined that
further  exploration  of  the  Miranda  Property was not commercially viable and
decided  on  April  25,  2000  to  abandon  its  interest  in  the  property.

In  April  2002,  the Company identified a business opportunity and acquired the
issued  and  outstanding  shares of Access Network Limited ("Access"), a British
Virgin  Island  Company,  and  certain  assets associated with the operations of
Access  by  the  issuance  of  14,000,000  common shares at a price of $0.09 per
share.  Access was in the business of supplying long distance telephone services
to  Asian  users.  Also, the Company changed its name from Explore Technologies,
Inc.  to  Pan  Asia  Communications  Corp.

On  May  15,  2002,  the Company issued 12,598,500 common shares to creditors of
Access  in  settlement  of  debt  of  $629,925.

On  June  5,  2002,  the  Company  issued  5,950,000  shares  of common stock to
consultants  at  a deemed price of $0.09 per share for a number of agreements to
provide  customer research, technology support and financial services related to
the business acquired from Access.  The Company has cancelled all agreements for
services  from  consultants and other agents effective (September 3rd 2002) with
the  rescission  of the acquisition of Access.  No shares issued with respect to
consulting  services  will  be  returned  to  treasury.

The  Company was unable to raise the capital necessary to pursue the development
of  Access  and  on  September 3, 2002, the Company entered into an agreement to
rescind  the Access agreement dated May 15, 2002 and to return 14,000,000 common
shares  issued,  to  treasury. Effective October 30, 2002, the Company cancelled
and  returned  to  treasury  14,000,000  acquisition  shares.  In  addition, the
Company  cancelled  9,272,880 shares from the 12,598,500 common shares issued to
creditors  of  Access  in  respect  of  the acquisition. The remaining 3,325,620
shares  were  deposited by two creditors as collateral and are not available for
physical  return  to  the  Company. The Company has given notice to the Transfer
agent  not  to transfer the aforesaid balance of shares should they be presented
for  transfer.

JOINT  VENTURE  INVESTMENT  WITH  HUBEI  ZENITH  AIRBECK PHARMACEUTICAL CO. LTD.
("AIRBECK")

On  February  26, 2003, the Company identified a new business opportunity and on
March  18,  2003 entered into an Acquisition Agreement with Red Dot Capital Inc.
("Red  Dot")  to  acquire,  on  certain  terms and conditions, 100% of Red Dot's
57.14%  joint venture interest in Hubei Pharmaceutical Co., Ltd. ("HBJV").  HBJV
was  incorporated  as a private Chinese joint venture corporation in the city of
Xiangfan  in Hubei province, People's Republic of China ("China") on January 24,
2003  by Red Dot and Hubei Zenith Airbeck Pharmaceutical Co. Ltd.  The latter is
licensed  to  engage  in  research,  development,  production  and  sale  of
pharmaceutical products.  Airbeck is a Chinese government funded company located
in  Xiangfan,  involved  in  research,  development, production and sale of bulk
pharmaceutical  products  through  its Bulk Division as well as over-the-counter
and  patented  pharmaceutical  products  in  dosage  forms including injections,
capsules,  tablets,  syrups  and other form through its Dosage Division.  HBJV's
initial  line  of business will be to operate the Dosage Division contributed by
Airbeck  to  the  joint  venture.

Effective  April  2,  2003,  the  Company  underwent a name change from Pan Asia
Communications  Corp.  to  Hubei Pharmaceutical Group, Ltd. and consolidated its
capital  on a 10 old for 1 new basis. Its common shares commenced trading on the
OTC  Bulletin  Board  on  a  Post-consolidation basis on Thursday, April 3, 2003
under  the  new  symbol  HBEI.

The terms of the Acquisition Agreement are as follows:

The  company  is  to  issue  22,000,000 post-consolidation, restricted shares of
common  stock in its capital (the "Shares") at par value of $0.001 per share, to
Red  Dot, or Red Dot's nominees, appointed in writing on the following terms and
conditions:
     3,000,000  common  shares  to be issued on closing.  These were issued from
treasury  on  April  3,  2003;
     19,000,000  common  shares  to be issued at the time the Airbeck assets are
vended  into  the  joint  venture.  These  were issued from treasury on July 25,
2003.


<PAGE>
The  company  is  to  issue  2,000,000  post-consolidation, restricted shares of
common  stock  in  its capital as a finders' fee due and payable at such time as
Airbeck  assets  are  vended into the joint venture as referred to above.  These
shares  were  re-negotiated  at a total of 1,500,000 common shares and issued on
August 15, 2003. However, 1,000,000 common shares as a part of this finders' fee
are  subsequently  cancelled on April 23, 2004 and will be returned to treasury.
(See  Note  16  -  Subsequent  events,  below).

The  company  is  to  assume  all of Red Dot's obligations pursuant to the Joint
Venture  Agreement  with  Airbeck.

As  further  consideration  of Red Dot's assignment of its interest in HBJV, the
Company  is  to  issue  the  following  number of post-consolidation, restricted
shares  of  common  stock  in  its  capital  to  Red  Dot, or Red Dot's nominees
appointed in writing, upon HBJV attaining the following  cumulative, gross sales
revenue:

<TABLE>
<CAPTION>
               Gross Sales   Additional Shares
                  Amount        to Be Issued
               -------------------------------
<S>                          <C>
               $  5,000,000          5,000,000
                  7,500,000          2,500,000
                 10,000,000          2,500,000
                 12,500,000          2,500,000
                 15,000,000          2,500,000
               ===============================
</TABLE>

Based  on the Joint Venture Agreement between Airbeck and Red Dot dated December
23,  2002,  the  Amended  HBJV  Articles dated July 8, 2003 and the Supplemental
Joint  Venture Agreement between Airbeck, Red Dot and the Company dated July 31,
2003,  the  details  of  the  joint  venture  are  as  follows:
     The  Company  owns  a controlling interest of 57.14% in HBJV by agreeing to
     invest US dollar cash of $4,830,000 (RMB40,000,000), and to transfer its US
     dollar  cash  investment  to  HBJV  as  follows:
          -    An  initial  15%  ($724,500)  on  or  before  October  22,  2003.
          -    A  further  35%  ($1,690,500)  on  or  before  April  23,  2004.
          -    A  further  25%  ($1,207,500)  on  or  before  April  23,  2005.
          -    A  final  25%  ($1,207,500)  on  or  before  April  23,  2006.

          This  amount  is  not  recorded  as  a  liability  in  these financial
          statements  as  it  is  contingent  upon the Company raising funds for
          investment.  The  Company invested $278,000 and advanced $123,672 cash
          to  HBJV  before  January 31, 2004. On February 28, 2004, the Company,
          the management of Airbeck and the board of HBJV subsequently arrived a
          memorandum  to amend the abovementioned investment agreement. Based on
          this  memorandum, the Company's cash investment schedule is changed to
          total  cash  investment  should be invested in HBJV on or before April
          23,  2006.

     Airbeck  owns a minority interest of 42.86% in HBJV by investing intangible
     assets  in  the  form  of  pharmaceutical  production  licenses  valued  at
     $3,381,000  (RMB28,000,000)  along  with  machinery and equipment valued at
     $241,500  (RMB2,000,000).  On  January  16,  2004,  an  amended  investment
     agreement  was  arrived  between the Company and the management of Airbeck.
     Based on this amended investment agreement, Airbeck would retain $3,381,000
     intangible  assets  of pharmaceutical production licenses. Instead of these
     intangible assets, Airbeck transferred $678,243 of inventory and $2,702,757
     of  plant,  property  and  equipment,  to  HBJV.

The  values  of  inventory, plant, property and equipment contributed by Airbeck
were  assessed  and appraised by Xiangfan Huaju Certified Public Accountant Co.,
Ltd.,  a  qualified  appraisal  firm  registered  in  Xiangfan,  China.  Total
investment  of $3,622,500 from Airbeck in the form of inventory, plant, property
and  equipment  were  transferred  into  HBJV  except  buildings  are  under the
procedure  of  title  transfer.

Airbeck  is presently in the procedure of privatization, and it is expected that
the  privatization  process  will  take  a  number  of  months for approvals and
finalization.  Management  agrees  that  the  new  ownership  of  Airbeck, after
privatization,  will  own  the 42.86% interest in HBJV. The detailed name of the
ownership  will  not be known until finalization of the privatization procedure.


