Note 9 Segment Information

6 Months Ended

Sep. 30, 2012

Note 9 Segment Information:

Note 9 Segment Information

NOTE 9 SEGMENT INFORMATION

A)    Business segment reporting – by services

The Company has one reportable segment as of September 2012 and two as of September 2011 that include franchised to operate an owned Caffe Kenon in Hong Kong and subfranchise to operate two Caffe Kenon in Hong Kong and Beijing respectively. The subfranchisee located in Beijing has terminated the franchise agreement with effect from May 31, 2011 with an immaterial early termination fee of $6,210, no geographic information has been presented.  The sufranchisee located in Hong Kong has been acquired by the Company in March 2012 and becomes the second owned Caffe Kenon franchised to operate in Hong Kong.

Each reportable segment is separately organized and focuses on different customer groups of consumers and subfranchisees.  Each reportable segment prepares a stand-alone set of financial reporting package including information such as revenue, expenses, and goodwill, and the package is regularly reviewed by the Chief Executive Officer.

The following is the summary of relevant information relating to each segment reconciled to amounts on the accompanying consolidated financial statements for the three months ended September 30, 2012.

Three Months ended September 30, 2012 (unaudited)
	Franchise		Subfranchise			Corporate			Total
Revenue	$    225,632		$                -			$             -			$        225,632
Depreciation and amortization	(8,238)		-			-			(8,238)
Cost of revenues and operating expenses excluding depreciation and amortization	(174,408)		-			(34,754)			(209,162)
Operating Income (Loss)	42,986		-			(34,754)			8,232
Other income	1,405		-			-			1,405
Other expenses	-		-			-			-
Total Other Income, Net	1,405		-			-			1,405
Income tax expenses	-		-			-			-
Net Income (Loss)	$      44,391		$                -			$ (34,754)			$            9,637
Total assets, excluding goodwill	$    586,719		$                -			$             -			$        586,719
Goodwill	$    311,291		$                -			$             -			$        311,291
Capital expenditure	$        1,585		$                -			$             -			$          1,585
Six Months ended September 30, 2012 (unaudited)
	Franchise		Subfranchise			Corporate			Total
Revenue	$    438,819		$                 -			$               -			$       438,819
Depreciation and amortization	(16,477)		-			-			(16,447)
Cost of revenues and operating expenses excluding depreciation and amortization	(368,005)		-			(38,250)			(406,255)
Operating Income (Loss)	54,337		-			(38,250)			16,087
Other income	2,727		-			-			2,727
Other expenses	-		-			-			-
Total Other Income, Net	2,727		-			-			2,727
Income tax expenses	-		-			-			-
Net Income (Loss)	$      57,064		$                -			$   (38,250)			$          18,814
Total assets, excluding goodwill	$    586,719		$                 -			$               -			$        586,719
Goodwill	$    311,291		$                 -			$               -			$        311,291
Capital expenditure	$        1,585		$                 -			$               -			$            1,585
Three Months ended September 30, 2011 (unaudited)
	Franchise			Subfranchise		Corporate		Total
Revenue	$      89,543			$               -		$              -		$        89,543
Depreciation and amortization	(6103)			-		-		(6,103)
Cost of revenues and operating expenses excluding depreciation and amortization	(100,201)			(1,078)		-		(101,279)
Operating income/(loss)	(16,761)			(1,078)		-		(17,839)
Other income	844			-		-		844
Other expenses	(74)			-		-		(74)
Total other income (net)	770			-		-		770
Income tax expenses	(355)			178		-		(177)
Net income/(loss) after tax	$  (16,346)			$         ( 900)		$              -		$        (17,246)
Total assets, excluding goodwill	$     158,526			$        29,466		$               -		$        187,992
Goodwill	$       55,484			$                  -		$               -		$          55,484
Capital expenditure	$                -			$                   -		$               -		$                   -
Six Months ended September 30, 2011 (unaudited)
		Franchise			Subfranchise		Total
Revenue		$183,759			$16,482		$200,241
Depreciation and amortization		(12,201)			-		(12,201)
Cost of revenues and operating expenses excluding depreciation and amortization		(217,182)			(11,350)		(228,532)
Operating (loss)/income		(45,624)			5,132		(40,492)
Other income		1,771			-		1,771
Other expenses		(566)			-		(566)
Total other income (net)		1,205			-		1,205
Income tax expenses		(619)			(847)		(1,466)
Net (loss)/income after tax		$(45,038)			$4,285		$(40,753)
Total assets, excluding goodwill		$ 158,526			$  29,466		$ 187,992
Goodwill		$   55,484			-		$   55,484
Capital expenditure		$        657			-		$        657

B)    Business segment reporting – by geography

As its secondary segments, the Company reports two geographical areas, which are the main market areas: Hong Kong and Beijing.  There is no any single foreign country market accounting for more than 10% of total revenues for the three months ended September 30, 2012 and 2011, respectively.

The following tables set forth revenues from customers of products sold by geographic segment:

Geographical information:	Three months ended September30,		Six months ended September 30,
	2012	2011		2012	2011
Hong Kong	$      225,632	$     89,543		$438,819	$194,031
Beijing	-	-		-	$6,210
Total	$     225,632	$     89,543		$438,819	$200,241

All the long lived assets of the Company are located in Hong Kong.