NOTE 12 DUE TO RELATED COMPANIES
As of December 31, 2011 and 2010,
the balance due to related companies was $288,555 and $3,115,298, respectively. The balance as of December 31, 2011 represents financing
obtained from Beijing Zhao Cheng Chuang Zhan Investment Company Limited (BJZC) while the balance as of December 31,
2010 represents financing obtained from Guang Dong Xin Sheng Environmental Protection Company Limited (GDXS) and
Beijing Zhao Cheng Chuang Zhan Investment Company Limited (BJZC). Mr. Pu, the Chairman of the Board, has equity interests
in both companies. All amounts are non-interest-bearing, unsecured and repayable on demand.