NOTE  2.  DEVELOPMENT  STAGE  ACTIVITIES


<PAGE>
The  Company  is  a  development  stage  company  as defined in the Statement of
Financial  Accounting Standards No.7.  The Company is devoting substantially all
of  its present efforts to establish a new business for the Company by acquiring
the  operating  Dosage  Division of Hubei Zenith Airbeck Pharmaceutical Co. Ltd.
and  none  of this joint venture corporation's planned principal operations have
commenced  at January 31, 2004.  All accumulated expenses of $78,492 in HBJV are
considered  as  part  of  the  Company's  development  stage  activities and are
capitalized  as  deferred  charges  in  the  balance  sheet.  Also,  all  losses
accumulated  since  inception  have  been  considered  as  part of the Company's
development  stage  activities.

Since  its  inception,  the  Company has funded operations through invested cash
from  common  stock  issuances  to  meet  its  strategic  objectives. Management
believes  that  sufficient  funding  will  be  available  to  meet  its business
objectives,  including  anticipated  cash  needs  for  working  capital.


NOTE  3.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES


BASIS  OF  PRESENTATION

These  consolidated  financial  statements have been prepared in accordance with
Accounting  Principles  Generally  Accepted  in  the  United  States  ("USGAAP).

PRINCIPLES  OF  CONSOLIDATION

The  accompanying  consolidated financial statements include the accounts of the
Company  and the HBJV. The 42.86% interest in the HBJV owned by Airbeck is shown
as  a  minority  interest  in  the  consolidated  financial  statements.  All
intercompany  transactions and intercompany balances have been eliminated.  HBJV
has  not  commenced  operating  activities;  therefore, HBJV does not affect the
statement  of  income.

USE  OF  ESTIMATES

The  preparation  of  financial  statements  in  conformity with USGAAP 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  dates  of the financial statements and the reported amounts of revenues and
expenses  during  the reporting periods.  Actual results could differ from those
estimates.

CASH  AND  CASH  EQUIVALENTS

Cash  and  cash  equivalents  consist  of  cash  on  deposit  and  highly liquid
short-term  interest  bearing securities with a maturity at the date of purchase
of  three  months  or  less.

As  at  January  31,  2004, $82,056 (RMB680,000) of HBJV's RMB cash is frozen by
court  order  in a bank account in the Bank of China, West Xianfan Branch and is
excluded  from  current assets and is disclosed as cash restricted as to use, by
Court  Order.  (See  Note  16.  Subsequent  Events  -  Lawsuit  against  Hubei
Pharmaceutical  Co.,  Ltd.  ("HBJV"),  below.)

INCOME  TAXES

Provisions  for  income  taxes  are based on taxes payable or refundable for the
current  year  and deferred taxes on temporary differences between the amount of
taxable  income  and pretax financial income and between the tax bases of assets
and  liabilities  and  their  reported  amounts  in  the  financial  statements.
Deferred  tax  assets and liabilities are included in the financial statement at
currently  enacted  income  tax  rates  applicable  to  the  period in which the
deferred  tax  assets  and liabilities are expected to be realized or settled as
prescribed in FASB Statement No. 109, Accounting for Income Taxes.  Deferred tax
assets  are reduced by a valuation reserve to nil due to uncertainty of applying
tax  losses  brought  forward.  As  changes  in  tax  laws  or rate are enacted,
deferred  tax  assets  and  liabilities  are  adjusted through the provision for
income  taxes.  (Note  14.  Income  Tax  -  The  United  States,  below)

Income Tax Exemptions and Reductions, relating to operation of the joint venture
corporation  in  China  are  disclosed  in  Note  11.  Income Tax Exemptions and
Reductions  -  China,  below.

STOCK  BASED  COMPENSATION


<PAGE>
SFAS  No.  123,  "Accounting  for  stock-based  compensation" permits the use of
either  a  "fair  value based method" or the "intrinsic value method" defined in
Accounting  Principles  Board  Opinion  25,  "Accounting  for  stock  issued  to
employees"  (APB  25)  to  account  for  employee  stock-based  compensation
arrangements.

The Company accounts for employee stock based compensation using the intrinsic
value method prescribed in APB 25 and related interpretations.  Accordingly,
compensation cost for stock options is measured as the excess, if any, of the
fair value of the Company's common stock at the date of the grant over the
amount an employee must pay to acquire the common stock.  Non-employee stock
based compensation is accounted for using the fair value method in accordance
with SFAS No. 123 - "Accounting for Stock Based Compensation".

No  disclosures relating to stock based compensation have been included with the
accompanying  consolidated  balance  sheet, as all stock options were granted to
directors  and  employees  at exercise prices that were the same as or excess of
the  fair  market  value of the Company's common stock at the date of the grant.
(See  Note  12  --  Summary  of  Options  outstanding,  below.)

COMPENSATED  ABSENCES

Employees of the corporation are entitled to paid vacations, sick days and other
time  off  depending on job classification, length of service and other factors.
It  is  impractical  to estimate the amount of compensation for future absences,
and accordingly, no liability has been recorded in the accompanying consolidated
financial  statements.  The  corporation's  policy  is to recognize the costs of
compensated  absences  when  paid  to  employees.

NET PROFIT  (LOSS)  PER  SHARE

The  Company  adopted  Statement  of Financial Accounting Standards No. 128 that
requires  the  reporting  of  both  basic  and diluted earnings per share. Basic
earnings  per share is computed by dividing net income available to common share
owners  by  the  weighted  average  number  of common shares outstanding for the
period.  Diluted  earnings  per share reflects the potential dilution that could
occur  if  securities or other contracts to issue common stock were exercised or
converted  into  common  stock.  In  accordance with FASB 128, any anti-dilutive
effects  on  net  loss  per  share  are  excluded.

DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS


As  defined  in  FASB  107,  the company estimates whether the fair value of all
financial  instruments  differ  materially from the aggregate carrying values of
its financial instruments recorded in the accompanying balance sheet, which need
to  be  disclosed.  The estimated fair values of amounts have been determined by
the  Company  using  available  market  information  and  appropriate  valuation
methodologies.  Considerable judgment is required in interpreting market data to
develop  the  estimates  of  fair  value, and accordingly, the estimates are not
necessarily  indicative  of  the  amounts  that  the  Company could realize in a
current  market  exchange.


CONCENTRATION  OF  CREDIT  RISK


Financial  instruments  that  potentially  subject  the Company to a significant
concentration  of  credit  risk  consist  primarily of cash and cash equivalents
which are not collateralized.  The Company limits its exposure to credit loss by
placing  its  cash  and  cash  equivalents  with  high  credit quality financial
institutions.


LONG-LIVED  ASSETS


Statement  of  Financial  Accounting  Standards  No.  121,  "Accounting  for the
Impairment  of  Long-Lived  Assets and for Long-Lived Assets to be Disposed Of,"
requires  that  long-lived  assets be reviewed for impairment whenever events or
changes  in  circumstances  indicate  that  the  carrying amount of the asset in
question  may  not be recoverable.  This standard did not have a material effect
on  the  Company's  results  of  operations, cash flows or financial position in
these  financial  statements.


<PAGE>
FOREIGN  CURRENCY  TRANSLATION


The  reporting currency of the Company is the United States Dollar. The accounts
of  other  currencies  are  translated  into  US Dollars on the following basis:


     Monetary  assets  and  liabilities  are  translated  at the current rate of
     exchange.
     The  weighted  average  exchange  rate  for the period is used to translate
     revenue,  expenses, and gains or losses from the functional currency to the
     reporting  currency.
     The  gain  or  loss  on  the  of  foreign  currency financial statements is
     reported as a separate component of stockholders' equity and not recognized
     in net income. Gains or losses on remeasurement from the recording currency
     are  recognized  in  current  net  income.
     Gains  or  losses  from  foreign  currency  transactions  are recognized in
     current  net  income.
     Fixed  assets are measured at historical exchange rates that existed at the
     time  of  the  transaction.
     Depreciation  is  measured at historical exchange rates that existed at the
     time  the  underlying  related  asset  was  acquired.
     An  analysis  of  the  changes  in  the  cumulative  currency  translation
     adjustment  is  disclosed  as  part  of stockholders' equity and summarized
     below:

<TABLE>
<CAPTION>
                                              Year Ended January 31
                                             -----------------------
                                                2004         2003
                                             -----------  ----------
<S>                                          <C>          <C>
               Balance, Beginning of period          --           --
               Change during the period           ($623)          --
                                             -----------  ----------
               Balance, End of period             ($623)          --
                                             ===========  ==========
</TABLE>

The  effect  of  exchange  rate  changes  on  cash  balances  is reported in the
statement  of  cash  flows as a separate part of the reconciliation of change in
cash  and  cash  equivalents  during  the  period.

