10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-K

S

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

For the Fiscal Year ended March 31, 2007

£

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  S 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  S 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.   S 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.   S

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 filer S

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

The aggregate market value of the registrant's voting common stock held by non-affiliates as of September 30, 2006 based upon the closing price reported for such date on the OTC Bulletin Board, was US$10,563,773.

As of June 19, 2007, the registrant had 1,613,297 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

Page

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. (“THZA”) was organized under the laws of China as a wholly-owned subsidiary of BHCA.

In July 2006, we sold 95% of our interests in our subsidiaries BAQM to a third party and 5% to a shareholder.

In March 2007, we carried out a reverse-split, where 1,000 shares of Common Stock, either issued and outstanding or held by the Company as treasury stock, immediately prior to the record date was reclassified and changed into one fully-paid and non-assessable share of Common Stock.

2

Material Developments

On June 19, 2007, our largest shareholder transferred his shares to Hershop.com Ltd. (BVI) and Global Women Multi-Media Co., Ltd. (BVI) and he no longer owns shares in the company.  In connection with the transfer of shares, two of our directors, Jiang Qiang and Miao Bulin, resigned from the board of directors at a board meeting held on June 19, 2007.  At the same meeting, Hershop.com Ltd. (BVI) and Global Women Multi-Media Co., Ltd. (BVI) appointed Xing Jing and Yu Huiyang as members of the board of directors, and the board appointed Douglas Toth as an independent director.  

After the board meeting we filed a form 8-K with further information on these developments.

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.

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.

3

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, 2007, we had one significant advertising customer which accounted for 64% 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 five 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 eight 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 International Advertising Magazine and International Advertising Institute in July 2006, we ranked eleventh among all advertising companies in China

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 19, 2007, we had 119 full-time employees located in China. Our employees sign one year labor contracts with us which are subject to annual renewal.

4

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.

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, 2007, one customer accounted for 64% of our total sales. In the fiscal year ended March 31, 2006, sales to one customer accounted for approximately 69% 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 experience 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 expose d 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.

5

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.

 Hershop.com Ltd. (BVI) and Global Women Multi-Media Co., Ltd. (BVI) own a large percentage of our outstanding common shares and may have the ability to influence matters requiring shareholder approval.

As of June 21, 2007, Hershop.com Ltd. (BVI) and Global Women Multi-Media Co., Ltd. (BVI) collectively owned 46.48% of our outstanding common shares. As such, Hershop.com Ltd. (BVI) and Global Women Multi-Media Co., Ltd. (BVI), if they chose to act in concert with respect to these shares, could have 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 shareholders will exercise their 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.

6

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.

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.

7

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 ite ms. 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.

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 6.4% accumulated appreciation of the Renminbi against the U.S. dollar up to March 31, 2007. 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.

8

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, 2007 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 10 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, 2007. Matters submitted to a vote of security holders earlier in the fiscal year ended March 31, 2007 have been disclosed in our Form 10-Q filings.

PART II

ITEM 5

MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

As of May 31, 2007, our common stock was listed on the Over the Counter Bulletin Board under the symbol “ATVG” and we had approximately 92 shareholders holding 1,613,297 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.  

9

DATE	CLOSING BID		CLOSING ASK
	HIGH	LOW	HIGH	LOW
	(in US$)
2004
First Quarter	70	30	100	40
Second Quarter	50	20	70	25
Third Quarter	25	16	35	25
Fourth Quarter	50	13	60	14
2005
First Quarter	65	30	90	45
Second Quarter	35	30	45	38
Third Quarter	32	32	38	38
Fourth Quarter	32	20	38	25
2006
First Quarter	40	13	45	20
Second Quarter	26	20	40	30
Third Quarter	80	20	120	30
Fourth Quarter	41	7	53	90
2007
First Quarter	7	2.5	9	3

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. As of March 31, 2007, no options had been granted under the 2001 Stock Plan.

Sales of Unregistered Securities

On August 9, 2005, we issued 1,629 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 $35 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.

10

Repurchase of Equity Securities

We did not repurchase any securities within the fiscal year ended March 31, 2007.

ITEM 6

SELECTED FINANCIAL DATA

The following table sets forth selected historical consolidated financial data for the years ended March 31, 2003, 2004, 2005, 2006 and 2007. 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, 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, 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,
	2007	2006	2005	2004(1)	2003(1)
	(in US$, except number of shares and other data)
Consolidated Statement of Operations Data :
Total revenues	65,733,578	61,793,864	48,228,470	41,800,113	11,031,068
Total cost of sales	62,282,688	58,402,504	45,282,789	40,173,644	11,100,311
Total expenses	942,532	2,288,879	2,587,055	1,637,120	744,033
Income (loss) from operations before other         income (expense)	2,508,358	1,102,481	358,626	(10,651)	(813,276)
Total other income (expense)	96,176	35,688	(16,684)	38,213	8,909
Income (loss) before income taxes	2,604,534	1,138,169	341,942	27,562	(804,367)
Net income (loss)	2,564,432	1,116,177	340,459	24,952	(804,947)
Net income (loss) per share (2)	1.59	0.69	0.21	0.03	(1.07)
Weighted average number of ordinary shares outstanding (2)	1,613,191	1,615,844	1,621,562	750,000	750,000
Consolidated Balance Sheet Data:
Total assets	16,051,801	16,179,000	10,805,406	11,920,281	3,098,889
Total liabilities	16,088,029	18,881,824	14,756,526	11,894,290	3,097,850
Total shareholders’ equity (deficit)	(36,228)	(2,702,824)	(3,951,120)	25,991	1,039
Other Data:
Net cash provided by operating activities	1,953,426	2,080,229	569,315	600,203	(601,356)
Net cash used by investing activities	(279,319)	(482,367)	(325,704)	(95,580)	(47,557)
Net cash provided (used) by financing activities	499,590	200,410	(190,685)	460,974	404,756

