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18. CAPITAL COMMITMENT AND OPERATING LEASE COMMITMENTS

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

18. CAPITAL COMMITMENT AND OPERATING LEASE COMMITMENTS

NOTE 18 – CAPITAL COMMITMENT AND OPERATING LEASE COMMITMENTS

As of June 30, 2014, 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 nine pieces of land under non-cancelable operating leases, which are fixed in rentals and expired through December 2021, December 2030, December 2031, December 2032, December 2040, February 2059, August 2059 and June 2060, respectively. The Company accounts for the leases as operating leases.

The Company has no purchase commitment as of June 30, 2014.

The following table sets forth the Company’s contractual obligations as of June 30, 2014:

	Capital Lease Obligations			Operating Lease Obligations		Property Management Fees
Payable within:
the next 12 months	$	305,069		$	977,474	$	101,397
the next 13 to 24 months		305,069			999,436		101,397
the next 25 to 36 months		305,069			1,019,185		101,397
the next 37 to 48 months		305,069			1,043,157		50,697
the next 49 to 60 months		305,069			1,064,850		-
thereafter		3,355,757			20,844,067		-
Total	$	4,881,102		$	25,948,169	$	354,888
Less: Amount representing interest		(1,963,967	)
Present value of net minimum lease payments	$	2,917,135

Rental expenses related to operating leases of the Company amounted to $243,791 and $237,214, which were charged to the income statements for the three-month ended June 30, 2014 and 2013, respectively. Rental expenses related to operating leases of the Company amounted to $489,041 and $471,533, which were charged to the income statements for the six-month ended June 30, 2014 and 2013, respectively.