REVENUE  RECOGNITION

The  Securities  and  Exchange Commission (SEC) issued Staff Accounting Bulletin
(SAB)  101,  Revenue Recognition in Financial Statements, in December 1999.  The
SAB  summarizes  certain of the SEC staff's views in applying generally accepted
accounting  principles  to  revenue recognition in financial statements.  During
the  current  year,  the  Company  performed a review of its revenue recognition
policies  and  determined  that  it  is  in  compliance  with  SAB  101.

FINANCIAL  INSTRUMENTS

The  Company's financial instruments consist of cash, prepaid expenses, accounts
payable,  none  of  which  are  held  for  trading  purposes.

It  is  management's  opinion  that  this  Company is not exposed to significant
interest  or  credit risks arising from these financial instruments, as the fair
value  of  these financial instruments approximate their carrying values, except
cash  restricted  as  to  use, by Court Order of $82,056, the date of release of
which  is  not  known  at  the  date  of  these  financial  statements.

SEGMENTED  INFORMATION

The  Company's  identifiable  assets  as are located in the following countries:


<PAGE>
<TABLE>
<CAPTION>
     JANUARY 31, 2004            CANADA     CHINA       TOTAL
                                --------------------------------
<S>                             <C>       <C>         <C>
     Current assets             $366,389  $  908,478  $1,274,867
     Cash Restricted as to use            $   82,056  $   82,056
     Net fixed assets           $  7,555  $2,966,599  $2,974,154
     Deferred charges, net            --  $   78,492  $   78,492
                                --------  ----------  ----------
     Total assets               $373,944  $4,035,625  $4,409,569
                                ========  ==========  ==========

     JANUARY 31, 2003            CANADA     CHINA       TOTAL
                                --------------------------------
     Current assets             $     66  $       --  $       66
                                --------  ----------  ----------
     Total assets               $     66  $       --  $       66
                                ========  ==========  ==========
</TABLE>

PROPERTY,  PLANT  AND  EQUIPMENT

Fixed  assets are stated at cost less accumulated depreciation.  Depreciation is
recorded  at  the  following  rates,  based  upon the useful life of the assets:

Office equipment         -  20% per annum on the declining balance
Computer                 -  30% per annum on the declining balance
Leasehold improvement       Allocated on a straight-line basis over the term
                         -  of the lease
Property, plant and      -  6% per annum on the straight-line basis
buildings
Lease equipment             7.14% to 12.5% per annum on the straight-line
                         -  basis

Fixed  assets in the HBJV will record depreciation based on above rates when the
operations  commence.


NOTE 4.   JOINT VENTURE AND BASIS OF PRESENTATION

JOINT VENTURE - HUBEI PHARMACEUTICAL CO., LTD. ("HBJV")

The  details of the investment items and proposed investment items are disclosed
in  Note 1   - Joint Venture Investment with Hubei Zenith Airbeck Pharmaceutical
Co.,  Ltd.  above.  Salient points from Note 1 are repeated here for convenience
along  with  additional  clarification.

$3,622,500 of capital stock in the joint venture is composed of investments from
Airbeck  as  follows:

JOINT VENTURE - HUBEI PHARMACEUTICAL CO., LTD. ("HBJV")

<TABLE>
<CAPTION>
                                            Appraised Value     Recognized Value
                                          (See Note 1, above)     by Management
                                          --------------------  -----------------
<C>       <S>                             <C>                   <C>
     (a)  Plant, property and equipment   $          2,944,257  $       2,944,257
                                          --------------------  -----------------
     (b)  Inventory                       $            690,071  $         678,243
          Total investments from Airbeck  $          3,634,328  $       3,622,500
                                          ====================  =================
</TABLE>

Based  on  the  original  investment agreements signed on December 23, 2002, the
Amended  HBJV  Articles  dated  July  8, 2003 and the Supplemental Joint Venture
Agreement  between Airbeck, Red Dot and the Company dated July 31, 2003, Airbeck
owns a minority interest of 42.86% in HBJV by investing intangible assets in the
form  of pharmaceutical production licenses valued at $3,381,000 (RMB28,000,000)
along with machinery and equipment valued at $241,500 (RMB2,000,000).

Based  on  the  amended investment agreement signed on January 16, 2004, Airbeck
would  transfer further $2,702,757 of plant, property and equipment and $678,243
of  inventory instead of $3,381,000 abovementioned intangible assets. The effect
of  this  change  of  Airbeck's  investment in HBJV is to transfer the operating
dosage  division,  complete with $2,944,257 of plant, property and equipment and
$678,243  of  inventory  to  HBJV  while  leaving  with  Airbeck  $3,381,000  of
aforementioned  intangible  assets,  all  of  its


<PAGE>
liabilities,  and its current assets except inventory of $678,243 transferred to
the  Joint  Venture.


CAPITAL LEASE AGREEMENT IN HBJV

On  July  8,  2003,  HBJV  signed  a  lease  agreement with Airbeck to lease two
properties  with  equipment from Airbeck. This lease agreement no longer applies
because  Airbeck  transferred  these  two properties with equipment to HBJV as a
part  of  Airbeck's investments under the amended investment agreement signed on
January  16,  2004.

NOTE  5.  INVENTORY

Xiangfan Huaju Certified Public Accountant Co., Ltd., a qualified appraisal firm
registered  in  Xiangfan,  China,  assessed and appraised the value of inventory
transferred from Airbeck into HBJV is $690,071 (RMB5,718,617.46). The management
of  HBJV  and  Airbeck  agreed  that  the value of this inventory is $678,243 at
January 31, 2004, as disclosed in these financial statements.


NOTE 6.  PREPAID EXPENSES


On  August  29, 2003, in accordance with a directors resolution dated August 21,
2003, the company issued 750,000 shares to consultant, Ding Hong, MD pursuant to
an  Independent  Contractor  /  Consulting Agreement dated May 30, 2003; 350,000
shares  to  consultant,  Erwin  Heuchert pursuant to an Independent Contractor /
Consulting  Agreement dated June 5, 2003; 400,000 shares to consultant, Wei Jian
Ping, MD pursuant to an Independent Contractor / Consulting Agreement dated June
12,  2003;  and  500,000  shares  to  consultant,  Xiang  Qian  pursuant  to  an
Independent  Contractor  /  Consulting Agreement dated June 13, 2003. Management
determed  that  these shares are issued at a price of $0.25 per share, and those
agreements  for  two  year  period consulting services and initially recorded as
prepaid  expenses,  and  expended in the period when services are delivered. The
details of prepaid expenses as at January 31, 2004, are as follows:

<TABLE>
<CAPTION>
<S>                                                     <C>
     Prepaid consulting fees
       2,000,000 shares issued June, 2003               $ 500,000
       Expensed as consulting fee, 06/01/03 - 10/31/03   (104,167)
       Expensed as consulting fee, 11/01/03 - 01/31/04    (62,500)
                                                        ----------
       Balance as at January 31, 2004                     333,333
     HDM Capital                                            4,630
     Travel advance                                         4,766
     Other                                                  9,549
                                                        ----------
     Total prepaid expenses as at January 31, 2004      $ 352,278
                                                        ==========
</TABLE>

NOTE  7.  RELATED  PARTY  TRANSACTIONS

The  Company acquired $8,888 (CAD$9,180.18) of new computers and printers from a
company  related  to  a  Director  during  the  year  ended  January  31,  2004.

The  following  expenses  were  paid  or  payable to Directors of the Company as
management  fees and to companies related to a Director and a deemed employee as
service  fees  charged:

<TABLE>
<CAPTION>
                                                      January 31,
                                                ------------------------
                                                   2004         2003
                                                -----------  -----------
<S>                                             <C>          <C>
     Management fees                            $115,496.00  $135,000.00
     Service fees charged by related companies       32,553           --
                                                -----------  -----------
                                                $148,048.88  $135,000.00
                                                ===========  ===========
</TABLE>


<PAGE>
INVESTMENT  IN  HBJV

The  President  and  Director  is     the  owner  of  Red  Dot Capital Inc. that
assigned  its  interest in the joint venture to the Company and Red Dot received
22,000,000 post consolidated restricted common shares at par value of $0.001 per
share.


NOTE  8.  PENSION  AND  EMPLOYMENT  LIABILITIES

The  company  does  not  have  liabilities  as at January 31, 2004, for pension,
post-employment benefits or post-retirement benefits.  The company does not have
a  pension  plan.


