Land Use Rights

3 Months Ended

Jun. 30, 2011

Land Use Rights [Text Block]

10. Land use rights

		June 30,			December 31,
		2011			2010
		(Unaudited)
Land use rights	$	1,089,762		$	1,068,589
Accumulated amortization		(75,403	)		(63,161	)
	$	1,014,359		$	1,005,428

The Company obtained the right from the relevant PRC land authority for a period of fifty years to use the land on which the Company’s office premises, production facilities and warehouse are situated. As of December 31, 2010, the land use rights were pledged as collateral under certain loan arrangements. The land use rights were released upon the maturity of the bank loans (Note 12).

During the six months ended June 30, 2011 and 2010, amortization amounted to $10,848 and $10,394 respectively. The estimated amortization expense for each of the five succeeding years from June 30, 2011 is approximately $21,000 each year.

The Company made a prepayment for land use rights of RMB12.7 million (approximately $2.0 million) during the six months ended June 30, 2011, which has been reflected on the accompanying condensed consolidated balance sheet as of June 30, 2011. The area is approximately 152,246 square meters and is intended for future manufacturing facilities expansion.