Notes

(1)

The financial data for the fiscal years ended March 31, 2004 and 2003 are those of our subsidiary BAHA and its wholly owned subsidiaries.

(2)

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

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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, 2005, 2006 and 2007. 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, 2005, 2006 and 2007, we had total revenues in the amount of US$48.2 million, US$61.8 million and US$65.8 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.

12

Cost of Sales

For the fiscal years ended March 31, 2005, 2006 and 2007, our cost of sales were US$45.3 million, US$58.4 million and US$62.2 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 prepa id expenses are transferred to our cost of sales. As of March 31, 2007, we had prepaid expenses in the amount of US$1.4 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, 2005, 2006 and 2007, due to our current operating model our cost of sales represented 93.9%, 94.5% and 94.8% 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, 2005, 2006 and 2007, our operating expenses were US$2.6. million, US$2.3 million and US$0.9 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.

13

Results of Operations

Fiscal Year ended March 31, 2007 Compared to Fiscal Year ended March 31, 2006

Total Revenues. Our total revenues for the fiscal year ended March 31, 2007 increased by 6.37% to US$65.8 million as compared to US$61.8 million for the fiscal year ended March 31, 2006. This was primarily due to increased revenues from the addition of new customers throughout the fiscal year ended March 31, 2007.

Cost of Sales. Our cost of sales increased by 6.64% during the fiscal year ended March 31, 2007 to US$62.2 million as compared to US$58.4 million for the fiscal year ended March 31, 2006. This increase in our cost of sales corresponded with the 6.37% increase in our revenues for the fiscal year ended March 31, 2007.

Gross Profit. As a result of the foregoing, our gross profit for the fiscal year ended March 31, 2007 increased by 1.75% to US$3.5 million as compared to US$3.4 million for the fiscal year ended March 31, 2006. Our gross profit margin ratio decreased slightly from 5.5% for the year ended March 31, 2006 to 5.2% for the year ended March 31, 2007.

Total Expenses. Our total expenses for the fiscal year ended March 31, 2007 were US$0.9 million which consisted primarily of general and administrative expenses of US$1.5 million, and a bad debt recovery of US$0.7 million. This represented a decrease of 58.82% from our total expenses of US$2.3 million for the fiscal year ended March 31, 2006, which was primarily the result of an increase in bad debt recovery by US$0.6 million from 2006 to 2007 and a decrease in general and administrative expenses in the amount of US$0.7 million from 2006 to 2007. The increase in bad-debt recovery for the fiscal year ended March 31, 2007 was mainly due to a decrease in average aging of our accounts receivable as a result of increased efforts expended on debt collection. The decrease in general and administrative expenses corresponded with our effort to control expenses for the fiscal year ended March 31, 2007.

Income Before Income Taxes. Our income before income taxes was US$2.6 million for the year ended March 31, 2007 compared to US$1.1 million for the fiscal year ended March 31, 2006.

Net Income. As a result of the foregoing, our net income increased by 129.7% to US$2.6 million for the fiscal year ended March 31, 2007 from US$1.1 million for the fiscal year ended March 31, 2006.  

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.

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$3.3 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.

14

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 the combined 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.

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, 2005, 2006 and 2007:

	Fiscal Year ended March 31,
	2007	2006	2005
	US$	US$	US$
Net cash provided by operating activities	1,953,426	2,080,229	569,315
Net cash used by investing activities	(279,319)	(482,367)	(325,704)
Net cash provided (used) by financing activities	499,590	200,410	(190,685)
Effect of exchange rate change on cash	103,011	36,346	-
Net increase in cash and cash equivalents	2,276,708	1,834,618	52,926
Cash and cash equivalents (closing balance)	5,209,406	2,932,698	1,098,080

Our total assets as of March 31, 2007 were US$16.1 million. Our total liabilities as of March 31, 2007 were US$16.1 million. Liabilities consisted primarily of US$9.7 million in accounts payable and US$4.1 million in notes and convertible notes payable.

Our net cash provided by operating activities did not change significantly in the fiscal year ended March 31, 2007 as compared to the fiscal year ended March 31, 2006. 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.

Our net cash used by investing activities decreased to US$0.3 million for the fiscal year ended March 31, 2007 compared to net cash used by investing activities of US$0.5 million for the fiscal year ended March 31, 2006, due primarily to decreases in payments for property and equipment.

