Note 11 - Related Party Transactions

9 Months Ended

Jun. 30, 2013

Notes

Note 11 - Related Party Transactions

Note 11 – Related Party Transactions

The Company periodically has receivables from its affiliates, owned by Mr. Pu Fachun, the single largest shareholder and president of the Company. The Company expects all outstanding amounts due from its affiliates will be repaid and no allowance is considered necessary. The Company also periodically borrows money from its shareholders to finance the operations.

As of June 30, 2013, the Company has a receivable of $46,840 from Sichuan Chunfei Daily Chemicals Co. Ltd. (“Daily Chemical”), a receivable of $21,616 from Sichuan Hedi Chinese Medicine Development Co. Ltd. and a receivable of $49,478 from Lantian Yinwu Co. Ltd., respectively. These companies are owned by Mr. Pu Fachun, the single largest shareholder and president of the Company. The loans to these related parties are non interest bearing and due on demand.

The details of loans from related parties are as follows:

	June 30, 2013	September 30, 2012
Short term:
Chunfei Real Estate	$ 1,614,976	$ 1,837,809
Shubing Feed Co.	46,494	-
Sichuan Lanmate Technology Co. Ltd.	1,134,000	-
Pu Fachun	1,951,478	2,362,505
Total	$4,746,948	$4,200,314
Long term:
Sichuan Lanmate Technology Co.Ltd.	$1,487,364	$               -
Pu Fachun	1,767,043	1,385,315
Total	$3,254,407	$1,385,315

Short term loans from Chunfei Real Estate, which is owned by Mr. Pu Fachun, the single largest shareholder and president of the Company, were $1,614,976, including $1,564,069 payable on demand and non interest bearing. Short term loan from Shubing Feed Co., which is owned by Mr. Pu Xidi, son of Mr. Pu Fachun, was $46,494 due on demand and non interest bearing. Short term loan from Sichuan Lanmate Technology Co. Ltd. was $1,134,000 due on June 5, 2014 and bearing a fixed interest rate of 8% per year. Short term loans from Mr. Pu were $1,951,478 due on demand and non interest bearing.

Long term loans from Sichuan Lanmate Technology Co, Ltd. were $1,487,364, consisting of $740,178 due on October 9, 2014 and bearing a fixed interest rate of 8% per year and $747,186 due on May 2, 2018 and non interest bearing. Long term loans from Mr. Pu were $1,767,043, consisting of $1,410,643 due on December 31, 2014 and non interest bearing and $356,400 due on July 10, 2018 and bearing a fixed interest rate of 1% per month.

The Company recorded imputed interest of $29,559 and $88,676 for non-interest bearing related party loans for the three months and nine months ended June 30, 2013.