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 management 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:

Ø	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, 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 three months ended September 30, 2017:

	For the three months ended September 30, 2017
	Bluish			Herbal			Agricultural
	dogbane			products			products			Total
Segment revenue	$	1,046,297		$	3,265,893		$	3,497,304		$	7,809,494
Cost of goods		581,291			2,585,063			2,539,157			5,705,511
Business and sales related tax		4,472			11,141			-			15,613
Gross profit		460,534			669,689			958,147			2,088,370
Gross profit contribution %		22.1	%		32.1	%		45.8	%		100.0	%

The following table presents summarized information by segment for the three months ended September 30, 2016:

	For the three months ended September 30, 2016
	Bluish			Herbal			Agricultural
	dogbane			products			products			Total
Segment revenue	$	737,461		$	3,180,371		$	2,448,832		$	6,366,664
Cost of goods		367,220			2,437,713			1,631,239			4,436,172
Business and sales related tax		3,604			11,941			-			15,545
Gross profit		366,637			730,717			817,593			1,914,947
Gross profit contribution %		19.1	%		38.2	%		42.7	%		100.0	%

Total Assets as of

	September 30, 2017		June 30, 2017

Bluish Dogbane or “Luobuma”	$	7,188,041	$	6,983,551
Herbal products		37,142,813		35,222,278
Agricultural products		26,945,434		26,079,141
	$	71,276,288	$	68,284,970