Our net cash used by investing activities increased to US$0.5 million for the fiscal year ended March 31, 2006 compared to net cash used by investing activities of US$0.3 million for the fiscal year ended March 31, 2005. This was primarily due to increased payments for property and equipment.

15

Net cash provided by financing activities was US$0.5 million in the fiscal year ended March 31, 2007, as compared to net cash provided by financing activities of US$0.2 million for the fiscal year ended March 31, 2006. This increase was primarily due to short-term loans received from Ji’nan Commercial Bank Wenxi Branch. Net cash provided by financing activities was US$0.2 million in the fiscal year ended March 31, 2006, as compared to net cash used by financing activities in the amount of US$0.2 million during the fiscal year ended March 31, 2005.

Contractual Obligations

On October 23, 2006, we entered into a six-month bank loan with Ji’nan Commercial Bank Wenxi Branch in the amount of $387,552 to raise funds for our advertising business. BAHA and its legal representative provided guarantees on the loan. The loan bore a monthly interest at the rate of 0.604% and was fully repaid on April 10, 2007.

On November 29, 2006, we entered into a one-year bank loan with Ji’nan Commercial Bank Wenxi Branch in the amount of $258,368 to raise funds for our advertising business. The collateral of the loan is the office facility of SHCCA. The loan bears monthly interest at the rate of 0.6825%.

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, 2007, the outstanding amount on the note payable to JHRED was US$108,514, which bears interest at the current monthly bank rate in China.

At March 31, 2007, we had two convertible notes payable totaling US$4,000,000, however, the conversion provision expired on December 31, 2006. 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, 2007:

	Payments due by period
Contractual Obligation	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years
	US$	US$	US$	US$	US$
Capital expenditure	-	-	-	-	-
Operating leases	23,777	23,777	-	-	-
Short-term debt	4,754,434	4,754,434	-	-	-
Long-term debt	-	-	-
Total	4,778,211	4,778,211	-	-	-

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.

16

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.  

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.

17

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 liab ility 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, 2007, we had an outstanding note payable in the amount of US$108,514 which is subject to a variable interest rate, and two short-term loans in the amount of US$387,552 and $258,368, which are subject to a monthly interest at the rate of 0.604% and 0.6825%, respectively. 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.

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

	For the year ended March 31,
	2007	2006	2005(1)
Net foreign exchange gain	102,164	$ 23,418	-
Percent of revenue	0.15%	0.04%	-
Percent of profit from income before taxes	3.92%	2.06%	-

________________

(1)

The Renminbi remained pegged to the U.S. dollar until July 21, 2005.

18

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.

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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
Jing Xing	40	Director	June 2008
Li Li	44	Chairman and Director	June 2008
Yan Gong	43	Chief Executive Officer and Director	June 2008
Hongmei Zhang	42	Finance Manager	June 2008
Huiyang Yu	26	Director	June 2008
Douglas J. Toth	46	Director	June 2008

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

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 and served as our Chief Executive Office since July 2006. 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.  

Hongmei Zhang has served as our Finance Manager from July 2006. From 1998 to June 2006, Ms. Zhang worked for our subsidiary BAHA first as chief accountant, then Vice-Finance Manager and subsequently as Finance Manager.

Jing Xing has served has a director since June 2007.  Since 2006, Mr. Xing has served as president of Sun New Media Inc., president of investment business at Sun Media Investment Group, chairman of the board of Sun Capital Consultant Ltd,  and as the CEO of China Media Tradex Limited.  From 2003 to 2006, Mr. Xing served as chairman, vice chairman, executive director and CEO of SMI Corporation Ltd. ( formerly known as Star East Holdings Limited, HK listing symbol 198 ).  From 2003 to 2006 he also served as executive director of Stellar Megamedia Group Limited.  From 2003 to 2005, Mr. Xing served as executive director & general manager of Sun TV, chairman and executive director of SMI Publishing Group Limited ( HK listing symbol 8010 ), and as vice chairman and executive director of M-Channel Limited (HK listing symbol 8036).  Since 2000, Mr. Xing has served as the vice chairman and executive dire ctor of a newspaper in Beijing, the People’s Republic of China called the Beijing Daily Messenger.  From 1999 to 2005, Mr. Xing was the chairman and CEO of Beijing KP Network Technical Co. Ltd..  Mr. Xing holds master degree of science from the Beijing Software Graduate School of Beijing University.

20

Huiyang Yu has served as a director since June 2007. Since 2005, Mr. Yu has been self-employed as a consultant in brand marketing. From 2003 to 2005, Mr. Yu served as sales manager for Germany Vaillant Group. Mr. Yu holds a bachelors degree from the Beijing Second Foreign Language University

Douglas J. Toth  has served as a director since June 2007.  Since 2002, Mr. Toth has served as CEO of Groupmark Financial Ltd..  From 1998 to 2002, Mr. Toth served as a director of Somerset Financial Group. Additionally, he has knowledge of financial and SEC reporting. Mr. Toth studied theoretical mathematics at Rutgers University and finance at the New York Institute of Finance.

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, 2007, we paid US$59,976 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.