NOTE  9.  DEFERRED  CHARGES

Deferred  charges  are  classified  as  long-term assets. This is represented by
$78,492  of  organization  costs  in  HBJV  as  at January 31, 2004 that will be
amortized, after the Company commences the operations of the Joint Venture.

Where  amortization  has  been deducted in arriving at the carrying value of the
deferred  charge,  this  fact  will  be  disclosed and the income statement will
disclose  the  amount  charged  for  amortization  of  deferred  charges.

NOTE  10.  CAPITAL  STOCK

On March 24, 2003, four million pre-consolidation common shares were returned to
the  transfer agent for cancellation pursuant to a renegotiated debt settlement.
The  Company  re-negotiated  a  debt settlement made previously with Eurocapital
Holdings  A.V.V.  ("EuroCapital"),  referenced  in  the  audited statement dated
January  31st, 2003. Under the terms of the re-negotiated agreement, EuroCapital
agreed  to  tender their 4,000,000 shares on the condition that the Company make
payment to EuroCapital and/or their nominee in the sum of Fifty Thousand Dollars
which the company later paid EuroCapital on March 18, 2003. The 4,000,000 common
shares  were  returned to the transfer agent for cancellation on March 24, 2003.

On  April  2,  2003,  the Company consolidated its issued and outstanding common
shares  on  a  10-old  for  1-new  basis.  Following the rollback, the Company's
authorized  capital  was  increased  back  to  one hundred million (100,000,000)
common  shares.

On  April  3,  2003,  the Company issued 3,000,000 common shares of common stock
pursuant  to  an  agreement entered into with Red Dot Capital, Inc. to acquire a
57.14%  interest  in  a  joint  venture  located  in  China. This issue has been
recorded  at  par  value  pending completion of the transaction. The shares were
issued  in  reliance  of  exemption  from registration under Regulation S of the
Securities  Act of 1933 as amended, and carry an appropriate restrictive legend.


On  July  6th,  2003  the  Company  issued 80,000 shares of common stock for the
private placement subscription tendered by an accredited investor and closed May
30th, 2003.  The investor subscribed for 80,000 units consisting of one share at
$0.15 and  2.5  purchase warrants to purchase an additional share, on or before
November 30th, 2003, at a price of $0.20.  An additional 12,000 units consisting
of 1 share and 2.5 purchase warrants were recorded as a finders' fee with
respect to this private placement.  The shares were issued in reliance of
exemption from registration under Regulation S of the Securities Act of 1933 as
amended, and carry an appropriate restrictive legend. A summary of outstanding
warrants appears below as Note 11, below.

On July 6th, 2003 the Company issued 2,366,324 shares of common stock at a price
of $0.15 per share, for the private placement subscription tendered by a group
of  accredited investors closed May 30th, 2003.  The company recorded payment of
$16,895 and issued 43,500 shares of common stock as finders' fees with respect
to this private placement. The shares were issued in reliance of exemption from
registration under Regulation S of the Securities Act of 1933 as amended, and
carry  an  appropriate  restrictive legend.  A summary of all Warrants
Outstanding is presented as Note 11, below.


On  July  25,  2003, the Company issued 19,000,000 common shares of common stock
from  the  treasury  pursuant to an agreement entered into with Red Dot Capital,
Inc. to acquire a 57.1% interest in a joint venture located in China. This issue
has been recorded at par value pending completion of the transaction.


<PAGE>
On August 15th, 2003, the Company issued 1,500,000 common shares of common stock
as finders' fees relating to the acquisition of Red Dot's interest in HBJV.  The
finders'  fee  was  re-negotiated  and  reduced from the 2,000,000 common shares
originally  approved  by  the  shareholders. This issue has been recorded at par
value  pending  completion  of  the  transaction.

On  July  25,  2003,  the Company accepted private placement subscription offers
from  a  group of accredited investors to subscribe for 728,999 units at a price
of  $0.30  each.  Each  unit  consisted  of  one  share  of common stock and one
purchase  warrant  to purchase an additional share of common stock at a price of
$0.80  if  exercised  on  or  before  July  31,  2004  or at a price of $1.50 if
exercised  after  July  31,  2004  and before July 31, 2005.  The Company issued
693,333  common  shares on August 21, 2003, and 35,666 common shares on December
11, 2003.  The shares carry an appropriate restrictive legend.  A summary of all
Warrants  Outstanding  is  presented  at  Note  11,  below.

On  August  29, 2003, in accordance with a directors resolution dated August 21,
2003, the company issued 750,000 shares to consultant, Ding Hong, MD pursuant to
an  Independent  Contractor  /  Consulting Agreement dated May 30, 2003; 350,000
common  shares  to  consultant,  Erwin  Heuchert  pursuant  to  an  Independent
Contractor  /  Consulting Agreement dated June 5, 2003; 400,000 common shares to
consultant, Wei Jian Ping, MD pursuant to an Independent Contractor / Consulting
Agreement  dated  June  12, 2003; and 500,000 common shares to consultant, Xiang
Qian pursuant to an Independent Contractor / Consulting Agreement dated June 13,
2003. Management determined that these shares are issued at a price of $0.25 per
share,  and  those  agreements  for  two  year  period  consulting  services and
initially recorded as prepaid expenses, and expended in the period when services
are  delivered.

On  December  1,  2003, 301,300 shares were issued at a price of $0.45 per share
with  respect to a private placement.  Each of these shares carries a warrant to
purchase an additional share at a price of $0.80 per share on or before November
14,  2004  or  at  $1.50  per  share  after  November 14, 2004, but on or before
November  14,  2005.  These  shares were issued under the conditions of Rule 144
and  carry  an  appropriate  restrictive  legend.  A  summary  of  all  Warrants
Outstanding  is  presented  at  Note  11,  below.

On  December 1, 2003, a total of 104,400 warrants were exercised with respect to
private  placement shares issued July 6th, 2003.  These shares were issued under
the  conditions  of  Rule  144 and carry an appropriate restrictive legend.  The
remaining  warrants  expired  and  will  not  be  exercised.

On December 9, 2003, a treasury order was placed for an additional 35,666 shares
with  respect to funds received in an earlier private placement for which shares
had  not  been  issued.  Each  of  these shares carries a warrant to purchase an
additional share at a price of $0.80 per share on or before July 31, 2004, or at
$1.50  per  share  after  July  31,  2004 but on or before July 31, 2005.  These
shares  were  issued  under  the conditions of Rule 144 and carry an appropriate
restrictive  legend.


On  December  11,  2003,  one  of Directors exercised 25,000 shares of his stock
options  at  the  exercise  price  of $0.22 per share. (See Note 12 - Summary of
Options  Outstanding,  below)

NOTE  11.  SUMMARY  OF  WARRANTS  OUTSTANDING

Warrants  to  purchase up to 1,030,299 shares of common stock are outstanding at
January  31,  2004.  The  details  are  as  follows:

<TABLE>
<CAPTION>
Warrants granted with respect to           Shares
                                          Available                Exercise Price at Date*
                                          ------------------------------------------------------------
                                                     Jul. 31, 04   Jul. 31,05   Nov.14,04   Nov.14,05
                                                     -------------------------------------------------
<S>                                       <C>        <C>           <C>          <C>         <C>
Private placement, August 21, 2003          728,999  $       0.80  $      1.50  N/A         N/A
                                                     ------------  -----------  ----------  ----------
Private placement, Nov.14, 2003             301,300  N/A           N/A          $     0.80  $     1.50
                                          ---------
Total outstanding warrants, Jan.31, 2004  1,030,299
                                          =========
<FN>
* If the expiry date for the warrant falls on a weekend or Statutory holiday the date will be extended
to close of business on the next business day.
</TABLE>

NOTE  12.  SUMMARY  OF  OPTIONS  OUTSTANDING

STOCK  OPTIONS  GRANTED  TO  DIRECTORS


<PAGE>
On  August  21st, 2003, the Company passed resolutions to grant stock options to
purchase  750,000  shares  of common stock at a price of $0.22 to its president,
Reid  Li and 500,000 shares of common stock at a price of $0.22 to its corporate
secretary,  Eric  Fletcher.  The  options  have  fixed terms and shall expire on
August  20th,  2008. On the date of stock options granted, the fair market value
of  the  Company's  common  stock  is  $0.20  per  share.

On December 11, 2003, Eric Fletcher exercised 25,000 of the titled 500,000 stock
options  granted  leaving  a  balance  of  475,000  options  available.

