Note 4 - Disposal of Subsidiaries and Discontinued Operation

12 Months Ended

Apr. 30, 2016

Notes

Note 4 - Disposal of Subsidiaries and Discontinued Operation

NOTE 4 – DISPOSAL OF SUBSIDIARIES AND DISCONTINUED OPERATION

On July 25, 2014, the Company entered into an agreement to dispose of its entire equity interest in Hongsheng, a VIE subsidiary, to Guotai Investment Holdings Limited at a total cash consideration of approximately $4.54 million.

Pursuant to the agreement, Hongsheng shall transfer all its operations, assets and liabilities other than investment in QBA prior to the completion of the above transaction. Therefore, the entire arrangement is to dispose of the shell of Hongsheng together with the entire interest in QBA.

As of the disposal date, QBA's assets and liabilities are summarized as follows:

	July 25, 2014
Assets
Cash and cash equivalents	$2,969,661
Inventories	6,708
Accounts receivable	525
Other receivables and deposits	8,892
Property, plant and equipment, net	5,937
Total assets	2,991,723
Liabilities
Accounts payable	29,699
Accrued expenses and other payables	17,462
Total current liabilities	47,161
Net assets of QBA	2,944,562

The assets of QBA as of May 31, 2014 are classified as assets held for sale and liabilities in the consolidated balance sheet.

The results of QBA during the year (up to date of disposal) are summarized as follows:

	From June 1 2014 to July 25, 2014
Revenue	$3
Other income and gains	164
Service costs	-
Personnel cost	(93,580)
Depreciation expense	(3,689)
Administrative and other expenses	(6,916)
Net loss	(104,018)

The results of QBA for the year ended 31 May, 2015 is reported as discontinued operations in the condensed consolidated statement of income and comprehensive income.

The gain on disposal of QBA is analyzed as follows:

Consideration received	4,565,936
Less: Net assets of QBA	(2,944,563)
Less: Goodwill arising in the acquisition of QBA	(610,386)
Gain on disposal	1,010,987