The following table sets forth the compensation paid in respect of the years ended March 31, 2005, 2006 and 2007 to our Chief Executive Officer, to each of the three other most highly paid officers and to each of our directors.

21

NAME AND PRINCIPAL POSITION	YEAR	SALARY (US$)	BONUS (US$)	OTHER ANNUAL COMPENSATION
Qiang Jiang(1)	2005	$ 14,857	-0-	-0-
Chief Executive Officer and Director	2006	$ 15,214	-0-	-0-
	2007	-0-	-0-	-0-
Li Li	2005	$28,586	-0-	-0-
Chairman and Director	2006	$29,194	-0-	-0-
	2007	$29,993	-0-	-0-
Yan Gong	2005	$23,982	-0-	-0-
Chief Executive Officer and Director	2006	$24,031	-0-	-0-
	2007	$23,942	-0-	-0-
Hongmei Zhang	2005	$5,145	-0-	-0-
Financial Manager	2006	$5,313	-0-	-0-
	2007	$6,571	-0-	-0-
Chuan He	2005	$10,759	-0-	-0-
Media Planning Manager	2006	$10,676	-0-	-0-
	2007	$12,866	-0-	-0-
Dapeng Sun	2005	$4,762	-0-	-0-
Customer Service Manager	2006	$4,918	-0-	-0-
	2007	$6,503	-0-	-0-

___________________________________

⁽¹⁾

^{Qiang Jiang ceased to be our Chief Executive Officer on June 30, 2006, and ceased to be our director on June 19, 2007.}

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 shares to us. These shares have been cancelled but had not been re-issued to any management personnel as of March 31, 2006.

ITEM 12

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of June 19, 2007, the number and percentage of the 1,613,297 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.

22

TITLE OF CLASS	NAME AND ADDRESS OF BENEFICIAL OWNER	AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP	PERCENT OF CLASS
Common	Hershop.com Ltd. (BVI) P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands	281,251	17.43%
Common	Global Women Multi-Media Co., Ltd. (BVI) P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands	468,751	29.05%
Common	Jing Xing(1) 73 Jupiter Road Singapore, 576550	-0-	-0-
Common	Huiyang Yu(1) Room 406,New Four Building,Baojia street,Xicheng district,Beijing, China	-0-	-0-
Common	Douglas J. Toth(1) 1120 6th Ave. 4th Floor New York, NY 10032	-0-	-0-
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	Faithhill Investments Limited (2) P.O. Box 957 Offshore Incorporations Centre Road Town Tortola, BVI	204,235	12.65%
Common	Vesto Pacific Holdings, Ltd. 10th Floor, Hutchison House 10 Harcourt Road Hong Kong	200,001	12.39%
Common	Sun New Media Inc. No 5 Bldg Shiqiao, World Apt 1st Fl, Dongsanhuan Road, Beijing, People’s Republic of China	99,630	6.17%
Common	Beijing Shengshi Chuanren Advertising Co., Ltd. 5 Bei Feng Xiang Technology Development Zone, Yangsong Town, Huairou, Beijing People’s Republic of China	96,766	5.99%
Common	Capital Holdings, LLC 5882 South 900 East, Ste 202 Salt Lake City, UT 84121	83,616	5.18%
Common	Officer and Directors as a Group: 5 persons	0	0

__________________________

⁽¹⁾

Officer or director of the Company.

⁽²⁾

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

23

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 shares of our common stock, valued at the market price of $35 per share, to Mr. Wu as repayment for the loans in the amount of US$30,000 and US$27,027.

24

ITEM 14

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

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, 2006 and US$90,000 for the fiscal year ended March 31, 2007.  

Audit-Related Fees

There were no audit-related fees billed by our principal accountant during the fiscal year ended March 31, 2007. 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.

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.

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.

25

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	Bylaws (3)
10.1	Convertible Promissory Note(4)
10.2	Convertible Promissory Note (4)
10.3	Registration Rights Agreement(4)
14.1	Code of Ethics(5)
21.1	List of Subsidiaries
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Finance Manager pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of 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 on December 9, 2002.

⁽³⁾

Incorporated by reference to our Annual Report on Form 10-KSB for the year ended December 31, 2006, filed on   June 28, 2006.

⁽⁴⁾

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

⁽⁵⁾

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

26

INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Beijing, China

We have audited the consolidated balance sheets of Asia Premium Television Group, Inc. and subsidiaries as of March 31, 2007 and 2006 and the related consolidated statements of income, comprehensive loss, stockholders equity (deficit) and cash flows for each of the three years in the period ended March 31, 2007.  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 provided 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, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2007, in conformity with U.S. generally accepted accounting principles.  

