**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington
      D.C. 20549**





**FORM
      10-K**




R
            ANNUAL
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXHANGE ACT OF
                1934





For
      the
      Fiscal Year ended March 31, 2006




£
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXHANGE ACT OF
                1934





For
      the
      transition period from _____ to _____





Commission
      File Number: 033-33263





ASIA
      PREMIUM TELEVISION GROUP, INC.


(Name
      of
      small business issuer as specified in its charter)





NEVADA
            
            62-1407521(State
                or other jurisdiction of
                incorporation or organization)
            
            (I.R.S.
                Employer Identification
                Number)








SUITE
      602, 2 NORTH TUANJIEHU STREET, CHAOYANG DISTRICT,


BEIJING
      100026, PEOPLE’S REPUBLIC OF CHINA


(Address
      of principal executive offices)





86-10-6582-7900


(Issuer’s
      telephone number)





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


NONE





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


COMMON
      STOCK, US$0.001 PAR VALUE





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





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





Indicate
      check mark whether the registrant (1) has filed all reports required to be
      filed
      by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
      preceding 12 months (or for such shorter period that the issuer was required
      to
      file such reports), and (2) has been subject to such filing requirements for
      the
      past 90 days. R Yes £ No





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





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):





Large
                accelerated filer£
            Accelerated
                filer£
            Non-accelerated
                filerR





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





The
      aggregate market value of the registrant's voting common stock held by
      non-affiliates as of September 30, 2005 based upon the closing price reported
      for such date on the OTC Bulletin Board, was US$10,585,865.43.





As
      of
      June 20, 2006, the registrant had 1,613,191,009 shares of its common stock
      outstanding.





**Documents
      Incorporated by Reference:** None.











**ASIA
      PREMIUM TELEVISION GROUP, INC.**


**ANNUAL
      REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 2006**





INDEX
              
              PagePART
                I
              
              2Item 1
              Business
              2Item 1A
              Risk
                Factors
              4Item 1B
              Unresolved
                SEC Comments
              8Item 2
              Properties
              8Item 3
              Legal
                Proceedings
              8Item 4
              Submission
                of Matters to a Vote of Security Holders
              8PART
                II
              
              9Item 5
              Market
                for Registrant’s Common Equity and Related Stockholder Matters
              9Item 6
              Selected
                Financial Data
              10Item 7
              Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
              11Item 8
              Financial
                Statements and Supplementary Data
              17Item 9
              Changes
                In and Disagreements with Accountants on Accounting and Financial
                Disclosure
              17Item 9A
              Controls
                and Procedures
              17Item 9B
              Other
                Information
              17PART
                III
              
              18Item 10
              Directors
                and Executive Officers of the Company
              18Item 11
              Executive
                Compensation
              19Item 12
              Security
                Ownership of Certain Beneficial Owners and Management
              21Item 13
              Certain
                Relationships and Related Transactions
              22Item 14
              Principal
                Accountant Fees and Services
              23PART
                IV
              
              24Item 15
              Exhibits
                and Financial Statement Schedules
              24INDEX
                TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
              F-1







**FORWARD-LOOKING
      STATEMENTS NOTICE**





This
      Annual Report on Form 10-K contains “forward-looking statements” within the
      meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the
      “Securities Act”) and Section 21E of the U.S. Securities Exchange Act of 1934,
      as amended (the “Exchange Act”). Such statements relate to, among other things,
      our future plans of operations, business strategy, operating results and
      financial position and are often, though not always, indicated by words or
      phrases such as “anticipate,” “estimate,” “plan,” “project,” “outlook,”
“continuing,” “ongoing,” “expect,” “believe,” “intend,” and similar words or
      phrases. These forward-looking statements include statements other than
      historical information or statements of current condition, but instead represent
      only our belief regarding future events, many of which by their nature are
      inherently uncertain and outside of our control. Important factors that could
      cause actual results to differ materially from forward-looking statements
      include, but are not limited to, those described in the section titled “Risk
      Factors” appearing elsewhere in this Annual Report, as well as the
      following:





·
            changes
                in the advertising and marketing services markets in
                China;





·
            our
                ability to attract and retain
                customers;





·
            the
                financial condition of our
                customers;





·
            unexpected
                changes in our margins and certain cost or expense items as a percentage
                of our net revenues;





·
            our
                ability to execute key strategies;





·
            actions
                by our competitors;





·
            our
                ability to retain and attract key
                employees;





·
            risks
                associated with assumptions we make in connection with our critical
                accounting estimates;





·
            potential
                adverse accounting related
                developments;





·
            developments
                or change in the regulatory and legal environment for advertising
                and
                marketing service companies in China; and





·
            other
                matters discussed in this Annual Report
                generally.





Consequently,
      readers of this Annual Report should not rely upon these forward-looking
      statements as predictions of future events. New risk factors emerge from time
      to
      time and it is not possible for our management to predict all risk factors,
      nor
      can we access the impact of all factors on our business or the extent to which
      any factor, or combination of factors, may cause actual results to differ
      materially from those contained in any forward-looking statements. We undertake
      no obligation to update or revise any forward-looking statement in this Annual
      Report to reflect any new events or any change in conditions or
      circumstances.  All
      of
      the forward-looking statements in this Annual Report are expressly qualified
      by
      these cautionary statements.


1


**PART
      I**




**ITEM
      1**  **BUSINESS**




**History**





Asia
      Premium Television Group, Inc., together with its subsidiaries (“ASTV,” the
“Company,” “we,” “us,” or “our”) was originally incorporated in the state of
      Nevada on September 21, 1989 under the name Fulton Ventures, Inc. On July 18,
      1990, we changed our name to Triad Warranty Corporation, Inc., and on May 22,
      2000, we changed our name to GTM Holdings, Inc. From 1993 through May 2001,
      we
      did not engage in any business operations.





In
      June
      2001, we acquired American Overseas Investment Co., Ltd. (“AOI”), a company
      incorporated in Macau, a special administrative region (“SAR”) of the People's
      Republic of China (“PRC” or “China”). With our acquisition of AOI, we began to
      focus our business on acquiring and developing companies with the goal to
      building a broad network of media, marketing and advertising companies in
      Greater China. On September 19, 2002, we changed our name to Asia Premium
      Television Group, Inc. to more accurately reflect our business.





In
      December 2002, our subsidiary Asia Premium Television Group, Inc. (“ASTV-BVI”),
      a company organized under the laws of the British Virgin Islands, was
      formed.





In
      July
      2004, we completed the acquisition of 100% of Beijing Asia Hongzhi Advertising
      (“BAHA”) (formerly known as Shandong Hongzhi Advertising Company, Ltd.), a
      company organized under the laws of China, and its wholly-owned subsidiaries
      Shandong Hongzhi Communications and Career Advertising Co., Ltd. (“SHCCA”), a
      company established under the laws of China in April 2003, and Tibet Asia
      Culture Media Co., Ltd. (“TACM”), a company established under the laws of China
      in April 2004.





In
      July
      2004, we also completed the acquisition of 100% of Beijing Hongzhi Century
      Advertising (“BHCA”) (formerly known as Beijing Youngfu Century Advertising
      Consultancy Company, Ltd.), a company organized under the laws of
      China.





In
      April
      2005, Beijing Asia Qiangshi Media Advertising Co., Ltd. (“BAQM”) was organized
      under the laws of China as a wholly-owned subsidiary of BAHA.





In
      September 2005, we sold our interests in our subsidiaries AOI and ASTV-BVI
      to a
      third party.





In
      April
      2006, Tibet Hongzhi Advertising Co., Ltd. was organized under the laws of China
      as a wholly-owned subsidiary of BHCA.





**Nature
      Of Business**





We operate as a single segment business and provide advertising, media and
      marketing solutions to product manufacturers, service providers and other
      clients located in China. Our comprehensive products and services range from
      consumer research and brand management to advertisement production, media
      planning, public relations and direct marketing services. We deliver a
      comprehensive range of solutions that we believe simplify, improve and maximize
      the effectiveness of multiple phases of our customers’ marketing campaigns, from
      the inception of an advertising concept, through design, production
      and targeted distribution, and ultimately to the measurement of advertising
      effectiveness. Our customers may employ any one of the services we provide
      individually or on a combined basis to meet their specific
      needs.


2


Our
      broad
      range of service offerings can be categorized generally into the following
      groups:





*Media
      consulting services* .
      Our
      media consulting services consist of developing targeted, effective marketing
      strategies to enable our customers to reach their marketing and brand
      objectives *.* We
      begin
      by analyzing a customer’s product or service and conducting consumer and market
      research to develop an understanding of its competitiveness in the marketplace.
      We then identify the target audience for a particular product or service and
      the
      most effective channels to reach the targeted audience. Based on this
      information, we develop and present a marketing and advertising strategy to
      the
      customer for approval.





*Advertisement
      production services* .
      Based
      on the marketing and advertising strategies we develop for our customers, or
      according to our customers’ own requirements, we develop and create advertising
      designs and concepts and produce advertising materials which can take the form
      of film, video, print, or electronic media.





*Advertising
      agent services* .
      We
      prepare media buying and publishing plans for our customers. Once a plan is
      approved, we negotiate and purchase advertising space or air time from broadcast
      media to communicate our customers’ advertising materials to their targeted
      audiences.





*Evaluation
      services.* After
      our
      services are provided, we provide our customers with third-party reports
      concerning the publication or broadcast of their adverting materials to confirm
      and summarize the services provided. We discuss with our customers any necessary
      adjustments in connection with our services to maximize the effectiveness of
      our
      customers’ advertising.





**Customers**





We
      believe that we have excellent working relationships with our customers. Some
      of
      our major clients have been using our services for more than seven years, and
      we
      continue to add new customers to our customer base. During the year ended March
      31, 2006, we had one significant advertising customer which accounted for 69%
      of
      our total sales. Our largest customer is Inner Mongolia Yili Industrial Co.,
      Ltd. (“Yili”), a leading company in the Chinese diary product industry. Yili is
      a publicly traded company in China and has been our customer for more than
      four
      years. Another of our other large customers is Shandong Dong-e E-jiao Group,
      a
      producer of Chinese herbal medicines and health products, which has been our
      customer for over seven years.





**Competition**





The
      advertising and marketing industry in China is highly competitive. The principal
      methods of competition in our business are pricing, quality, flexibility,
      customer targeting capabilities, breadth of service, timeliness of delivery,
      customer service and other value-added services. There are many advertising
      agencies in China which represent customers in both local and international
      capacities. Our major competitors include Saatchi & Saatchi,
      McCann-Erickson, Shanghai Leo Burnett, Beijing Dentsu, Beijing Weilai
      Advertising, Guangdong Advertising, Shanghai Advertising, Shanghai Lowe &
Partners, Shanghai Hakuhodo, and Beijing Dayu Weiye Advertising. According
      to
      the rankings jointly compiled by China Central Television Station, Advertising
      Institute of Communication University of China, Advertising Pointer Newspaper
      and Proprietor Magazine in April 2006, we ranked tenth among the top 100
      advertising companies in China which had the greatest impact in China from
      2005
      to 2006.


3


We
      believe we have the ability to compete effectively in this highly competitive
      industry. We have been operating in the advertising and marketing sector in
      China for more than ten years and are committed to continually enhancing our
      business to satisfy the needs of our clients and to grow our revenues. Our
      advertising and marketing team includes media veterans with international
      advertising experience as well as experienced professionals with knowledge
      and
      insight in the local Chinese market. We believe that our integrated team enables
      us to provide effective, high quality advertising services according to
      international standards and practices, and that also simultaneously cater
      to the preferences and needs of the local market.





**Intellectual
      Property**





We
      do not
      own any patents, trademarks or licenses. We view our company’s name and the
      reputation associated with our name as an important asset, but have not
      registered our company’s name as a trademark.





**Government
      Regulations**





As
      an
      advertising business, we are subject to a variety of rules, regulations and
      standards set by the State Administration of Industry and Commerce (“SAIC”) of
      the PRC government. We have been granted a business license to operate as an
      advertising agency by the Department of Advertising Regulation of the SAIC
      and
      are required to adhere to certain standards in order to maintain our
      license.




In
      addition to business taxes, we are required to pay taxes equal to 3% of our
      sales revenue as a cultural improvement and enhancement surcharge required
      by
      the Chinese government.





**Employees**





As
      of
      June 20, 2006, we had 119 full-time employees located in China. Our employees
      sign one year labor contracts with us which are subject to annual renewal.





**ITEM
      1A**  **RISK
      FACTORS**




We
      are
      subject to a variety of possible risks that could adversely impact our revenues,
      results of operations or financial condition. Some of these risks relate to
      the
      industry in which we operate, while others are more specific to us. The
      following factors set out potential risks we have identified that could
      adversely affect us.




**We
      operate in a highly competitive industry** .




The
      advertising and marketing services industry in China is highly competitive.
      We
      face competition from other advertising agencies and providers of creative
      or
      media services, several of which may have greater financial, sales, marketing
      and other resources than we do. A client’s perception of the quality of our
      creative work, our reputation and those of our competitors are important factors
      in determining our competitive position. In addition, we face competition from
      larger agencies which may have greater ability to serve international clients
      on
      a broad geographic basis. Because an agency’s principal asset is its people,
      there are relatively low barriers to entry into the business. If we are unable
      to compete effectively against existing or future competitors, our financial
      conditional and results of operations may be adversely affected.


4




**Demand
      for our services may decrease due to a decline in our clients’ or an industry’s
      financial condition or due to an economic downturn in the Chinese
      economy.**




We
      cannot
      assure you that the demand for our services will continue at current levels.
      Our
      clients’ demands for our services may change based on their needs and financial
      condition. In addition, our business is dependent upon the economy and business
      environment in China in general. The growth of the Chinese economy has been
      uneven across geographic regions and industry sectors. When economic downturns
      affect particular clients or industry groups, demand for advertising and
      marketing services provided to these clients or industry groups is often
      adversely affected. There can be no assurance that economic conditions or the
      level of demand for our services will improve or that they will not deteriorate.
      If there is a period of economic downturn or stagnation, our business, financial
      condition and results of operations may be adversely affected.




**We
      depend on a few key customers for a substantial majority of our sales and the
      loss of, or a significant reduction in orders from, any of them would likely
      significantly reduce our revenues*.***




In
      the
      fiscal year ended March 31, 2006, one customer accounted for 69% of our total
      sales. In the fiscal year ended March 31, 2005, sales to two customers accounted
      for approximately 62% of our total sales. Our operating results in the
      foreseeable future will likely continue to depend on sales to a relatively
      small
      number of clients. The loss of those customers would cause our revenues to
      decline. If those customers experiences
      financial difficulty, it could result in significant reductions in services
      provided by us and may have a material adverse effect on our financial position,
      results of operations and liquidity. In addition, our exposure to credit risks
      with respect to accounts receivable is concentrated in a few customers. Although
      we have not experienced any material losses as a result of our customers’
default in their payment obligations in the past, we are nevertheless exposed
      to
      significant credit loss in the event of non-performance by any one of our
      customers in the future. We seek to mitigate this risk with credit evaluations
      we perform on our customers and an
      ongoing monitoring process we implement with respect to outstanding
      balances.




**Our
      cash flows may be insufficient to fund our future business
      expansion.**




We
      believe that our existing cash and cash equivalents and anticipated cash flows
      from operations will be sufficient to meet our operational needs for the
      foreseeable future. However, our capital requirements depend on numerous
      factors, including the rate of market acceptance of our services and our ability
      to maintain and expand our customer base, among others. The timing and amount
      of
      our capital requirements cannot be accurately predicted. There can be no
      assurance that our operations will generate sufficient cash flows or that we
      will be able to obtain sufficient financing on a timely basis or at all or
      on
      terms acceptable to us. Any inability to raise funds as needed may prevent
      us
      from implementing future business plans.




