Note 3 - Operating Leases

12 Months Ended

Mar. 31, 2015

Notes

Note 3 - Operating Leases

NOTE 3 – OPERATING LEASES

On October 1, 2011, the Company entered into an agreement with Shandong YCT for the lease of one automobile. The lease term is from October 1, 2011 to September 30, 2021. The total lease payment of RMB131,468 (approximately USD21,370) was paid in full at lease signing and amortized over the life of the lease.

On June 20, 2013, the Company entered into a Farmland Leasing Agreement with Shiqiao Village for the lease of 2,000Mu farmland for the development of the acer truncatum bunge planting bases. The lease term is from July 1, 2013 to June 30, 2043. The lease payment is RMB1, 000(approximately USD 163) per Mu annually and should be paid every five years in advance. The first lease payment was for the rents of the first five years in the amount of RMB10,000,000 (approximately USD1,625,461), which was paid on July 10, 2013. (See NOTE 11 - FUTURE MINIMUM LEASE PAYMENTS)

On March 1, 2014, the Company entered into a Farmland Leasing Agreement with Zhongce No.4 Village for the lease of 200Mu farmland to the development of the acer truncatum bunge planting bases. The lease term is from March 1, 2014 to February 28, 2044. The lease payment is RMB1,000 per Mu annually and should be paid every five years in advance. The first lease payment was for the rents of the first five years in the amount of RMB1,000,000 (approximately USD 162,546), which was paid on March 10, 2014. (See NOTE 11 - FUTURE MINIMUM LEASE PAYMENTS)

On January 7, 2015, the Company entered into a new Farmland Leasing Agreement with a company, Shandong Wanziyuan Tourism Development Co. (“Shandong Wanziyuan”), to lease 2,000Mu farmland for the development of the acer truncatum bunge planting bases. The lease term is from January 15, 2015 to December 31, 2029. The lease payment is RMB1, 000 (approximately USD 163) per Mu annually and should be paid every five years in advance. The first lease payment was for the rents of the first five years in the amount of RMB10,000,000 (approximately USD1,628,081), which was paid on January 8, 2015. (See NOTE 11 - FUTURE MINIMUM LEASE PAYMENTS)

The Company accounts for the lease agreement as an operating lease in accordance to ASC 840-10-25-37, which requires, if land is the sole item of property leased and either the transfer-of-ownership criterion in paragraph 840-10-25-1(a) or the bargain-purchase-option criterion in paragraph 840-10-25-1(b) is met, the lessee shall account for the lease as a capital lease. Otherwise, the lessee shall account for the lease as an operating lease. Per ASC 840-2-25-1, rent shall be charged to expense by lessees over the lease term as it becomes payable.

The components of prepaid lease were as follows:

Prepaid leases	As of March 31, 2015
	Current portion		Long-term
Shiqiao Village and Shandong Wanziyuan – 4000Mu	$	651,232	$	1,953,698
Zhongce No. 4 Village – 200Mu		32,562		94,971
Total prepaid land lease		683,794		2,048,669
Shandong YCT - Automobile		2,140		11,772
Total prepaid lease	$	685,934	$	2,060,441

The prepaid lease is amortized over the life of the leases based on straight-line method. The lease expenses for the years ended March 31, 2015 and 2014 were $441,334 and $253,275, respectively.