The  company  also  granted  a stock option to purchase 200,000 shares of common
stock at a price of $0.22 to its director, Clint Cheng. Mr. Clint Cheng resigned
his position in the Company on October 24, 2003, so the titled options under his
name  expired  30  days  thereafter  based on the terms of the option agreement.

EMPLOYEE  STOCK  OPTION  PLAN

On August 21, 2003, the Board of Directors of the Company passed a resolution to
establish  an  employee  stock  option  plan.  The Company engaged Dieterich and
Associates  to  prepare documentation and a registration statement in support of
the  Stock Option Plan and Directors Options granted to date. In accordance with
information  provided  by  Dieterich  and Associates, the Company established an
employee  stock  option  plan  consisting  of  3,000,000  shares  and  filed  a
registration statement with respect to the plan on December 9, 2003. The summary
of  this  2003  employee  stock  option  plan  is  as  follows:

(a)  Type  of  Awards

          The  Board  of  Directors (the "Board") and the Compensation Committee
     (the  "Committee")  of  the Company are authorized under this Plan to enter
     into  any  type of arrangement ("Grant" or "Award") with a Participant that
     is  not  inconsistent  with  the  provisions  of this Plan and that, by its
     terms,  involves  or  might involve the issuance of shares of the Company's
     $0.001  par  value  common  stock  (the  "Stock") or a derivative security.

(b)  Amount  of  Stock

     The  aggregate number of shares of Stock which may be purchased pursuant to
     the  exercise of Awards shall be 3,000,000 shares of Stock. Of this amount,
     the  Board or the Committee shall have the power and authority to designate
     whether  any  options  so  issued  shall  be  the  options  which  meet the
     requirements  of  Section  422  of  the  Internal  Revenue Code of 1986, as
     amended  ("ISOs")  or  not  ISOs  ("NSOs").  If  an  Award  ceases  to  be
     exercisable,  in  whole  or  in  part,  the shares of Stock underlying such
     option  shall  continue  to  be  available  under  this  Plan.

(c)  Eligible  Persons

     With  respect to ISOs, an eligible person means any individual who has been
     employed  by  the  Company  or  by  any  subsidiary  of  the  Company for a
     continuous  period  of  at  least thirty days; or with respect to all other
     forms  of  Awards, an eligible person means (i) any individual who has been
     employed  by  the  Company  or  by  any  subsidiary  of  the Company, for a
     continuous  period of at least sixty days, (ii) any director of the Company
     or  any  subsidiary of the Company (iii) any member of the Company advisory
     board or of any of the Company's subsidiary(ies), or (iv) any consultant of
     the  Company  or  by  any  subsidiary  of  the  Company.

(d)  Grant  of  Awards

     The Board or the Committee has the right to issue the Awards established by
     this  Plan  to  eligible  persons.

(e)  Exercise  Price

     The  exercise  price  per  share  shall  be  determined by the Board or the
     Committee  at the time any Award is granted, and shall be not less than (i)
     in  the  case  of an ISO, the fair market value, (ii) in the case of an ISO
     granted to a ten percent or greater stockholder, shall be determined by the
     Board,  or  (iii) in the case of all other Awards, not less than 75% of the
     fair market value (but in no event less than the par value) of one share of
     Stock  on  the date the Award is granted, as determined by the Board or the
     Committee.

(f)  Determination  of  Fair  Market  Value


<PAGE>
     In  granting  ISOs under this Plan, the Board or the Committee shall make a
     good  faith  determination  as to the fair market value of the Stock at the
     time  of  granting  the  ISO.

(g)  No Guarantee of Employment and Nontransferability

     Nothing  in  this plan or in any writing granting an Award will confer upon
     any  eligible  person  the  right to continue in the employ of the eligible
     person's  employer, or will interfere with or restrict in any way the right
     of  the eligible person's employer to discharge such eligible person at any
     time  for  any  reason  whatsoever, with or without cause. No Award granted
     under  the  Plan shall be transferable other than by will or by the laws of
     descent  and  distribution.

(h)  Effective  Date

     The  effective  date that the Plan was adopted by the Company is August 21,
     2003

GRANTED  EMPLOYEE  STOCK  OPTION

On  October  1,  2003, the Company signed an Employee Non-qualified Stock Option
Agreement  with  Howard  Milne/HDM  Capital  Inc.,  an  investor  communication
consultant,  pursuant  to  the  stock option plan. Accordingly, Howard Milne/HDM
Capital  Inc.  has  been granted an option to purchase up to 500,000 shares at a
price  of  $0.50  (Fair market value at the grant date) under the employee stock
option  plan.  The  option will expire on August 20, 2008 and includes a monthly
vesting  rate  provision.

A summary of options outstanding as at January 31, 2004 is as follow:

<TABLE>
<CAPTION>
     OPTIONS GRANTED                 SHARES    EXERCISE PRICE
                                    ---------  ---------------
                                                EXPIRE DATE:
                                                AUG.20, 2008
                                               ---------------
<S>                                 <C>        <C>
     Reid Li, President               750,000  $          0.22
     Eric Fletcher, Secretary         475,000  $          0.22
     Howard Milne/HDM Capital Inc.    500,000  $          0.50
                                    ---------
                                    1,725,000
                                    =========
<FN>
     (1)  If  the  expiry  date  for the warrant falls on a weekend or Statutory
     holiday the date will be extended to close of business on the next business
     day.
</TABLE>

NOTE 13. INCOME TAX EXEMPTIONS AND REDUCTIONS -- CHINA

The  Chinese  government  provides  a special tax incentive to encourage foreign
investment.  HBJV  is  a  joint  venture  company and one of the investors is an
American  company  thereby  qualifying  the joint venture for special income tax
treatment  under  the provision.  HBJV will be exempt from tax for the first two
years  and  then  benefit from a 50% reduction in income tax for a further three
years.  The corporate income tax rate, before the reduction, is currently 33% of
taxable  income.


NOTE 14. INCOME TAX - THE UNITED STATES

Actual income tax expense differs from income tax expense computed by applying
the U.S. federal statutory corporate rate of 35% to pretax income as follows:

<TABLE>
<CAPTION>
                                                     January 31,
                                               ----------------------
                                                  2004        2003
                                               ----------  ----------
<S>                                            <C>         <C>
Provision (Benefit) at the statutory tax rate  ($215,671)  ($309,594)
Non-deductible items                                  --     245,623
Increase in valuation allowance                  215,671      63,971
                                               ----------  ----------
Income tax provision                                  --          --
                                               ==========  ==========
</TABLE>

The net deferred income tax asset is comprised of the following:


<PAGE>
<TABLE>
<CAPTION>
Deferred Income Tax Assets               January 31,
                                  ----------------------
                                     2004        2003
                                  ----------  ----------
<S>                               <C>         <C>
Net operating loss carryforwards  $ 369,492   $ 140,000
Valuation allowance                (369,492)   (140,000)
                                  ----------  ----------
Net deferred income tax assets           --          --
                                  ==========  ==========
</TABLE>

Realization of the net deferred tax asset is dependent on the Company's ability
to generate taxable earnings in the future.  The Company has $1,055,691 of net
operating losses carried forward as at January 31, 2004.


NOTE  15.  MINORITY  INTEREST

The  parent company theory is used almost exclusively in practice for disclosing
minority  interests  in  a consolidated balance sheet.  Under the parent company
theory,  minority  interests are not considered part of stockholders' equity and
are  disclosed  in  the consolidated balance sheet between the liability section
and  the  stockholders'  equity  section.

The  Company  owns  a  majority  interest  of  57.14% in HBJV and Airbeck owns a
minority  interest  of  42.86%  in  HBJV.  Airbeck's  interest  of  $3,622,500
investment  in  HBJV  is  disclosed as the Minority Interest in the consolidated
balance  sheet.  The  joint  venture  corporation  has  not  commenced operating
activities;  therefore, the statement of operations does not show any adjustment
of  the  joint  venture  corporation.


NOTE  16.  SUBSEQUENT  EVENTS

LAWSUIT AGAINST HUBEI PHARMACEUTICAL CO., LTD. ("HBJV")
-------------------------------------------------------

On  December  18,  2003,  a  Court  Order,  from the District Court of Appeal in
Xianfan High Technology Industry Development District, indicated that a suit was
filed  against  Hubei  Pharmaceutical Co., Ltd. ("HBJV") by a former employee of
HBJV  and  a  shareholder of the Company, Mr. Zhang, Ruiguang, alleging that the
Joint  Venture  owe  him  RMB606,000.  District  court  has, accordingly, frozen
$82,056 (RMB680,000) of HBJV's bank account. On February 17, 2004, HBJV received
a  lawsuit  notice  from the District Court of Appeal in Xianfan High Technology
Industry  Development  District  related  to  this  allegation. HBJV has engaged
lawyers  to  defend this case and the outcome of this action is not known at the
date  of  these  financial  statements.

