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Note 6 - Short Term Loans

3 Months Ended

Dec. 31, 2013

Note 6 - Short Term Loans

Note 6 – Short Term Loans

The short term loans as of ecember 31, 2013 and September 30, 2013 consisted of the following:

	December 31, 2013	September 30, 2013

a) Loan payable to Nanchong City Bureau of Finance due on demand at fixed interest rate of 0.465% per month	$ 654,400	$ 650,400

b) Loan payable to Nanchong Commercial Bank due on January 24, 2014, which was paid in full in January 2014, and July 1, 2014, at fixed interest rate of 6.6% per annum, guaranteed by a third party	1,636,000	1,626,000

c) Loan payable to Nanchong Bank of Communications due on July 1, 2014, at floating interest rate, guaranteed by third parties, Mr. Pu Fachun, Zhang Xuchu and Feng Ting, Hedi Medicines	818,000	813,000

d) Individual loans from unrelated parties, which are due on demand and bearing interests from 0% to 72% per annum	3,744,804	2,256,400

Total Short Term Loans	$6,853,204	$5,345,800

The Company pledged its land use right and its building and equipment to a third party to secure the bank loans.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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