NOTE 5- LAND USE RIGHTS

Land use rights are recognized at cost less accumulated amortization. According to the Chinese laws and regulations regarding land use rights, land in urban districts is owned by the State, while land in the rural areas and suburban areas, except otherwise provided for by the State, is collectively owned by individuals designated as resident farmers by the State. However, in accordance with the legal principle that land ownership is separate from the right to the use of the land, the government grants the user a “land use right” (the “Right”) to use the land. The Company has the Right to use the land for 50 years and amortizes the rights on a straight-line basis over the period of 50 years.

	June 30, 2017		June 30, 2016

Land use rights	$	1,641,181	$	1,674,053
Less: accumulated amortization		(294,550)		(265,288)
Land use rights, net	$	1,346,631	$	1,408,765

For the years ended June 30, 2017 and 2016, the Company recognized amortization expense of $39,390 and $40,042, respectively.

The estimated future amortization expenses are as follows:

Twelve months ending June 30:

2018	$	32,824
2019		32,824
2020		32,824
2021		32,824
2022		32,824
Thereafter		1,182,511
Total	$	1,346,631