Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended |
Sep. 30, 2013 | |
Document Information [Line Items] | ' |
Document Type | '10-Q |
Amendment Flag | 'true |
Document Period End Date | 30-Sep-13 |
Document Fiscal Year Focus | '2013 |
Document Fiscal Period Focus | 'Q3 |
Trading Symbol | 'SGAS |
Entity Common Stock, Shares Outstanding | 57,608,833 |
Entity Registrant Name | 'Sino Gas International Holdings, Inc. |
Entity Central Index Key | '0001326364 |
Current Fiscal Year End Date | '--12-31 |
Entity Filer Category | 'Smaller Reporting Company |
Amendment Description | 'This Amendment No. 2 (this “Amendment”) on Form 10-Q/A amends the consolidated financial statements of the Quarterly Report on Form 10-Q filed by the registrant with the Securities and Exchange Commission (the “SEC”) on November 19, 2013 (the “Original Filing”), as amended on a Form 10-Q/A filed with the SEC on January 27, 2014.ASC 220-10-45-5 requires the presentation of amounts of comprehensive income attributable to the parent as well as comprehensive income attributable to the non-controlling interest. We are filing this Amendment to revise our financial statements to include comprehensive income attributable to the non-controlling interest. This change affects presentation only and does not impact the Company’s financial results.Except as described above, no other changes have been made to the Original Filing. This Amendment continues to describe conditions as of the date of the Original Filing and the Company has not modified or updated other disclosures presented in the Original Filing. This Amendment does not reflect events occurring after the date of the Original Filing nor does it modify or update disclosures affected by subsequent events occurring after the date of the Original Filing nor does it modify or update disclosures affected by subsequent events. Accordingly, this Amendment should be read in conjunction with the Company’s Form 10-Q for the three and nine months ended September 30, 2013, and subsequent filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended. |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
ASSETS | ' | ' |
Cash & cash equivalents | $4,534,930 | $13,836,027 |
Restricted cash | 0 | 232,326 |
Notes receivable | 325,129 | 65,254 |
Accounts receivable | 11,592,971 | 11,951,962 |
Other receivables | 6,429,813 | 3,228,774 |
Related party receivable | 333,257 | 343,551 |
Inventory | 2,352,255 | 719,342 |
Advance to suppliers | 7,194,855 | 5,364,552 |
Prepaid expenses and taxes | 1,870,495 | 969,229 |
Total Current Assets | 34,633,705 | 36,711,017 |
Non-Current Assets | ' | ' |
Investment | 23,597,237 | 23,213,107 |
Property, plant & equipment, net | 55,528,569 | 53,267,196 |
Construction in progress | 52,764,430 | 43,384,156 |
Intangible assets, net | 956,062 | 949,987 |
Goodwill | 4,598,321 | 1,677,975 |
Deposit | 703,148 | 562,790 |
Total Non-current Assets | 138,147,767 | 123,055,211 |
Total Assets | 172,781,472 | 159,766,228 |
LIABILITIES & STOCKHOLDERS' EQUITY | ' | ' |
Bank loans | 32,903,079 | 21,810,580 |
Accounts payable | 16,818,409 | 17,073,587 |
Other payables - current portion | 5,274,630 | 9,578,447 |
Accrued liabilities | 30,222 | 38,259 |
Convertible Bonds | 0 | 8,020,825 |
Unearned revenue | 5,435,746 | 3,813,148 |
Related party payable | 185,853 | 0 |
Total Current Liabilities | 60,647,939 | 60,334,846 |
Non-current Liabilities | ' | ' |
Long-term bank loans | 9,948,955 | 11,557,765 |
Total Non-current Liabilities | 9,948,955 | 11,557,765 |
Total Liabilities | 70,596,894 | 71,892,611 |
STOCKHOLDERS' EQUITY | ' | ' |
Common Stock US$0.001 par value; 250,000,000 shares authorized; 57,608,833 and 31,802,382 issued and outstanding as of September 31, 2013 and December 31, 2012 respectively. | 57,609 | 31,801 |
Statutory reserve | 6,741,806 | 6,150,234 |
Retained earnings | 32,487,358 | 30,024,006 |
Non-Controlling Interest | 7,372,994 | 7,374,492 |
Accumulated other comprehensive income | 8,125,754 | 5,474,055 |
Total Stockholders' Equity | 102,184,578 | 87,873,617 |
Total Liabilities & Stockholders Equity | 172,781,472 | 159,766,228 |
Preferred Stock B [Member] | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred stock value | 201 | 201 |
Additional paid in capital | 233,655 | 233,655 |
Preferred Stock B1 [Member] | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred stock value | 0 | 0 |
Additional paid in capital | 0 | 0 |
Common Stock [Member] | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Additional paid in capital | 46,649,350 | 38,069,322 |
Beneficial Conversion Feature [Member] | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Additional paid in capital | $515,851 | $515,851 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets [Parenthetical] (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Preferred stock, par value (in dollars per share) | $0.00 | ' |
Preferred stock, shares authorized | 100,000,000 | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 57,608,833 | 31,802,382 |
Common stock, shares outstanding | 57,608,833 | 31,802,382 |
Preferred Stock B [Member] | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 200,997 | 200,997 |
Preferred stock, shares outstanding | 200,997 | 200,997 |
Preferred Stock B1 [Member] | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income and Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Sales revenue | $13,878,779 | $11,427,105 | $42,171,537 | $33,000,374 |
Cost of revenue | 8,260,261 | 5,728,802 | 27,861,037 | 20,268,632 |
Gross Profit | 5,618,518 | 5,698,303 | 14,310,500 | 12,731,742 |
Operating Expense | ' | ' | ' | ' |
Selling expense | 1,340,699 | 874,965 | 3,739,652 | 2,390,600 |
General and administrative expense | 1,260,485 | 1,421,384 | 4,131,962 | 3,505,514 |
Total operating expense | 2,601,184 | 2,296,349 | 7,871,614 | 5,896,114 |
Operating Income | 3,017,334 | 3,401,954 | 6,438,886 | 6,835,628 |
Other Income/(Expense) | ' | ' | ' | ' |
Investment income | 198,121 | 0 | 196,009 | 0 |
Other income | 154,703 | 33,795 | 186,144 | 68,493 |
Other expense | 14,425 | -100,868 | -109,442 | -227,962 |
Interest income | 41,913 | 38,275 | 142,075 | 194,240 |
Interest expense | -933,705 | -666,589 | -2,802,258 | -2,292,354 |
Total other income/(expense) | -524,543 | -695,387 | -2,387,472 | -2,257,583 |
Income before tax | 2,492,791 | 2,706,567 | 4,051,414 | 4,578,045 |
Income tax | -495,011 | -838,612 | -1,273,694 | -1,168,051 |
Gain/(Loss) from discontinued operations, net of tax | 0 | 0 | 0 | 0 |
Net income | 1,997,780 | 1,867,955 | 2,777,720 | 3,409,994 |
Net income (loss) attributable to Common stockholders | 1,997,780 | 1,867,983 | 2,779,218 | 3,410,951 |
Net income (loss) attributable to Non-controlling interest | 0 | -28 | -1,498 | -957 |
Other Comprehensive income | ' | ' | ' | ' |
Foreign currency translation adjustment | 916,233 | 315,041 | 2,651,699 | 314,234 |
Comprehensive income | 2,914,013 | 2,182,996 | 5,429,419 | 3,724,228 |
Comprehensive income (loss) attributable to Common stockholders | 2,914,013 | 2,183,029 | 5,432,347 | 3,725,273 |
Comprehensive income (loss) attributable to Non-controlling interest | $0 | ($33) | ($2,928) | ($1,045) |
Earnings per share | ' | ' | ' | ' |
Basic (in dollars per share) | $0.06 | $0.06 | $0.09 | $0.11 |
Diluted (in dollars per share) | $0.06 | $0.06 | $0.09 | $0.11 |
Weighted Average Shares Outstanding | ' | ' | ' | ' |
Basic (in shares) | 32,650,813 | 31,793,698 | 32,650,813 | 31,793,698 |
Diluted (in shares) | 32,650,813 | 31,793,698 | 32,650,813 | 31,793,698 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Apic - Preferred Stock B [Member] | Apic - Preferred Stock B1 [Member] | Apic - Common Stock [Member] | Statutory Reserve [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Preferred Stock B [Member] | Preferred Stock B1 [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] |
Apic Warrants Series A B J C D [Member] | Apic - Warrants Series E G [Member] | Apic - Warrants Series F R [Member] | Apic - Convertible Bonds Detachable [Member] | Apic - Beneficial Conversion Feature [Member] | ||||||||||||
Balance at at Dec. 31, 2011 | $80,704,081 | $243,750 | $0 | $36,302,875 | $6,150,234 | $24,702,285 | $3,417,981 | $8,222,939 | $210 | $0 | $31,792 | $0 | $0 | $0 | $223,367 | $1,408,648 |
Balance (in shares) at Dec. 31, 2011 | ' | ' | ' | ' | ' | ' | ' | ' | 209,681 | 0 | 31,793,698 | ' | ' | ' | ' | ' |
Net Income | 6,383,440 | 0 | 0 | 0 | 0 | 6,383,440 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Conversion of Preferred Stock B to Common Stock | 0 | -10,095 | 0 | 68,435 | 0 | 0 | 0 | 0 | -9 | 0 | 9 | 0 | 0 | 0 | 0 | -58,340 |
Conversion of Preferred Stock B to Common Stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | -8,684 | 0 | 8,684 | ' | ' | ' | ' | ' |
Expiration Of Convertible Bond | 1,269,023 | 0 | 0 | 2,584,912 | 0 | 0 | 0 | 0 | ' | 0 | 0 | 0 | 0 | 0 | -223,367 | -1,092,522 |
Conversion of Convertible Bonds to Common Stock | 258,065 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 258,065 |
