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PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2012

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

		December 31,		December 31,
		2012		2011
Permit of land use		$ 447,013		$ 442,978
Building		2,419,125		2,397,286
Plant, machinery and equipment		6,381,209		6,184,254
Motor vehicle		147,080		145,300
Office equipment		222,273		204,552
Construction in progress		3,688,567		351,571
Total		13,305,267		9,725,941
Less: accumulated depreciation		(4,273,373)		(3,391,124)
Property and Equipment, net		$ 9,031,894		$ 6,334,817

Construction in progress consisted of machinery, equipment, construction costs incurred in connection with the construction of a new facility and required manufacturing upgrades. Once the machinery is in production and the the facility is in use, construction in progress is moved into plant, machinery and equipment and depreciated. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Asset		Life - years
Permit of land use		40 - 70
Building		20 - 35
Plant, machinery and equipment		10
Motor vehicle		5 - 10
Office equipment		3-5

Depreciation relating to office equipment was included in general and administrative expenses, while all other depreciation was included in cost of revenue. For the years ended December 31, 2012 and 2011, depreciation expense was $851,047 and $555,036, respectively.

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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