COMMITMENTS AND CONTINGENCY

3 Months Ended

Sep. 30, 2011

COMMITMENTS AND CONTINGENCY

8. COMMITMENTS AND CONTINGENCY

(a) Office leases

The Company leases certain office premises and apartments for employees under operating leases through October 31, 2013. Future minimum lease payments under operating leases agreements were as follows:

	Amount
	US$
Twevle months ending September 30,
2012		161,682
2013		79,206
		240,888

Rent expense for the three months ended September 30, 2011 and 2010 was $88,100 and $76,505, respectively.

(b) Contingency

The Labor Contract Law of the People’s Republic of China requires employers to assure the liability of the severance payments if employees are terminated and have been working for the employers for at least two years prior to January 1, 2008. The employers will be liable for one month for severance pay for each year of the service provided by the employees. As of September 30, 2011, the Company has estimated its severance payments of approximately $141,000, which has not been reflected in its consolidated financial statements, as the probability of payment is remote.