Conversion of Convertible Bonds to Common Stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 0 | ' | ' | ' | ' | ' |
Appropriation of Income to Non-controlling Interest | 0 | 0 | 0 | 0 | 0 | -1,061,719 | 1,061,719 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Issuance of Subsidiary's Common Stock | 2,007,892 | 0 | 0 | -886,900 | 0 | 0 | 2,894,792 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Appropriation of Retained Earnings | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Foreign Currency Translation Adjustment | -2,748,884 | 0 | 0 | 0 | 0 | 0 | 0 | -2,748,884 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Balance at at Dec. 31, 2012 | 87,873,617 | 233,655 | 0 | 38,069,322 | 6,150,234 | 30,024,006 | 7,374,492 | 5,474,055 | 201 | 0 | 31,801 | 0 | 0 | 0 | 0 | 515,851 |
Balance (in shares) at Dec. 31, 2012 | ' | ' | ' | ' | ' | ' | ' | ' | 200,997 | 0 | 31,802,382 | ' | ' | ' | ' | ' |
Net Income | 2,777,720 | 0 | 0 | 0 | 0 | 2,777,720 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Conversion of Convertible Bonds to Common Stock | 8,605,836 | ' | ' | 8,580,028 | 0 | 0 | 0 | 0 | ' | ' | 25,808 | 0 | 0 | 0 | 0 | 0 |
Conversion of Convertible Bonds to Common Stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,806,451 | ' | ' | ' | ' | ' |
Appropriation of Income to Non-controlling Interest | 0 | 0 | 0 | 0 | 0 | 1,498 | -1,498 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Capital Gain on Sale of Investment from Headquarter to Jiangsu Energy | 275,706 | 0 | 0 | 0 | 275,706 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Appropriation of Retained Earnings | 0 | 0 | 0 | 0 | 315,866 | -315,866 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Foreign Currency Translation Adjustment | 2,651,699 | 0 | 0 | 0 | 0 | 0 | 0 | 2,651,699 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Balance at at Sep. 30, 2013 | $102,184,578 | $233,655 | $0 | $46,649,350 | $6,741,805 | $32,487,358 | $7,372,994 | $8,125,754 | $201 | $0 | $57,609 | $0 | $0 | $0 | $0 | $515,851 |
Balance (in shares) at Sep. 30, 2013 | ' | ' | ' | ' | ' | ' | ' | ' | 200,997 | 0 | 57,608,833 | ' | ' | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Cash Flows from Operating Activities | ' | ' | ' | ' |
Net Income | $1,997,780 | $1,867,955 | $2,777,720 | $3,409,994 |
Bad debt provision | 6,135 | 27,667 | -3,626 | 24,147 |
Depreciation expense | 392,487 | 487,794 | 1,229,226 | 1,243,876 |
Amortization expense of intangible assets | 18,718 | 4,283 | 48,512 | 21,764 |
Amortization expense of convertible bonds | 200,155 | 215,611 | 585,009 | 617,279 |
Withdraw/(deposit) in restricted time deposits | 0 | 207,927 | 232,326 | -230,749 |
Decrease/(increase) in accounts and other receivables | -846,464 | -3,092,746 | -3,098,298 | -364,579 |
Decrease/(increase) in inventory | -341,566 | -543,283 | -1,632,913 | -1,409,447 |
Decrease/(increase) in prepaid expenses | -3,499,898 | 886,563 | -2,731,569 | -435,090 |
Decrease/(Increase) in related party receivable | 54,238 | 965 | 10,293 | -2,056 |
Increase/(decrease) in accounts and other payables | -3,993,927 | -914,575 | -2,758,579 | 6,145,427 |
Cash Sourced/(Used) in Operating Activities of Continued Operation | -6,012,342 | -851,839 | -5,341,899 | 9,020,566 |
Cash Sourced/(Used) in Operating Activities of Discontinued Operation | 0 | 0 | 0 | 0 |
Cash Sourced/(Used) in Operating Activities | -6,012,342 | -851,839 | -5,341,899 | 9,020,566 |
Cash Flows from Investing Activities | ' | ' | ' | ' |
Decrease/(Increase) in deposit | -97,574 | 31,736 | -140,356 | -2,273,914 |
Increase of investment in equity | -85,872 | 22,759 | -384,131 | -57,414 |
Purchase of property, plant & equipment | -2,259,415 | -696,243 | -3,490,599 | -4,824,370 |
Increase of goodwill | 0 | 0 | -2,920,345 | 0 |
(Purchase)of/Proceeds from intangible assets | -54,587 | -54,587 | 0 | 0 |
Increase in construction in progress | -3,344,421 | -3,673,880 | -9,380,274 | -8,082,352 |
Cash Sourced/(Used) in Investing Activities of Continued Operation | -5,841,869 | -4,315,628 | -16,370,291 | -15,238,050 |
Cash Sourced/(Used) in Investing Activities of Discontinued Operation | 0 | 0 | 0 | 0 |
Cash Sourced/(Used) in Investing Activities | -5,841,869 | -4,315,628 | -16,370,291 | -15,238,050 |
Cash Flows from Financing Activities | ' | ' | ' | ' |
Increase/(decrease) of bank loans | 5,587,563 | 2,389,100 | 9,483,689 | 7,204,542 |
Increase of statutory reserve | -954,799 | 0 | 275,706 | 0 |
Increase of notes payable | -113,119 | 0 | 0 | 0 |
Cash Sourced/(Used) in Financing Activities | 4,518,645 | 2,389,100 | 9,759,395 | 7,204,542 |
Net increase in cash & cash equivalents for the periods | -7,334,566 | -2,778,367 | -11,952,795 | 987,058 |
Effect of currency translation | 957,667 | -591,678 | 2,651,699 | -828,466 |
Cash & cash equivalents at the beginning of periods | 10,912,830 | 6,403,183 | 13,836,027 | 2,874,546 |
Cash & cash equivalents at the end of periods | 4,534,930 | 3,033,138 | 4,534,930 | 3,033,138 |
Supplementary cash flows information | ' | ' | ' | ' |
Interest received | 41,913 | 38,275 | 142,075 | 194,240 |
Interest paid | 493,324 | 667,907 | 2,219,411 | 2,030,510 |
Income tax paid | $436,252 | $348,990 | $1,218,104 | $1,765,901 |
ORGANIZATION_AND_PRINCIPAL_ACT
ORGANIZATION AND PRINCIPAL ACTIVITIES | 9 Months Ended | |
Sep. 30, 2013 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' | |
1 | ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Sino Gas International Holdings, Inc. (the “Company”) was incorporated under the laws of the State of Utah on August 19, 1983 as Evica Resources, Inc. The Company changed its name to American Arms, Inc. on April 5, 1984, and then changed its name to Dolce Ventures, Inc. on May 21, 2002, and ultimately changed its name to Sino Gas International Holdings, Inc. on November 17, 2006. | ||
On September 7, 2006, the Company underwent a reverse-merger with Gas Investment China Co., Ltd. (“Gas (BVI)”), an International Business Company incorporated in the British Virgin Islands, and its wholly owned subsidiary Beijing Zhong Ran Weiye Gas Co., Ltd. (“Beijing Gas”), involving an exchange of shares whereby the Company issued an aggregate of 14,361,646 shares to the shareholders of Gas (BVI) in exchange for all of the issued and outstanding shares of Gas (BVI). For financial reporting purposes, this transaction is classified as a recapitalization of Sino Gas International Holdings, Inc. (Legal acquirer, accounting acquiree) and the historical financial statements of Gas Investment China Co. Ltd. (Legal acquiree, accounting acquirer) | ||
The Company’s primary business operations are conducted through Beijing Gas. Beijing Gas is a natural gas services operator, principally engaging in the investment, operation, and management of city gas pipeline infrastructure, in the distribution of natural gas to residential and industrial users, in the construction and operation gas stations, and in the development and application of natural gas related technologies. Beijing Gas develops its operating subsidiaries, known as project companies. Each project company operates as a local natural gas distributor in a city or county. Pursuant to an exclusive franchise agreement with the local government or entities responsible for administering and/or regulating gas utilities, each project company is granted the exclusive right to develop and operate natural gas distribution systems and distribute natural gas at the operational location. | ||
The Company holds equity interests of 51% each in Sino Gas Construction, Ltd., and Tongyuan International Holding Limited. It holds a 100% interest in Beijing Gas, which in turn holds an equity interest of 90% to 100% in its operating subsidiaries, and an individual shareholder nominally holds the remainder of the equity interest in such project companies. Each such individual shareholder has relinquished any and all rights, power and interest to Beijing Gas in the respective project companies under enforceable contracts. This structure was intended to comply with a PRC law that required a limited liability company to have at least two shareholders. | ||
The Company owns and operates natural gas distribution systems in 34 small and medium size cities serving approximately 293,758 residential and seven industrial customers. The Company’s facilities include approximately 2,039 kilometers of pipeline and delivery networks (including delivery trucks) with a daily capacity of approximately 156,000 cubic meters of natural gas. | ||
The common stock of the Company is currently quoted on the National Association of Securities Dealers’ Over-the-Counter Bulletin Board under the symbol “SGAS”. | ||
Basis of Presentation and Organization | ||
The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). | ||