/s/ HJ &Associates, LLC

HJ & Associates, LLC

Salt Lake City, Utah

May 25, 2007

F-2

ASIA PREMIUM TELEVISION GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

ASSETS
		March 31, 2007		March 31, 2006
CURRENT ASSETS
Cash	$	5,209,406	$	2,932,698
Short-term investment		25,931		-
Accounts receivable, net of allowance for doubtful accounts (Note 2)		8,049,236		8,585,429
Receivable from related party, net of allowance  for doubtful accounts (Note 11)		36,874		35,367
Other receivables, net of allowance for doubtful accounts		244,190		377,037
Prepaid expenses (Note 3)		1,449,404		3,298,048
Other current assets		30,370		9,693
Total Current Assets		15,045,411		15,238,272
PROPERTY AND EQUIPMENT, NET (Note 4)		1,006,390		934,810
OTHER ASSETS		-		5,918
Total Assets	$	16,051,801	$	16,179,000
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable	$	9,720,917	$	10,181,968
Accounts payable – related party (Note 11)		70,693		80,060
Accrued expenses		451,001		467,455
Customer deposits		828,778		1,117,725
Other payables		262,206		2,780,023
Short-term loan (Note 5)		645,920		-
Notes payable, current (Note 6)		108,514		149,761
Convertible notes payable (Note 6)		4,000,000		4,000,000
Total Current Liabilities		16,088,029		18,776,992
NON CURRENT LIABILITIES
Notes payable (Note 6)		-		104,832
Total Liabilities	$	16,088,029	$	18,881,824
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value, 1,750,000,000 shares authorized, 1,623,297 and 1,623,191 shares issued, 1,613,297 and 1,623,191 shares outstanding		1,623		1,623
Less: Treasury stock at cost		(10)		(10)
Capital in excess of par value (deficit)		(2,453,719)		(2,453,719)
Accumulated other comprehensive income		125,582		23,418
Retained earnings (deficit)		2,290,296		(274,136)
Total Stockholders' Equity (Deficit)		(36,228)		(2,702,824)
Total Liabilities and Stockholders’ Equity (Deficit)	$	16,051,801	$	16,179,000

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

F-3

ASIA PREMIUM TELEVISION GROUP, INC. AND SUBSIDIARIES

Consolidated Statements Of Operations

		For the Years Ended March 31
		2007		2006		2005
REVENUE	$	65,733,578	$	61,793,864	$	48,228,470
COST OF SALES		62,282,688		58,402,504		45,282,789
GROSS PROFIT		3,450,890		3,391,360		2,945,681
General and administrative		1,464,695		2,203,081		1,776,163
Bad debt expenses (recovery) (Note 8)		(678,480)		(26,975)		736,264
Depreciation		156,317		112,773		74,628
Total Expenses		942,532		2,288,879		2,587,055
INCOME (LOSS) BEFORE OTHER INCOME (EXPENSE)		2,508,358		1,102,481		358,626
OTHER INCOME (EXPENSE)
Gain on disposal of assets		6,637		689		-
Gain on extinguishments of debts		88,515		-		-
Interest expense		(24,181)		(6,206)		(36,254)
Interest income		45,961		47,622		17,019
Other income (expense)		(20,756)		(6,417)		2,551
Total Other Income (Expense)		96,176		35,688		(16,684)
INCOME BEFORE INCOME TAXES		2,604,534		1,138,169		341,942
CURRENT INCOME TAX EXPENSE (Note 9)		40,102		21,992		1,483
NET INCOME	$	2,564,432	$	1,116,177	$	340,459
BASIC INCOME PER SHARE (Note 14)	$	1.59	$	0.69	$	0.21
DILUTED EARNINGS PER COMMON SHARE (Note 14)	$	1.59	$	0.65	$	0.20

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

F-4

ASIA PREMIUM TELEVISION GROUP, INC. AND SUBSIDIARIES

Consolidated Statements Of Stockholders' Equity (Deficit)

	Common Stock				Capital in excess of par value (deficit)		Accumulated other comprehensive income		Retained Earnings (Deficit)		Total Stockholders’ equity (Deficit)
	Shares		Dollars
Balance, March 31, 2004	750,000		750		1,756,013		-		(1,730,772)		25,991
Recapitalization of Subsidiaries (Note1)	871,668		871		(4,318,441)		-		-		(4,317,570)
Net income for the year   ended March 31, 2005	-		-		-		-		340,459		340,459
Balance, March31, 2005	1,621,668		1,621		(2,562,428)		-		(1,390,313)		(3,951,120)
Shares issued for debt	1,629		2		57,024		-		-		57,026
Treasury Stock	(10,000)		(10)		10		-		-		-
Debt forgiveness	-		-		51,675		-		-		51,675
Foreign Currency translation Adjustment	-		-		-		23,418		-		23,418
Net income for the year   ended March 31, 2006	-		-		-		-		1,116,177		1,116,177
Balance, March 31,2006	1,613,297		1,613		(2,453,719)		23,418		(274,136)		(2,702,824)
Foreign Currency    translation Adjustment	-		-		-		102,164		-		102,164
Net income for the year   ended March 31, 2007	-		-		-		-		2,564,432		2,564,432
Balance, March 31,2007	1,613,297	$	1,613	$	(2,453,719)	$	125,582	$	2,290,296	$	(36,228)