**We
      rely on key management personnel.**




Our
      success will depend, in part, on the efforts of our executive officers and
      other
      key employees. The market for qualified personnel is competitive and our future
      success will depend upon, among other factors, our ability to attract and retain
      these key personnel. The loss of the services of any of our key management
      personnel or the failure to attract and retain employees could have a material
      adverse effect on our results of operations and financial condition due to
      the
      resulting disruptions in the leadership and continuity of our business
      relationships.




5


**Mr.
        Qiang Jiang owns a large percentage of our outstanding common shares and
        may
        have the ability to influence matters requiring shareholder
        approval.**
  As
        of
        June 20, 2006, Mr. Qiang Jiang, owned 46.49% of our outstanding common
        shares. As such, Mr. Jiang has significant influence over shareholder actions
        and may have the ability to control our company and to direct our affairs,
        including.




·
            composition
                of our board of directors, and, through it, our direction and policies,
                including the appointment and removal of
                officers;




·
            mergers
                or other business combinations and opportunities involving
                us;




·
            further
                issuance of capital stock or other securities by
                us;




·
            our
                financing activities;




·
            payment
                of dividends; and




·
            approval
                of our business plans and general business
                development.




There
      can
      be no assurance that our controlling shareholder will exercise his control
      in
      our best interests.





**China’s
      legal system is characterized by uncertainty that could negatively impact our
      business and results of operations.**





The
      Chinese legal system is a civil law system based on written statutes. Unlike
      common law systems, it is a system in which decided legal cases have little
      value as precedent. Beginning in 1979, the PRC government promulgated a
      comprehensive system of laws and regulations governing economic matters, which
      has had the overall effect of significantly enhancing the protections afforded
      to foreign invested enterprises in China. However, these laws, regulations
      and
      legal requirements are relatively new and are evolving rapidly, and their
      interpretation and enforcement involve uncertainties. These uncertainties could
      limit the legal protections available to foreign investors. In addition,
      enforcement of existing laws, or contracts based on existing law, may be
      uncertain and sporadic. Furthermore, interpretation of statutes and regulations
      may be subject to new government policies reflecting domestic political changes.





Our
      activities in China are subject to administrative review and approval by the
      SAIC of the PRC government. Because of the changes occurring in China’s legal
      and regulatory structure, we may not be able to secure or renew the requisite
      governmental approvals for our activities. Failure to obtain or maintain the
      requisite governmental approvals for any of our activities could adversely
      affect our business and results of operations.




**Any
      recurrence of severe acute respiratory syndrome, or SARS, or another widespread
      public health problem, could negatively impact our business and results of
      operations.**




A
      renewed
      outbreak of SARS or another widespread public health problem in China, where
      substantially all of our revenue is derived and where our operations are
      located, could have a negative effect on our operations. Our operations may
      be
      impacted by a number of health-related factors, including the following:





·
            quarantines
                or closures of some of our offices which would severely disrupt our
                operations;




·
            the
                sickness or death of our key officers and employees; and




·
            a
                general slowdown in the Chinese economy.




Any
      of
      the foregoing events or other unforeseen consequences of public health problems
      could adversely affect our business and results of operations.


6




**Changes
      in China’s political and economic policies could negatively impact our business.**




Substantially
      all of our business operations are conducted in China. Accordingly, our results
      of operations, financial condition and prospects are subject in a significant
      degree to the economic, political and legal developments in China. Although
      we
      believe that the economic reform and the macroeconomic measures adopted by
      the
      PRC government have had a positive effect on the economic development of China,
      we cannot predict the future direction of these economic reforms or the effects
      these measures may have on our business, financial position or results of
      operations. In addition, the Chinese economy differs from the economies of
      most
      countries belonging to the Organization for Economic Cooperation and
      Development, or OECD. These differences include:





·
            economic
                structure;




·
            level
                of government involvement in the economy;




·
            level
                of development;




·
            level
                of capital reinvestment;




·
            control
                of foreign exchange;




·
            methods
                of allocating resources; and




·
            balance
                of payments position.




As
      a
      result of these differences, our business may not develop in the same way or
      at
      the same rate as might be expected if the Chinese economy were similar to those
      of the OECD member countries.




**Restrictions
      on foreign currency exchange may limit our ability to receive and use our
      revenues effectively.**




Any
      future restrictions on currency exchanges may limit our ability to use revenues
      generated in Renminbi to fund our business activities outside China or to make
      payments in U.S. dollars or other foreign currencies. Although the Chinese
      government introduced regulations in 1996 to allow greater convertibility of
      the
      Renminbi for current account transactions, significant restrictions still
      remain, including primarily the restriction that foreign invested enterprises
      may only buy, sell and/or remit foreign currencies at those banks authorized
      to
      conduct foreign exchange business after providing valid commercial documents.
      In
      addition, remittance of foreign currencies abroad and conversion of Renminbi
      for
      capital account items, including direct investment and loans, is subject to
      governmental approval in China, and companies are required to open and maintain
      separate foreign exchange accounts for capital account items. We cannot be
      certain that the Chinese regulatory authorities will not impose more stringent
      restrictions on the convertibility of the Renminbi, especially with respect
      to
      foreign exchange transactions.





**Fluctuations
      in the value of the Renminbi could negatively impact our results of
      operations.**




Our
      revenues, operating expenses and substantially all of our assets and liabilities
      are denominated in Renminbi. Our reporting currency is the U.S. dollar. As
      a
      result, we are exposed to foreign exchange risk, and our results of operations
      may be negatively impacted by fluctuations in the exchange rate between the
      U.S.
      dollar and Renminbi. A significant depreciation in the Renminbi against the
      U.S.
      dollar will cause a decrease in our net profits, if any, and any increase in
      net
      losses we may suffer.


7




The
      value
      of the Renminbi is subject to changes in China’s governmental policies and to
      international economic and political developments. Since January 1, 1994, the
      PRC government has used a unitary managed floating rate system. Under this
      system, the People’s Bank of China, or PBOC, publishes a daily base exchange
      rate with reference primarily to the supply and demand of Renminbi against
      U.S.
      dollar and other foreign currencies in the market during the previous day.
      Authorized banks and financial institutions are allowed to quote buy and sell
      rates for Renminbi within a specified band around the central bank’s daily
      exchange rate. On July 21, 2005, PBOC announced an adjustment of the exchange
      rate of the U.S. dollar to Renminbi from 1:8.27 to 1:8.11 and modified the
      system by which the exchange rates are determined.




This
      adjustment has resulted in an approximately 2.0% appreciation of the Renminbi
      against the U.S. dollar. While the international reaction to the Renminbi
      revaluation has generally been positive, significant international pressure
      may
      result in the adoption of an even more flexible currency policy, which could
      result in a further and more significant appreciation of the Renminbi against
      the U.S. dollar. There can be no assurance that the Renminbi will appreciate,
      or
      that the Renminbi will not depreciate, in the future.




**Your
      ability to bring an action against us or against our directors and officers,
      or
      to enforce a judgment against us or them, may be limited because we conduct
      all
      of our operations in China and all of our directors and officers reside outside
      of the United States.**




We
      conduct all of our operations in China. All of our directors and officers
      reside, and substantially all of the assets of those persons are located,
      outside the United States. As a result, it may be difficult for you to bring
      an
      action against us or against these individuals in the United States in the
      event
      that you believe that your rights have been infringed under the securities
      laws
      or otherwise. Even if you are successful in bringing an action of this kind,
      the
      laws of China may render you unable to enforce a judgment against our assets
      or
      the assets of our directors and officers.





**ITEM
      1B**  **UNRESOLVED
      SEC COMMENTS**




None.




**ITEM
      2**  **PROPERTIES**




We
      have
      entered into a building lease for our office located in Beijing. The Beijing
      facility lease expires on August 31, 2006 and is renewable on an annual basis.
      Our subsidiary SHCCA previously occupied office space in Ji’nan which we leased
      from a third party. Following the expiration of our Ji’nan facility lease on
      April 30, 2006, SHCCA moved into an office unit which we
      initially purchased in November 2005. We believe our current facilities are
      adequate for the purposes for which they are currently used and are well
      maintained. See Note 9 to our audited consolidated financial statements included
      in this Annual Report for a further discussion of our lease
      commitments.





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




We
      are
      not involved in any current, and are not aware of any pending, legal proceedings
      involving our company or our officers and directors which may have any material
      impact on our results of operations or financial position.





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




There
      were no matters submitted to a vote of security holders during the fourth
      quarter of our fiscal year ended March 31, 2006.


8





**PART
      II**




**ITEM
      5**  **MARKET
      FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS** ****




**Market
      Information**





As
      of May
      31, 2006, our common stock was listed on the Over the Counter Bulletin Board
      under the symbol “ASTV” and we had approximately 95 shareholders holding
      1,613,191,009 shares of common stock.





The
      following quotations, as provided by the National Quotation Bureau, represent
      prices between dealers and do not include retail markup, markdown or commission.
      In addition, these quotations do not represent actual transactions.








**DATE**
            **CLOSING
                BID**
            **CLOSING
                ASK****HIGH**
            **LOW**
            **HIGH**
            **LOW**(in
                US$)2004First
                Quarter
            0.07
            0.03
            0.10
            0.04Second
                Quarter
            0.05
            0.02
            0.07
            0.025Third
                Quarter
            0.025
            0.016
            0.035
            0.025Fourth
                Quarter
            0.05
            0.013
            0.06
            0.0142005First
                Quarter
            0.065
            0.03
            0.09
            0.045Second
                Quarter
            0.035
            0.03
            0.045
            0.038Third
                Quarter
            0.032
            0.032
            0.038
            0.038Fourth
                Quarter
            0.032
            0.02
            0.038
            0.0252006First
                Quarter
            0.04
            0.013
            0.045
            0.02





**Dividends**





We
      have
      not paid, nor declared, any dividends since our inception and do not intend
      to
      declare any such dividends in the foreseeable future. Our ability to pay
      dividends is subject to limitations imposed by Nevada law. Under Nevada law,
      dividends may be paid to the extent that a corporation’s assets exceed its
      liabilities and it is able to pay its debts as they become due in the usual
      course of business.





**Securities
      Authorized for Issuance under Equity Compensation Plans.**





During
      2001, we adopted a stock plan (the “2001 Stock Plan”). Under the terms and
      conditions of the 2001 Stock Plan, our board of directors is empowered to grant
      stock options to our employees, consultants, officers, and members of our board
      of directors. Additionally, our board of directors has the power to determine,
      at the time of granting any such options, the vesting provisions and whether
      the
      options will qualify as Incentive Stock Options under Section 422 of the
      Internal Revenue Code (Section 422 provides certain tax advantages to the
      employee recipients). The 2001 Stock Plan was approved by our shareholders
      on
      September 15, 2001. The total number of shares of common stock available under
      the 2001 Stock Plan may not exceed 2,000,000. As of March 31, 2006, no options
      had been granted under the 2001 Stock Plan.


9


**Sales
      of Unregistered Securities**





On
      August
      9, 2005, we issued 1,629,331 shares of our common stock to one of our
      shareholders in connection with the settlement and repayment of a loan from
      the
      shareholder in the amount of $30,000 and other amounts owed by us to the
      shareholder. The market price of our common stock was $0.035 per share as of
      the
      date of the issuance of these shares to the shareholder. These shares were
      issued without registration in reliance upon the exemption from the registration
      requirements of the Securities Act afforded by Section 4(2) of the Securities
      Act.





**Repurchase
      of Equity Securities**





We
      did
      not repurchase any securities within the fourth quarter of the fiscal year
      ended
      March 31, 2006.


**ITEM
        6 **SELECTED
        FINANCIAL DATA****




The
      following table sets forth selected historical consolidated financial data
      for
      the years ended March 31, 2002, 2003, 2004, 2005 and 2006. You should
      read the following selected historical consolidated financial data in
      conjunction with “Item 7. Management’s Discussion and Analysis of Financial
      Condition and Results of Operations” and the related audited consolidated
      financial statements and related notes included elsewhere in this Annual
      Report.





The
      financial data for the year ended March 31, 2002, 2003 and 2004 are those of
      our
      subsidiary BAHA, which we acquired in July 2004, and its wholly-owned
      subsidiaries in existence in each of those fiscal years (collectively, the
      “Subsidiaries”). While ASTV has a March 31 fiscal year-end, BAHA and the
      Subsidiaries have statutory December 31 fiscal year-ends. The financial data
      for
      the years ended March 31, 2002, 2003 and 2004 are derived from financial
      statements of BAHA and
      the Subsidiaries that have been prepared and audited based on a fiscal year
      ended March 31 to match ASTV’s fiscal year end.





**Year
                ended March 31,****2006**
            
            **2005**
            
            **2004****(1)******
            
            **2003****(1)******
            
            **2002****(1)****(in
                US$, except number of shares and other
                data)****Consolidated
              Statement of Operations Data :**Total
                revenues
            
            
            61,793,864
            
            
            48,228,470
            
            
            41,800,113
            
            
            11,031,068
            
            
            107,618Total
                cost of sales.
            
            
            58,402,504
            
            
            45,282,789
            
            
            40,173,644
            
            
            11,100,311
            
            
            631,350Total
                expenses
            
            
            2,288,879
            
            
            2,587,055
            
            
            1,637,120
            
            
            744,033
            
            
            138,997Income
                (loss) from operations before otherincome
                (expense)
            
            
            1,102,481
            
            
            358,626
            
            
            (10,651
            )
            
            (813,276
            )
            
            (662,729
            )Total
                other income (expense)
            
            
            35,688
            
            
            (16,684
            )
            
            38,213
            
            
            8,909
            
            
            (42,201
            )Income
                (loss) before income taxes
            
            
            1,138,169
            
            
            341,942
            
            
            27,562
            
            
            (804,367
            )
            
            (704,930
            )Net
                income (loss)
            
            
            1,116,177
            
            
            340,459
            
            
            24,952
            
            
            (804,947
            )
            
            (704,930
            )Net
                income (loss) per share(2)
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0Weighted average number of ordinary shares
                outstanding (2)
            
            
            1,615,843,576
            
            
            1,621,561,678
            
            
            750,000,000
            
            
            750,000,000
            
            
            750,000,000**Consolidated
                Balance Sheet Data:**Total
                assets
            
            
            16,179,000
            
            
            10,805,406
            
            
            11,920,281
            
            
            3,098,889
            
            
            2,126,229Total
                liabilities
            
            
            18,881,824
            
            
            14,756,526
            
            
            11,894,290
            
            
            3,097,850
            
            
            1,320,244Total
                shareholders’ equity (deficit) (3)
            
            
            (2,702,824
            )
            
            (3,951,120
            )
            
            25,991
            
            
            1,039
            
            
            805,985**Other
                Data:**Net
                cash provided by operating activities
            
            
            2,080,229
            
            
            569,315
            
            
            600,203
            
            
            (601,356
            )
            
            (89,100
            )Net
                cash used by investing activities
            
            
            (482,367
            )
            
            (325,704
            )
            
            (95,580
            )
            
            (47,557
            )
            
            33,971Net
                cash provided (used) by financing activities
            
            
            200,410
            
            
            (190,685
            )
            
            460,974
            
            
            404,756
            
            
            254,359





*Notes*


(1) The
      financial data for the fiscal years ended March 31, 2004, 2003 and 2002 are
      those of our subsidiary BAHA and the Subsidiaries.


(2)
      Based
      on the weighted average number of shares deemed to be outstanding during the
      period.


(3)
      See
      Note 14 to our audited consolidated financial statements included
      herein.





10




**ITEM
      7**  **MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS**




This
      section provides a review of our financial condition and results of operation
      for the years ended March 31, 2004, 2005 and 2006. The analysis is based on,
      and
      should be read in conjunction with, our audited consolidated financial
      statements and related notes that are included in this Annual
      Report.





**Revenues**





For
      the
      fiscal years ended March 31, 2004, 2005 and 2006, we had total revenues in
      the
      amount of US$41.8 million, US$48.2 million and US$61.8 million, respectively.
      Our revenues are primarily derived from the planning and execution of
      advertising programs in various media. Most of our client contracts are
      individually negotiated and accordingly, the terms of client engagements and
      the
      basis on which we earn fees vary significantly.





Revenues
      for the creation, planning and placement of advertising are primarily determined
      on a negotiated fee basis, taking into account prevailing market standards
      and
      our costs of production.





**Factors
      which affect revenues**





Our
      revenues are directly dependent upon the advertising, marketing and corporate
      communications requirements of our clients. Our revenues are driven by our
      ability to maintain and grow existing business, as well as to generate new
      business. Our business is directly affected by economic conditions in China
      and
      in the industries we serve and by the marketing and advertising requirements
      and
      practices of our clients and potential clients. When economic conditions
      decline, companies generally decrease advertising and marketing budgets, and
      it
      becomes more difficult to achieve profitability. Our business is highly
      competitive, which tends to mitigate our pricing power.





Our
      business strategy includes acquiring ownership stakes in media, advertising
      and
      marketing businesses in Greater China with the goal of continually improving
      their operations and increasing their profitability. In July 2004, we
      acquired two subsidiaries, BAHA and BHCA, which affected our revenues, expenses,
      operating income and net income for the fiscal year ended March 31, 2005.
      Additional information regarding these acquisitions is provided in Note 1 to
      our
      audited consolidated financial statements included in this Annual Report.





**Seasonality**





Our
      revenues are subject to key factors that affect the level of advertising
      spending in China generally. In addition to fluctuations in advertising spending
      relating to general economic and market conditions, advertising spending is
      also
      subject to fluctuations based on the seasonality of consumer spending. In
      general, a relatively larger amount of advertising spending is concentrated
      on
      product launches and promotional campaigns prior to the holiday season in
      December. In addition, advertising spending generally tends to increase in
      China
      during January and February each year due to the Chinese Lunar New Year
      holiday. ****





**Revenue
      recognition**





Depending
      on the terms of the client contract, fees for the services we perform are
      primarily recognized in one of three ways: completion of milestones,
      straight-line (or monthly basis) or completed contract. See Note 1 to our
      audited consolidated financial statements for a further discussion of our
      revenue recognition accounting policies.


11




**Cost
      of Sales**





For
      the
      fiscal years ended March 31, 2004, 2005 and 2006, our cost of sales were US$40.2
      million, US$45.3 million and US$58.4 million, respectively. Our
      cost
      of sales consist primarily of media charges for the use of media resources,
      business tax and surcharges and production costs. Media
      charges we
      pay
      with respect to contracts that we enter into with media suppliers to place
      our
      customers’ advertisements comprise the majority of our cost of sales. We are the
      primary obligors under these agreements with media suppliers, and are
      responsible for paying for the use of media resources regardless of whether
      we
      receive payment from our clients.  The
      media
      charges we pay impact our working capital and operating cash flow, as media
      suppliers often require partial advance payment for the use of media resources.
      We record these payments as prepaid expenses. Once the services are provided
      by
      media suppliers, these prepaid expenses are transferred to our cost of
      sales. As of March 31, 2006, we had prepaid expenses in the amount of
      US$3.3 million for media charges.





Our
      cost
      of sales are directly related to servicing our clients. Our cost of sales
      represent a significant percentage of our revenue. In the fiscal years ended March
      31,
      2004, 2005 and 2006, due to our current operating model, our
      cost of sales represented 96.1%, 93.9% and 94.5% of our total revenues,
      respectively, and our profit margins have historically been low. In the future,
      we may consider changing our operating model as discussed in the “Plan of
      Operation” section below to increase our profit margins.





**Operating
      Expenses**





For
      the
      fiscal years ended March 31, 2004, 2005 and 2006, our operating expenses were
      US$1.6 million, US$2.6. million and US$2.3 million, respectively. Our
      operating expenses consist of general and administrative expense, bad debt
      expense and depreciation. General and administrative expense comprises
      professional fees including legal and accounting fees, executive compensation,
      operating overhead, entertainment expense and other miscellaneous expenses.
      Bad
      debt expense is accrued when individual accounts receivable show signs of
      uncollectibility, based on an aging analysis for receivables over 90 days due
      on
      a quarterly basis at the end of each period.





**Plan
      of Operation**





We
      intend
      to continue to focus on providing advertising, media and marketing solutions
      to
      our customers. We attach great importance to customer satisfaction. We are
      also
      focused on developing new customers to broaden our customer base and to avoid
      excessive concentration in a limited number of large customers.





We
      believe we have sufficient working capital to meet our needs of existing
      and planned operations for the next 12 months. We may consider raising
      additional funds from various sources in order to further our goal of attracting
      new customers, increasing our scale of operations or to further develop a new
      operating model whereby we distribute air time and advertising space, to
      increase our profitability.





We
      do not
      have any plans in the next 12 months to purchase significant equipment, nor
      do
      we expect any significant change in number of our employees.





**Results
      of Operations**





**Fiscal
      Year ended March 31, 2006 Compared to Fiscal Year ended March 31, 2005**





***Total
      Revenues*** .
      Our
      total revenues for the fiscal year ended March 31, 2006 increased by 28.1%
      to
      US$61.8 million as compared to US$48.2 million for the fiscal year ended March
      31, 2005. This was primarily due to significantly increased revenues from our
      largest customer as well as the addition of new customers throughout the fiscal
      year ended March 31, 2006.


12


***Cost
      of Sales.*** Our cost
      of sales increased by 29.0% during the fiscal year ended March 31, 2006 to
      US$58.4 million as compared to US$45.3 million for the fiscal year ended March
      31, 2005. This increase in our cost of sales corresponded with the 28.1%
      increase in our revenues for the fiscal year ended March 31, 2006.





***Gross
      Profit.*** As a
      result of the foregoing, our gross profit for the fiscal year ended March 31,
      2006 increased by 15.1% to US$3.4 million as compared to US$2.9 million for
      the
      fiscal year ended March 31, 2005. Our gross profit margin ratio decreased
      slightly from 6.1% for the year ended March 31, 2005 to 5.5% for the year ended
      March 31, 2006.





***Total
      Expenses.*** Our
      total
      expenses for the fiscal year ended March 31, 2006 were US$2.3 million which
      consisted primarily of general and administrative expenses of US$2.2 million.
      This represented a decrease of 11.5% from our total expenses of US$2.6 million
      for the fiscal year ended March 31, 2005, which was
      primarily the result
      of
      a decrease in bad debt expenses by US$0.7 million from 2005 to 2006 which was
      partially offset by an increase in general administrative expenses in the amount
      of US$ 0.4 million from 2005 to 2006. The decrease in bad-debt expense for
      the
      fiscal year ended March 31, 2006 was mainly due to a decrease in average aging
      of our accounts receivable as a result of increased efforts expended on debt
      collection. The increase in general and administrative expenses corresponded
      with our increase in revenues for the fiscal year ended March 31, 2006.





***Income
      Before Income Taxes.*** Our
      income before income taxes was US$1.1 million for the year ended March 31,
      2006
      compared to US$0.34 million for the fiscal year ended March 31,
      2005.





***Net
      Income.*** As
      a
      result of the foregoing, our net income increased by 227.8% to US$1.1 million
      for the fiscal year ended March 31, 2006 from US$0.34 million for the fiscal
      year ended March 31, 2005.





**Fiscal
      Year ended March 31, 2005 Compared to Fiscal Year ended March 31,
      2004**





***Total
      Revenues*** .
      Our
      total revenues for the fiscal year ended March 31, 2005 increased by 15.4%
      to
      US$48.2 million as compared to US$41.8 million for the fiscal year ended March
      31, 2004. This was primarily due to significantly increased revenues from our
      second largest customer as well as the addition of new customers throughout
      fiscal 2005.





***Cost
      of Sales.*** Our cost
      of sales increased by 12.7% during the fiscal year ended March 31, 2005 to
      US$45.3 million as compared to US$40.2 million for the fiscal year ended March
      31, 2004. This increase was a result of, but slightly lower than, our increase
      in sales, as we strived to improve our operating efficiency and control costs
      during the year.





***Gross
      Profit*** .
      As a
      result of the foregoing, our gross profit for the fiscal year ended March 31,
      2005 increased by 81.1% to US$2.9 million as compared to US$1.6 million for
      the
      fiscal year ended March 31, 2004. In addition, our gross profit margin ratio
      increased from 3.9% for the year ended March 31, 2004 to 6.1% for the year
      ended
      March 31, 2005.





***Total
      Expenses.*** Our
      total
      expenses for the fiscal year ended March 31, 2005 were US$2.6 million consisting
      primarily of general and administrative expenses of US$1.8 million. This
      represented an increase of 58.0% over total expenses at US$1.6 million for
      the
      fiscal year ended March 31, 2004.





***Income
      Before Income Taxes.*** Our
      income before income taxes was US$0.34 million for the year ended March 31,
      2005
      compared to US$0.03 million for the fiscal year ended March 31,
      2004.





***Net
      Income.*** As
      a
      result of the foregoing, our net income increased by 1,264.5% to US$0.34 million
      for the fiscal year ended March 31, 2005 from US$0.02 million for the fiscal
      year ended March 31, 2004.


13




**Liquidity
      and Capital Resources**





We
      finance our operations primarily through cash generated from operating
      activities and a mixture of short and long-term loans.





The
      following table summarizes our cash flows for the fiscal years ended March
      31,
      2004, 2005 and 2006:




**Fiscal
                Year ended March 31,****2006**
            
            **2005**
            
            **2004**US$
            
            US$
            
            US$Net
                cash provided by operating activities
            
            
            2,080,229
            
            
            569,315
            
            
            600,203Net
                cash used by investing activities
            
            
            (482,367
            )
            
            (325,704
            )
            
            (95,580
            )Net
                cash provided (used)by
                financing activities
            
            
            200,410
            
            
            (190,685
            )
            
            460,
                974Effect
                of exchange rate change on cash
            
            
            36,346
            
            
            -
            
            
            -Net
                increase in cash and cash equivalents
            
            
            1,834,618
            
            
            52,926
            
            
            965,597Cash
                and cash equivalents (closing balance)
            
            
            2,932,698
            
            
            1,098,080
            
            
            1,045,154





Our
      total
      assets as of March 31, 2006 were US$16.2 million. Our total liabilities at
      March
      31, 2006 were US$18.9 million. Liabilities consisted primarily of US$10.2
      million in accounts payable and US$4.3 million in notes and convertible notes
      payable. See Note 14 to our audited consolidated financial statements
      included herein.





Our
      net
      cash provided by operating activities increased to US$2.1 million for the fiscal
      year ended March 31, 2006 compared to US$0.6 million for the fiscal year ended
      March 31, 2005. This increase was primarily due to a significant increase in
      accounts payable and other payables. As compared to the fiscal year ended March
      31, 2004, our net cash provided by operating activities did not change
      significantly in the fiscal year ended March 31, 2005.





Our
      net
      cash used by investing activities increased to US$0.48 million for the fiscal
      year ended March 31, 2006 compared to net cash used by investing activities
      of
      US$0.33 million for the fiscal year ended March 31, 2005, due primarily to
      increases in payments for property and equipment.


Our
      net
      cash used by investing activities increased to US$0.33 million for the fiscal
      year ended March 31, 2005 compared to net cash used by investing activities
      of
      US$0.10 million for the fiscal year ended March 31, 2004. This was primarily
      due
      to increased payments for property and equipment.





Net
      cash
      provided by financing activities was US$0.20 million in the fiscal year ended
      March 31, 2006, as compared to net cash used by financing activities in the
      amount of US$0.19 million during the fiscal year ended March 31, 2005. In the
      fiscal year ended March 31, 2006, our net cash provided by financing activities
      consisted primarily of proceeds from related parties, whereas in the fiscal
      year ended March 31, 2005, our net cash used in financing activities primarily
      consisted of payments made to
      related parties. Net cash used in financing activities during the fiscal year
      ended March 31, 2005 was US$0.19 million compared to net cash provided by
      financing activities in the amount of US$0.46 million for the fiscal year ended
      March 31, 2004. This change was primarily due to the fact that we had greater
      proceeds from related parties in the fiscal year ended March 31, 2004 over
      the fiscal year ended March 31, 2005.





**Contractual
      Obligations**





On
      October 18, 2005, we entered into an agreement with Ji’nan Haichen Real Estate
      Development Co., Ltd. (“JHRED”) to borrow US$316,993 to acquire an office
      facility for SHCCA. Our note payable to JHRED matures on October 17, 2007 and
      provides for monthly payments in the amount of US$12,480. At March 31, 2006,
      the
      outstanding amount on the note payable to JHRED was US$254,593, which bears
      interest at the current monthly bank rate in China.




14


At
      March
      31, 2006, we had two convertible notes payable totaling US$4,000,000, which
      may
      be convertible into an aggregate of 100,000,000 shares of common stock. These
      notes do not provide for payment of interest or any other repayment terms other
      than by conversion into shares of our common stock.





The
      following table sets forth information regarding our aggregate payment
      obligations in future years based on contractual obligations that we had as
      of
      March 31, 2006:





**Payments
                due by period****Contractual
                Obligations**
            
            **Total**
            
            **Less
                than**
              **1
                year**
            
            **1-3
                years**
            
            **3-5
                years**
            
            **More
                than**
              **5
                years**US$
            
            US$
            
            US$
            
            US$
            
            US$Capital
                expenditure
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Operating
                leases
            
            
            19,269
            
            
            19,269
            
            
            -
            
            
            -
            
            
            -Short-term
                debt
            
            
            4,149,761
            
            
            4,149,761
            
            
            -
            
            
            -
            
            
            -Long-term
                debt
            
            
            104,832
            
            
            -
            
            
            104,832Total
            
            
            4,273,862
            
            
            4,169,030
            
            
            104,832
            
            
            -
            
            
            -




**Off-Balance
      Sheet Commitments and Arrangements**





We
      have
      not entered into any financial guarantees or other commitments to guarantee
      the
      payment obligations of any third parties. In addition, we have not entered
      into
      any derivative contracts that are indexed to our own shares and classified
      as
      shareholder’s equity, or that are not reflected in our consolidated financial
      statements. Furthermore, we do not have any retained or contingent interest
      in
      assets transferred to an unconsolidated entity that serves as credit, liquidity
      or market risk support to such entity. Moreover, we do not have any variable
      interest in any unconsolidated entity that provides financing, liquidity, market
      risk or credit support to us or engages in leasing, hedging or research and
      development services with us.