This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Company’s principal subsidiaries, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the People’s Republic of China (“PRC”) or in the accounting standards used in the places of their domicile. The accompanying consolidated financial statements reflect necessary adjustments not recorded in the books of account of the Company’s subsidiaries to present them in conformity with US GAAP. | ||
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Significant Accounting Policies [Text Block] | ' | |||||||||||||
2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||
(a) | Method of Accounting | |||||||||||||
The Company maintains its general ledger and journals with the accrual method of accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements. | ||||||||||||||
(b) | Use of estimates | |||||||||||||
The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates. | ||||||||||||||
(c) | Economic and political risks | |||||||||||||
The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environment in the PRC, and by the general state of the PRC economy. | ||||||||||||||
The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment, and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to law and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. | ||||||||||||||
(d) | Principles of Consolidation | |||||||||||||
The consolidated financial statements include the accounts of the Company and its subsidiaries (the “Group”). Significant inter-company transactions have been eliminated in consolidation. Investments in which the Company has a 20 percent to 50 percent voting interest and where the Company exercises significant influence over the investor are accounted for using the equity method. | ||||||||||||||
The Company owned its subsidiaries after inception and continued to acquire equity interests throughout the reporting periods. The following table depicts the identities of the consolidating subsidiaries as of September 30, 2013: | ||||||||||||||
Name of Company | Place of Incorporation | Date of Incorporation | Beneficial Interest % | Equity Interest % | Registered Capital | |||||||||
GAS Investment China Co., Ltd. | The British Virgin Islands | 6/19/03 | 100 | 100 | USD 10,000,000 | |||||||||
Sino Gas Construction, Ltd. | The British Virgin Islands | 1/9/07 | 51 | 51 | USD 98,039 | |||||||||
Sino Gas Investment Development, Ltd. | The British Virgin Islands | 1/9/07 | 100 | 100 | USD 50,000 | |||||||||
Tongyuan International Holding Limited | Hong Kong | 12/20/11 | 51 | 51 | HKD 10,000 | |||||||||
Beijing Zhong Ran Weiye Gas Co., Ltd. | PRC | 8/29/01 | 100 | 100 | RMB 206,000,000 | |||||||||
Beijing Chenguang Gas Co., Ltd. | PRC | 10/30/02 | 100 | 100 | RMB 35,239,600 | |||||||||
Guannan Weiye Gas Co., Ltd. | PRC | 6/19/03 | 100 | 100 | RMB 9,510,000 | |||||||||
Ningjin Weiye Gas Co., Ltd. | PRC | 12/3/03 | 100 | 100 | RMB 3,000,000 | |||||||||
Yutian Zhongran Weiye Gas Co., Ltd. | PRC | 12/19/03 | 100 | 100 | RMB 3,000,000 | |||||||||
Xingtang Weiye Gas Co., Ltd. | PRC | 2/18/04 | 100 | 100 | RMB 3,000,000 | |||||||||
Wuqiao Gas Co., Ltd. | PRC | 6/30/04 | 100 | 100 | RMB 2,000,000 | |||||||||
Sihong Weiye Gas Co., Ltd. | PRC | 12/3/04 | 100 | 95 | RMB 10,000,000 | |||||||||
Langfang Weiye Dangerous Goods Transportation Co., Ltd. | PRC | 3/22/05 | 100 | 95 | RMB 1,000,000 | |||||||||
Linzhang Weiye Gas Co., Ltd. | PRC | 7/6/05 | 100 | 100 | RMB 1,000,000 | |||||||||
Jiangsu Weiye Gas Co., Ltd. | PRC | 8/22/05 | 100 | 98.9 | RMB 45,694,900 | |||||||||
Zhangjiakou City Xiahuayuan Jinli Gas Co., Ltd. | PRC | 9/30/05 | 100 | 100 | RMB 2,000,000 | |||||||||
Longyao Zhongran Weiye Gas Co., Ltd. | PRC | 10/13/05 | 100 | 100 | RMB 3,000,000 | |||||||||
Yuxian Jinli Gas Co., Ltd. | PRC | 11/8/05 | 100 | 100 | RMB 9,500,000 | |||||||||
Hengshui Weiye Gas Co., Ltd. | PRC | 12/20/05 | 100 | 100 | RMB 3,000,000 | |||||||||
Changli Weiye Gas Co., Ltd. | PRC | 12/8/06 | 100 | 100 | RMB 3,000,000 | |||||||||
Chenan Chenguang Gas Co., Ltd. | PRC | 1/23/07 | 100 | 100 | RMB 1,500,000 | |||||||||
Wuhe Weiye Gas Co., Ltd. | PRC | 1/30/07 | 100 | 100 | RMB 3,000,000 | |||||||||
Gucheng Weiye Gas Co., Ltd. | PRC | 3/21/07 | 100 | 100 | RMB 3,000,000 | |||||||||
Luquan Chenguang Gas Co., Ltd. | PRC | 4/27/07 | 100 | 100 | RMB 2,000,000 | |||||||||
Shijiazhuang Chenguang Gas Co., Ltd. | PRC | 6/14/07 | 100 | 100 | RMB 2,000,000 | |||||||||
Nangong Weiye Gas Co., Ltd. | PRC | 6/25/07 | 100 | 100 | RMB 3,000,000 | |||||||||
Sixian Weiye Gas Co., Ltd. | PRC | 9/3/07 | 100 | 100 | RMB 3,000,000 | |||||||||
Baishan Weiye Gas Co., Ltd. | PRC | 7/13/07 | 100 | 100 | RMB 15,000,000 | |||||||||
Xinhe Weiye Gas Co., Ltd. | PRC | 7/2/09 | 100 | 100 | RMB 300,000 | |||||||||
Hebei Weiye Gas (Group) Co., Ltd. | PRC | 12/18/09 | 100 | 100 | RMB 75,439,270 | |||||||||
Gaocheng Weiye Gas Co., Ltd. | PRC | 1/27/10 | 100 | 100 | RMB 200,000 | |||||||||
Jiangsu Zhong Ran Weiye Energy Investment Co., Ltd. | PRC | 3/10/11 | 100 | 99 | RMB 200,000,000 | |||||||||
Fusong Weiye Gas Co., Ltd. | PRC | 7/29/11 | 100 | 90 | RMB 10,000,000 | |||||||||
Jize Weiye Gas Co., Ltd. | PRC | 9/20/11 | 100 | 100 | RMB 1,000,000 | |||||||||
Baishan Weiye Cheyong Gas Co., Ltd. | PRC | 8/13/12 | 100 | 100 | RMB 1,000,000 | |||||||||
Baishan Weiye Wuzi Co., Ltd. | PRC | 11/5/12 | 100 | 100 | RMB 1,000,000 | |||||||||
Baishan Liquefied Gas Co., Ltd. | PRC | 8/31/12 | 100 | 100 | RMB 2,000,000 | |||||||||
(e) | Cash and Cash Equivalents | |||||||||||||
The Company considers all cash and other highly liquid investments with initial maturities of three months or less to be cash equivalents. | ||||||||||||||
(f) | Accounts Receivable | |||||||||||||
Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as needed. The Company extends unsecured credit to customers in the normal course of business and does not accrue interest on trade accounts receivable. | ||||||||||||||
(g) | Advances to Suppliers | |||||||||||||
Advances to suppliers represent the cash paid in advance for purchasing raw materials. The advances to suppliers are interest free and unsecured. | ||||||||||||||
(h) | Investments in Equity Securities | |||||||||||||
The equity method of accounting was used to account for the Company’s investment in equity securities for which the Company did not have controlling equity interest. A non-controlling equity interest for the Company is typically a position of less than 50% beneficial ownership. | ||||||||||||||
The consolidated statement of income includes the Company’s share of the post-acquisition results of the investment’s performance for the year. In the consolidated balance sheet, investments in equity securities are stated at the Company’s share of the net assets of the investments plus any potential premium, or less discounts paid at the time of acquisition, and less any identified impairment loss. | ||||||||||||||
The Company did not record any goodwill when it acquired its equity positions in Xiangke Oil Gas and Qujing Gas. Accordingly, in accordance with SFAS 142, the Company has not taken an amortization expense of goodwill during the time it has carried stakes in their equity securities. | ||||||||||||||
(i) | Accounting for the Impairment of Long-Lived Assets | |||||||||||||
The Company has adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”), ASC 360-10-35. The Company evaluates its long lived assets for impairment when indicators of impairment are present or annually, whichever occurs sooner. In the event that there are indications of impairment, the Company will record a loss to statements of income equal to the difference between the carrying value and the fair value of the long lived asset. The Company typically, but not exclusively, uses the expected future discounted flows method to determine fair value of long lived asset subject to impairment. The fair value of long lived assets held for disposition will include the cost of disposal. | ||||||||||||||
The Company’s long-lived assets are grouped by their presentation on the consolidated balance sheets, and further segregated by their operating and asset type. Long-lived assets subject to impairment include buildings, equipment, vehicles, accounting software licenses, and franchise and land use rights. The Company makes its determinations based on various factors that impact those assets. | ||||||||||||||
(j) | Property, Plant and Equipment | |||||||||||||
Property, plant and equipment, other than construction in progress, are stated at cost less accumulated depreciation and impairment loss. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the property, plant and equipment are as follows: | ||||||||||||||
Assets Class | Estimated Useful Life | |||||||||||||
Gas Pipelines (Up to December 31, 2007) | 25 years | |||||||||||||
Gas Pipelines (Starting from January 1, 2008) | 50 years | |||||||||||||
Buildings | 25 years | |||||||||||||
Leasehold Improvements | 25 years | |||||||||||||
Machinery & Equipment | 20 years | |||||||||||||
Motor Vehicles | 10 years | |||||||||||||
Office Equipment | 8 years | |||||||||||||
