NOTE 15 - SEGMENT REPORTING

ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Group's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Group's business segments.

The Company's chief operating decision maker has been identified as the Chief Executive Officer who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the Group. Based on management's assessment, the Company has determined that it has three operating segments according to its major products and locations as follows:

Developing, manufacturing and distributing of specialized fabrics, textile products and other by-products derived from an indigenous Chinese plant called Apocynum Venetum, commonly known as “Bluish Dogbane” or known in Chinese as “Luobuma” (referred to herein as Luobuma):

The operating companies of this segment, namely Tenet-Jove and Tenet Huatai, specialize in Luobuma developing and manufacturing of relevant products.

This segment’s operations are focused in the north region of Mainland China, mostly carried out in Beijing and Tianjin City.

Processing and distributing of traditional Chinese medicinal herbal products as well as other pharmaceutical products (“Herbal products”):

The operating companies of this segment, namely AnKang Longevity Group and its subsidiaries, plant and process more than 600 kinds of Chinese medicinal herbal products with an established domestic sales and distribution network.

Ankang Longevity Group is also engaged in the retail pharmacy business and the operating revenue, which is not material, is also included in this segment.

Planting, processing and distributing of green and organic agricultural produce as well as growing and cultivating of Chinese Yew trees (“Agricultural products”):

The operating companies of this segment, the Zhisheng Group, is engaged in the business of growing and distributing green and organic vegetables and fruits as well as providing logistics services for distributing agricultural products. This segment has been focusing its efforts on the growing and cultivating of Chinese yew trees (formally known as “taxus media”), a small evergreen tree whose branches can be used for the production of anti-cancer medications and the tree itself can be used as an ornamental indoor bonsai tree, which are known to have the effect of purifying air quality.

The operations of this segment are located in the East and North regions of Mainland China, mostly carried out in Shandong Province and in Beijing where the Zhisheng Group has newly developed over 100 acres of modern greenhouses for cultivating yew trees and other plants.

The following table presents summarized information by segment for the year ended June 30, 2017:

	For the year ended June 30, 2017
	Bluish			Herbal			Agricultural
	dogbane			products			products			Total
Segment revenue	$	3,624,993		$	13,245,236		$	16,722,108		$	33,592,337
Cost of goods		1,695,938			10,124,063			10,956,034			22,776,035
Business and sales related tax		16,076			59,898			-			75,974
Gross profit		1,912,979			3,061,275			5,766,074			10,740,328
Gross profit contribution %		17.8	%		28.5	%		53.7	%		100.0	%

The following table presents summarized information by segment for the year ended June 30, 2016:

	For the year ended June 30, 2016
	Bluish			Herbal			Agricultural
	dogbane			products			products			Total
Segment revenue	$	4,387,060		$	14,031,955		$	16,787,837		$	35,206,852
Cost of goods		1,974,182			10,990,162			11,072,897			24,037,241
Business and sales related tax		20,711			64,327			-			85,038
Gross profit		2,392,167			2,977,466			5,714,940			11,084,573
Gross profit contribution %		21.6	%		26.9	%		51.5	%		100.0	%

Total Assets as of

	June 30, 2017		June 30, 2016

Bluish Dogbane or “Luobuma”	$	6,983,551	$	6,963,093
Herbal products		35,222,278		28,088,515
Agricultural products		26,079,141		21,997,180
	$	68,284,970	$	57,048,788