**Application
      of Critical Accounting Policies**





Our
      significant accounting policies are described in Note 1 to our consolidated
      financial statements included in this Annual Report. We
      prepare our financial statements in conformity with U.S. GAAP, which
      requires our management to make estimates and assumptions that affect the
      reported amounts of assets and liabilities, disclosure of contingent assets
      and
      liabilities on the date of the financial statements and the reported amounts
      of
      revenues and expenses during the financial reporting period. Since the use
      of
      estimates is an integral component of the financial reporting process, actual
      results could differ from those estimates. Some of our accounting policies
      require higher degrees of judgment than others in their application. We consider
      the policies discussed below to be critical to an understanding of our financial
      statements as their application places the most significant demands on our
      management’s judgment.





**Revenue
      Recognition**





We
      rely
      on SEC Staff Accounting Bulletin: No. 101“Revenue Recognition in Financial
      Statements” (“SAB 101”) to recognize our revenue. SAB 101 states that revenue
      generally is realized or realizable and earned when all of the following
      criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery
      has occurred or services have been rendered, (3) the seller's price to the
      buyer
      is fixed or determinable, and (4) collectibility is reasonably
      assured.





We
      provide advertising agent, media consulting and advertising production services.
      These services can either be (1) bundled together, in one or more combinations,
      in a single contract, or (2) provided independently pursuant to separate
      contracts. Revenue recognition is dependent on the type of service provided
      to
      the customer: (a) for advertising agent services, we recognize revenue at the
      end of each month in which the services were provided; (b) for both media
      consulting and advertising production services, we recognize revenue upon the
      achievement of particular milestones set forth in the contract.


15


When
      two
      or more services are bundled together in a single contract, the recognition
      of
      revenue related to one deliverable is not contingent upon the provision of
      service or milestone achievement of any subsequent deliverable. We follow EITF
      00-21 for recognizing revenues in instances involving the delivery or
      performance of multiple deliverables.





We
      may be
      required to provide a refund to the customer in the event of non-delivery of
      a
      service by us if the customer does not otherwise extend the delivery deadline,
      accept substitute service, or choose another alternative as set forth in the
      contract. However, we are not required to refund any portions of amounts
      previously received and for which services have been rendered because subsequent
      deliverables are not provided. At no point do we recognize any revenue when
      there is a possibility of having to refund anything to the
      customer.





We
      report
      our revenue on a gross basis under the guidance of EITF 99-19, as (1) we are
      the
      primary obligor under contracts with our suppliers and have the risks and
      rewards of a principal in these transactions; (2) we have latitude in
      establishing the price for services under our advertising contracts, and the
      net
      amount earned by us varies with each contract; (3) we are primarily responsible
      for the fulfillment of services ordered by the customer pursuant to the
      contract, including the portion of the services performed by the media supplier
      with whom we separately contract; and (4) we have discretion in supplier
      selection.





**Income
      Taxes**





We
      account for income taxes under the provisions of SFAS No. 109,
“Accounting for Income Taxes”, as described in Note 8 to our audited
      consolidated financial statements included in this Annual Report. We record
      a
      valuation allowance to reduce our deferred tax assets to the amount that we
      believe is more likely than not to be realized. In the event we were to
      determine that we would be able to realize our deferred tax assets in the future
      in excess of their recorded amount, an adjustment to our deferred tax assets
      would increase our income in the period such determination was made. Likewise,
      if we determine that we would not be able to realize all or part of our net
      deferred tax assets in the future, an adjustment to our deferred tax assets
      would be charged to our income in the period such determination is made. We
      record income tax expense on our taxable income using the balance sheet
      liability method at the effective rate applicable in China in our consolidated
      statements of operations and comprehensive income.







**ITEM
      7A**  **QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**




Our
      primary exposure to market risks relate to interest rates and foreign exchange
      rates.





**Interest
      rates**





Our
      exposure to market risk for changes in interest rates relates primarily to
      our
      debt obligations. As of March 31, 2006, we had an outstanding note payable
      in
      the amount of US$254,593 which is subject to a variable interest rate. We do
      not
      anticipate being exposed to material risks due to changes in market interest
      rates.





**Foreign
      exchange rates**





Substantially
      all our revenues and expenses are denominated in Renminbi, which are translated
      to U.S. dollars as our reporting currency for our financial statements. As
      such,
      our primary foreign exchange risk is to changes in the value of the Renminbi
      relative to the U.S. dollar. See “Item
      3A.
      Risk Factors — Fluctuations in the value of the Renminbi could negatively
      impact our results of operations.” We
      do not
      engage in any hedging activities, and as such, we may in the future experience
      economic loss or gain as a result of any foreign currency exchange rate
      fluctuations.


16


The
      following chart indicates the net foreign exchange gain/loss we recognized
      in
      the periods indicated.




**For
                the year ended March 31,****2006**
            
            **2005****(1)**
            
            **2004****(1)**Net
                foreign exchange gain
            
            $
            23,418
            
            
            -
            
            
            -Percent
                of revenue
            
            
            0.04
            %
            
            -
            
            
            -Percent
                of profit from income before taxes
            
            
            2.06
            %
            
            -
            
            
            -*________________*(1) The
              Renminbi remained pegged to the U.S. dollar until July 21, 2005.





**ITEM
      8**  **FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA**




Reference
      is made to the Index to the audited consolidated financial statements on
      Page F-1 for our audited consolidated financial statements and notes
      thereto and supplementary schedules.





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




We
      reported on Form 8-K that we had dismissed our independent accountants,
      Pritchett, Siler & Hardy, LLC (“PSH”) on May 26, 2005. During the two most
      recent years there was no adverse opinion or disclaimer of opinion, or
      modification as to uncertainty, audit scope or accounting principles contained
      in the accountant’s report on our financial statements. There were no
      disagreements with PSH on any matter of accounting principles or practices,
      financial statement disclosure, auditing scope or procedures, which
      disagreements, if not resolved to the satisfaction of PSH, would have caused
      them to make reference thereto in their reports on the financial statements.
      Our
      board of directors approved the dismissal of PSH as our independent accountants.





We
      engaged HJ & Associates, LLC as our company’s independent accountants
      effective as of May 26, 2005.





**ITEM
      9A**  **CONTROLS
      AND PROCEDURES**




Our
      management, with the participation of our Chief Executive Officer and Finance
      Manager, carried out an evaluation of the effectiveness of our “disclosure,
      controls and procedures” (as defined in Rules 13a-15(3) and 15-d-15(3) of the
      Exchange Act) as of the end of the period covered by this Annual Report (the
      “Evaluation Date”). Based upon that evaluation, our Chief Executive Officer and
      Finance Manager concluded that, as of the Evaluation Date, our disclosure,
      controls and procedures are effective, providing them with material information
      relating to our company as required to be disclosed in the reports we file
      or
      submit under the Exchange Act on a timely basis.




There
      were no changes in our internal controls over financial reporting, known to
      our
      Chief Executive Officer or Finance Manager, that occurred during the period
      covered by this report that has materially affected, or is reasonably likely
      to
      materially affect, our internal control over financial reporting.





**ITEM
      9B**  **OTHER
      INFORMATION**




None.


17
  **PART
      III**




**ITEM
      10**  **DIRECTORS
      AND EXECUTIVE OFFICERS OF THE COMPANY** ****




The
      following table sets forth the name, age, position and term of office for each
      our executive officers and directors. ****





**NAME**
            **AGE**
            **POSITION**
            **TERM
                EXPIRES**Qiang Jiang(1)
            44
            Chief Executive Officer and Director
            June 2006/May 2007Bulin Miao(2)
            29
            Finance Manager
            June 2006Li Li
            43
            Chairman and Director
            May 2007Yan Gong(3)
            42
            Chief Operating Officer and Director
            June 2006/ May 2007Hongmei Zhang(4)
            41
            Vice Finance Manager
            June 2006Min Wei
            52
            Director
            May 2007





*________________*


(1) Mr.
      Jiang will cease to be our Chief Executive Officer on June 30, 2006.


(2) Mr.
      Miao will cease to be our Finance Manager on June 30, 2006.


(3)
      Mr.
      Gong will become our Chief Executive Officer on July 1, 2006.


(4)
      Ms.
      Zhang will become our Finance Manager on July 1, 2006.




Set
      forth
      below is certain biographical information regarding each of our executive
      officers and directors:





**Qiang
      Jiang** has
      served as director of our company since March 2003. From March 2003 to June
      2006, Mr. Jiang was also our Chief Executive Officer. From 2001 to 2002, Mr.
      Jiang was Vice President of Sun Television Cybernetworks Co., Ltd. Prior to
      that, from 1992 to 2001, Mr. Jiang was Chairman and General Manager of Shandong
      Hongzhi Computer System Company, Ltd. and of our subsidiary BAHA (formerly
      known
      as Shandong Hongzhi Advertising Company.) Mr. Jiang is also on the board of
      directors of our subsidiary Tibet Hongzhi Advertising Co., Ltd. (“THZA”) and
      Beijing Asia Qiangshi Media Advertising Co., Ltd., a wholly-owned subsidiary
      of
      BAHA. Mr. Jiang holds a degree from Ji'nan University.





**Bulin
      Miao** served
      as our Finance Manager from September 2004 to June 2006. From 2002 to June
      2006,
      Mr. Miao was the Finance Manger of our subsidiary BAHA. From 2001 to 2002 he
      was
      Finance Manager for Sun Television Cybernetworks Co., Ltd. Prior to that from
      1998 to 2000, Mr. Miao worked for Taiwan Foo Kee Group first as a cashier,
      then
      accountant and later Finance Manager. Mr. Miao obtained his diploma in
      accounting from Xi’an Statistics Institute, and bachelor’s degree in accounting
      from Beijing Technology and Business University.





**Li
      Li** has
      served as our Chairman and director of our company since May 2004. From 1997
      to
      2003 he served as Chairman, Vice-Chairman and later General Manager of Chongqing
      Changjiang River Water Transport Co., Ltd. Mr. Li was Chairman and General
      Manager of Hua Rong Investment Co., Ltd. from 1996 to 2000. Mr. Li holds degrees
      from University of Science and Technology of China. Mr. Li is also on the board
      of directors of THZA and Shenzhou Lianhe Culture Media Development Co., Ltd.





**Yan
      Gong** has
      served as a director of our company since March 2003. Beginning in July 2006,
      Mr. Gong will serve as our Chief Executive Officer. From March 2003 to June
      2006, Mr. Gong served as our Chief Operating Officer. Mr. Gong has also served
      as Chief Operating Officer of our subsidiary BAHA since 2002. From 1997 to
      2002
      Mr. Gong was the General Manager of BAHA. Mr. Gong is also on the board of
      directors of our subsidiaries BAHA, BHCA, SHCCA and TACM. Mr. Gong studied
      business management in Japan.


18




**Hongmei
      Zhan** **g**has served as our Vice Finance Manager since September 2004. Beginning
      in July 2006, Ms. Zhang will serve as our Finance Manager. From 1998 to June
      2006, Ms. Zhang worked for our subsidiary BAHA first as chief accountant, then
      Vice Finance Manager and next Finance Manager.





**Min
      Wei** has
      served as our director since May 2004. Mr. Wei has nearly 30 years of experience
      in the media and advertising industry. Since 2001, Mr. Wei has served as the
      Vice Director, Movie Satellite Channels Program Production Center, State
      Administration of Radio, Film and Television. From 1996 to 2001, Mr. Wei was
      with Shandong TV Station, initially as Director of Advertising Department,
      then
      as Vice President *.*





All
      of
      our executive officers hold their positions at the discretion of our board
      of
      directors. All of our directors hold their positions for a term of one year
      or
      until their successors are duly elected and qualified.





**Audit
      Committee and Audit Committee Financial Expert**





Our
      board
      of directors does not have a separate audit committee as we are not required
      to
      have an audit committee because we do not have any listed securities as defined
      in Section 240.10A-3 of the Sarbanes-Oxley Act of 2002 (“Section 240.10A-3”). We
      do not have an audit committee financial expert, as defined under Section
      228.401 of the Sarbanes-Oxley Act of 2002, as we do not have any listed
      securities as defined in Section 240.10A-3.




**Code
      of Ethics**




We
      have
      adopted a code of ethics that applies to our Chief Executive Officer, Finance
      Manager, other senior management, directors and other personnel. The code of
      ethics was filed as Exhibit 99.1 to our Annual Report on Form 10-KSB
      for the fiscal year ended March 31, 2004 and is incorporated by reference
      in this Annual Report. There has been no change to the code of ethics from
      2004.




**ITEM
      11**  **EXECUTIVE
      COMPENSATION**




For
      the
      fiscal year ended March 31, 2006, we paid US$77,225 in compensation to our
      management.





We
      do not
      have any written compensation agreements with any of our officers or
      directors.





We
      have
      no arrangements for the remuneration of officers and directors, except that
      they
      will be entitled to receive reimbursement for actual, demonstrable out-of-pocket
      expenses, including travel expenses, if any, made on our behalf in the
      investigation of business opportunities. Other than as reflected in the table
      below, no remuneration has been paid to our officers or directors. There are
      no
      agreements or understandings with respect to the amount or remuneration those
      officers and directors are expected to receive in the future. As of the date
      of
      this Annual Report, no stock options have been issued to our officers or
      directors.


19




The
      following table sets forth the compensation paid in respect of the years ended
      March 31, 2004, 2005 and 2006 to our Chief Executive Officer, to each of the
      four other most highly paid officers and to each of our directors.




**NAME
                AND PRINCIPAL POSITION**
            
            **YEAR**
            
            **SALARY**
              **(US$)**
            
            **BONUS
                (US$)**
            
            **OTHER
                ANNUAL**
              **COMPENSATION**Qiang
                Jiang(1)
            
            
            2004
            
            $
            7,315
            
            
            -0-
            
            
            -0-Chief
                Executive Officer and Director
            
            
            2005
            
            $
            14,857
            
            
            -0-
            
            
            -0-2006
            
            $
            15,214
            
            
            -0-
            
            
            -0-Bulin
                Miao(2)
            
            
            2004
            
            $
            3,494
            
            
            -0-
            
            
            -0-Finance
                Manager
            
            
            2005
            
            $
            8,618
            
            
            -0-
            
            
            -0-2006
            
            $
            8,786
            
            
            -0-
            
            
            -0-Li
                Li
            
            
            2004
            
            $
            11,000
            
            
            -0-
            
            
            -0-Chairman
                and Director
            
            
            2005
            
            $
            28,586
            
            
            -0-
            
            
            -0-2006
            
            $
            29,194
            
            
            -0-
            
            
            -0-Yan
                Gong(3)
            
            
            2004
            
            $
            12,009
            
            
            -0-
            
            
            -0-Chief Operating
                Officer and Director
            
            
            2005
            
            $
            23,982
            
            
            -0-
            
            
            -0-2006
            
            $
            24,031
            
            
            -0-
            
            
            -0-Min
                Wei
            
            
            2004
            
            
            -0-
            
            
            -0-
            
            
            -0-Director
            
            
            2005
            
            
            -0-
            
            
            -0-
            
            
            -0-2006
            
            
            -0-
            
            
            -0-
            
            
            -0-




(1)
      Mr.
      Jiang will cease to be our Chief Financial Officer on June 30,
      2006.


(2)
      Mr.
      Miao will cease to be our Finance Manager on June 30, 2006.


(3)
      Mr.
      Gong will become our Chief Financial Officer on July 1, 2006.




In 2004, certain of our shareholders, directors, and officers entered into
      an
      agreement with us to establish a fund wherein shares of common stock would
      be
      returned to us by the shareholders for no additional consideration. The returned
      shares would be cancelled and subsequently re-issued by us as incentives to
      compensate new officers, directors and other management team members. On July
      28, 2005, one of our shareholders returned 10,000,000 shares to us. These shares
      have been cancelled but had not been re-issued to any management personnel
      as of
      March 31, 2006.