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized. | ||||||||||||||
(k) | Intangible Assets | |||||||||||||
Intangible assets are stated at cost less accumulated amortization and impairment loss. Amortization is provided over their estimated useful lives using the straight-line method. Estimated useful lives of the intangibles are as follows: | ||||||||||||||
Asset Class | Estimated Useful Life | |||||||||||||
Land use rights | 20 - 50 years | |||||||||||||
Franchises | 30 years | |||||||||||||
Accounting software | 3 years | |||||||||||||
(l) | Goodwill | |||||||||||||
Goodwill impairment tests are performed annually and more frequently whenever events or changes in circumstances indicate goodwill carrying values exceed estimated reporting unit fair values. Upon indication that the carrying values of such assets may not be recoverable, the Company recognizes an impairment loss as a charge against current operations. | ||||||||||||||
(m) | Construction in Progress | |||||||||||||
Construction in progress represents the cost of constructing pipelines and is stated at cost. Costs are comprised of direct and indirect incremental costs of acquisition or construction. Completed items are transferred from construction in progress to the gas pipelines of fixed assets when they are ready for their intended use. The major cost of construction relates to construction materials, direct labor wages, and other overhead. Construction of pipeline, through which to distribute natural gas, is one of the Group’s principal businesses. The Group builds city main pipeline networks and branch pipeline networks to make gas connections to residential users, industrial and commercial users, with the objective of generating revenue on gas connections and gas usage fees collected from these customers. These projects, once completed, will significantly increase the gas supply capacity. | ||||||||||||||
(n) | Unearned Revenue | |||||||||||||
Unearned revenue represents prepayments by customers for gas purchases and advance payments on construction and installation of pipeline contracts. The Company records such prepayments as unearned revenue when the payments are received. | ||||||||||||||
(o) | Financial Instruments | |||||||||||||
The Company adopted ASC 820-10, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for using fair value to measure assets and liabilities, and expands disclosures about fair value measurements. | ||||||||||||||
ASC 820-10 includes a fair value hierarchy that is intended to increase the consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing an asset or liability based upon their own market assumptions. The fair value hierarchy consists of the following three levels: | ||||||||||||||
Level 1 – inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. | ||||||||||||||
Level 2 – observable inputs other than level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||
Level 3 – instrument valuations are obtained without observable market values and require a high-level of judgment to determine the fair value. | ||||||||||||||
The Company’s financial instruments consist mainly of cash, bank notes receivable, and debt obligations. Based on the borrowing rates currently available to the Company for loans and similar terms and average maturities, the fair value of debt obligations also approximates its carrying value due to the short-term nature of the instruments. While the Company believes its valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. | ||||||||||||||
The following tables present the Company’s financial assets and liabilities at fair value in accordance with ASC 820-10: | ||||||||||||||
At September 30, | Quoted in | Significant | ||||||||||||
2013:00:00 | Active Markets | Other | Significant | |||||||||||
for Identical | Observable | Unobservable | ||||||||||||
Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||
Financial assets: | ||||||||||||||
Cash | $ | 4,534,930 | $ | - | $ | - | $ | 4,534,930 | ||||||
Notes receivable | 325,129 | - | - | 325,129 | ||||||||||
Total financial assets | $ | 4,860,059 | $ | - | $ | - | $ | 4,860,059 | ||||||
Financial liabilities: | ||||||||||||||
Notes payable | $ | - | $ | - | $ | - | $ | - | ||||||
Total financial liabilities | $ | - | $ | - | $ | - | $ | - | ||||||
At December 31, | ||||||||||||||
2012:00:00 | Quoted in Active Markets | Significant Other | Significant | |||||||||||
for Identical | Observable | Unobservable | ||||||||||||
Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||
Financial assets: | ||||||||||||||
Cash | $ | 13,836,027 | $ | - | $ | - | $ | 13,836,027 | ||||||
Restricted cash | 65,254 | - | - | 65,254 | ||||||||||
Total financial assets | $ | 13,901,281 | $ | - | $ | - | $ | 13,901,281 | ||||||
Financial liabilities: | ||||||||||||||
Notes payable | $ | - | $ | - | $ | - | $ | - | ||||||
Total financial liabilities | $ | - | $ | - | $ | - | $ | - | ||||||
(p) | Foreign Currency Translation | |||||||||||||
The accompanying financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (“RMB”). The financial statements are translated into United States dollars from RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. | ||||||||||||||
9/30/13 | 12/31/12 | |||||||||||||
Years end RMB : US$ exchange rate | 6.1514 | 6.3161 | ||||||||||||
Average yearly RMB : US$ exchange rate | 6.2215 | 6.3198 | ||||||||||||
The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation. | ||||||||||||||
(q) | Revenue Recognition | |||||||||||||
The Company has two sources of revenue: (a) sales of natural gas and (b) connection fees for constructing connections to the natural gas distribution network. In accordance with FASB ASC 605-10, the Company recognizes gas distribution revenue when natural gas is rendered to customers, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Connection fees are recognized when the outcome of a contract can be estimated reliably and the stage of completion at the balance sheet date can be measured reliably. | ||||||||||||||
Payments received before all of the relevant criteria for revenue recognition satisfied are recorded as unearned revenue. | ||||||||||||||
(r) | Cost of Revenue | |||||||||||||
The cost for distribution of natural gas is comprised of raw materials, delivery cost, and other overhead. The cost of connection fees consists of construction materials, direct labor wages, and other overhead. | ||||||||||||||
(s) | Investment Income | |||||||||||||
Investment income represents the Company’s share of post-acquisition results of its investment in equity securities for the year. | ||||||||||||||
(t) | Income Taxes | |||||||||||||
The Company uses the accrual method of accounting to determine and report its taxable reduction of income taxes for the year in which they are available. The Company has implemented Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. Income tax liabilities computed according to the United States, and People’s Republic of China tax laws are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes primarily related to differences between the basis of fixed assets and intangible assets for financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes. A valuation allowance is created to evaluate deferred tax assets, whether it is more likely than not that these items will expire either before the Company is able to realize that tax benefit, or that future realization is uncertain. | ||||||||||||||
In respect of the Company’s subsidiaries domiciled and operated in China and British Virgin Islands, the taxation of these entities is summarized below: | ||||||||||||||
⋅ | All of the operating companies are located in the PRC; GAS Investment China Co., Ltd., Sino Gas Construction, Ltd., and Sino Gas Investment Development, Ltd. are located in the British Virgin Islands; and Tongyuan International Holdings Limited is located in Hong Kong. All of these entities are subject to the relevant tax laws and regulations of the PRC, Hong Kong, and the British Virgin Islands in which the related entities are domiciled. The maximum tax rates of the subsidiaries pursuant to the countries in which they are domiciled are: | |||||||||||||
Subsidiary | Country of Domicile | Income Tax Rate | ||||||||||||
PRC Operating Companies (per Note 2. (d) Principals of Consolidation) | PRC | 25 | % | |||||||||||
i. GAS Investment China Co., Ltd. | BVI | 0 | % | |||||||||||
ii. Sino Gas Construction, Ltd. | BVI | 0 | % | |||||||||||
iii. Sino Gas Investment Development, Ltd | BVI | 0 | % | |||||||||||
iv. Tongyuan International Holdings Limited | Hong Kong | 16.5 | % | |||||||||||
⋅ | Effective January 1, 2008, the PRC government implemented a new 25% tax rate for all enterprises regardless of whether it was a domestic or foreign enterprise, without any tax holiday, which is defined as “two-year exemption followed by three-year half exemption” hitherto enjoyed by tax payers. As a result of the new tax law, the standard 15% tax rate preference terminated as of December 31, 2007. However, the PRC government has established a set of transition rules to allow enterprises that utilized the tax holidays prior to January 1, 2008 to continue utilizing the tax preference. | |||||||||||||
