RELATED PARTY TRANSACTION

9 Months Ended

Sep. 30, 2014

RELATED PARTY TRANSACTION [Text Block]

11. RELATED PARTY TRANSACTION

Related party balances are as follows:

			September 30,		December31,
Related parties	Relationship		2014		2013
Amounts due from related parties			(Unaudited)
Zhejiang Shuangsheng Logistic Company Limited (“Shuangsheng Logistic”)	Controlled by the same ultimate stockholders	$	-	$	97,887
Shuangdeng Paper	Controlled by the same ultimate stockholders		114,191		127,935
		$	114,191	$	225,822
Amounts due to related parties
SD Group	Controlled by the same ultimate stockholders	$	304,687	$	-
Shuang Ke Da	Controlled by the same ultimate stockholders		332,540		216,992
Shuangsheng Logistic	Controlled by the same ultimate stockholders		2,417		2,435
Hangzhou New Shengda Investment Limited (“New Shengda”)	Controlled by the same ultimate stockholders		904,573		551,112
Shuangdeng Paper	Controlled by the same ultimate stockholders		1,164,990		1,361,307
		$	2,709,207	$	2,131,846

The amount due from Shuangsheng Logistics represents the prepayment for transportation fee. The amount due from Shuangdeng Paper represents the receivable for selling the paper cartons. They were recorded as “amount due from related parties” in the consolidated balance sheets, non-interest bearing and receivable within one year.

The amount due to SD Group represents the payable for the land and building lease from SD Group. The amount due to ShuangKeDa represents the payable for land lease and purchase of electricity and water from ShuangKeDa by the Group. The amount due to Shuangsheng Logistic represents the payable for transportation fee. The amount due to New Shengda represents the payable for land lease from New Shengda by the Group. The amount due to Shuangdeng Paper represents the payable for purchase of water, electricity and steam. They were recorded as “amount due to related parties” in the consolidated balance sheets, non-interest bearing and repayable within one year.

Significant related party transactions as follows:

			Three Months Ended September 30,				Nine Months Ended September 30,
Related parties	Relationship		2014		2013		2014		2013
			(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Lease from related parties
New Shengda	Controlled by the same ultimate stockholders	$	147,510	$	68,080	$	439,290	$	202,880
ShuangKeDa	Controlled by the same ultimate stockholders		68,838		-		205,002		-
SD Group	Controlled by the same ultimate stockholders		102,438		145,357		305,063		361,575
		$	318,786	$	213,437	$	949,355	$	564,455
Transportation service from related party
Shuangsheng Logistic	Controlled by the same ultimate stockholders	$	180,033	$	191,176	$	382,678	$	339,200
Sales to related parties
Shuangdeng Paper	Controlled by the same ultimate stockholders	$	54,993	$	49,299	$	219,838	$	191,464
Shengda XiangWei	Controlled by the same ultimate stockholders		14,107		58,495		73,025		163,296
		$	69,100	$	107,794	$	292,863	$	354,760
Purchase of steam from related party
Shuangdeng Paper	Controlled by the same ultimate stockholders	$	601,928	$	1,831,244	$	1,253,734	$	1,831,224
Purchase of water and electricity from related party
Shuang Ke Da	Controlled by the same ultimate stockholders	$	272,008	$	226,632	$	959,593	$	684,419

Guarantee by SD Group

SD Group entered into maximum debt guarantee contracts with Bank of China Xiaoshan Branch and Industrial Commercial Bank of China Xiaoshan Branch, under which SD Group agreed to act as guarantor for loans borrowed by Great Shengda from Bank of China Xiaoshan Branch and Industrial Commercial Bank of China Xiaoshan Branch (Note 8).

SD Group also entered into debt guarantee contracts with Agriculture Bank of China, under which SD Group agreed to act as guarantor for bank accepted notes payable amounting to US$6,743,750 borrowed by Great Shengda (Note 9).