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

F-5

ASIA PREMIUM TELEVISION GROUP, INC. AND SUBSIDIARIES

Consolidated Statements Of Cash Flows

		For The Years Ended March 31
		2007		2006		2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,564,432	$	1,116,177	$	340,459
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		156,317		112,773		74,628
Bad debt expense		(678,480)		(26,975)		736,264
Gain on disposal of assets		13,670		(689)		-
Changes in assets and liabilities:
(Increase) in accounts receivable & other receivable		1,301,530		(3,947,491)		(1,411,819)
Decrease (Increase) in prepaid expense		1,848,646		511,338		2,176,608
Decrease (Increase) in other current assets		(20,677)		16,561		(26,254)
Decrease (Increase) in other non-current assets		5,918		5,439		(11,357)
Increase (Decrease) in accounts payable & other payable		(2,978,868)		4,118,362		(503,954)
Increase in accounts payable-related party				-		-
Increase in accrued expenses		(16,454)		135,679		92,196
Increase (Decrease) in customer deposits		(288,948)		590		(897,456)
Exchange gain		46,340		38,465		-
Net Cash Provided by Operating Activities		1,953,426		2,080,229		569,315
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property and equipment		(260,275)		(569,376)		(400,629)
Proceeds from disposal of property and equipment		6,886		4,834		-
Proceeds from (payments for) note receivable		(25,930)		82,175		74,925
Net Cash Used by Investing Activities		(279,319)		(482,367)		(325,704)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term loan		645,920		-		-
Proceeds from note payable		-		254,593		78,550
Payments for note payable		(146,078)		(259,819)		-
Decrease (Increase) in advances receivable-related party		9,116		221,042		(44,565)
(Decrease) in advances payable-related party		(9,368)		(15,406)		(224,670)
Net Cash Provided (Used) by Financing Activities		499,590		200,410		(190,685)
Effect of Exchange Rate Change on Cash		103,011		36,346		-
NET INCREASE IN CASH		2,276,708		1,834,618		52,926
CASH AT BEGINNING OF PERIOD		2,932,698		1,098,080		1,045,154
CASH AT END OF PERIOD	$	5,209,406	$	2,932,698	$	1,098,080

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 (Continued)

		For The Years Ended March 31
		2007		2006		2005
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for
Interest	$	27,128	$	6,206	$	-
Income taxes	$	45,538	$	12,932	$	1,483
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCINGACTIVITIES

For the year ended March 31, 2007

None

For the year ended March 31, 2006

On July 28, 2005, one of the shareholders returned 10,000 shares to the Company for cancellation and potential reissuance as incentives to compensate new officers, directors and other management team members. (Note 7)

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 shares of common stock was issued to the shareholder to repay all loans owed according to the shareholder loan settlement agreement. (Note 12)

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”.

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

F-7

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

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”) 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.

Subsidiaries

BAHA 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”) 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 changed its name to Beijing Hongzhi Century Advertising Co., Ltd.

Shandong Hongzhi Communications and Career Advertising Co., Ltd. (“SHCCA”) 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”) 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”) was organized under the laws of the People’s Republic of China in April 2005 as a wholly-owned subsidiary of BAHA.

Tibet Hongzhi Advertising Co., Ltd. (“THZA”) was organized under the laws of the People’s Republic of China in April 2006 as a wholly-owned subsidiary of BHCA.

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

American Overseas Investment Company (“AOI”), 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.

On July 31, 2006, the Company sold 95% of BAQM shares to a third party and 5% to a shareholder at the net book value as of June 30, 2006.

F-8

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Consolidation

The consolidated financial statements include the accounts of Parent, BAHA, BHCA, SHCCA, TACM, AOI, APTV-BVI, BAQM and THZA (“the Company”).  All inter-company balances and transactions between Parent and subsidiaries have been eliminated in consolidation.  The 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, 2007 have been reclassified to conform to the headings and classifications used in the March 31, 2007 financial statements.  

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, SHCCA and THZA 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, SHCCA and THZA 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.

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)

F-9

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 9).

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 14).

Foreign Currency Translation Policy

The translations of the functional currency financial statements of subsidiaries into United States reporting currency dollars are performed for assets 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, BAQM and THZA’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”).

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 replaces 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.

F-10

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.  

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.

F-11

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition Policy (Continued)

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 $0, $187,871 and $0, for the years ended March 31, 2007, 2006 and 2005, 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 $0, $164,367 and $0 for the years ended March 31, 2007, 2006 and 2005.

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, 2007 represented the cumulative foreign currency translation adjustment.

NOTE 2 –

ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:

		March 31 2007		March 31 2006
Accounts receivable - trade	$	8,522,545	$	9,289,096
Allowance for doubtful accounts		(473,309)		(703,667)
Accounts receivable, net	$	8,049,236	$	8,585,429

Bad debt expense for the year ended March 31, 2007, 2006 and 2005 was $(249,567), $104,272 and $81,568 respectively (See Note 8).

NOTE 3 –

PREPAID EXPENSES

At March 31, 2007, the Company had prepaid expenses of $1,449,404. 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.

F-12

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 4 –

PROPERTY AND EQUIPMENT

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

		March 31 2007		March 31 2006
Office equipment	$	669,966	$	623,719
Vehicles		685,874		497,629
Leasehold improvement		46,700		45,115
Less accumulated depreciation		(396,150)		(231,653)
	$	1,006,390	$	934,810

Depreciation expense for the year ended March 31, 2007, 2006 and 2005 was $156,317, $112,773 and $74,628 respectively.

