Statutory Reserves

3 Months Ended

Sep. 30, 2011

Receivables, Loans, Notes Receivable, and Others

Restricted Assets Disclosure [Text Block]

NOTE 11 STATUTORY RESERVES

EESC’s subsidiaries in China are required to allocate a portion of their after tax profits to the statutory reserve.  Appropriations to the statutory reserve are required to be at least 10% of an enterprise’s after tax retained earnings.  When the surplus reserve account balance is equal to or greater than 50% of the Company’s registered capital, no further allocation to the surplus reserve account is required.

The statutory reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing stockholders in proportion to their shareholdings or by increasing the par value of shares currently held by them, provided that the remaining statutory surplus reserve balance after such issue is not less than 25% of the registered capital.

If the accumulated balance of the Company’s statutory reserve is not enough to make up for the losses of the Company’s previous year, the current years’ profit shall first be used for making up the losses before the statutory reserve is drawn.  As of September 30, 2011 and December 31, 2010 the Company had accumulated after tax profits of $3,496,127  and  $6,576,604 respectively and therefore is required to make accumulative contributions of $349,613 and $657,660, respectively, to the statutory surplus reserve account.

	September 30, 2011			December 31, 2010
After tax profits	$	3,496,127		$	6,576,604
Percentage applied		10	%		10	%
Addition to Accumulated Statutory Surplus Reserve	$	349,613		$	657,660
Accumulated Statutory Surplus Reserve	$	1,574,994		$	1,225,381