⋅ | Since Sino Gas International Holdings, Inc. is primarily a holding company without any business activities in the United States, the Company shall not be subject to United States income tax for nine months ended September 30, 2013. | |||||||||||||
(u) | Advertising | |||||||||||||
The Company expensed all advertising costs as incurred. | ||||||||||||||
(v) | Risk | |||||||||||||
⋅ | Concentration of Credit Risk | |||||||||||||
Concentration of credit risk is limited to accounts receivable and is subject to the financial conditions of major customers. The Company does not require collateral or other security to support accounts receivable. The Company conducts periodic reviews of its clients’ financial condition and customers’ payment practices to minimize collection risk on accounts receivable. | ||||||||||||||
⋅ | Environmental risks | |||||||||||||
The Company has procured environmental licenses required by the PRC government. The Company has both a water treatment facility for water used in its production process and secure transportation to remove waste off site. In the event of an accident, the Company has purchased insurance to cover potential harm to employees, equipment, and the local environment. | ||||||||||||||
⋅ | Inflation Risk | |||||||||||||
Management monitors changes in prices levels. Historically inflation has not materially impacted the Company’s financial statements; however, significant increases in the price of raw materials and labor that cannot be passed on to the Company’s customers could adversely impact the Company’s results of operations. | ||||||||||||||
⋅ | Economic and Political Risks | |||||||||||||
The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC. | ||||||||||||||
The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. | ||||||||||||||
(w) | Statutory Reserves | |||||||||||||
As stipulated by the Company Law of the People’s Republic of China as applicable to Chinese companies with foreign ownership, net income after taxation can only be distributed as dividends after appropriation has been made for the following: | ||||||||||||||
i. | Making up cumulative prior years’ losses, if any; | |||||||||||||
ii. | Allocations to the “Statutory reserve” of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company’s registered capital; | |||||||||||||
iii. | Allocations to the discretionary surplus reserve, if approved in the shareholders’ general meeting. | |||||||||||||
(x) | Comprehensive Income | |||||||||||||
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other consolidated financial statements. The Company’s current component of other comprehensive income is the foreign currency translation adjustment. | ||||||||||||||
The Company uses FASB ASC Topic 220, “Reporting Comprehensive Income”. Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders. Comprehensive income for the years ended December 31, 2012 and 2011 included net income and foreign currency translation adjustments. | ||||||||||||||
(y) | Recent Accounting Pronouncements | |||||||||||||
On July 27, 2012, the FASB issued ASU 2012-02, “Intangibles-Goodwill and Other (Topic 350) – Testing Indefinite-Lived Intangible Assets for Impairment”. The ASU provides entities with an option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired. If an entity concludes that it is more than 50% likely that an indefinite-lived intangible asset is not impaired, no further analysis is required. However, if an entity concludes otherwise, it would be required to determine the fair value of the indefinite-lived intangible asset to measure the amount of actual impairment, if any, as currently required under US GAAP. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of this pronouncement will not have a material impact on its financial statements. | ||||||||||||||
In October, 2012, the FASB issued ASU No. 2012-04, “Technical Corrections and Improvements” (“ASU 2012-04”). The amendments cover a wide range of topics in the FASB ASC. The amendments are incorporated into two sections: a. Technical corrections and improvements and b. Conforming amendments related to fair value measurements. | ||||||||||||||
a. | The amendments in the technical corrections and improvements section are categorized as follows: | |||||||||||||
⋅ | Source literature amendments. These amendments are considered necessary due to differences between source literature and the FASB ASC. The amendments primarily carry forward legacy document guidance and/or subsequent amendments into the FASB ASC. Often, either writing style or phrasing in the legacy documents did not directly relate to the FASB ASC format and style so that the meaning of certain guidance might have been unintentionally altered. | |||||||||||||
⋅ | Guidance clarification and reference corrections. These amendments include updated wording or corrected references, or a combination of both. | |||||||||||||
• | Relocated guidance. These amendments primarily move authoritative literature guidance from one location to another location that is deemed more appropriate within the FASB ASC. | |||||||||||||
b. | On the fair value measurements issue, the guidance in ASU 2012-04 identifies when the use of the term “fair value” should be linked to the definition of fair value included in FASB ASC 820, entitled Fair Value Measurement. Most of the amendments are of a nonsubstantive nature. Many of the amendments relate to conforming wording to be consistent with the terminology in FASB ASC 820 for example, references to market value and current market value have been changed to appropriately refer to fair value so that the literature is consistent throughout. | |||||||||||||
In October 2012, the FASB issued ASU No. 2012-06, “Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution” (“ASU 2012-06”). This amendment requires that indemnification assets recognized in accordance with Subtopic 805-20, Business Combinations—Identifiable Assets and Liabilities, and Any Noncontrolling Interest, as a result of a government-assisted acquisition of a financial institution involving an indemnification agreement should be subsequently measured on the same basis as the asset subject to indemnification. For public and nonpublic entities, the amendments in this Update are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2012. Management does not expect the adoption of this standard has a significant effect on the Company’s consolidated financial position or results of operations. | ||||||||||||||
In January 2013, the FASB issued ASU No. 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities” (“ASU 2013-01”). The Update clarifies that ordinary trade receivables and receivables are not in the scope of Accounting Standards Update No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. Specifically, Update 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in FASB Accounting Standards Codification® or subject to a master netting arrangement or similar agreement. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. Management does not expect the adoption of this standard has a significant effect on the Company’s consolidated financial position or results of operations. | ||||||||||||||
As of September 30, 2013, there are no other recently issued accounting standards not yet adopted that would have a material effect on the Company’s consolidated financial statements. | ||||||||||||||
(z) | Earnings per Share | |||||||||||||
The Company computes earnings per share (“EPS”) in accordance with FASB ASC 260 “Earnings per share”. SFAS No. 128 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., contingent shares, convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. | ||||||||||||||
(aa) | Subsequent Events | |||||||||||||
The Company evaluates subsequent events that have occurred after the consolidated balance sheet date but before the consolidated financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. The Company has identified no subsequent events that would require disclosure to the consolidated financial statements. | ||||||||||||||
ACCOUNTS_RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Receivables [Abstract] | ' | |||||||
Financing Receivables [Text Block] | ' | |||||||
3 | ACCOUNTS RECEIVABLE | |||||||
For natural gas sales, revenue is due when the gas is sold. Most residential customers settle their accounts via prepayments with debit cards, while industrial customers are billed and pay according to the contract terms ranging from 10 days to one month. | ||||||||