20


**ITEM
      12**  **SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**




The
      following table sets forth as of June 20, 2006, the number and percentage of
      the
      1,613,191,009 outstanding shares of common stock which, according to the
      information supplied to us, were beneficially owned by (i) each director, (ii)
      each executive officer, (iii) all directors and executive officers as a group
      and (iv) each person who, to our knowledge, is the beneficial owner of more
      than
      5% of our outstanding common stock. Except as otherwise indicated, the persons
      named in the table have sole voting and dispositive power with respect to all
      shares beneficially owned, subject to community property laws where applicable.





**TITLE
                OF CLASS**
            **NAME
                AND ADDRESS OF**
              **BENEFICIAL
                OWNER**
            **AMOUNT
                AND NATURE OF BENEFICIAL OWNERSHIP**
            **PERCENT
                OF CLASS**Common
            Qiang
                Jiang(1)
              Room
                602, 2 North Tuanjiehu Street
              Chaoyang
                District, Beijing 100026
              People’s
                Republic of China
            750,000,000
            46.49%Common
            Li
                Li(1)
              Room
                602, 2 North Tuanjiehu Street
              Chaoyang
                District, Beijing 100026
              People’s
                Republic of China
            -0-
            -0-Common
            Yan
                Gong(1)
              Room
                602, 2 North Tuanjiehu Street
              Chaoyang
                District, Beijing 100026
              People’s
                Republic of China
            -0-
            -0-Common
            Min
                Wei(1)
              Room
                602, 2 North
              Tuanjiehu
                Street
              Chaoyang
                District, Beijing 100026
              People’s
                Republic of China
            -0-
            -0-Common
            Faithhill
                Investments Limited(2)
              P.O.
                Box 957
              Offshore
                Incorporations Centre
              Road
                Town
              Tortola,
                BVI
            204,234,700
            12.66%Common
            Vesto
                Pacific Holdings, Ltd.
              10th
                Floor, Hutchison House
              10
                Harcourt Road
              Hong
                Kong
            200,000,000
            12.39%Common
            Beijing
                Shengshi Chuanren Advertising Co., Ltd.
              5
                Bei Feng Xiang Technology Development Zone, Yangsong Town, Huairou,
                Beijing
              People’s
                Republic of China
            96,765,300
            5.99%Common
            Capital
                Holdings, LLC
              5882
                South 900 East, Ste 202
              Salt
                Lake City, UT 84121
            83,615,603
            5.18%Common
            Officer
                and Directors as a Group: 4 persons
            750,000,000
            46.49%




(1)
      Officer or director of the Company.


(2)
      Faithhill Investments Limited is owned 100% by Sun Media Group,
      Inc.


21


**ITEM
      13**  **CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS**




**Net
      income guarantees**





In
      connection with our acquisition of BAHA which we finalized in July 2004, three
      of our shareholders, Qiang Jiang, Xiuying Chang and Feng Wang, guaranteed that
      the net income of BAHA would be not less than US$1.5 million for each of the
      two
      years ending on the first and second anniversary of the completion date of
      the
      acquisition. These shareholders agreed that in the event that BAHA failed to
      generate the guaranteed net income, the shareholders would contribute an amount
      equal to the difference between the guaranteed net amount and BAHA’s actual net
      income.





In
      connection with our acquisition of BHCA which we completed in July 2004, two
      of
      our shareholders, Qiang Jiang and Xiaojing Zheng, guaranteed that the net income
      of BHCA would be not less than RMB$8.0 million (approximately US$1.0 million)
      for each of the two years ending on the first and second anniversary of the
      completion date of the acquisition. These shareholders agreed that in the event
      that BHCA failed to generate the guaranteed net income, the shareholders would
      contribute an amount equal to the difference between the guaranteed net amount
      and BHCA’s actual net income.





By
      the
      terms of the agreements, the above guarantees expire on July 8, 2006. Due to
      significant changes in the fair value of ASTV following our acquisition of
      BAHA
      and BHCA, we have agreed to abandon the right to enforce the guarantees. We
      intend to sign an agreement canceling the guarantees after July 8, 2006.





**Anti-dilution
      agreement**





On
      October 21, 2002, we entered into an anti-dilution agreement (the “Anti-Dilution
      Agreement”) with William Fisher, our former President, which required us to
      issue additional shares of our common stock to Mr. Fisher as and when necessary
      to enable him to maintain a 7% ownership in our company.  On December
      15, 2003 (effective November 4, 2003), we extended the agreement indefinitely
      so
      long as Mr. Fisher did not voluntarily sell shares of common stock to cause
      his
      ownership interest in our company to fall below 7%, among other conditions.
      This
      agreement was cancelled pursuant to satisfaction of the terms of a general
      release agreement we entered into with Mr. Fisher in June 2005.





**General
      releases and Loan settlement agreement**





On
      June
      28, 2005, we entered into a general release agreement with Mr. Fisher and Hong
      Kong Pride Investment Ltd. (“HKPI”), a company controlled by Mr. Fisher,
      pursuant to which Mr. Fisher and HKPI agreed to release and discharge us from
      all obligations under the Anti-Dilution Agreement and waive all claims against
      us for past due salary or compensation, among other things, upon receipt of
      payment in the amount of US$20,000.





On
      June
      28, 2005, we also entered into a general release agreement with Stanley Roy
      Goss, our former Chief Financial Officer, and AOI, pursuant to which Mr. Goss
      and AOI agreed to release all claims against us for past due salary or
      compensation, among other things, upon receipt of payment in the amount of
      US$10,000.





In
      July
      2005, we entered into a loan settlement agreement (the “Loan Settlement
      Agreement”) with Zheng (Bruno) Wu, one of our shareholders, pursuant to which
      Mr. Wu agreed to loan us US$30,000, which was to be repaid by the issuance
      of
      our shares to Mr. Wu, and to accept repayment for a previous loan to us in
      the
      amount of US$27,027 in the form of additional shares. On August 9, 2005,
      pursuant to the Loan Settlement Agreement, we issued 1,629,331 shares of our
      common stock, valued at the market price of $0.035 per share, to Mr. Wu as
      repayment for the loans in the amount of US$30,000 and US$27,027.




22





**ITEM
      14**  **PRINCIPAL
      ACCOUNTANT FEES AND SERVICES**




**Audit
      Fees**





The
      aggregate fees billed during the fiscal year ended March 31, 2005 for
      professional services rendered by PSH, our former accountant, for the audit
      of
      BAHA and its subsidiaries’ financial statements for the fiscal years ended March
      31 2004 and 2003, which was filed on Form 8-K, was US$87,347. The fees billed
      for professional services rendered by PSH for the audit of our annual financial
      statements, review of our financial statements included in our quarterly reports
      and services normally provided by the accountant in connection with statutory
      and regulatory filings or engagements was US$42,666 for fiscal year ended March
      31, 2005. PSH also billed fees in the amount of US$5,000 in the fiscal year
      ended March 31, 2006 in connection with its review of our annual report on
      Form
      10-K filed with the SEC.





The
      aggregate fees billed for professional services rendered by HJ & Associates,
      LLC, our current accountant, for the audit of our annual financial statements,
      review of our financial statements included in our quarterly reports and
      services normally provided by the accountant in connection with statutory and
      regulatory filings or engagements was US$84,000 for the fiscal year ended March
      31, 2005 and US$84,000 for the fiscal year ended March 31, 2006.





**Audit-Related
      Fees**





In
      the
      fiscal year ended March 31, 2006, our principal accountant billed fees in the
      amount US$2,500 in connection with responding to comments we received from
      the
      SEC with respect to our annual report on Form 10-KSB for the year ended March
      31, 2005 we filed with the SEC. There were no audit-related fees billed by
      our
      principal accountant during the fiscal year ended March 31, 2005.





**Tax
      Fees**





The
      aggregate fees billed in each of the last two fiscal years for professional
      services rendered by the principal accountant for tax compliance, tax advice,
      and tax planning were US$0 for fiscal year ended 2006 and US$0 for fiscal year
      ended 2005.





**All
      Other Fees**





There
      were no other aggregate fees billed in either of the last two fiscal years
      for
      products and services provided by the principal accountant, other than the
      services reported above.





We
      do not
      have an audit committee currently serving and as a result our board of directors
      performs the duties of an audit committee. Our board of directors will evaluate
      and approve in advance, the scope and cost of the engagement of an auditor
      before the auditor renders audit and non-audit services. We do not rely on
      pre-approval policies and procedures.


23




**PART
      IV**




**ITEM
      15**  **EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES**






(a)   
Documents
      filed as part of this Annual Report:




1.      
      **Consolidated
      Financial Statements**




The
      audited consolidated
      financial statements filed in this Annual Report are listed on page F-1
      hereof.




2.      
      **Financial
      Statement Schedules**




The Supplemental Schedule of Non-Cash Investing and Financing
      Activities appears
      on page F-8 hereof.





3.      Exhibits





**Exhibit
                No.**
            **Title**3.1
            Certificate
                of Incorporation(1)3.2
            Articles
                of Amendment to Charter(1)3.3
            Certificate
                of Amendment to Certificate of Incorporation(2)3.4
            Bylaws10.1
            Convertible
                Promissory Note(3)10.2
            Convertible
                Promissory Note(3)10.3
            Registration
                Rights Agreement(3)14.1
            Code
                of Ethics(4)21.1
            List
                of Subsidiaries31.1
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 200231.2
            Certification
                of Finance Manager pursuant to Section 302 of the Sarbanes-Oxley
                Act of
                200232.1
            Certification
                of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 200232.2
            Certification
                of Finance Manager pursuant to Section 906 of the Sarbanes-Oxley
                Act of
                2002




(1)
      Incorporated by reference to our Annual Report on Form 10-KSB for the year
      ended
      December 31, 1999, filed on April 17, 2000.


(2)
      Incorporated by reference to our report on Form 8-K filed December 9,
      2002.


(3)
      Incorporated by reference to our Annual Report on Form 10-KSB for the year
      ended
      December 31, 2002, filed on May 20, 2003.


(4)
      Incorporated by reference to our Annual Report on Form 10-KSB for the year
      ended
      March 31, 2004, filed on August 11, 2004.




24


**INDEX
      TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS** ****




Reports of Independent Registered
              Public Accounting Firms
            F-2Consolidated Balance Sheets
            F-4Consolidated Statements of
              Operations
            F-5Consolidated Statements of
              Stockholders’ Equity (Deficit)
            F-6Consolidated Statements of Cash
              Flows
            F-7Notes to the Consolidated Financial
              Statements
            F-9




F-1




**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





To
      the
      Board of Directors


Asia
      Premium Television Group, Inc. and Subsidiaries


Beijing,
      China





We
      have
      audited the consolidated balance sheets of Asia Premium Television Group, Inc.
      and Subsidiaries as of March 31, 2006 and 2005, and the related consolidated
      statements of operations, stockholders equity (deficit) and cash flows for
      the
      years then ended. These consolidated financial statements are the responsibility
      of the Company's management. Our responsibility is to express an opinion on
      these consolidated financial statements based on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the
      consolidated financial statements are free of material misstatement. An audit
      includes examining, on a test basis, evidence supporting the amounts and
      disclosures in the consolidated financial statements. An audit also includes
      assessing the accounting principles used and significant estimates made by
      management, as well as evaluating the overall consolidated financial statement
      presentation. We believe that our audits provide a reasonable basis for our
      opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of Asia Premium
      Television Group, Inc. and Subsidiaries as of March 31, 2006 and 2005, and
      the
      results of their operations and their cash flows for the years then ended,
      in
      conformity with U.S. generally accepted accounting principles.








/s/
      HJ
& Associates, LLC




HJ
&
      Associates, LLC


Salt
      Lake
      City, Utah


May 19, 2006


F-2




**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





Board
      of
      Directors


BEIJING
      ASIA HONGZHI ADVERTISING CO., LTD. AND SUBSIDIARIES


Beijing,
      China





We
      have
      audited the accompanying consolidated statements of operations, stockholders'
      equity (deficit) and cash flows of Beijing Asia Hongzhi Advertising Co., Ltd.
      and Subsidiaries (a company organized in the People’s Republic of China) for the
      year ended March 31, 2004. These financial statements are the responsibility
      of
      the Company's management. Our responsibility is to express an opinion on these
      financial statements based on our audit.





We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States of America). Those standards require
      that we plan and perform the audit to obtain reasonable assurance about whether
      the financial statements are free of material misstatement. An audit includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements. An audit also includes assessing the accounting
      principles used and significant estimates made by management, as well as
      evaluating the overall financial statement presentation. We believe that our
      audit provides a reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the consolidated results of operations and cash flows of
      Beijing Asia Hongzhi Advertising Co., Ltd. and Subsidiaries for the year ended
      March 31, 2004, in conformity with accounting principles generally accepted
      in
      the United States of America.





The
      financial statements referred to above were prepared assuming the Company will
      continue as a going concern. As discussed in Note 14 to the financial
      statements, the Company has current liabilities in excess of current assets.
      This factor raises substantial doubt about the ability of the Company to
      continue as a going concern. Management’s plans in regards to these matters are
      also described in Note 14. The financial statements do not include any
      adjustments that might result from the outcome of these
      uncertainties.








/s/
      PRITCHETT, SILER & HARDY, P.C.




PRITCHETT,
      SILER & HARDY, P.C.


