RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2012

RELATED PARTY TRANSACTIONS [Text Block]

11. RELATED PARTY TRANSACTIONS

Due from related parties

Due from related parties consisted of loans or advances to the following:

		As of December 31,
		2012		2011
Loan to Tianjing Yanfeng Real Esstate Co.,Ltd ("Tianjing Yanfeng")	$	-	$	79,442

Due to related parties

Due to related parties consisted of the following:

		As of December 31,
		2012		2011
Advance from officers and shareholders	$	1,120,059	$	985,852
Loan from Shaanxi Yanfeng Real Estate Co., Ltd.		396,284		397,210
Loan from Xi'an Yanfeng Biotechnology Co., Ltd.		364,582		365,433
Loan from Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd.		114,130		101,686
Shaanxi Chaoying Personal Care Group Co., Inc		76,087		-
Total due to related parties:	$	2,071,142	$	1,850,181

Mr. Yanbiao Bai owns 64% and is the CEO and Chairman of Shaanxi Chaoying Beauty & Cosmetics Group. Mr. Bai is the Chairman of Shaanxi Yangfeng Real Estate and Xi’an Yanfeng Biotechnology. The above amounts due to relate parties were unsecured, interest free, and due on demand.

Lease agreement

The Company’s subsidiary in PRC leased an office space under an operating lease agreement from Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd. for a lease term originally expired on December 31, 2009, and had been extended to December 31, 2015. The rent payment under this operating lease was $6,338 (equivalent to RMB40,000) per month. The total future minimum lease payments for this lease as of December 31, 2012 were $228,151.

Future minimum lease payments under operating leases with initial or remaining terms of one year or more are as follows:

For the Years Ended December 31,		Amount
2013	$	76,050
2014		76,050
2015		76,051
2016		-
2017		-
Total	$	228,151

Total rental expense charged to operations amounted to $70,537 and $74,269 for the years ended December 31, 2012 and 2011, respectively.

Operation of SPA business

In January 2011, SD Chaoying engaged Dongshan Victoria Spring Hotel (“Victoria”), which is controlled by the wife of the General Manager of SD Chaoying, to manage and operate the SPA business at the completed section of the cultural and entertainment facility. SD Chaoying has not charged any fees from Victoria and no written agreement was signed. As a result, no revenue was recognized for the years ended December 31, 2012 and 2011. Costs related to operating commercial rental amounted to $65,846 and $64,272 for the years ended December 31, 2012 and 2011, respectively.