For construction projects, connection fees are generally collected in installments. First deposits of 30% of the total contract sum are received from the client when the project commences. A second payment of 30% is received at a milestone set out in the contracts. A third payment of 30% is received after construction is completed. The remaining 10% is typically held back by the client and acts as a warranty on the quality of the project. The retained money is usually received by the Company after the 1 year warranty period. | ||||||||
The Company believes it has provided adequate provisions for doubtful accounts. Doubtful allowance accounts at September 30, 2013 and December 31, 2012 were approximately 1% of gross account receivables. To collect on doubtful accounts, the Company uses all of its efforts, such as having internal staff call for payment, filing legal pledges, or even hiring collection agents to collect the outstanding balance. If the collection is no longer probable, the Company will write off the balance against the allowance for doubtful accounts. | ||||||||
The Company has not experienced any material delinquent accounts that were uncollectible and has not written off a material balance against the allowance for doubtful accounts. | ||||||||
Accounts Receivable | ||||||||
9/30/13 | 12/31/12 | |||||||
Accounts receivable | $ | 11,710,072 | $ | 12,072,689 | ||||
Less: Allowance for bad debt | -117,101 | -120,727 | ||||||
Accounts receivable, net | $ | 11,592,971 | $ | 11,951,962 | ||||
Allowance for Bad Debt | ||||||||
9/30/13 | 12/31/12 | |||||||
Beginning balance | $ | -120,727 | $ | -104,323 | ||||
Allowance provided | - | -16,404 | ||||||
Charge against allowance | 3,626 | - | ||||||
Reversals | - | - | ||||||
Ending balance | $ | -117,101 | $ | -120,727 | ||||
Accounts Receivable Aging Analysis | ||||||||
9/30/13 | 12/31/12 | |||||||
<30 Days | $ | 5,813,898 | $ | 4,264,620 | ||||
30-60 Days | 131,352 | 1,122,384 | ||||||
60-90 Days | 1,114,469 | 2,253,942 | ||||||
90-180 Days | 1,770,459 | 480,993 | ||||||
180-360 Days | 1,813,652 | 95,569 | ||||||
>360 Days | 1,066,242 | 3,855,181 | ||||||
Total | $ | 11,710,072 | $ | 12,072,689 | ||||
The increase in accounts receivable aged 180-360 days primarily reflects sales recorded during the current year. The decrease in accounts receivable aged over 360 days reflects receipt of payments of amounts that had been due. | ||||||||
Our top ten customers accounted for 39.34% of the total accounts receivable as of September 30, 2013: | ||||||||
Beijing Langfa Oil and Gas Technology Co., Ltd. | $ | 321,271 | 2.74 | % | ||||
Beijing Tongzhou Ayou Liquefied Gas Station | 395,361 | 3.38 | % | |||||
Beijing Yinzuo Hezhi Real Estate Development Co., Ltd. | 373,844 | 3.2 | % | |||||
Hebei Dihua Real Estate Co., Ltd. | 518,451 | 4.43 | % | |||||
Hebei Natural Gas Co., Ltd. | 616,881 | 5.28 | % | |||||
Hebei Zhonggang Steel Co., Ltd. | 594,588 | 5.09 | % | |||||
Jiangsu Zhonghuang Real Estate Co., Ltd. | 505,657 | 4.32 | % | |||||
Lianyun Port Zhaolong Home Development Co., Ltd. | 515,883 | 4.41 | % | |||||
Shanghai Datun Energy Co., Ltd. (Jiangsu Branch) | 338,663 | 2.9 | % | |||||
Zaoqiang Taihe Real Estate Co., Ltd. | 419,417 | 3.59 | % | |||||
$ | 4,600,016 | 39.34 | % | |||||
OTHER_RECEIVABLES
OTHER RECEIVABLES | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Other Receivables [Abstract] | ' | |||||||
Other Receivables [Text Block] | ' | |||||||
4 | OTHER RECEIVABLES | |||||||
9/30/13 | 12/31/12 | |||||||
Employee travel advance | $ | 1,190,692 | $ | 323,463 | ||||
Advance for consultant service | 550,866 | 786,404 | ||||||
Short term security deposit for construction pipeline | 247,358 | 186,090 | ||||||
Others | 4,440,897 | 1,932,817 | ||||||
$ | 6,429,813 | $ | 3,228,774 | |||||
RELATED_PARTY_RECEIVABLE
RELATED PARTY RECEIVABLE | 9 Months Ended | ||
Sep. 30, 2013 | |||
Related Party Transactions [Abstract] | ' | ||
Related Party Transactions Disclosure [Text Block] | ' | ||
5 | RELATED PARTY RECEIVABLE | ||
A related party receivable of $333,257 is due from the Company’s founder and CEO Mr. Liu Yuchuan. The Company borrowed $3,024,895 (RMB 20,000,000) from China Development Bank. The loan was secured by the CEO’s personal home property, which carried a $333,257 (RMB 2,396,000) mortgage. Because the Bank required the mortgage loan to be settled before it would collateralize on it, the Company paid the entire mortgage on behalf of the CEO. This payment was interest free. | |||
INVESTMENT
INVESTMENT | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Schedule of Investments [Abstract] | ' | |||||||||
Investment Holdings [Text Block] | ' | |||||||||
6 | INVESTMENT | |||||||||
Ref. | 9/30/13 | 12/31/12 | ||||||||
-1 | Beijing Zhongran Xiangke Oil Gas Technology Co., Ltd. | $ | 10,212,856 | $ | 9,938,953 | |||||
-2 | Qujing City Fuel Gas Co., Ltd. | 9,157,282 | 9,157,282 | |||||||
-3 | Tongshan Hengxin Jiaye Gas Co., Ltd. | 4,194,586 | 4,085,207 | |||||||
-4 | China Construction Bank | 32,513 | 31,665 | |||||||
Total | $ | 23,597,237 | $ | 23,213,107 | ||||||
-1 | The Company through its wholly owned subsidiary Beijing Gas invested $2,189,038 (RMB 13,465,648) in the acquisition of a 40% equity position in Xiangke Oil Gas. The $10,212,856 investment as of September 30, 2013 consisted of principal and accumulated post-acquisition investment income attributed to Xiangke Oil Gas’ operation results. | |||||||||
-2 | Along with two local partners in Qujing city, the second largest city in Yunnan province of PRC, Beijing Gas established Qujing City Fuel Gas Co., Ltd. with registered capital of $4,387,761 (RMB 30,000,000). Beijing Gas’ original investment of $1,746,764 (RMB 11,700,000) represented 39% equity ownership of Qujing Gas. | |||||||||
On December 17, 2010, the Company, along with its wholly owned subsidiaries Gas Construction and Beijing Gas, entered into a Subscription Agreement with AMP Capital Asian Giants Infrastructure Fund (“AGIF”), under the terms of which Gas Construction issued to AGIF 48,039 ordinary shares that represents 49% of the total issued capital of Gas Construction for consideration of US$2.0 million. In addition, pursuant to the Subscription Agreement, the equity interest in Qujing Gas held by Beijing Gas was transferred to Gas Construction so that Gas Construction became the beneficial holder of a 39% equity interest in Qujing Gas. After the close of the equity subscription, shareholders of Qujing Gas amended the Articles of Incorporation to raise the level of registered capital to $20,425,157 (RMB 130,000,000). The $9,157,282 investment as of September 30, 2013 consisted of principal and accumulated post-acquisition investment income attributed to Qujin Gas’ operational results. | ||||||||||
Investment | Xiangke Oil Gas | Qujing Gas | ||||||||
Investment Cost | $ | 2,189,038 | $ | 7,766,760 | ||||||
Prior years investment income | 4,494,221 | 232,393 | ||||||||
2011 investment income | 858,264 | 512,387 | ||||||||
2012 investment income | 26,713,323 | 645,742 | ||||||||
$ | 10,212,856 | $ | 9,157,282 | |||||||
-3 | On April 23, 2008, Beijing Gas entered into an agreement to acquire a 100% equity interest in Tongshan Hengxin Jiaye Natural Gas Co., Ltd. (“Tongshan Gas”), for a purchase price of $4,660,000 (RMB 32,600,000). Tongshan is a regional natural gas distributor and developer of natural gas distribution networks in Jiangsu province of the PRC. As of September 30, 2013, the Company has not finished the registration of the equity transfer with the Tongshan City Industrial and Commercial Administration. Therefore, acquisition payments of $4,194,586 for Tongshan Gas were classified as investment as of that date. | |||||||||
-4 | The Company purchased a $32,513 (RMB 200,000) long-term fund with the Bank of Construction in an effort to maintain a favorable relationship and enhance further credit facility. | |||||||||
PROPERTY_PLANT_AND_EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | ||||||||||
7 | PROPERTY, PLANT AND EQUIPMENT | ||||||||||
Property, Plant, and Equipment consisted of the following as of September 30, 2013 and December 31, 2012: | |||||||||||
9/30/13 | At Cost | Accumulated Depreciation | Net | ||||||||
Gas Pipelines | $ | 52,602,053 | $ | 4,697,718 | $ | 47,904,335 | |||||
Motor Vehicles | 7,306,639 | 3,207,476 | 4,099,163 | ||||||||
Machinery & Equipment | 2,165,572 | 529,671 | 1,635,901 | ||||||||
Buildings | 2,105,503 | 448,982 | 1,656,521 | ||||||||
Leasehold Improvements | 88,581 | 53,680 | 34,901 | ||||||||
Office Equipment | 384,179 | 186,431 | 197,748 | ||||||||
Total | $ | 64,652,527 | $ | 9,123,958 | $ | 55,528,569 | |||||
12/31/12 | At Cost | Accumulated Depreciation | Net | ||||||||
Gas Pipelines | $ | 50,028,098 | $ | 3,961,187 | $ | 47,904,335 | |||||
Motor Vehicles | 6,628,442 | 2,835,134 | 3,793,308 | ||||||||
Machinery & Equipment | 2,180,403 | 484,195 | 1,696,208 | ||||||||
Buildings | 1,862,560 | 378,184 | 1,484,376 | ||||||||
Leasehold Improvements | 88,071 | 68,158 | 19,913 | ||||||||
Office Equipment | 374,355 | 167,875 | 206,480 | ||||||||
Total | $ | 61,161,929 | $ | 7,894,733 | $ | 53,267,196 | |||||
