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.

	September 30, 2017		June 30, 2017

Land use rights	$	1,671,395	$	1,641,181
Less: accumulated amortization		(308,332)		(294,550)
Land use rights, net	$	1,363,063	$	1,346,631

For the three months ended September 30, 2017 and 2016, the Company recognized amortization expense of $9,645 and $9,643, respectively.

The estimated future amortization expenses are as follows:

Twelve months ending September 30:

2018	$	33,428
2019		33,428
2020		33,428
2021		33,428
2022		33,428
Thereafter		1,195,923
Total	$	1,363,063