Salt
      Lake
      City, Utah


November
      8, 2004


F-3




**ASIA
      PREMIUM TELEVISION GROUP, INC. AND SUBSIDIARIES**


Consolidated
      Balance Sheets




March
                31,2006
            
            March
                31,2005**ASSETS**CURRENT
                ASSETSCash
            
            $
            2,932,698
            
            $
            1,098,080Short-term
                investment
            
            
            -
            
            
            82,175Accounts
                receivable, net of allowance for
              doubtful
                accounts (Note 2)
            
            
            8,585,429
            
            
            4,179,151Receivable
                from related party, net of allowance
              for
                doubtful accounts (Note 10)
            
            
            35,367
            
            
            214,504Other
                receivables, net of allowance for
              doubtful
                accounts
            
            
            377,037
            
            
            896,593Prepaid
                expenses (Note 3)
            
            
            3,298,048
            
            
            3,809,386Other
                current assets
            
            
            9,693
            
            
            26,254Total
                Current Assets
            
            
            15,238,272
            
            
            10,306,143PROPERTY
                AND EQUIPMENT, NET (Note 4)
            
            
            934,810
            
            
            487,906OTHER
                ASSETS
            
            
            5,918
            
            
            11,357Total
                Assets
            
            $
            16,179,000
            
            $
            10,805,406**LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)**CURRENT
                LIABILITIESAccounts
                payable
            
            $
            10,181,968
            
            $
            6,083,439Accounts
                payable - related party (Note 10)
            
            
            80,060
            
            
            95,467Accrued
                expenses
            
            
            467,455
            
            
            331,776Customer
                deposits
            
            
            1,117,725
            
            
            1,117,135Other
                payables
            
            
            2,780,023
            
            
            2,868,890Notes
                payable, current (Note 5)
            
            
            149,761
            
            
            259,819Convertible
                notes payable (Note 5)
            
            
            4,000,000
            
            
            4,000,000Total
                Current Liabilities
            
            
            18,776,992
            
            
            14,756,526NON
                CURRENT LIABILITIESNotes
                payable (Note 5)
            
            
            104,832
            
            
            -Total
                Liabilities
            
            
            18,881,824
            
            
            14,756,526STOCKHOLDERS'
                EQUITY (DEFICIT)Common
                stock, $.001 par value, 1,750,000,000 shares authorized,
              1,623,191,009
                and 1,621,561,678 shares issued,
              1,613,191,009
                and 1,621,561,678 shares outstanding
            
            
            1,623,191
            
            
            1,621,562Less:
                Treasury stock
            
            
            (10,000
            )
            
            -Capital
                in excess of par value (deficit)
            
            
            (4,065,297
            )
            
            (4,182,369
            )Accumulated
                other comprehensive income
            
            
            23,418
            
            
            -Retained
                earnings (deficit)
            
            
            (274,136
            )
            
            (1,390,313
            )Total
                Stockholders' Equity (Deficit)
            
            
            (2,702,824
            )
            
            (3,951,120
            )Total
                Liabilities and Stockholders’ Equity (Deficit)
            
            $
            16,179,000
            
            $
            10,805,406





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


F-4


**ASIA
      PREMIUM TELEVISION GROUP, INC. AND SUBSIDIARIES**


Consolidated
      Statements Of Operations




For
                the Years EndedMarch
                31,2006
            
            
            2005
            
            
            2004REVENUE
            
            $
            61,793,864
            
            $
            48,228,470
            
            $
            41,800,113COST
                OF SALES
            
            
            58,402,504
            
            
            45,282,789
            
            
            40,173,644GROSS
                PROFIT
            
            
            3,391,360
            
            
            2,945,681
            
            
            1,626,469EXPENSE:General
                and administrative
            
            
            2,203,081
            
            
            1,776,163
            
            
            1,136,467Bad
                debt expenses (recovery) (Note 7)
            
            
            (26,975
            )
            
            736,264
            
            
            483,521Depreciation
            
            
            112,773
            
            
            74,628
            
            
            17,132Total
                Expenses
            
            
            2,288,879
            
            
            2,587,055
            
            
            1,637,120INCOME
                (LOSS) BEFORE OTHERINCOME
                (EXPENSE)
            
            
            1,102,481
            
            
            358,626
            
            
            (10,651
            )OTHER
                INCOME (EXPENSE)Gain
                on disposal of assets
            
            
            689
            
            
            -
            
            
            42,127Interest
                expense
            
            
            (6,206
            )
            
            (36,254
            )
            
            -Interest
                income
            
            
            47,622
            
            
            17,019
            
            
            114,730Other
                income (expense)
            
            
            (6,417
            )
            
            2,551
            
            
            (118,644
            )Total
                Other Income (Expense)
            
            
            35,688
            
            
            (16,684
            )
            
            38,213INCOME
                BEFORE INCOME TAXES
            
            
            1,138,169
            
            
            341,942
            
            
            27,562CURRENT
                INCOME TAX EXPENSE (Note 8)
            
            
            21,992
            
            
            1,483
            
            
            2,610NET
                INCOME
            
            $
            1,116,177
            
            $
            340,459
            
            $
            24,952BASIC
                INCOME PER SHARE (Note 13)
            
            $
            0.00
            
            $
            0.00
            
            $
            0.00DILUTED
                EARNINGS PER
              COMMON
                SHARE (Note 13)
            
            $
            0.00
            
            $
            0.00
            
            $
            N/A




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





F-5


**ASIA
      PREMIUM TELEVISION GROUP, INC. AND SUBSIDIARIES**


Consolidated
      Statements Of Stockholders' Equity (Deficit)





Common
                StockShares
            
            
            Dollars
            
            
            Capital
                par value
              (Deficit)
            
            
            Accumulated
                other comprehensive income
            
            
            Retained
                  Earnings (Deficit)
            
            
            Total
                Stockholders' equity (Deficit)Balance,
                March 31, 2003
            
            
            750,000,000
            
            $
            750,000
            
            $
            1,006,763
            
            $
            -
            
            $
            (1,755,724
            )
            $
            1,039Net
                income for the year ended
              March31,
                2004
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            24,952
            
            
            24,952Balance,
                March 31, 2004
            
            
            750,000,000
            
            
            750,000
            
            
            1,006,763
            
            
            -
            
            
            (1,730,772
            )
            
            25,991Recapitalization
                of
              Subsidiaries
                (Note1)
            
            
            871,561,678
            
            
            871,562
            
            
            (5,189,132
            )
            
            -
            
            
            -
            
            
            (4,317,570
            )Net
                income for the year ended
              March
                31, 2005
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            340,459
            
            
            340,459Balance,
                March31, 2005
            
            
            1,621,561,678
            
            
            1,621,562
            
            
            (4,182,369
            )
            
            -
            
            
            (1,390,313
            )
            
            (3,951,120
            )Shares
                issued for debt
            
            
            1,629,331
            
            
            1,629
            
            
            55,397
            
            
            -
            
            
            -
            
            
            57,026Treasury
                Stock
            
            
            (10,000,000
            )
            
            (10,000
            )
            
            10,000
            
            
            -
            
            
            -
            
            
            -Debt
                forgiveness
            
            
            -
            
            
            -
            
            
            51,675
            
            
            -
            
            
            -
            
            
            51,675Foreign
                Currency
              translation
                Adjustment
            
            
            -
            
            
            -
            
            
            -
            
            
            23,418
            
            
            -
            
            
            23,418Net
                income for the year ended
              March
                31, 2006
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            1,116,177
            
            
            1,116,177Balance,
                March 31,2006
            
            
            1,613,191,009
            
            $
            1,613,191
            
            $
            (4,065,297
            )
            $
            23,418
            
            $
            (274,136
            )
            $
            (2,702,824
            )




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




F-6




**ASIA
      PREMIUM TELEVISION GROUP, INC. AND SUBSIDIARIES**


Consolidated
      Statements Of Cash Flows





For
                The Years Ended March 31,2006
            
            2005
            
            2004CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                income
            
            $
            1,116,177
            
            $
            340,459
            
            $
            24,952Adjustments
                to reconcile net income to net cash
              provided
                by operating activities:Depreciation
                expense
            
            
            112,773
            
            
            74,628
            
            
            17,132Bad
                debt expense
            
            
            (26,975
            )
            
            736,264
            
            
            483,521Gain
                on disposal of assets
            
            
            (689
            )
            
            -
            
            
            (42,127
            )Changes
                in assets and liabilities:(Increase)
                in accounts receivable &
              other
                receivable
            
            
            (3,947,491
            )
            
            (1,411,819
            )
            
            (2,709,832
            )Decrease
                (Increase) in prepaid expense
            
            
            511,338
            
            
            2,176,608
            
            
            (5,985,994
            )Decrease
                (Increase) in other current assets
            
            
            16,561
            
            
            (26,254
            )
            
            -Decrease
                (Increase) in other non-current assets
            
            
            5,439
            
            
            (11,357
            )
            
            -Increase
                (Decrease) in accounts payable &
              other
                payable
            
            
            4,118,362
            
            
            (503,954
            )
            
            7,560,318Increase
                in accounts payable-related party
            
            
            -
            
            
            -
            
            
            12,084Increase
                in accrued expenses
            
            
            135,679
            
            
            92,196
            
            
            80,105Increase
                (Decrease) in customer deposits
            
            
            590
            
            
            (897,456
            )
            
            1,145,060Increase
                in other liabilities
            
            
            -
            
            
            -
            
            
            14,984Exchange
                gain
            
            
            38,465
            
            
            -
            
            
            -Net
                Cash Provided by Operating Activities
            
            
            2,080,229
            
            
            569,315
            
            
            600,203CASH
                FLOWS FROM INVESTING ACTIVITIESPayments
                for property and equipment
            
            
            (569,376
            )
            
            (400,629
            )
            
            (83,495
            )Proceeds
                from disposal of property and equipment
            
            
            4,834
            
            
            -
            
            
            -Proceeds
                from (payments for) note receivable
            
            
            82,175
            
            
            74,925
            
            
            (12,085
            )Net
                Cash Used by Investing Activities
            
            
            (482,367
            )
            
            (325,704
            )
            
            (95,580
            )CASH
                FLOWS FROM FINANCING ACTIVITIESProceeds
                from note payable
            
            
            254,593
            
            
            78,550
            
            
            181,269Payments
                for note payable
            
            
            (259,819
            )
            
            -
            
            
            -Decrease
                (Increase) in advances receivable-related party
            
            
            221,042
            
            
            (44,565
            )
            
            477,085(Decrease)
                in advances payable-related party
            
            
            (15,406
            )
            
            (224,670
            )
            
            (197,380
            )Net
                Cash Provided (Used) by Financing Activities
            
            
            200,410
            
            
            (190,685
            )
            
            460,974Effect
                of Exchange Rate Change on Cash
            
            
            36,346
            
            
            -
            
            
            -NET
                INCREASE IN CASH
            
            
            1,834,618
            
            
            52,926
            
            
            965,597CASH
                AT BEGINNING OF PERIOD
            
            
            1,098,080
            
            
            1,045,154
            
            
            79,557CASH
                AT END OF PERIOD
            
            $
            2,932,698
            
            $
            1,098,080
            
            $
            1,045,154




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


F-7


**ASIA
      PREMIUM TELEVISION GROUP, INC. AND SUBSIDIARIES**


Consolidated
      Statements Of Cash Flows (Continued)








For
                The Years Ended March 31,2006
            
            2005
            
            2004SUPPLEMENTAL
                DISCLOSURES OF CASH
              FLOW
                INFORMATIONCash
                paid during the period for:Interest
            
            $
            6,206
            
            
            -
            
            
            -income
                taxes
            
            $
            12,932
            
            $
            1,483
            
            $
            2,610SUPPLEMENTAL
                SCHEDULE OF NON-CASH INVESTING AND FINANCING
                ACTIVITIES





For
      the year ended March 31, 2006





On
      July
      28, 2005, one of the shareholders returned 10,000,000 shares to the Company
      for
      cancellation and potential reissuance as incentives to compensate new officers,
      directors and other management team members. (Note 6)





During
      July 2005 the Company entered into a shareholder loan settlement agreement
      of
      $30,000 from a shareholder to finalize general release agreements. On August
      9,
      2005, 1,629,331 shares of common stock was issued to the shareholder to repay
      all loans owed according to the shareholder loan settlement agreement. (Note
      11)





For
      the year ended March 31, 2005





The
      Company finalized its acquisition of Beijing Asia Hongzhi Advertising Co.,
      Ltd.
      on July 9, 2004. The transaction has been accounted for in a manner similar
      to a
“reverse acquisition”.





For
      the year ended March 31, 2004





None





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




F-8


**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004





NOTE
      1 -  SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES





Organization





Asia
      Premium Television Group, Inc. (“Parent”) was organized under the laws of the
      State of Nevada on September 21, 1989. Parent went through various name changes
      prior to September 2002 when the name was changed to Asia Premium Television
      Group, Inc. Asia Premium Television Group, Inc. was originally formed to
      purchase, merge with or acquire any business or assets which management believes
      has potential for being profitable.





Parent
      entered into a stock for stock acquisition with Beijing Asia Hongzhi Advertising
      Co., Ltd. (“BAHA Subsidiary”) during March 2003, which was finalized on July 9,
      2004, in a transaction that has been accounted for as a recapitalization of
      BAHA
      in a manner similar to a reverse purchase. There was no adjustment to the
      carrying values of the acquired assets or liabilities. Operations prior to
      July
      2004 are those of BAHA. The parent is the continuing entity for legal purposes;
      BAHA is the continuing entity for accounting purposes.





The
      Parent had issued 750,000,000 shares of common stock to the shareholders of
      BAHA
      and Subsidiaries prior to March 31, 2004. The acquisition had not been
      considered completed until July 9, 2004, but the 750,000,000 shares of common
      stock were issued and outstanding on the records of Parent at March 31,
      2004.





The
      March
      31, 2004 financial statements referenced herein, are those of Beijing Asia
      Hongzhi Advertising Co., Ltd. and Subsidiaries. The March 31, 2006 and 2005
      financial statements are those of Beijing Asia Hongzhi Advertising Co., Ltd.
      and
      Subsidiaries as well as those of the Parent from July 9, 2004.





Subsidiaries




Beijing
      Asia Hongzhi Advertising Co., Ltd. (“BAHA Subsidiary”) was organized under the
      laws of the People’s Republic of China on June 1, 1995 as Shandong Hongzhi
      Advertising Co., Ltd. In July 2003, its name was changed to Beijing Asia Hongzhi
      Advertising Co., Ltd.





Beijing
      Hongzhi Century Advertising Co., Ltd (“BHCA Subsidiary”) was organized under the
      laws of the People’s Republic of China on January 7, 2003 as Beijing Yongfu
      Century Consulting Co., Ltd. as a wholly-owned subsidiary of BAHA. In March
      2003
      BHCA Subsidiary changed its name to Beijing Hongzhi Century Advertising Co.,
      Ltd.





Shandong
      Hongzhi Communications and Career Advertising Co., Ltd. (“SHCCA Subsidiary”) was
      organized under the laws of the People’s Republic of China on April 29, 2003 as
      a wholly-owned subsidiary of BAHA.





Tibet
      Asia Culture Media Co., Ltd (“TACM Subsidiary”) was organized under the laws of
      the People’s Republic of China in April 2004 as a wholly-owned subsidiary of
      BAHA.





Beijing
      Asia Qiangshi Media Advertising Co., Ltd (“BAQM Subsidiary”) was organized under
      the laws of the People’s Republic of China in April 2005 as a wholly-owned
      subsidiary of BAHA.




F-9


**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004





NOTE
      1 -  SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





Subsidiaries
      (Continued)




Asia
      Premium Television Group, Inc. (“APTV-BVI Subsidiary”) was formed on December
      28, 2002, as a British Virgin Island Company.





American
      Overseas Investment Company (“AOI Subsidiary”), a company incorporated in
      Macau SAR, China, was acquired by the Company in June 2001.





On
      September 30, 2005, the Company sold AOI and APTV-BVI to a third party with
      a
      net book value of $0 at a price of $1.





Consolidation




The
      consolidated financial statements include the accounts of Parent, BAHA, BHCA,
      SHCCA, TACM, AOI, APTV-BVI and BAQM (“the Company”). All inter-company balances
      and transactions between Parent and subsidiaries have been eliminated in
      consolidation. The parent Company has a March 31 year end while the subsidiaries
      have statutory December 31 year ends. The subsidiaries have been audited on
      March 31 year ends to match the parent.





Reclassification




The
      financial statements for years prior to March 31, 2006 have been reclassified
      to
      conform to the headings and classifications used in the March 31, 2006 financial
      statements. The financials statements for the year ended December 31, 2004
      have
      been revised to reflect the elimination of inter-company sales and cost of
      sales. These eliminations, which were not reflected in the original financial
      statements, had no effect on net income, earnings per share, or total assets.





Minority
      Interests




Under
      the
      laws of the People’s Republic of China, a Chinese company with limited
      liabilities must have no less than two shareholders. Small minority interests
      exist in BHCA Subsidiary and SHCCA Subsidiary because of this requirement.
      However, the Company has agreements with those individuals to hold these
      interests only on behalf of the Company. In substance, the Company controls
      all
      of the rights of the minority interest shareholders, and the holders of minority
      interests in BHCA Subsidiary and SHCCA Subsidiary have no economic interests
      in
      these subsidiaries, therefore the Company has accounted for the subsidiaries
      as
      being wholly-owned.