Mr.  Zhang,  Ruiguang  seized  a  minor amount of office furniture and equipment
owned by HBJV. The Company is seeking return of these assets.

The Company has countersued Mr. Zhang Ruiguang, and the Company expects to be
successful in obtaining release of the funds tied up in the Court and return of
other assets seized.

CHANGES  OF  JOINT  VENTURE  OWNERSHIP
--------------------------------------

As  indicated  in  Note  1  above, Airbeck is in the procedure of privatization.
Management agrees that the new ownership of Airbeck following privatization will
own the 42.86% minority interest in HBJV. The detailed name of the ownership may
not  be  known  until  the  privatization  process  is  completed.

PLANT BUILDING IN PROCESS OF RENOVATION
---------------------------------------

A four story concrete building is in the process of renovation, from a warehouse
facility to result in a "clean" medical product (dosage) production facility.
The building commenced renovation on March 1, 2004 and the renovation is
expected to be completed by June 20, 2004.

NEW OPERATION
-------------

The manufacturing facility was subsequently transferred to HBJV effective March
1, 2004, and proposes to commence product operation after that date.

AMENDMENT TO JOINT VENTURE AGREEMENT
------------------------------------


<PAGE>
As outlined in note 1, above, relating to the Joint Venture Investment with
Hubei Airbeck Pharmaceutical Co., Ltd. by amendment dated February 28, 2004, the
cash investment scheduled by the Company was changed to that the total cash
investment should be invested in HBJV on or before April 23, 2006.

This amendment also revised the assets transferred to the Joint Venture by
Airbeck and is reflected in these financial statements.


<PAGE>
Item  8  Changes In and Disagreements With Accountants on Disclosure
As previously reported on Form 8K/A filed October 10th, 2003 the company
appointed Moen and Company as auditors on July 31st, 2003.  There have been no
disagreements on accounting and financial disclosures from the inception of the
Company through the date of this Form 10-KSB.

Item  8A  Controls  and  Procedures
We carried out an evaluation, under the supervision and with the participation
of the our management, including our Chief Executive Officer and Chief Financial
Officer, regarding the effectiveness of our procedures and controls designed to
reasonably assure that information required to be disclosed in our reports filed
under the Securities Exchange Act of 1934, such as this Annual Report, are
recorded, processed and reported within the time periods prescribed by the SEC
rules and regulations.

We do not expect that our disclosure procedures and controls would prevent all
instances of error or fraud.  No matter how well designed, a control system may
provide reasonable, but not absolute assurance that its objectives will be met.
The benefits of controls must be weighed against the cost of implementing them.
No evaluation can absolutely assure that all control issues have been identified
and instances of fraud, if present, detected.  There are inherent limitations in
any system reliant on judgment and decision making and simple unforeseen error
or mistake can result in failure.  The design of any system is based, in part,
on assumptions regarding the likelihood of the future occurrence of certain
events and there can be no absolute assurance that the design of any control
system would achieve its goals under all potential conditions and combination of
future events.


The Company's Chief Executive Officer and its Chief Financial Officer have
concluded that the Company maintains disclosure controls and procedures that are
effective in providing reasonable assurance that information required to be
disclosed in the Company's reports under the Exchange Act is recorded,
processed, summarized and reported within the time periods prescribed by SEC
rules and regulations, and that such information is accumulated and communicated
to the Company's management, including its Chief Executive Officer and its Chief
Financial Officer, as appropriate, to provide for decisions regarding disclosure
requirements in a timely manner.


There have been no significant changes in the Company's internal controls or
factors that could significantly affect these controls subsequent to the
evaluation.


PART III


Item  9  Directors, Executive Officers, Promoters and Control Persons

The following sets forth our directors and executive directors.

Name                    Position                                            Age
----                    --------                                            ---
H. Y. (Reid) Li         President, Chief Executive Officer and Director      40
E. H. (Eric) Fletcher   Secretary, Chief Financial Officer and Director      49


Background of Directors
Mr. Reid H.Y. Li. is an established corporate finance executive whose career has
focused on value enhancement of large or government-controlled industry through
privatization or strategic joint ventures.  Mr. Li holds a Bachelors degree in
Economics and a Masters degree in Finance and Management.  He is currently
stationed in China and involved full time in advancing the interests of Hubei
Pharmaceutical Group.

Eric Fletcher has over 25 years experience at the senior management level, with
an extensive multi-national background in marketing and distribution. He has
worked as a college instructor with a focus on managerial accounting and is a
published author in the information technology and communications fields.  He
owns an IT business serving the needs of medical and research professionals in
addition to several other vertically integrated small to mid-sized companies in
various industries and is currently involved full-time assisting Mr. Li
advancing the interests of the Company and in evaluating other opportunities.

All directors are elected annually by the shareholders and hold office until the
next Annual Meeting of Shareholders. Each officer of the Company holds office at
the pleasure of the Board of Directors.


<PAGE>
FAMILY RELATIONSHIPS
No director or officer of the Company has any family relationship with any other
officer or director of the Company.

SIGNIFICANT EMPLOYEES
Mr. Howard Milne has been engaged through his company HDM Capital Inc. to act as
director of corporate communications.  He has an in depth background in Chinese
joint venture pharmaceutical companies having spent seven successful years as
Vice President of Corporate Communications for a Biotech company whose shares
are publicly traded on the Toronto Stock Exchange.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

To the best of the registrant's knowledge, during the past five years, no
director, executive officer, promoter or control person of the Company:

     (1)  has filed a petition under the federal bankruptcy laws or any state
          insolvency law, nor had a receiver, fiscal agent or similar officer
          appointed by a court for the business or present of such a person, or
          any partnership in which he was a general partner at or within two
          years before the time of such filing, or any corporation or business
          association of which he was an executive officer within two years
          before the time of such filing;

     (2)  were convicted in a criminal proceeding or named subject to a pending
          criminal proceeding (excluding traffic violations and other minor
          offenses);

     (3)  were the subject to any order, judgment or decree, not subsequently
          reversed, suspended or vacated, of any court of competent
          jurisdiction, permanently or temporarily enjoining, barring,
          suspending or otherwise limiting his involvement in any type of the
          following activities:

               (i)  acting as a futures commission merchant, introducing broker,
                    commodity trading advisor, commodity pool operator, floor
                    broker, leverage transaction merchant, associated person of
                    any of the foregoing, or as an investment advisor,
                    underwriter, broker or dealer in securities, or as an
                    affiliated person, director of any investment company, or
                    engaging in or continuing any conduct or practice in
                    connection with such activity;

               (ii) engaging in any type of business practice;

              (iii) engaging in any activity in connection with the purchase or
                    sale of any security or commodity or in connection with any
                    violation of federal or state securities laws or federal
                    commodity laws.

     (4)  were the subject of any order, judgment or decree, not subsequently
          reversed, suspended or vacated, of any federal or state authority
          barring, suspending or otherwise limiting for more than 60 days the
          right of such person to engage in any activity described above under
          this Item, or to be associated with persons engaged in any such
          activity;

     (5)  were found by a court of competent jurisdiction in a civil action or
          by the Securities and Exchange Commission to have violated any federal
          or state securities law and the judgment in such
          civil finding or find by the Securities and Exchange Commission has
          not been subsequently reversed, suspended or vacated;

     (6)  were found by a court of competent jurisdiction in a civil action or
          by the Commodity Futures Trading Commission to have violated any
          federal commodities law, and the judgment in such civil action or
          finding by the Commodity Futures Trading Commission has not been
          subsequently reversed, suspended or vacated.


<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

To the best of our knowledge all directors, officers and persons who
beneficially owned more than ten percent of our common stock filed timely
reports in compliance with Section 16(a).

The company does not have an audit committee financial expert serving on its
audit committee as both of its directors have relevant experience and, as at the
fiscal year end, the first joint venture acquisition was not yet transacting
business.  The company may seek an individual to fill this role in the current
year.  It is felt that an ideal candidate would be bilingual, conversationally
and in writing, and would possess a working familiarity of US GAAP along with at
least a basic familiarity with accounting principals in use in China.  Relevant
experience in the manufacturing sector, particularly pharmaceuticals, would be
an asset and it seems likely that such a candidate may arise out of our
discussion and ongoing efforts at identifying acquisition targets and joint
venture opportunities.

Item 10  Executive Compensation
The following table summarizes all compensation earned by or paid to our Chief
Executive and Chief Financial Officers. No officer received compensation in
excess of $100,000
during year 2003.

<TABLE>
<CAPTION>
===============================================================================================
                                   SUMMARY COMPENSATION TABLE
-----------------------------------------------------------------------------------------------
                       ANNUAL COMPENSATION                 LONG-TERM COMPENSATION
                  -------------------------------  --------------------------------------------
                                                            AWARDS           PAYOUTS
                                                   ------------------------  --------
                                                                SECURITIES
                                                                  UNDER-                 ALL
NAME AND                                           RESTRICTED      LYING                OTHER
PRINCIPAL                           OTHER ANNUAL      STOCK      OPTIONS/      LTIP    COMPEN-
POSITION    YEAR  SALARY    BONUS   COMPENSATION    AWARD(S)       SARS      PAYOUTS    SATION
                    ($)      ($)         ($)           ($)          (#)        ($)       ($)
---------  -----  -------  -------  -------------  -----------  -----------  --------  --------
<S>         <C>   <C>      <C>      <C>            <C>          <C>          <C>       <C>
            2000        0
Rod Jao     2001    3,000
(1)         2002        0
---------  -----  -------  -------  -------------  -----------  -----------  --------  --------
Cecil       2001        0
Morris      2002    3,000
(2)         2003    3,000
---------  -----  -------  -------  -------------  -----------  -----------  --------  --------
Mark
Glusing     2002        0                               20,000
(3)         2003        0
---------  -----  -------  -------  -------------  -----------  -----------  --------  --------
Reid Li,
CEO
(4)         2003   50,000                                           750,000
---------  -----  -------  -------  -------------  -----------  -----------  --------  --------
Eric.
Fletcher,
CFO (5)     2003   53,500                                           500,000
===============================================================================================
<FN>
(1)  Mr. Jao resigned his offices and as a director on December 4, 2002
(2)  Mr. Morris resigned his offices and as a director on April 2, 2003.
(3)  Mr. Glusing resigned his offices and as a director on April 2, 2003.
(4)  Mr. Li was appointed as a Director and President on April 2, 2003.  He received an option
to purchase 750,000 shares of common stock at a price of $0.22 in 2003.
(5)  Mr. Fletcher was appointed as a Director and Corporate Secretary on April 2, 2003.  He
received and option to purchase 500,000 shares at a price of $0.22 in 2003.
</TABLE>


Option Grants in 2003
The following table sets forth options granted to the named executive officers
during the past fiscal year.

<TABLE>
<CAPTION>
=================================================================
              OPTION/SAR GRANTS IN LAST FISCAL YEAR
                     [Individual Grants]
-----------------------------------------------------------------
                          PERCENT OF
            NUMBER OF        TOTAL
           SECURITIES    OPTIONS/SARS
           UNDERLYING     GRANTED TO     EXERCISE OR
          OPTIONS/SARS   EMPLOYEES IN    BASE PRICE    EXPIRATION
NAME       GRANTED (#)    FISCAL YEAR      ($/SH)         DATE
                              (1)            (2)
--------  -------------  -------------  -------------  ----------
<S>       <C>            <C>            <C>            <C>
Reid Li         750,000           43 %  $       0.22      8/20/08
=================================================================


<PAGE>
=================================================================
Eric
Fletcher        500,000           29 %  $       0.22      8/20/08
=================================================================
<FN>
Footnotes to Table
     (1)  Based on total options granted to employees in 2003 of 1,750,000
     (2)  Granted at 10% above the market value of $0.20 per share
</TABLE>

REPORT ON REPRICING OF OPTIONS/SAR
The Company did not re-price any options or SARs during the year ended January
31, 2004.


FISCAL YEAR END OPTION VALUES
The following table sets forth for our executive officers named in the Summary
Compensation Table the number and value of exercisable and un-exercisable
options as at January 31st, 2004.

<TABLE>
<CAPTION>
==================================================================
    AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-
                      END OPTION/SAR VALUES
------------------------------------------------------------------
                                   NUMBER OF
                                   SECURITIES        VALUE OF
                                   UNDERLYING     UNEXERCISED IN-
           SHARES                 UNEXERCISED        THE-MONEY
          ACQUIRED                OPTIONS/SARS    OPTIONS/SARS AT
             ON        VALUE     AT FY-END (#)      FY-END ($)
          EXERCISE    REALIZED    EXERCISABLE/     EXERCISABLE/
NAME         (#)        ($)      UNEXERCISABLE   UNEXERCISABLE(1)
--------  ---------  ----------  --------------  -----------------
<S>       <C>        <C>         <C>             <C>
Reid Li              $     0.00     750,000 / 0  $    495,000 / $0
--------  ---------  ----------  --------------  -----------------
Eric
Fletcher     25,000  $     0.00     475,000 / 0  $    313,500 / $0
==================================================================
<FN>
(1) Based upon the closing price of $0.66 per share on January 30th, 2004.
</TABLE>

ITEM 11  Security Ownership Of Certain Beneficial Owners and Management

Principal Shareholders

The following table shows the amount of our common stock beneficially owned
(unless otherwise indicated) by each shareholder known by us to be the
beneficial owner of more than 5% of our common stock, by each of our executive
officers and directors and the executive officers and directors as a group.
Except as otherwise indicated, all information is as of March 15, 2004 and the
number of shares of common stock outstanding as of that date is 20,462,000.  To
our knowledge, except as indicated in the footnotes to this table or pursuant to
applicable community property laws, the persons named in the table have sole
voting and investment power with respect to the shares of common stock
indicated.

Security ownership of certain beneficial owners.

<TABLE>
<CAPTION>
==============================================================================
TITLE OF   NAME AND ADDRESS OF BENEFICIAL    AMOUNT AND NATURE OF  PERCENT OF
CLASS                   OWNER                BENEFICIAL OWNERSHIP     CLASS
--------  ---------------------------------  --------------------  -----------
<S>       <C>                                <C>                   <C>
          Cui Jing
Common    c/o Gregory Yankee Law Corp.                  8,000,000       26.02%
          200 - 675 West Hastings Street
          Vancouver, B.C. Canada   V7L 3G8
--------  ---------------------------------  --------------------  -----------
          Reid Li (1)
Common    410 Park Avenue                               4,340,000       14.12%
          New York, NY 10022
--------  ---------------------------------  --------------------  -----------
          Kerrislane Capital Corp.
Common    Floor #27, Zhi Zao Jui Road                   2,200,000        7.16%
          Shanghai, PRC 200011
--------  ---------------------------------  --------------------  -----------
Common    Yu Zuo Laing                                  2,000,000        6.51%
==============================================================================
<FN>
(1) Based upon Reid Li's Form 5 filing with the SEC on April 20th, 2004 for
holdings as at January 31st, 2004.  1,590,000 shares owned directly, 750,000
exercisable options,


<PAGE>
1,000,000 shares held by Red Dot Capital Inc. controlled by Reid Li and
1,000,000 shares held by Red Dot Management Inc. controlled by Reid Li.
</TABLE>

Security ownership of management.

<TABLE>
<CAPTION>
==============================================================================
TITLE OF    NAME AND ADDRESS OF BENEFICIA    AMOUNT AND NATURE OF  PERCENT OF
CLASS                   OWNER                BENEFICIAL OWNERSHIP     CLASS
--------  ---------------------------------  --------------------  -----------
<S>       <C>                                <C>                   <C>
          Reid Li (1)
Common    410 Park Avenue                               4,340,000       14.12%
          New York, NY 10022
--------  ---------------------------------  --------------------  -----------
          Eric Fletcher (2)
Common    38596 - 126 West 3rd Street                   1,500,000        4.88%
          N, Vancouver, B.C. Canada V7M1E8
==============================================================================
<FN>
(1) Based upon Reid Li's Form 5 filing with the SEC on April 20th, 2004 for
holdings as at January 31st, 2004.  1,590,000 shares owned directly, 750,000
exercisable options, 1,000,000 shares held by Red Dot Capital Inc. controlled by
Reid Li and 1,000,000 shares held by Red Dot Management Inc. controlled by Reid
Li.
(2)  Based upon Eric Fletcher's Form 5 filing with the SEC on March 9th, 2004
for holdings as at January 31st, 2004. 1,025,000 shares owned directly, 475,000
exercisable options.
</TABLE>

Equity Compensation Plan Information

The company's 2003 Employee Stock Option Plan for which a registration statement
was filed on Form S-8 on December 9th, 2003 set aside 3,000,000 shares for
distribution pursuant to the plan.  An additional 1,250,000 shares were reserved
for issuance upon conversion of stock options granted to the company's two
directors.

