INTANGIBLE ASSETS

12 Months Ended

Jun. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 8 - INTANGIBLE ASSETS

Intangible assets consist of the following:

	June 30,		June 30,
	2012		2011
Land use rights, net	$	11,014,591	$	11,814,149
Technology patent, net		1,902,131		1,188,969
Customer relationships, net		8,253,368		9,045,858
Non-compete agreement, net		125,453		163,363
Trademarks		6,323,098		6,296,290
Total	$	27,618,641	$	28,508,629

LAND USE RIGHT

On September 25, 2009, Yuxing was granted a land use right for approximately 88 acres (353,000 square meters or 3.8 million square feet) by the People’s Government and Land & Resources Bureau of Hu County, Xi’an, Shaanxi Province. The fair value of the related intangible asset was determined to be the respective cost of RMB 73,184,895 (or $11,102,149). The intangible asset is being amortized over the grant period of 50 years using the straight line method.

On August 13, 2003, Tianjuyuan was granted a certificate of Land Use Right for a parcel of land of approximately 11 acres (42,726 square meters or 459,898 square feet) at Ping Gu District, Beijing. The purchase cost was recorded at RMB 1,045,950 (or $158,670). The intangible asset is being amortized over the grant period of 50 years.

On August 16, 2001, Jinong received a land use right as a contribution from a shareholder, which was granted by the People’s Government and Land & Resources Bureau of Yanling District, Shaanxi Province. The fair value of the related intangible asset at the time of the contribution was determined to be RMB 7,285,099 (or $1,105,150). The intangible asset is being amortized over the grant period of 50 years.

The Land Use Rights consist of the following:

	As of June 30,
	2012			2011
Land use rights	$	12,912,125		$	12,452,801
Less: accumulated amortization		(1,897,534	)		(638,652	)
Total land use rights, net	$	11,014,591		$	11,814,149

TECHNOLOGY PATENT

On August 16, 2001, Jinong was issued a technology patent related to a proprietary formula used in the production of humid acid. The fair value of the related intangible asset was determined to be the respective cost of RMB 5,875,068 (or $891,248) and is being amortized over the patent period of 10 years using the straight line method.

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The preliminary fair value on the acquired technology patent was estimated to be RMB 9,200,000 (or $1,375,084) and is amortized over the remaining useful life of six years using the straight line method. See Note 3.

The technology know-how consisted of the following:

	As of June 30,
	2012			2011
Technology know-how	$	2,387,891,		$	2,332,113
Less: accumulated amortization		(485,760	)		(1,143,144	)
Total technology know-how, net	$	1,902,131		$	1,188,969

CUSTOMER RELATIONSHIP

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The preliminary fair value on the acquired customer relationships was estimated to be RMB 65,000,000 (or $9,715,268) and is amortized over the remaining useful life of ten years.

	As of June 30,
	2012			2011
Customer relationships	$	10,296,000		$	10,096,418
Less: accumulated amortization		(2,042,632	)		(1,050,560)
Total customer relationships, net	$	8,253,368		$	9,045,858

NON-COMPETE AGREEMENT

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The preliminary fair value on the acquired non-compete agreement was estimated to be RMB 1,320,000 (or $197,295) and is amortized over the remaining useful life of five years using the straight line method.  

	June 30,			June 30,
	2012			2011
Non-compete agreement	$	209,088		$	204,204
Less: accumulated amortization		(83,635	)		(40,841)
Total non-compete agreement, net	$	125,453		$	163,363

TRADEMARKS

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The preliminary fair value on the acquired trademarks was estimated to be RMB 40,700,000 (or $6,083,252) and is subject to an annual impairment test.

Total amortization expenses of intangible assets for the years ended June 30, 2012, 2011 and 2010 amounted to $1,562,906, 1,587,190 and $287,521, respectively.

AMORTIZATION EXPENSE

Estimated amortization expenses of intangible assets for the next five (5) years after June 30, 2012, are as follows:

Year Ends	Expense ($)
June 30, 2013		1,665,601
June 30, 2014		1,665,601
June 30, 2015		1,665,601
June 30, 2016		1,665,601
June 30, 2017		1,665,601