LAND USAGE RIGHTS

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

Note 5. LAND USAGE RIGHTS

According to the laws of the PRC, the government owns all of the land in the PRC. The government of the PRC, its agencies and collectives hold all land ownership.  Companies or individuals are authorized to use the land only through land usage rights granted by the PRC government. Land usage rights can be transferred upon approval by the land administrative authorities of the PRC (State Land Administration Bureau) upon payment of the required land transfer fee. Accordingly, the Company paid in advance for land usage rights. Prepaid land usage rights are being amortized and recorded as lease expenses using the straight-line method over the terms of the leases, which range from 40 to 50 years. The amortization expense was $180,920 and $176,822 for fiscal years 2012 and 2011, respectively. The following table sets forth land usage rights of the Company as of December 31, 2012 and 2011, respectively.

	December 31
	2012			2011
Cost	$	9,007,199		$	7,777,929
LessAccumulated amortisation		(1,288,836	)		(1,104,433	)
	$	7,718,363		$	6,673,496