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CAPITAL COMMITMENT AND OPERATING LEASE COMMITMENTS
 6 Months Ended
Jun. 30, 2012
CAPITAL COMMITMENT AND OPERATING LEASE COMMITMENTS

NOTE 19 – CAPITAL COMMITMENT AND OPERATING LEASE COMMITMENTS

 

As of June 30, 2012, the Company has leased a real property adjacent to Factory No. 1, with the related production facility, channels and ducts, other production equipment and the buildings located on the property, under capital lease. The future minimum lease payments required under capital lease, together with the present value of such payments, are included in the table show below.

 

The Company has leased seven pieces of land under non-cancelable operating leases, which are fixed in rentals and expired through December 2021, December 2030, December 2031, December 2040, February 2059, August 2059 and June 2060, respectively. The Company accounts for the leases as operating leases.

 

The Company has committed approximately $13,097,126 for the second phase enhancement projects to the Company’s existing bromine extraction and crude salt production facilities as of June 30, 2012.

 

The following table sets forth the Company’s contractual obligations as of June 30, 2012:

 

    Capital Lease
Obligations		     Operating Lease
Obligations		     Purchase
Obligations		  
Payable within:                        
the next 12 months   $ 296,772     $ 391,919     $ 13,097,126  
the next 13 to 24 months     296,772       774,856       -  
the next 25 to 36 months     296,772       785,560       -  
the next 37 to 48 months     296,772       797,566       -  
the next 49 to 60 months     296,772       809,241       -  
thereafter     3,858,042       18,736,421       -  
Total   $ 5,341,904     $ 22,295,563     $ 13,097,126  
Less: Amount representing interest     (2,316,826 )                
Present value of net minimum lease payments   $ 3,025,078                  

  

Rental expenses related to operating leases of the Company amounted to $194,450 and $157,480, which were charged to the income statements for the three-month ended June 30, 2012 and 2011, respectively. Rental expenses related to operating leases of the Company amounted to $388,766 and $261,488, which were charged to the income statements for the six-month ended June 30, 2012 and 2011, respectively.