NOTE 5 –

SHORT-TERM LOANS

On October 23, 2006, the Company entered into a six-month bank loan with Ji’nan Commercial Bank Wenxi Branch in the amount of $387,552 to raise funds for its advertising business. BAHA and its legal representative provide guarantees on the loan. The loan bore a monthly interest at the rate of 0.604% and has been fully repaid on April 10, 2007.

On November 29, 2006, the Company entered into a one-year bank loan with Ji’nan Commercial Bank Wenxi Branch in the amount of $258,368 to raise funds for its advertising business. The collateral of the loan is the office facility of SHCCA. The loan bears monthly interest at the rate of 0.6825%.

NOTE 6 –

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.

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.

F-13

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 6 –

NOTES PAYABLES (Continued)

Convertible Notes Payable

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.  The conversion provision expired on December 31, 2006.

F-14

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 6 –

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, 2007, the unpaid note payable to JHRED is $108,514, which is subjected to the interest based on the current monthly bank rate.

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

Minimum Annual Payments		March 31, 2007		March 31, 2006
Within one year	$	4,108,514	$	4,149,761
After one year but within two years		-		104,832
	$	4,108,514	$	4,254,593

NOTE 7 -  CAPITAL STOCK

Common Stock

On March 26, 2007, the Company effected a reverse stock split of its common stock, par value $0.001 per share, whereby each one thousand shares of Common Stock, either issued and outstanding or held by the Company as treasury stock, immediately prior to the record date was reclassified and changed into one fully-paid and non-assessable share of Common Stock. All fractional shares were rounded up to ensure each shareholder receives at least one post-split share.

At March 31, 2007, the Company had 1,623,297 shares issued and 1,613,297 shares outstanding.

Warrants/Options

The Company has no warrants/options issued and outstanding as of March 31, 2007 and 2006.

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. At March 31, 2007 and 2006, no options were granted under the Plan.

F-15

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 7 -  CAPITAL STOCK (Continued)

Development Fund

In 2004, certain shareholders, directors, and officers entered into an agreement to establish a fund wherein 0.65 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 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 10,000 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 8 -

BAD DEBT EXPENSES (RECOVERY)

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

		March 31, 2007		March 31, 2006		March 31, 2005
Accounts receivable (Note 2)	$	(249,567)	$	104,272	$	81,568
Receivable from related party (Note 11)		(12,800)		(44,834)		(68,978)
Other receivables		(416,113)		(86,413)		723,674
	$	(678,480)	$	(26,975)	$	736,264

NOTE 9 -

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, 2007 unused United States operating loss carryforwards of $399,645 which may be applied against future taxable income.  The deferred tax assets, which consist of net operating losses, equal approximately $59,947 for the years ended March 31, 2007. 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, 2007, therefore, no deferred tax asset has been recognized. The change in the valuation allowance is $1,173 for th e year ended March 31, 2007.

F-16

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 9 -

INCOME TAXES (Continued)

United States operations (Continued)

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

		March 31, 2007		March 31, 2006
Net operating loss carryover - federal	$	59,947	$	61,120
Valuation allowance		(59,947)		(61,120)
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, 2007	March 31, 2006	March 31, 2005
Computed tax at the expected
federal statutory	15%	15%	15%
Valuation allowance	(15)%	(15)%	(15)%
Effective income tax rates	-	-	-

Foreign operations

The Company has available at March 31, 2007, 2006 and 2005, unused PRC operating loss carryforwards of $814,481, $1,480,600 and $1,460,161, 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 $268,800, $488,600 and $481,800 for the years ended March 31, 2007, 2006 and 2005. 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, 2 007, 2006 and 2005, therefore, no deferred tax asset has been recognized.  The change in the valuation allowance is approximately $(219,800), $6,800 and $12,800 for the years ended March 31, 2007, 2006 and 2005, 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-17

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 9 -

INCOME TAXES (Continued)

Foreign operations (Continued)

		March 31, 2007		March 31, 2006		March 31, 2005
Current income tax expense:
Book income	$	856,916	$	418,411	$	215,922
Bad debt expense (recovery)		(223,898)		(8,902)		(53,177)
Entertainment		6,262		11,698		4,274
Payroll related expenses		67,525		116,184		141,761
Interest expense		-		(2,232)		6,710
Accrued bonuses		(55,833)		54,241		-
Other		9,671		1,995		25,391
Net operating loss from loss entities		(8,152)		15,568		-
Tax exempt income		(612,389)		(584,971)		(339,398)
Tax expense	$	40,102	$	21,992	$	1,483
Deferred tax expense (benefit) resulted from:
Excess of tax over financial accounting net operating loss	$	-	$	-	$	-
Valuation allowance		219,800		(6,800)		(12,800)
Allowance for bad debts		(219,800)		6,800		12,800
Net deferred tax expense	$	-	$	-	$	-

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

		March 31, 2007		March 31, 2006
Net operating loss carryover	$	8,050	$	15,600
Allowance for bad debt		260,750		473,000
Valuation allowance		(268,800)		(488,600)
Deferred Tax Asset (Liability)	$	-	$	-

F-18

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 10 -

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, 2007. The Ji’nan facility lease expires on April 30, 2006.  The combined lease expense for the years ended March 31, 2007, 2006 and 2005 amounted to $87,599, $116,665 and $70,197, respectively.  The following is a schedule of minimum annual rental payments for the next five years.