Compensation Plan Table

The following table provides aggregate information as of the end of the fiscal
year ended January 31st, 2004 with respect to all compensation plans (including
individual compensation arrangements) under which equity securities are
authorized for issuance.  See also Note 12 to the Company's Financial
Statements.

<TABLE>
<CAPTION>
        =================================================================
             EQUITY COMPENSATION PLAN INFORMATION
        -----------------------------------------------------------------
                                                             NUMBER OF
                                                            SECURITIES
                                                             REMAINING
                                                           AVAILABLE FOR
                                                              FUTURE
                           NUMBER OF                      ISSUANCE UNDER
                         SECURITIES TO      WEIGHTED-         EQUITY
                        BE ISSUED UPON       AVERAGE       COMPENSATION
                          EXERCISE OF    EXERCISE PRICE        PLANS
                          OUTSTANDING    OF OUTSTANDING     (EXCLUDING
                           OPTIONS,         OPTIONS,        SECURITIES
                         WARRANTS AND     WARRANTS AND     REFLECTED IN
        PLAN CATEGORY       RIGHTS           RIGHTS         COLUMN (a))
        --------------  ---------------  ---------------  ---------------
<S>                     <C>              <C>              <C>
        Equity                                                  3,725,000
        compensation
        plans approved
        by security       1,225,000 (1)  $          0.22
        holders             500,000 (2)  $          0.50
        --------------  ---------------  ---------------  ---------------
        Equity
        compensation
        plans not
        approved by
        security
        holders
        --------------  ---------------  ---------------  ---------------
          TOTAL
        =================================================================
<FN>
     (1)  Directors options
     (2)  2003 Employee Stock Option Plan
</TABLE>

Item 12  Certain Relationships and Related Transactions
The  Company acquired new computers and printers valued at $8,888 from a company
related  to  a  Director  during  the  year  ended  January  31,  2004.


<PAGE>
The  following  expenses  were  paid  or  payable to Directors of the Company as
management  fees and to companies related to a Director and a deemed employee as
service  fees  charged:

<TABLE>
<CAPTION>
                                                       January 31,
                                                -------------------------
                                                    2004         2003
                                                ------------  -----------
<S>                                             <C>           <C>
     Management fees                            $ 115,496.00  $135,000.00
     Service fees charged by related companies        32,553           --
                                                ------------  -----------
                                                $ 148,048.88  $135,000.00
                                                ============  ===========
</TABLE>

The  President  and  Director is the owner of Red Dot Capital Inc. that assigned
its interest in the joint venture to the Company and Red Dot received 22,000,000
post  consolidated  restricted  common  shares at par value of $0.001 per share.

During  the fiscal year ended January 31st, 2003, prior to the change of control
and renaming of the company to Hubei Pharmaceutical Group, the Company attempted
to  acquire a business interest as a long distance carrier and provider of Voice
over  IP  services.  Concurrent  with  this  it  changed  its  name from Explore
Technologies  to  Pan  Asia  Communications  Corp.  It  appears  to  the current
management  of  the  company  that there may have been undisclosed related party
transactions  and  changes  in  control that were not declared at the time or in
subsequent  reports.  Accordingly,  the  current  board  of  directors  does not
believe  it  can  properly  disclose  what  may  have  taken  place  under prior
management  with  respect  to  related  transactions  for  the fiscal year ended
January  31st, 2003.  A rescission agreement was entered into under which all of
the  common  stock  issued with respect to an acquisition that may not have been
completed  was  returned  to  treasury.  In addition, all stock issued for debt,
including  debt to parties that may have been related, was to have been returned
to  treasury.  In total, 23,272,880 of the 26,598,500 shares issued with respect
to  matters  purporting  to relate to the acquisition were returned to treasury.
Management  does  not believe that allocating the resources necessary to attempt
to  more  fully  document  what  took place would be in the best interest of the
shareholders  or  necessarily  lead  to  a  more  accurate  record.  As reported
previously,  a  total  of  3,325,620  shares  issued  for  debt,  subsequently
consolidated  to  332,562  shares,  have  not  yet been returned to treasury for
cancellation.  The  recipient(s),  who  may have been related parties, agreed at
the  time  of  the  rescission,  and  have confirmed recently, that these shares
should  be  cancelled and that the company received no consideration in exchange
for  them  at  the  time  they  were  issued.  Although  willing  to  do so, the
recipients  have  been  unable to return the shares because they were pledged as
security  and  are  being  held  by a party related to the rescinded transaction
whose shares received with respect to the transaction have already been returned
and  cancelled.  Management  believes  that  it is appropriate that these shares
should  be  cancelled  and  have received several legal opinions to this effect.
The company is taking appropriate action now to attempt to cancel the shares and
management  feel that if it is successful, and all shares issued with respect to
the  transaction are returned to treasury, it would be cost effective and in the
best  interest  of  the  shareholders  to accept an incomplete record of related
party  transactions  for  the  fiscal  year  ended  January  31st,  2003.

Item  13  Exhibits  and  Reports

The following previously filed documents are incorporated by reference:

<TABLE>
<CAPTION>
<C>   <C>         <S>    <C>
 2.1   5/15/2002  8-K    Acquisition of telecommunications business
 2.2   5/28/2002  8-K/A  Acquisition of telecommunications business
 2.3   9/23/2002  8-K    Rescind acquisition of telecommunications business
 2.4    2/4/2003  8-K    Debt settlement with EuroCapital Holdings, Shares returned to
                         treasury
 2.5    2/7/2003  8-K    Shares issued to Uninet Technologies for debt
                         Acquisition of interest in Hubei Pharmaceutical Company
 2.6   4/10/2003  8-K    Appoint new board members
 2.7   6/25/2003  8-K    Private Placement
 2.8    9/4/2003  8-K    Complete Acquisition of Hubei Pharmaceutical Company
 3.1   4/10/2003  8-K    Change name to Hubei Pharmaceutical Group
10.1   8/29/2003  S-8    Consultant Agreements, Treasury issue for compensation
10.2   12/9/2003  S-8    Employee Stock Option Plan
13.1   5/15/2003  10KSB  Annual report - January 31st, 2003
16.1  10/10/2003  8-K/A  Change in certifying accountant
17.1   4/10/2003  8-K    Resignations of previous board members
17.2  10/28/2003  8-K    Resignation of Director
</TABLE>


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The following exhibits are included herein:
31.1     CERTIFICATION  of  Reid  Li
31.2     CERTIFICATION  of  Eric  Fletcher

Item 14  Principal Accounting fees and Services
Morgan and Company served as the Company's independent accountants for the
fiscal year ended January 31st, 2002 and during the course of that fiscal year
they were not engaged by the Company to provide certain non-audit services.
During the year ended December 31, 2003, the following fees were paid for
services provided by Morgan and Company.

Audit Fees. The aggregate fees paid for the annual audit of the Company's
financial statements included in the Company's Form 10-KSB for the year ended
January 31st, 2003 amounted to approximately $4,000.

Moen and Company served as the Company's independent accountants for the fiscal
year ended January 31st, 2004 and during the course of that fiscal year were
engaged by the Company to provide independent reviews of quarterly reports, an
audit of the consolidate balance sheet included in Form 10QSB for the fiscal
quarter ended July 31st, 2003 following acquisition of an interest in the Hubei
Pharmaceutical Company joint venture and the annual audit of the Company's
financial statements included in the Company's Form 10KSB for the year ended
January 31st, 2004.  During the year ended December 31, 2004, the following fees
were paid for services provided by Moen and Company.

Audit Related Fees. The aggregate fees paid for the consolidated balance sheet
included in Form10QSB for the quarter ended July 31st, 2003 and as partial
payment for the annual audit of the company's financial statements for the year
ended January 31st, 2004 amounted to approximately $33,000.

Independent Review Fees.  The aggregate fees paid for independent review of the
Company's quarterly financial statements amounted to approximately $3,000.


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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

HUBEI PHARMACEUTICAL GROUP, LTD.
(Registrant)


/s/ Reid H. Y. Li                    Date: May 15, 2004
----------------------------
Reid H. Y. Li
President / Director


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dated indicated.


/s/ Reid H. Y. Li                    Date: May 15, 2004
----------------------------
Reid H. Y. Li
President / Director


/s/ Eric Fletcher                    Date: May 15, 2004
----------------------------
E. H. (Eric) Fletcher
Secretary / Director


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