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PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2014

Property and equipment consisted of the following:

	March 31,			December 31,
	2014			2013
Permit of land use	$	457,111		$	460,964
Building		2,473,773			2,494,623
Plant, machinery and equipment		6,609,282			6,671,620
Motor vehicle		150,403			151,670
Office equipment		235,371			229,210
Construction in progress		29,009,843			25,497,600
Total		38,935,783			35,505,687
Less: accumulated depreciation		(5,420,743	)		(5,264,350	)
Property and Equipment, net	$	33,515,040		$	30,241,337

A reconciliation of total interest cost incurred to interest expense

A reconciliation of total interest cost incurred to interest expense as recognized in the consolidated statement of operations is as follows:

	For the Three Months
	Ended March 31,
	2014		2013
Total interest cost incurred	$	276,215	$	82,445
Interest cost capitalized		219,768		-
Interest expense	$	56,447	$	82,445

Useful lives of the assets

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

- Definition

Tabular disclosure of the useful life and salvage value of 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.

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