Minimum Annual Payments		March 31, 2007		March 31, 2006
Within one year	$	23,777	$	19,269

NOTE 11 -

RELATED PARTY TRANSACTIONS

Receivables 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 2007		March 31 2006
Receivables from related party	$	96,268	$	105,383
Allowance for doubtful accounts		(59,394)		(70,016)
Receivables from related party, net	$	36,874	$	35,367

Bad debt expense (recovery) for the years ended March 31, 2007, 2006 and 2005 was $(12,800), $(44,834) and $(68,978) respectively (See Note 8).

Accounts Payable

The Company has accounts payable to related parties at March 31 2007 and 2006 of $70,693 and $80,060 respectively.

Management Compensation

For the years ended March 31, 2007, 2006 and 2005, the Company expensed $59,976, $77,225 and $104,411 respectively, for services as management compensation.

Accrued Expenses

At March 31, 2007, unpaid bonus to employees is $123,804, which is included within accrued expenses on the face of the balance sheet.  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.

F-19

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 12 -

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 $3 0,000 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 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 $35 per share.

F-20

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2007, 2006 and 2005

NOTE 13 –CONCENTRATIONS

Sales

For the year ended March 31, 2007, the Company had had two significant customers which accounted for 64%, and 10% of 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 customers which accounted for 52%, and 10% of sales.

Cost of Sales

The cost of sales during the year ended March 31, 2007, 2006 and 2005 were $62,282,688, $58,402,504 and $45,282,789. Cost associated with China Central TV Station (CCTV) accounted for 10%, 24% and 25% of the cost of sales respectively.

Accounts Receivable

At March 31, 2007, the Company had two customers which accounted for 59% and 19% of the Company’s accounts receivable balances respectively.

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

Foreign Operations

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

NOTE 14 –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, 2007, 2006 and 2005.

	For The Years Ended March 31
	2007		2006		2005
Income available to common shareholders (Numerator)	2,564,432	$	1,116,177	$	340,459
Weighted average number of common shares outstanding used in earnings per share during the period (Denominator)	1,613,191		1,615,844		1,621,562
Weighted average number of common shares outstanding used in diluted earnings per share during the period (Denominator)	1,613,191		1,715,844		1,701,562

F-21

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, 2007

By:  /s/ Yan Gong                

Yan Gong

Chief Executive Officer

Date: June 28, 2007

By: /s/ Hongmei Zhang            

Hongmei Zhang

Finance 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, 2007

By: /s/ Li Li                      

Li Li

Chairman and Director

Date: June 28, 2007

By: /s/ Yan Gong                  

Yan Gong

Director

Date: June 28, 2007

By: /s/ Jing Xing                   

Jing Xing

Director

Date: June 28, 2007

By: /s/ Huiyang Yu                  

Huiyang Yu

Director

Date: June 28, 2007

By: /s/ Douglas J. Toth               

Douglas J. Toth

Director

EX-21

Exhibit 21.1

List of Subsidiaries of the Company

Name	Place of Incorporation
Beijing Asia Hongzhi Advertising Co., Ltd.	People’s Republic of China
Beijing Hongzhi Century Advertising Co., Ltd	People’s Republic of China
Shandong Hongzhi Communications and Career Advertising Co., Ltd.	People’s Republic of China
Tibet Asia Culture Media Co., Ltd.	People’s Republic of China
Beijing Asia Qiangshi Media Advertising Co., Ltd.	People’s Republic of China
Tibet Hongzhi Advertising Co., Ltd.	People’s Republic of China

EX-31

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Qiang Jiang, the Chief Executive Officer of Asia Premium Television Group, Inc. (the “Company”), certify that:

1.

I have reviewed this annual report on Form 10-K of the Company;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

As the registrant’s certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and I have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.

As the registrant’s certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  June 28, 2007

/s/ Yan Gong                         

Yan Gong

Chief Executive Officer

2

EX-31

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bulin Miao, the Finance Manager of Asia Premium Television Group, Inc. (the “Company”), certify that:

1.

I have reviewed this annual report on Form 10-K of the Company;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

As the registrant’s certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and I have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.

As the registrant’s certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  June 28, 2007

/s/ Hongmei Zhang            

Hongmei Zhang

Finance Manager

2

EX-32

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Asia Premium Television Group, Inc. (the “Company”) on Form 10-K for the fiscal year ended March 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Qiang Jiang, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:  June 28, 2007

/s/ Yan Gong                  

Yan Gong

Chief Executive Officer

EX-32

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Asia Premium Television Group, Inc. and its subsidiaries (the “Company”) on Form 10-K for the fiscal year ended March 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bulin Miao, Finance Manager of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:  June 28, 2007

/s/ Hongmei Zhang        

Hongmei Zhang

Finance Manager