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EXCEL - IDEA: XBRL DOCUMENT - China Ginseng Holdings IncFinancial_Report.xls
10-Q - QUARTERLY REPORT - China Ginseng Holdings Incf10q0312_chinagiseng.htm
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EX-31.1 - CERTIFICATION OF CEO - China Ginseng Holdings Incf10q0312ex31i_chinagiseng.htm
EX-31.2 - CERTIFICATION OF CFO - China Ginseng Holdings Incf10q0312ex31ii_chinagiseng.htm
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EX-32.1 - CERTIFICATION OF CEO - China Ginseng Holdings Incf10q0312ex32i_chinagiseng.htm
v2.4.0.6
Ginseng Crops
9 Months Ended
Mar. 31, 2012
Ginseng Crops [Abstract]  
Ginseng Crops [Text Block]
 
NOTE D – GINSENG CROPS
 
The Company’s business, prior to June 30, 2009, was primarily to harvest and sell fresh and dried Ginseng.  The growth period takes approximately 6 years before harvest can commence and up to 8 years for improved harvest and seedling yields.  The Company has changed its business model to utilize the harvested Ginseng to manufacture Ginseng juice and other Ginseng beverages.  It commenced the juice operation in August 2010.  The Company plants selected areas each year and tracks the costs expended each year by planting area.  The Chinese government owns all the land in China.
 
Currently, the Company has land grants from the Chinese government for approximately 1,500 hectors of land (approximately 3,705 acres) to grow Ginseng which were awarded in April and May 2005.  These grants are for 20 years and the management of the Company believes that the grants will be renewed as the grants expire in different areas.  However, there are no assurances that the Chinese government will continue to renew these grants in the future. The planting of new Ginseng is dependent upon the Company’s cash flow and its ability to raise working capital.
 
During the past 5 years, the Company has planted approximately 520,000 square meters of land which represents approximately 3% of the total land grants. The Company plans to plant over the next 5 years
 
100,000 square meters, representing approximately 20,000 square meters per year. In the succeeding five years, the Company plans to harvest approximately 413,000 square meters of ginseng. The harvest plan by year is as follows: 2012-77,000; 2013-90,000; 2014-70,000 and 2017-67,000.
 
An analysis of ginseng crop costs is as follows for each of the applicable periods:
 
   
March 31,
   
June 30,
 
   
2012
   
2011
 
Beginning Crop Costs
  $ 2,930,278     $ 3,836,731  
Currency Conversion Adjustment to Beginning Balance
    -       156,308  
Capitalized Costs During Year:
               
Utilities
    -       1,325  
Field clearing and cultivation
    -       10,041  
Farmer lease fee net of management fee
    (86,735 )     (43,348 )
Labor
    54,190       -  
Depreciation
    51,594       11,267  
Other
    41,360       822  
Total Capitalized Costs
    60,409       (19,893 )
Less:
               
Cost of crops harvested
    (554,756 )     (1,042,868 )
      (554,756 )     (1,042,868 )
                 
Ending Crop Costs
    2,435,931       2,930,278  
Less: Current Portion
    201,461       769,581  
Non-Current Portion of Crop Costs
  $ 2,234,470     $ 2,160,697  
 
The cost of harvest is calculated by reference to the planting area and the detailed costs maintained for each planting area.  Based upon the square meters planted by area, a square meter cost is calculated and applied to the square meters harvested, rendering a cost of harvest.
 
For each financial reporting period, the Ginseng crop harvested is valued at net realizable value.  If the net realizable value is lower than carrying value, a write down is made for the difference.