NOTE 8 – PREPAYMENT FOR LONG-TERM ASSETS

At September 30, 2016 and December 31, 2015, prepayment for long-term assets consisted of prepayment for fishing vessels’ construction. In March 2016, the Company entered into two fishing vessels building agreements for 6 fishing vessels construction. In May 2016, the Company entered into one fishing vessels renovation agreement for 13 fishing vessels renovation. During the nine months ended September 30, 2016, the Company made prepayments of RMB 291.65 million (approximately $44.3 million) for the construction of 6 fishing vessels and the renovation of 13 fishing vessels. The Company reclassifies the prepayment for fishing vessels’ construction to construction-in-progress using the percentage of completion method. During the nine months ended September 30, 2016, the Company reclassified RMB 254.0 million (approximately $38.6 million) from prepayment for long-term assets to construction-in-progress. 

For the nine months ended September 30, 2016, a summary of activities in prepayment for long-term assets was as follows: