STOCKHOLDERS' EQUITY

9 Months Ended

Dec. 31, 2012

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

NOTE 13 - STOCKHOLDERS’ EQUITY

Stock Issued to Independent Directors

The total amount of the compensation in the form of issuing shares of common stock to the independent directors was $50 and $22,222 for the periods ended December 31, 2012 and March 31, 2012, respectively.

Stock Cancelled for Return of Patent

On February 28, 2011, the Company issued 44,254,952 shares of common stock, as a partial of total considerations to acquire a U.S. patent No. 6,475,531 B1 titled “Safe Botanical Drug for Treatment and Prevention of Influenza and Increasing Immune Function” from L.Y. Research Corp., a New Jersey Corporation.   The shares of the common stock were valued at the average closing market price on February 28, 2011 in the amount of $32,748,665.

On October 29, 2012, because the conditions set in the Purchase Agreement with L.Y. Research Corp. were not fulfilled, the Company and LY Research entered into a termination agreement to formally terminate the Purchase Agreement, and returned the patent and the shares to LY Research and the Company, respectively. Subsequently, the Company cancelled the returned shares of the Company’s common stock. As a result of this cancellation, “Additional paid-in capital” and “Retained earnings” decreased by $32,704,410 and $32,748,664, respectively.

Statutory Reserve

Subsidiaries incorporated in China are required to make appropriations to reserve funds, based on after-tax net income determined in accordance with generally accepted accounting principles of the People’s Republic of China (“PRC GAAP”).  Effective January 1, 2006, the Company is only required to contribute to one statutory reserve fund at 10% of net income after tax per annum, and any contributions are not to exceed 50% of the respective companies’ registered capital.

As of December 31, 2012, the Company appropriated $956,633 to the statutory reserve.