RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 14 – RELATED PARTY TRANSACTIONS

The material related party transactions undertaken by the Company with related parties for the three months ended June 30, 2013 and 2012 are presented as follows:

	For the three months ended
	June 30, 2013		June 30, 2012
	USD		USD
Commission expenses with related parties(1)		909,057		852,948

The material related party transactions undertaken by the Company with related parties for the six months ended June 30, 2013 and 2012 are presented as follows:

	For the six months ended
	June 30, 2013		June 30, 2012
	USD		USD
Commission expenses with related parties(1)		1,552,312		1,581,483

The related party balances as at June 30, 2013 and December 31, 2012 are presented as follows:

Liabilities	Purpose	June 30, 2013		December 31, 2012
		USD		USD
Other payable – a related party(1)	Commission		204,120		339,272
Other payable – a related party(2)	Loan		2,358,720		2,311,044
Other payable – a related party(3)	Contribution		1,493,085		1,431,308
Total other payable – related parties			4,055,925		4,081,624

⁽¹⁾During the year ended December 31, 2011, Guizhou Taibang signed an agency contract with Guizhou Eakan Co., Ltd. (“Guizhou Eakan”), an affiliate of one of the Guizhou Taibang’s noncontrolling interest shareholders, pursuant to which Guizhou Taibang would pay commission to Guizhou Eakan for the promotion of the product of Placenta Polypeptide. As of June 30, 2013, Guizhou Taibang accrued commission payable of $204,120 for service rendered by Guizhou Eakan. For the three months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $909,057. For the six months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $1,552,312.

⁽²⁾Guizhou Taibang has payables to Guizhou Eakan Investing Corp., amounting to approximately $2,358,720 and $2,311,044 as of June 30, 2013 and December 31, 2012, respectively. Guizhou Eakan Investing Corp. is one of the noncontrolling interest shareholders of Guizhou Taibang. The Company borrowed this interest free advance for working capital purpose for Guizhou Taibang. The balance is due on demand.

⁽³⁾Guizhou Taibang has payables to Jie’an, a noncontrolling interest shareholder of Guizhou Taibang, amounting to approximately $1,493,085 and $1,431,308 as of June 30, 2013 and December 31, 2012, respectively. In 2007, Guizhou Taibang received additional contributions from Jie’an of $962,853 (or RMB6,480,000) to maintain Jie’an’s equity interest in Guizhou Taibang at 9%. However, due to a legal dispute among shareholders over raising additional capital as discussed in the legal proceeding section (see Note 13), the contribution is subject to be returned to Jie’an. During the second quarter of 2010, Jie’an requested that Guizhou Taibang register its 1.8 million shares of additional capital contribution with the local AIC, pursuant to the Equity Purchase Agreement, and such registration was approved by the majority shareholders of Guizhou Taibang in a shareholders’ meeting held in the second quarter of 2010. However, the Board of Directors of the Company is withholding its required ratification of the shareholders’ approval of Jie’an’s request until the completion of the ongoing litigations. If the Company decided to ratify the approval, Dalin’s ownership in Guizhou Taibang will be diluted from 54% to 52.54% and Jie’an will be entitled to receive its pro rata share of Guizhou Taibang’s profits since the date of Jie’an contribution became effective. As this case is closely tied to the outcome of the strategic investors’ dispute stated above, the Company has set aside Jie’an’s additional fund of RMB5,040,000 (approximately $816,480), the over-paid subscription of RMB1,440,000 (approximately $233,280) along with RMB2,736,575 (approximately $443,325) in accrued interest and penalty as of June 30, 2013.