SHORT-TERM LOAN

12 Months Ended

Dec. 31, 2013

SHORT-TERM LOAN [Text Block]

11. SHORT-TERM LOAN

The Company had a short-term loan in the principal amount of $1,321,506 (equivalent to RMB8.0 million) and $1,505,880 (equivalent to RMB9.5 million) as of December 31, 2013 and 2012 from Changle Rural Credit Union, which is a bank located in Shandong Province of the PRC. The loan had a maturity date of September 2, 2013. On November 17, 2013, the Company renewed this short-term loan. The term of the renewal loan started from November 17, 2013 with a maturity date of October 16, 2014. The interest rate for the short-term loan was 12% per annum as of December 31, 2013. This short-term loan had been secured by the Company’s land use right and construction-in-progress of SD Chaoying with a book value of $3.25 million (equivalent to RMB19.69 million) and $4.65 million (equivalent to RMB27.47 million) as of December 31, 2013, respectively. For the $3.25 million land use rights, $2.62 million was classified under construction-in-progress for the commercial property and the remaining $0.63 million was classified under intangible assets subject to amortization.

Additionally, there is another short-term loan of $165,188 (equivalent to RMB1.0 million) from Mr. Fengguo Liu, an unrelated party. The short-term loan is due on January 12, 2014 with an interest rate at 2% per month. Also included in the current liabilities was $2,963,494 of loans from related companies, including Xi’an Yanfeng Biotechnology Co., Ltd., Shaanxi Yanfeng Real Estate Co. Ltd, Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd., and the stockholders who are also the Company's officers. These entities were related to the Company through common ownership and principal officers. These loans are non-interest bearing and have no set repayment terms.