Accounting
      Estimates




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


F-10


**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004





NOTE
      1 -  SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





Cash
      and Cash Equivalents




The
      Company considers all highly liquid investments purchased with a maturity of
      three months or less to be cash equivalents.





Accounts
      Receivable





Accounts
      receivable are carried at the expected realizable value. The provision for
      bad
      debt losses is estimated by management based on individual accounts receivable
      which show signs of uncollectibility and an ageing analysis for receivables
      of
      over 90 days at the end of each quarter. (See Note 2)





Property
      and Equipment




Property
      and equipment is stated at cost. Expenditures for major renewals and betterments
      that extend the useful lives of property and equipment are capitalized, upon
      being placed in service. Expenditures for maintenance and repairs are charged
      to
      expense as incurred. Depreciation is computed using the straight-line method
      over the estimated useful lives of the assets, which is five years (See Note
      4).
      In accordance with Statement of Financial Accounting Standards No. 144,
“Accounting for the Impairment of Disposal of Long-Lived Assets”, the Company
      periodically reviews their property and equipment for impairment.





Income
      Taxes




The
      Company accounts for income taxes in accordance with Statement of Financial
      Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes.” This
      statement requires an asset and liability approach for accounting for income
      taxes (See Note 8).





Earnings
      Per Share




The
      Company accounts for earnings per share in accordance with Statement of
      Financial Accounting Standards (“SFAS”) No. 128, “Earnings Per Share”, which
      requires the Company to present basic income per share and dilutive income
      per
      share. (See Note 13).





Foreign
      Currency Translation Policy




The
      translations of the functional currency financial statements of subsidiaries
      into United States reporting currency dollars are performed for a ssets
      and
      liabilities denominated in foreign currencies into U.S. dollars using the
      closing exchange rates in effect at the balance sheet dates. For revenues and
      expenses, the average exchange rate during the years was used to translate
      China
      Renminbi into U.S. dollars. The
      gains
      or losses resulting from translation are included in stockholders' equity
      (deficit) separately as other comprehensive
      income .





Gains
      and
      losses resulting from transactions in foreign currencies are included in the
      determination of net income (loss) for the period.





BAHA,
      BHCA, SHCCA, TACM, and BAQM ’s functional currency is the China Renminbi
      (“RMB”). AOI’s functional currency is the Macau SAR Pataca (“MOP”). APTV-BVI’s
      functional currency is the Hong Kong SAR Dollar (“HKD”).


F-11


**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004





NOTE
      1 -  SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





Stock
      Based Compensation





The
      Company accounts for its stock based compensation in accordance with Statement
      of Financial Accounting Standard No. 123 (Revised 2004) (“SFAS No. 123(R)”)
      "Share-Based Payment", which repl aces
      SFAS
      No. 123 “Accounting for Stock-Based Compensation”, and supersedes APB Opinion
      No. 25 “Accounting for Stock Issued to Employees”. In adoption of SFAS No.
      123(R), the Company recognizes compensation costs related to share-based payment
      transactions in the financial statements based on the fair value of the equity
      or liability instruments issued over the period that an employee provides
      service in exchange for the award. The Company also re-measures liability awards
      at the end of each reporting period. Stock issued to non-employees is valued
      based on the fair value of the services received or the fair value of the stock
      given up.





Recently
      Enacted Accounting Standards





Statement
      of Financial Accounting Standards (“SFAS”) No. 151, “Inventory Costs - an
      amendment of ARB No. 43, Chapter 4”, SFAS No. 152, “Accounting for Real Estate
      Time-Sharing Transactions - an amendment of FASB Statements No. 66 and 67”, SFAS
      No. 153, “Exchanges of Non-monetary Assets - an amendment of APB Opinion No.
      29”, SFAS No. 123 (revised 2004), “Share-Based Payment”, SFAS No. 155,
“Accounting for Certain Hybrid Financial Instruments”, FASB Staff Positions
      (“FSP”) FAS 109-1, “Application of FASB Statement 109 Accounting for Income
      Taxes”, FSP FAS 109-2, “Accounting and Disclosure Guidance for the Foreign
      Earnings Repatriation Provision within the American Jobs Creation Act of 2004”,
      Staff Accounting Bulletin (“SAB”) No. 107, “Share-Based Payment”, FASB
      Interpretation (“FIN”) No. 47, “Accounting for Conditional Asset Retirement
      Obligations” and FASB Statement No. 154, “Accounting Changes and Error
      Corrections.” were recently issued.  SFAS No. 151, 152, 153, 123 (revised
      2004), 155, FSP FAS 109-1, 109-2, SAB No. 107, FIN No.47 and FASB Statement
      No.
      154 have no current applicability to the Company or their effect on the
      financial statements would not have been significant.





Revenue
      Recognition Policy





The
      Company relies on SEC Staff Accounting Bulletin: No. 101“Revenue Recognition in
      Financial Statements” (“SAB 101”) to recognize its revenue. SAB 101 states that
      revenue generally is realized or realizable and earned when all of the following
      criteria are met: (1) persuasive evidence of an arrangement exists, (2)
      delivery has occurred or services have been rendered, (3) the
      seller's price to the buyer is fixed or determinable, and (4)
      collectibility is reasonably assured.





The
      Company provides advertising agent, media consulting and advertising production
      services. These services can either be (1) bundled together, in one or more
      combinations, in a single contract, or (2) provided independently pursuant
      to
      separate contracts. Revenue recognition is dependent on the type of service
      provided to the customer: (1) for advertising agent services, the Company
      recognizes revenue at the end of each month in which the services were provided;
      (2) for both media consulting and advertising production services, the Company
      recognizes revenue upon the achievement of particular milestones set forth
      in
      the contract.




F-12


**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004





NOTE
      1 -  SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





Revenue
      Recognition Policy (Continued)





When
      two
      or more services are bundled together in a single contract, the recognition
      of
      revenue related to one deliverable is not contingent upon the provision of
      service or milestone achievement of any subsequent deliverable. The Company
      follows EITF 00-21 for recognizing revenues in instances involving the delivery
      or performance of multiple deliverables.





The
      Company may be required to refund the customer in the event of non-delivery
      of a
      service by the Company and if the customer does not otherwise extend the
      delivery deadline, accept substitute service, or choose another alternative
      as
      set forth in the contract. However, the Company is not required to refund any
      portions of amounts previously received because subsequent deliverables were
      not
      provided. At no point does the Company recognize any revenue when there is
      a
      possibility of having to refund anything to the customer.





The
      Company reports its revenue on a gross basis under the guidance of EITF 99-19,
      as (1) the Company is the primary obligor under the contracts with its suppliers
      and has the risks and rewards of a principal in these transactions; (2) the
      Company has latitude in establishing the price for services under its
      advertising contracts, and the net amount earned by the Company varies with
      each
      contract; (3) the Company is primarily responsible for the fulfillment of
      services ordered by the customer pursuant to the contract, including the portion
      of the services performed by the supplier with whom the Company separately
      contracts; (4) the Company has discretion in supplier selection.





Advertising
      expenses





Advertising
      expenses, which generally represent the cost of promotions to create or
      stimulate a positive image of the Company, are expensed as incurred. Advertising
      expenses included in general and administration expenses are advertising costs
      of $187,871, $0 and $0, for the years ended March 31, 2006, 2005 and 2004,
      respectively.





Bonus
      Plan





The
      Company has set up an over-performance related staff compensation system for
      all
      of its PRC operating subsidiaries. The bonus is computed on a specified
      percentage of income before bonuses. These bonuses charged to general and
      administrative expenses were $164,367, $0 and $0 for the years ended March
      31,
      2006, 2005 and 2004.





Other
      comprehensive income





Other
      comprehensive income is defined as the change in equity of a company during
      a
      period from transactions and other events and circumstances excluding
      transactions resulting from investments from owners and distributions to owners.
      Accumulated other comprehensive income at March 31, 2006 represented the
      cumulative foreign currency translation adjustment.


F-13


**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004








NOTE
      2 -  ACCOUNTS
      RECEIVABLE





Accounts
      receivable consisted of the following:


**March
                31,**
              **2006**
            
            **March
                31,**
              **2005**Accounts
              receivable - trade
            
            $
            9,289,096
            
            $
            4,757,902Allowance
              for doubtful accounts
            
            
            (703,667
            )
            
            (578,751
            )Accounts
              receivable, net
            
            $
            8,585,429
            
            $
            4,179,151





Bad
      debt
      expense for the year ended March 31, 2006, 2005 and 2004 was $104,272, $81,568
      and $459,721 respectively (See Note 7).








NOTE
      3
      -  PREPAID
      EXPENSES





At
      March
      31, 2006, the Company had prepaid expenses of $3,298,048. The Company enters
      into agreements with vendors to provide advertising services. Usually the
      agreements cover a period of time, and the vendors require the Company to pay
      in
      advance. The prepaid expenses are transferred to cost of sales after the service
      is provided by the vendors.








NOTE
      4 -  PROPERTY
      AND EQUIPMENT





The
      following is a summary of property and equipment, at cost, less accumulated
      depreciation:




**March
                31,**
              **2006**
            
            **March
                31,**
              **2005**Office
                equipment
            
            $
            623,719
            
            $
            71,540Vehicles
            
            
            497,629
            
            
            486,694Leasehold
                improvement
            
            
            45,115
            
            
            43,687Less
                accumulated depreciation
            
            
            (231,653
            )
            
            (114,015
            )$
            934,810
            
            $
            487,906





Depreciation
      expense for the year ended March 31, 2006, 2005 and 2004 was $ 112,773, $74,628
      and $17,132 respectively.








NOTE
      5 -  NOTES
      PAYABLES





Convertible
      Notes Payable




The
      Company issued a convertible note payable on September 26, 2001 in the amount
      of
      $3,000,000 to acquire a film rights license from Sun Television Cybernetworks
      Holding Ltd. (“Sun”). The film rights license that was acquired from Sun
      provided the Company with the right to the Film Library, consisting of the
      master recordings of segmented productions including programs produced by Sun
      and programs licensed to Sun. In December 2001, the Company renegotiated the
      terms of the agreement to convert the note payable into 261,838 shares of common
      stock at an agreed upon price of $11.466 per share.


F-14




**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004





NOTE
      5 -
      NOTES PAYABLES (Continued)





Convertible
      Notes Payable (Continued)





The
      Company issued a convertible note payable on October 12, 2001 in the amount
      of
      $1,000,000 to acquire non-exclusive access rights for three years to use the
      production facilities and production equipment of Sun and access to use Sun
      employees to operate and assist, until such time as the sum of $1,000,000 of
      relevant charge-out rates has been reached. Sun is also granting airtime on
      the
      Sun TV Channel for three years from the commencement of broadcasting (but not
      commencing later than November 30, 2001). In December 2001, the Company
      renegotiated the terms of the agreement to convert the note payable into 87,217
      shares of common stock at an agreed upon price of $11.466 per
      share.





The
      film
      rights and the non-exclusive access rights have been fully impaired. The terms
      of the conversion provisions of the agreement are “At any time within 5 years of
      the date of the Note, the Noteholder may by notice in writing to the principal
      place of business of the Issuer demand repayment or conversion into shares
      of
      common stock in the Issuer having a par value of US$0.01 each of the entire
      principal amount of the Note. Unless the Issuer and the Noteholder agree in
      their absolute discretion to repayment of the Note, within 10 business days
      of
      receipt of a duly signed Notice, the Issuer shall issue and allot Shares in
      the
      name of the Noteholder or its nominee as identified in the Notice.” The two note
      payables do not provide for interest nor do they provide for any repayment
      terms
      other than by conversion into common stock.





The
      two
      convertible note payables also contain a contingency to issue additional common
      shares if the market value stock price is below $11.466 per share when the
      converted shares are subsequently sold. When the contingency is triggered,
      the
      Issuer shall issue such number of additional common shares equal to Z based
      on
      the following formula:





(A-B)
      /
      Y=Z




Where:




A
      = the
      total number of Conversion Shares sold multiplied by the Agreed Price;




B
      = the
      total number of Conversion Shares sold multiplied by the Market Value on the
      day
      of completion of the sale;




Y=
      Market
      Value per share on the day of completion of the sale;




Z=
      Number
      of additional shares issued.




Under
      the
      formula, Conversion Shares means the shares to be issued to Sun upon exercise
      by
      Sun of its conversion rights under the Convertible Notes. Agreed Price means
      $11.466, the trigger price of the obligation to issue contingent additional
      common shares when the converted shares are subsequently sold. Market Value
      means the average reported sale price on the ten trading days prior to the
      relevant valuation date on which the shares are traded; if no such sale of
      shares was reported during such period, Market Value shall be the average of
      the
      reported ask and bid prices for such period.





The
      Company account for the conversion feature of the convertible note under the
      guidance of EITF 00-19: Accounting for Derivative Financial Instruments Indexed
      to, and Potentially Settled in, a Company's Own Stock. At March 31, 2006, the
      total approximate number of shares for which the notes could have been
      converted, amounted to 75,000,000 shares and 25,000,000 shares of common stock
      respectively.


F-15




**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004





NOTE
      5 -  NOTES
      PAYABLES (Continued)





Notes
      Payable




On
      October 18, 2005 the Company entered into a note payable with Jinan Haichen
      Real
      Estate Development Co., Ltd. (“JHRED”) in the amount of $316,993 to acquire
      office facility for SHCCA. The note should be repaid on a monthly basis no
      less
      than $ 12,480 per month and matured on October 17, 2007. At March 31, 2006,
      the
      unpaid note payable to JHRED is $254,593, which is subjected to the interest
      based on the current monthly bank rate.





At
      March
      31, 2005, the Company had a note payable to Shandong Laiyang Tongda Sinopec
      Sales Center, Shandong Zhenghe Jing Mao Co., Ltd., and Shandong Zhenghe
      International Exhibition Co., Ltd.in the amount of $181,269, $18,127 and $60,423
      respectively, which were all interest free.





The
      following is a maturity schedule for the next five years.





**Minimum
                Annual Payments**
            
            **March
                31,**
              ****2006****
            
            **March
                31,**
              ****2005****Within
                one year
            
            $
            4,149,761
            
            $
            4,259,819After
                one year but within two years
            
            
            104,832
            
            
            -$
            4,254,593
            
            $
            4,259,819








NOTE
      6 -
      CAPITAL STOCK





Common
      Stock




The
      Company has authorized 1,750,000,000 shares of common stock, $.001 par value.
      At
      March 31, 2006, the Company had 1,623,191,009 shares issued and 1,613,191,009
      shares outstanding.





Warrants/Options





The
      Company has no warrants/options issued and outstanding as of March 31, 2006
      and
      2005.




2001
      Stock Plan





During
      2001, the Board of Directors adopted a Stock Plan (“Plan”). Under the terms and
      conditions of the Plan, the board is empowered to grant stock options to
      employees, consultants, officers, and Board of Directors of the Company.
      Additionally, the Board will determine at the time of granting the vesting
      provisions and whether the options will qualify as Incentive Stock Options
      under
      Section 422 of the Internal Revenue Code (Section 422 provides certain tax
      advantages to the employee recipients). The Plan was approved by the
      shareholders of the Company on September 15, 2001. The total number of shares
      of
      common stock available under the Plan may not exceed 2,000,000. At March 31,
      2006 and 2005, no options were granted under the Plan.


F-16




**ASIA
      PREMIUM TELEVISION GROUP,
      INC AND SUBSIDIARIES**Notes to the Consolidated Financial
      Statements


March
      31, 2006, 2005 and 2004




NOTE
      6 -
      CAPITAL STOCK (Continued)





Development
      Fund




In
      2004,
      certain shareholders, directors, and officers entered into an agreement to
      establish a fund wherein 650 million shares of common stock would be returned
      by
      the shareholders to the Company for cancellation and reissuance as incentives
      to
      compensate new officers, directors and other management team members based
      on
      the management effort and performance decided by the three
      shareholders.





