Note 3 - Operating Leases

12 Months Ended

Mar. 31, 2016

Notes

Note 3 - Operating Leases

NOTE 3 – OPERATING LEASES

On October 1, 2011, the Company entered into an agreement with Shandong Yong Chun Tang Bioengineering Co., Ltd. (“Shandong YCT”) for the lease of one automobile. The lease term is from October 1, 2011 to September 30, 2021. The total lease payment of RMB131,468 (approximately USD20,350) was paid in full at lease signing and is being amortized over the life of the lease.

On June 20, 2013, the Company entered into a Farmland Leasing Agreement with Shiqiao Village for the lease of 2,000Mu farmland for the development of the acer truncatum bunge planting bases. The lease term is from July 1, 2013 to June 30, 2043. The lease payment is RMB1, 000(approximately USD 155) per Mu annually and is paid every five years in advance. The first lease payment was for the rents of the first five years in the amount of RMB10,000,000 (approximately USD1,547,700),  Which was paid on July 10, 2013 (See NOTE 11)

On March 1, 2014, the Company entered into a Farmland Leasing Agreement with Zhongce No.4 Village for the lease of 200Mu farmland to the development of the acer truncatum bunge planting bases. The lease term is from March 1, 2014 to February 28, 2044. The lease payment is RMB1,000 (approximately USD 155) per Mu annually and is paid every five years in advance. The first lease payment was for the rents of the first five years in the amount of RMB1,000,000 (approximately USD154,770), which was paid on March 10, 2014. (See NOTE 11)

On January 7, 2015, the Company entered into a new Farmland Leasing Agreement with a company, Shandong Wanziyuan Tourism Development Co. ("Shandong Wanziyuan"), to lease 2,000Mu farmland for the development of the acer truncatum bunge planting bases. The lease term is from January 15, 2015 to December 31, 2029. The lease payment is RMB1, 000 (approximately USD 155) per Mu annually and is paid every five years in advance. The first lease payment was for the rents of the first five years in the amount of RMB10,000,000 (approximately USD1,547,700), which was paid on January 8, 2015 (See NOTE 11)

On July 2, 2015, the Company entered into an additional Farmland Leasing Agreement with a Zhongce Shen Village for the lease of 2,000Mu farmland to the development of the acer truncatum bunge planting bases. The lease term is from July 2, 2015 to July 2, 2029. The lease payment is RMB1,000 (approximately USD 155) per Mu annually and is paid every five years in advance. The first lease payment was for the rents of the first five years in the amount of RMB10,000,000 (approximately USD1,547,700), which was paid on July 3, 2015 (See NOTE 11)

The Company accounts for the lease agreements as operating leases in accordance to ASC 840-10-25-37, which requires, if land is the sole item of property leased and either the transfer-of-ownership criterion in paragraph 840-10-25-1(a) or the bargain-purchase-option criterion in paragraph 840-10-25-1(b) is met, the lessee shall account for the lease as a capital lease. Otherwise, the lessee shall account for the lease as an operating lease. Per ASC 840-2-25-1, rent is charged to expense by lessees over the lease term.

The components of prepaid lease were as follows:

	As of March 31, 2016
	Current portion		Long-term
Shiqiao Village and – 2000Mu	$	309,540	$	386,925
Shandong Wanziyuan – 2000Mu		309,540		851,235
Zhongce No. 4 Village – 200Mu		30,954		59,329
Zhongce Shen Village - 2000Mu		309,540		1,006,005
Total prepaid land lease		959,574		2,303,494
Shandong YCT - Automobile		2,035		9,156
Total prepaid lease	$	961,609	$	2,312,650

The prepaid lease is amortized over the life of the leases based on straight-line method. The lease expenses for the years ended March 31, 2016 and 2015 were $903,778 and $441,334, respectively.