Gas pipelines purchased prior to 2008 were depreciated over their 25 year useful lives. Starting from 2008, the Company purchased a new quality of pipelines under a 50 year warranty. The new gas pipelines were depreciated over their 50 year useful lives. | |||||||||||
Depreciation expenses included in the consolidated statements of income for the nine months ended September 30, 2013 and 2012 were $1,229,226 and $1,243,876, respectively. | |||||||||||
GOODWILL
GOODWILL | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Goodwill Disclosure [Text Block] | ' | |||||||
8 | GOODWILL | |||||||
Goodwill was related to the acquisitions of Beijing Chenguang Gas Co., Ltd. (“Chengguang Gas”), Yuxian Weiye Gas Co., Ltd. (“Yuxian Gas”) Guannan Weiye Gas Co., Ltd. (“Guannan Gas”) and Baishan Gas Co., Ltd. (“Baishan Gas”). Management annually reviews the carrying value of goodwill using the sum of the discounted cash flows to determine if an impairment charge is necessary. The Company has determined there were no impairments to goodwill as of September 30, 2013 and December 31, 2012. | ||||||||
9/30/13 | 12/31/12 | |||||||
Yuxian Gas | $ | 10,954 | $ | 10,954 | ||||
Guannan Gas | 409,963 | 409,963 | ||||||
Chengguang Gas | 1,257,058 | 1,257,058 | ||||||
Baishan Gas | 2,920,346 | - | ||||||
$ | 4,598,321 | $ | 1,677,975 | |||||
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||
Intangible Assets Disclosure [Text Block] | ' | ||||||||||
9 | INTANGIBLE ASSETS | ||||||||||
Intangible assets consisted of the following as of September 30, 2013 and December 31, 2012: | |||||||||||
9/30/13 | At Cost | Accumulated Amortization | Net | ||||||||
Land Use rights | $ | 1,107,117 | $ | 153,414 | $ | 953,703 | |||||
Franchises | 406,412 | 406,412 | - | ||||||||
Accounting Software | 51,152 | 48,793 | 2,359 | ||||||||
$ | 1,564,680 | $ | 608,618 | $ | 956,062 | ||||||
12/31/12 | At Cost | Accumulated Amortization | Net | ||||||||
Land Use Rights | $ | 1,009,020 | $ | 108,115 | $ | 900,905 | |||||
Franchises | 395,813 | 395,813 | - | ||||||||
Accounting Software | 105,260 | 56,178 | 49,082 | ||||||||
$ | 1,510,093 | $ | 560,106 | $ | 949,987 | ||||||
Land use rights represent the right to use and develop land granted by the local PRC government in accordance with zoning laws less accumulated amortization. Under PRC law, the Company is permitted to sell, transfer, or mortgage its land use rights. | |||||||||||
Under exclusive franchises agreements between the Company and the applicable PRC local government and entities in charge of gas utility, the Company operates as a local natural gas distributor in a city or county. Amortization expenses included in the consolidated statements of income for the nine months ended September 30, 2013 and 2012 were $48,512 and $7,536, respectively. | |||||||||||
LOANS
LOANS | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Receivables [Abstract] | ' | ||||||||||||||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | ' | ||||||||||||||
10 | LOANS | ||||||||||||||
(a) SHORT-TERM BANK LOANS | |||||||||||||||
Name of Bank | Note | Due Date | Interest Rate | 9/30/13 | 12/31/12 | ||||||||||
China Minsheng Banking Corp., Ltd. - Pinganli Branch | 1 | 2/28/13 | 9.512 | % | $ | - | $ | 1,108,279 | |||||||
China Merchants Bank - Beijing Shouti Branch | 5 | 6/14/13 | 7.888 | % | - | 1,583,255 | |||||||||
Bank of China - Baishan Branch | 4 | 6/19/14 | 6.65 | % | 1,950,775 | 1,424,930 | |||||||||
Bank of China - Shijiazhuang Branch | 3 | 6/6/14 | 7.2 | % | 1,625,646 | 1,583,255 | |||||||||
Nanjing Bank | 6 | 1/17/13 | 7.5 | % | - | 357,627 | |||||||||
Nanjing Bank | 6 | 1/17/13 | 8.8 | % | - | 799,386 | |||||||||
Wuhe Yongtai Bank | 6/20/14 | 9.9 | % | 812,823 | 759,963 | ||||||||||
Bank of Beijing – Zhongguancun Haidian Park Branch | 8/29/14 | 7.2 | % | 812,823 | 791,628 | ||||||||||
Baishan Dinghe Small Loan Co., Ltd. | On Demand | 43.2 | % | - | 316,651 | ||||||||||
Nanjing Bank | 6 | 10/24/13 | 7.5 | % | 1,487,466 | 1,448,679 | |||||||||
Dalian Bank - Beijing Branch | 2 | 12/31/13 | 8.1 | % | 4,876,939 | 1,345,767 | |||||||||
China Development Bank - Beijing Branch | 7 | 12/26/13 | 6.9 | % | 8,128,231 | 7,916,277 | |||||||||
Pudong Development Bank - Shijiazhuang Branch | 10/30/13 | 7.8 | % | 2,438,469 | 2,374,883 | ||||||||||
Pudong Development Bank - Shijiazhuang Branch | 1/7/14 | 7.8 | % | 812,823 | - | ||||||||||
Nanjing Bank | 6 | 2/21/14 | 7.5 | % | 1,763,826 | - | |||||||||
Industrial and Commercial Bank of China – Zhongguancun Branch | 6/25/14 | 5 | % | 975,388 | - | ||||||||||
China Merchants Bank | 6/26/14 | 8.1 | % | 1,625,646 | - | ||||||||||
Bank of China - Baishan Branch | 8/30/14 | 6.45 | % | 325,129 | - | ||||||||||
Baishan Huida Investment Management Co, Ltd. | 9/5/14 | 6.25 | % | 390,156 | - | ||||||||||
Peixuan Rural Credit Cooperation | 7/18/14 | 11.674 | % | 4,876,939 | - | ||||||||||
Total | $ | 32,903,079 | $ | 21,810,580 | |||||||||||
Note: | |||||||||||||||
-1 | The loan provided by China Minsheng Bank Corp., Ltd. was guaranteed by the CEO Mr. Liu Yuchuan’s personal credit. | ||||||||||||||
-2 | The loans provided by Bank of Dalian were secured by the Company’s subsidiary Chengguang Gas’ registered capital, CEO Mr. Liu Yuchuan and COO Mr. Zhou Zhicheng’s personal home properties, which have been appraised at total fair market value of $933,254 (RMB 6,380,854). | ||||||||||||||
-3 | The loan provided by Bank of China – Shijiazhuang Branch was guaranteed by Hebei Desheng Guarantee Co., Ltd. (“Hebei Desheng”). In connection with this collateralization, the Company was required to pay approximately $45,000 (RMB 300,000) as a financial service fee to Hebei Desheng. | ||||||||||||||
-4 | The loan provided by Bank of China – Baishan Branch was secured by the Company’s subsidiary Beijing Zhongran Weiye Gas Co., Ltd. with the authority of gas payment collection and Baishan Weiye Gas Co. Ltd. with liability. | ||||||||||||||
-5 | The loan provided by China Merchants Bank was guaranteed by the CEO Mr. Liu Yuchuan with unlimited liability, and the management Mr. Wang Weidong and Ms. Song Erxin with $154,703 (RMB 1,000,000) liabilities each. | ||||||||||||||
-6 | The loan provided by Nanjing Bank was secured by Beijing Zhongyou Sanhuan Technology Development Co., Ltd. and CEO Mr. Liu Yuchuan. | ||||||||||||||
-7 | The Company obtained the loans from China Development Bank via a collateralized agent Zhongyuan Guoxin Credit Guarantee Co., Ltd. (the “Guarantor”). The Guarantor guaranteed to the banks the entire principal and accrued interest. The Company pledged all of Beijing Gas’ subsidiaries and deposited $1,028,464 (RMB 6,800,000), which was classified as non-current asset deposits, with the Guarantor, and was required to pay 2% of the outstanding loans as a financial service fee to the Guarantor per annum. Because the Company lacked the favorable credit history to directly establish a credit facility with the banks, the credit collateralization from Guarantor was chosen as a financing solution. | ||||||||||||||
(b) | LONG-TERM BANK LOANS | ||||||||||||||
Name of Bank | Due Date | Interest Rate | 9/30/13 | 12/31/12 | |||||||||||
Bank of China - Baishan Branch | 6/24/15 | 6.65 | % | $ | 1,950,776 | $ | 2,849,860 | ||||||||
Baishan Huida Investment Management Co, Ltd. | 12/31/30 | 6.25 | % | 3,283,805 | 3,958,139 | ||||||||||
Bank of China - Baishan Branch | 8/30/16 | 6.45 | % | 2,275,905 | - | ||||||||||
Pudong Development Bank - Shijiazhuang Branch | 7/25/18 | 6.85 | % | 2,438,469 | - | ||||||||||
Peixuan Rural Credit Cooperation | 7/18/14 | 11.674 | % | - | 4,749,766 | ||||||||||
Total | $ | 9,948,955 | $ | 11,557,765 | |||||||||||
OTHER_PAYABLES
OTHER PAYABLES | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Payables and Accruals [Abstract] | ' | |||||||||
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | ' | |||||||||
11 | OTHER PAYABLES | |||||||||
(a) | Current other payables consisted of the following at September 30, 2013 and December 31, 2012: | |||||||||
Ref. | 9/30/13 | 12/31/12 | ||||||||
-1 | Amount due to Employees | $ | 1,357,532 | $ | 3,241,752 | |||||
-2 | Tax Payable | 926,095 | 1,256,502 | |||||||
-3 | Payables to Subcontractors | 276,435 | 3,614,959 | |||||||
-4 | Others | 2,714,568 | 1,465,234 | |||||||
Total | $ | 5,274,630 | $ | 9,578,447 | ||||||
-1 | Amounts due to employees included accrual payroll, welfare payable, continued education training program cost and individual travel advance. All of these amounts were unsecured, interest free, and have no fixed repayment terms. | |||||||||
-2 | The tax payable consists of value added tax, sales tax, income tax and local tax payables. | |||||||||
-3 | Payables to subcontractors are unbilled liabilities. | |||||||||
CONVERTIBLE_BONDS_AND_BOND_WAR
CONVERTIBLE BONDS AND BOND WARRANTS | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Convertible Bonds and Bond Warrants [Abstract] | ' | ||||||||
Convertible Bonds and Bond Warrants Disclosure [Text Block] | ' | ||||||||