On
      July
      28, 2005, one of the shareholders returned 10,000,000 shares to the Company,
      which is treated as treasury stock at the face value and the premium as
      additional paid-in capital. The shares have been valued at a predecessor cost
      value of $0.001 per share. At present, only 10 million shares have been returned
      and no shares have been reissued. When the shares are reissued to management
      personnel, the Company will record the fair market value of the shares issued
      as
      compensation expenses.








NOTE
      7 -  BAD
      DEBT
      EXPENSES (RECOVERY)





The
      following is a summary of bad debt expenses (recovery):





**March
                31,**
              **2006**
            ****
            ****
            **March
                31,**
              **2005**
            ****
            ****
            **March
                31,**
              **2004**Accounts
                receivable (Note 2)
            
            $
            104,272
            
            $
            81,568
            
            $
            459,721Receivable
                from related party (Note 10)
            
            
            (44,834
            )
            
            (68,978
            )
            
            23,800Other
                receivables
            
            
            (86,413
            )
            
            723,674
            
            
            -$
            (26,975
            )
            $
            736,264
            
            $
            483,521




NOTE
      8 -  INCOME
      TAXES





The
      Company accounts for income taxes in accordance with Statement of Financial
      Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes” which
      requires the liability approach for the effect of income taxes.





United
      States operations




The
      Company has available at March 31, 2006 unused United States operating loss
      carryforwards of $407,465 which may be applied against future taxable income.
      The deferred tax assets, which consist of net operating losses, equal
      approximately $61,120 for the years ended March 31, 2006. The amount of and
      ultimate realization of the benefits from the operating loss carryforwards
      for
      income tax purposes is dependent, in part, upon the tax laws in effect, the
      future earnings of the Company and other future events, the effects of which
      cannot be determined. Because of the uncertainty surrounding the realization
      of
      the loss carryforwards the Company has established a valuation allowance equal
      to the tax effect of the deferred tax assets at March 31, 2006, therefore,
      no
      deferred tax asset has been recognized. The change in the valuation allowance
      is
      $19,462 for the year ended March 31, 2006 .




F-17




ASIA
      PREMIUM TELEVISION GROUP, INC AND
      SUBSIDIARIES


Notes
      to the Consolidated Financial
      Statements  March 31, 2006, 2005 and 2004




NOTE
      8 -  INCOME
      TAXES (Continued)





United
      States operations (Continued)




The
      temporary differences gave rise to the following deferred tax asset
      (liability):





**March
                31,**
              **2006**
            ****
            ****
            **March
                31,**
              **2005**Net
                operating loss carryover
              -
                federal
            
            $
            61,120
            
            $
            41,658Valuation
                allowance
            
            
            (61,120
            )
            
            (41,658
            )Deferred
                Tax Asset (Liability)
            
            $
            -
            
            $
            -





The reconciliation of income tax from
      continuing operations computed at the U.S. federal statutory tax rate to the
      Company’s effective rate is as follows for the year ended:




**March
                31,**
              **2006**
            ****
            **March
                31,**
              **2005**
            ****
            **March
                31,**
              **2****004**Computed
                tax at the expectedfederal
                statutory
            
            15%
            
            15%
            
            15%Valuation
                allowance
            
            (15)%
            
            (15)%
            
            (15)%Effective
                income tax rates
            
            
            -
            
            
            -
            
            
            -





Foreign
      operations




The
      Company has available at March 31, 2006, 2005 and 2004, unused PRC operating
      loss carryforwards of $1,480,600, $1,460,161 and $871,000, respectively, which
      may be applied against future taxable income. The deferred tax assets, which
      consist of bad debt allowance and net operating losses, equal approximately
      $488,600, $481,800 and $469,000 for the years ended March 31, 2006, 2005 and
      2004. The amount of and ultimate realization of the benefits from the operating
      loss carryforwards for income tax purposes is dependent, in part, upon the
      tax
      laws in effect, the future earnings of the Company and other future events,
      the
      effects of which cannot be determined. Because of the uncertainty surrounding
      the realization of the loss carryforwards the Company has established a
      valuation allowance equal to the tax effect of the deferred tax assets at March
      31, 2006, 2005 and 2004, therefore, no deferred tax asset has been recognized.
      The change in the valuation allowance is approximately $6,800, $12,800 and
      $(38,000) for the years ended March 31, 2006, 2005 and 2004,
      respectively.




Chinese
      tax law stipulates the corporate income tax is levied at 33%; and smaller
      businesses can enjoy more favorable rates. Newly established independently
      running advertising companies are exempt from corporate income tax for the
      first
      two years from the date of inception. The material differences between the
      effective tax rate and the statutory rate are the valuation allowance,
      nondeductible payroll benefits and net income or loss which is not subject
      to
      tax in the initial two years from inception.




Chinese
      tax law stipulates the net loss after tax adjustments can be carried forward
      for
      five fiscal years.




The
      income tax provision differs from the amount of income tax by applying the
      Chinese Corporate income tax rate of 33% to pretax income from continuing
      operations consisted of the following for the year ended:




F-18


**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004





NOTE
      8 -  INCOME
      TAXES (Continued)




Foreign
      operations (Continued)





**March
                31,**
              **2006**
            ****
            **March
                31, 2005**
            ****
            **March
                31, 2004**Current
                income tax expense:Book
                income
            
            $
            418,411
            
            $
            215,922
            
            $
            9,095Bad
                debt expense (recovery)
            
            
            (8,902
            )
            
            (53,177
            )
            
            159,562Entertainment
            
            
            11,698
            
            
            4,274
            
            
            1,492Payroll
                related expenses
            
            
            116,184
            
            
            141,761
            
            
            33,462Interest
                expense
            
            
            (2,232
            )
            
            6,710
            
            
            -Accrued
                bonuses
            
            
            54,241
            
            
            -
            
            
            -Other
            
            
            1,995
            
            
            25,391
            
            
            -Net
                operating loss from loss entities
            
            
            15,568
            
            
            -
            
            
            -Tax
                exempt income
            
            
            (584,971
            )
            
            (339,398
            )
            
            (201,001
            )Tax
                expense
            
            $
            21,992
            
            $
            1,483
            
            $
            2,610Deferred
                tax expense (benefit) resulted from:Excess
                of tax over financial accounting net operating loss
            
            $
            -
            
            $
            -
            
            $
            -Valuation
                allowance
            
            
            (6,800
            )
            
            (12,800
            )
            
            38,000Allowance
                for bad debts
            
            
            6,800
            
            
            12,800
            
            
            (38,000
            )Net
                deferred tax expense
            
            $
            -
            
            $
            -
            
            $
            -




The temporary differences gave rise to the following deferred tax asset
      (liability):





**March
                31,**
              **2006**
            ****
            ****
            **March
                31,**
              **2005**Net
                operating loss carryover
            
            $
            15,600
            
            $
            15,100Allowance
                for bad debt
            
            
            473,000
            
            
            466,700Others
            
            
            -
            
            
            -Valuation
                allowance
            
            
            (488,600
            )
            
            (481,800
            )Deferred
                Tax Asset (Liability)
            
            $
            -
            
            $
            -


F-19


**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004





NOTE
      9
      -  OPERATING
      LEASES





The
      Company has entered into two building leases for its offices in Beijing and
      Ji’nan. The Beijing facility lease expires on August 31, 2006. The Ji’nan
      facility lease expires on April 30, 2006. The combined lease expense for the
      years ended March 31, 2006, 2005 and 2004 amounted to $116,665, $70,197 and
      $49,786, respectively. The following is a schedule of minimum annual rental
      payments for the next five years.





**Minimum
              Annual Payments**
            
            **March
                31,**
              **2006**
            ****
            **March
                31,**
              **2005**Within
                one year
            
            $
            19,269
            
            $
            42,681







NOTE
      10
      -  RELATED
      PARTY TRANSACTIONS





Receivable
      from related party





The
      receivables from related party mainly include the advances to staff, and are
      carried at the expected realizable value. Receivables from related party
      consisted of the following:





**March
                31,**
              **2006**
            
            **March
                31,**
              **2005**Receivables
                from related party
            
            $
            105,383
            
            $
            326,426Allowance
                for doubtful accounts
            
            
            (70,016
            )
            
            (111,922
            )Receivables
                from related party, net
            
            $
            35,367
            
            $
            214,504





Bad
      debt
      expense (recovery) for the years ended March 31, 2006, 2005 and 2004 was
      $(44,834), $(68,978) and $23,800 respectively (See Note 7).





Accounts
      Payable




The
      Company has accounts payable to related parties at March 31 2006 and 2005 of
      $
      80,060 and $95,467 respectively.








Management
      Compensation




For
      the
      years ended March 31, 2006, 2005 and 2004, the Company expensed $77,225,
      $104,411 and $36,012 respectively, for services as management
      compensation.





Accrued
      Expenses




At
      March
      31, 2006, unpaid payroll due to current officers and shareholder/former
      officer/director is $18,715 and unpaid bonus to employees is $164,367, which
      are
      included within accrued expenses on the face of the balance sheet.  At
      March
      31 2005, unpaid payroll due to current officers and shareholder/former
      officer/director included within accrued expenses was $88,338.


F-20


**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004





NOTE
      11
      -  COMMITMENTS
      AND CONTINGENCIES





Operational
      Agreements





The
      Company routinely enters into various consulting arrangements as part of their
      operations primarily related to marketing communication and brand promotion
      services to customers from industries such as real estate, banking, and
      cosmetics.





Net
      Income Guarantee




In
      connection with the acquisition of “BAHA” by Parent, three shareholders
      guaranteed that the profit of “BAHA”. should be no less than US$1.5 million for
      each of the two years ending on the first and second anniversary of the
      completion date of the acquisition. In the event that “BAHA”. does not generate
      the guaranteed net income, the shareholders have agreed to contribute an amount
      equal to the difference.





In
      connection with the acquisition of “BHCA” by Parent, two shareholders guaranteed
      that the profit of “BHCA” should be no less than RMB$8 million, approximately
      US$1 million for each of the two years ending on the first and second
      anniversary of the completion date of the acquisition. In the event that “BHCA”
do not generate the guaranteed net income, the shareholders have agreed to
      contribute an amount equal to the difference.





By
      the
      terms of the agreements, the above guarantees expire on July 8, 2006. Due to
      significant changes in the fair value of ASTV following our acquisition of
      BAHA
      and BHCA, we have agreed to abandon the right to enforce the guarantees. We
      intend to sign an agreement canceling the guarantees after July 8,
      2006.





Anti-Dilution
      Agreement




A
      shareholder previously received an anti-dilution agreement for a period of
      one
      year.  For any issuances of common stock by the Company, the shareholder
      was to receive an issuance of common stock sufficient to maintain a seven
      percent (7%) ownership in the Company.  The Company has made various
      issuances as part of the anti-dilution agreement.  On December 15, 2003
      (effective November 4, 2003) the Company extended the agreement indefinitely
      for
      as long as the shareholder does not voluntarily sell shares of common stock
      that
      causes its percentage ownership to fall below seven percent (7%), or as defined
      and agreed in cases of major acquisitions by the Company in which all parties
      may waive their rights under the anti-dilution agreement. In August 2005, the
      Company finalized general release agreements with the shareholders and a former
      officers/directors. The agreements state that the Company pays $30,000 and
      they
      agreed to cancel the above anti-dilution agreement and also settled accrued
      salary of $81,571.





The
      Company entered into a shareholder loan settlement agreement of $30,000 from
      a
      shareholder to finalize the general release agreement in July 2005. On August
      9,
      2005, 1,629,331 shares of common stock was issued to the shareholder to repay
      the $30,000 loan and previous $27,027 payables owed according to the shareholder
      loan settlement agreement at the market price of $0.035 per share.




F-21


**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004





NOTE
      12
      -CONCENTRATIONS




Sales




For
      the
      year ended March 31, 2006, the Company had one significant customer which
      accounted for 69% of sales.




For
      the
      year ended March 31, 2005, the Company had two significant customer which
      accounted for 52%, and 10% of sales.




For
      the
      year ended March 31, 2004, the Company had one significant customer which
      accounted for 50% of sales.




Cost
      of Sales




The
      cost
      of sales during the year ended March 31, 2006, 2005 and 2004 were $58,402,504,
      $45,282,789 and $40,173,644. Cost associated with China Central TV Station
      (CCTV) accounted for 24%, 25% and 10% of the cost of sales respectively.




Accounts
      Receivable




At
      March
      31, 2006, the Company had one customer which accounted for 79% of the Company’s
      accounts receivable balances.





At
      March
      31, 2005, the Company had two customers which accounted for 20%, and 11% of
      the
      Company’s accounts receivable balances respectively.





Foreign
      Operations




All
      of
      the Company’s operating activities are located in the People’s Republic of
      China.





NOTE
      13
      -EARNINGS PER SHARE





The
      following data show the amounts used in computing income per share and the
      effect on income and the weighted average number of shares of dilutive potential
      common stock for the years ended March 31, 2006, 2005 and 2004.






**For
                The Years Ended**
              **March
                31,****2006**
            
            **2005**
            
            **2004**Income
                available to common shareholders (Numerator)
            
            $
            1,116,177
            
            $
            340,459
            
            $
            24,952Weighted
                average number of common shares outstanding used in earnings per
                share
                during the period (Denominator)
            
            
            1,615,843,576
            
            
            1,621,561,678
            
            
            750,000,000Weighted
                average number of common shares outstanding used in diluted earnings
                per
                share during the period (Denominator)
            
            
            1,715,843,576
            
            
            1,701,561,678
            
            
            N/A


F-22




**ASIA
      PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2006, 2005 and 2004





NOTE
      14
      -GOING CONCERN FACTORS





At
      March
      31, 2006, the Company had a working capital deficiency of $3,538,720 which
      would
      have raised substantial doubt about the Company’s ability to continue as a going
      concern. However, management believes the going concern is mitigated because
      of
      the following factors: a) Convertible notes payable in the amount of $4,000,000
      is included in current liabilities but the note is held by a significant
      shareholder and will be repaid by conversion into common stock, b) the Company
      has shown a net profit in each of the two most recent fiscal years and expects
      the trend to continue, and, c) the Company has generated positive cash flows
      in
      each of the two most recent fiscal years and expects the trend to continue.







NOTE
      15
      -SUBSEQUENT EVENTS





On
      Apr
      28, 2006, Tibet Hongzhi Advertising Co., Ltd. was organized under the laws
      of
      the People’s Republic of China as a wholly-owned subsidiary of
      BHCA.




F-23




**SIGNATURES**





In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
      caused this Annual Report to be signed on its behalf by the undersigned,
      thereunto duly authorized.




**ASIA
      PREMIUM TELEVISION GROUP, INC.**


Date: June 28, 2006
              By: /s/
                Qiang JiangQiang JiangChief Executive OfficerDate: June 28, 2006
              By: /s/
                Bulin MiaoBulin MiaoFinance Manager






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






Date: June 28, 2006
            By: /s/
              Li LiLi LiChairman and DirectorDate: June 28, 2006
            By: /s/
              Qiang JiangQiang JiangDirectorDate: June 28, 2006
            By:/s/
              Yan GongYan GongDirectorDate: June 28, 2006
            By: /s/
              Min WeiMin WeiDirector





25