12 | CONVERTIBLE BONDS AND BOND WARRANTS | ||||||||
(a) | $8,000,000 Convertible Bond | ||||||||
On December 20, 2012, the Company completed a financing transaction with certain purchasers issuing $8,000,000 of the 8% senior secured convertible notes (the “Bonds”) with conversion price of $0.31 to purchase an aggregate of 25,806,452 shares of the Company’s common stock and it will expire on December 20, 2013. | |||||||||
On September 15, 2013, Lead Fame completed its acquisition of the 8% the Bond in the aggregate principal amount of $8,000,000 convertible into shares of the Company’s common stock, that was originally issued to Goldfield International Investments Ltd. (“Goldfield“). On September 18, 2013, Lead Fame converted the full amount of the Bond at the conversion price of $0.31 resulting in the issuance of 25,806,451 shares of common stock to Lead Fame. | |||||||||
Pledge Agreement and Guaranty | |||||||||
The notes are secured by the pledge of 100% of the shares of the Company’s wholly owned subsidiary Gas Investment China Co., Ltd. | |||||||||
Event of Default | |||||||||
Upon an event of default in any payment of interest or principal of the bonds, the principal, accrued and unpaid interest, and any additional amounts owing in respect of the bonds, will be due and payable at the option of the bondholders. In addition, the bondholders have the right to convert these notes and then all accrued and unpaid interest at any time. | |||||||||
Redemption | |||||||||
Bondholders may require the Company to repurchase the notes in whole or in part at an amount equal to 100% of the aggregate principal amount of the notes plus a premium such that the total cash yield to maturity of the note is 15% per annum, upon the occurrence of any change of control transaction or if the Company’s common stock ceases to be quoted for trading or listed for trading on either the OTC Bulletin Board or a subsequent market and such delisting is not cured within 30 days. | |||||||||
The convertible bonds payable, net consisted of the followings: | |||||||||
9/30/13 | 12/31/12 | ||||||||
Ref. | 8M Bonds | 8M Bonds | |||||||
-1 | Convertible Bonds Payable – principal | $ | - | $ | 8,000,000 | ||||
-2 | Less: Interest Discount - Warrants | - | - | ||||||
-3 | Less: Interest Discount - Beneficial Conversion Feature | - | -258,065 | ||||||
-4 | Less: Bond Discount - Issuance Cost | - | - | ||||||
-5 | Accretion of Interest Discount - Warrants | - | - | ||||||
-6 | Accretion of Interest Discount - Beneficial Conversion Feature | - | 258,065 | ||||||
-7 | Accretion of Bond Discount - Issuance Cost | - | - | ||||||
-8 | Accretion of Interest Discount - Redemption | - | 20,825 | ||||||
Convertible Bonds Payable, net | $ | - | $ | 8,020,825 | |||||
-1 | The principal amounts listed above represent the face amount of the convertible notes. | ||||||||
-2 | The proceeds were allocated between the convertible bonds and warrants based on their relative fair value. See Note 13 Capital Stock for the calculation of fair value of convertible bonds detachable warrants. | ||||||||
-3 | Because the conversion price is $0.31, which is lower than the fair market value of common stock on the date of issuance, the beneficial conversion feature was applied. Since the $8M bond will expire in one year, the beneficial conversion feature was amortized immediately. | ||||||||
-4 | The bond has no issuance cost. | ||||||||
-5 | Based on a 15% per annum redemption rate, the redemption values were determined to be $800,000. | ||||||||
Included in interest expense of $2,802,258, was $480,000 convertible bonds coupon expense and $542,334 non-cash flow amortization expense of convertible bonds, and $1,779,924 of bank loan interest expense. | |||||||||
CAPITAL_STOCK
CAPITAL STOCK | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Stockholders' Equity Note [Abstract] | ' | |||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | |||||||
13 | CAPITAL STOCK | |||||||
The authorized capital stock consists of (i) 250,000,000 shares of common stock, par value $0.001 per share, of which 57,608,833 shares are issued and outstanding, and (ii) 100,000,000 shares of preferred stock, par value $0.001 per share. The preferred stock consists of (a) series A convertible preferred stock, with 20,000,000 shares authorized of which no shares are issued and outstanding; (b) series B convertible preferred stock, with 5,000,000 shares authorized of which 200,997 shares are issued and outstanding; and (c) series B-1 convertible preferred stock, with 3,000,000 shares authorized of which no share are issued and outstanding. | ||||||||
The following table depicts the Company’s outstanding securities as of September 30, 2013: | ||||||||
Authorized Shares | Shares issued and outstanding | |||||||
Common Stock | 250,000,000 | 57,608,833 | ||||||
Convertible Preferred Stock A | 20,000,000 | - | ||||||
Convertible Preferred Stock B | 5,000,000 | 200,997 | ||||||
Convertible Preferred Stock B-1 | 3,000,000 | - | ||||||
There were 95,418 shares preferred stock B-1 and 4,380,413 shares preferred stock B converted into common stock in 2011. There was 8,684 shares preferred stock B converted into common stock in 2012. | ||||||||
INCOME_TAX
INCOME TAX | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||
Income Tax Disclosure [Text Block] | ' | |||||||||
14 | INCOME TAX | |||||||||
The following tabulation presents the income tax and deferred tax of the Company and its individual subsidiaries for the nine months ended September 30, 2013 and 2012: | ||||||||||
September 30, | September 30, | |||||||||
Description | 2013 | 2012 | ||||||||
Income (loss) before taxes: | ||||||||||
US | $ | -1,317,744 | -1,116,402 | |||||||
BVI | -1,129,454 | -509,801 | ||||||||
PRC | 6,498,612 | 6,204,248 | ||||||||
Total income before taxes | $ | 4,051,414 | $ | 4,578,045 | ||||||
Provision for taxes:- | ||||||||||
Current: | ||||||||||
US | - | - | ||||||||
BVI | - | - | ||||||||
PRC | -1,273,694 | 1,168,051 | ||||||||
-1,273,694 | 1,168,051 | |||||||||
Deferred: | ||||||||||
US | - | - | ||||||||
BVI | - | - | ||||||||
PRCs | - | - | ||||||||
Valuation allowance | - | - | ||||||||
- | - | |||||||||
Total provision for taxes | -1,273,694 | 1,168,051 | ||||||||
Effective tax rate | 31.44 | % | 25.51 | % | ||||||
The differences between the U.S. federal statutory income tax rates and the Company’s effective tax rate for the nine months ended September 30, 2013 and 2012 are shown in the following table: | ||||||||||
September 30, | September 30, | |||||||||
2013 | 2012 | |||||||||
U.S. federal statutory income tax rate | 34 | % | 34 | |||||||
Lower rates in PRC, net | -9 | % | -9 | % | ||||||
Tax holiday | 6.44 | % | 0.51 | % | ||||||
Accruals in foreign jurisdictions | N/A | N/A | ||||||||
Effective tax rate | 31.44 | % | 25.51 | % | ||||||
SEGMENT_INFORMATION
SEGMENT INFORMATION | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||
Segment Reporting Disclosure [Text Block] | ' | |||||||||||||
15 | SEGMENT INFORMATION | |||||||||||||
The Company has contracted with customers usually in two revenue segments, one is for the construction and installation of gas facilities and the other is for the subsequent sales of natural gas to the customers through the gas facilities the Company constructs. However, construction and installation contracts and gas supply contracts have different terms for the basis of revenue recognition and differ from one another in terms of the relevant cost-and-revenue to be recognized and hence separate calculations and subsequent payments of fees for each segment occur without any interdependence on one another. | ||||||||||||||
For management purposes, the Company is currently organized into two major operating divisions: (a) sales of natural gas and (b) installation of gas facilities/construction. These principal operating activities are the basis on which the Company reports its primary segment information. | ||||||||||||||
Financial Position Segment Report | ||||||||||||||
As of September 30, 2013 | ||||||||||||||
Shell, BVIs, & | ||||||||||||||
Gas Distribution | Gas Pipeline Installation | Eliminations | Total | |||||||||||
Assets | ||||||||||||||
Current Assets | $ | 21,785,682 | $ | 12,421,010 | $ | 427,013 | $ | 34,633,705 | ||||||
Non-Current Assets | 48,375,086 | 84,846,900 | 4,925,781 | 138,147,767 | ||||||||||
Total Assets | 70,160,768 | 97,267,910 | 5,352,794 | 172,781,472 | ||||||||||
Liabilities | ||||||||||||||
Current Liabilities | 16,299,344 | 44,348,595 | - | 60,647,939 | ||||||||||
Non-current Liabilities | 2,673,816 | 7,275,139 | - | 9,948,955 | ||||||||||
Total Liabilities | 18,973,160 | 51,623,734 | - | 70,596,894 | ||||||||||
Net Assets | 51,187,608 | 45,644,176 | 5,352,794 | 102,184,578 | ||||||||||
Liabilities & Equities | $ | 70,160,768 | $ | 97,267,910 | $ | 5,352,794 | $ | 172,781,472 | ||||||
Operation Result Segment Report | ||||||||||||||
For the nine months ended September 30, 2013 | ||||||||||||||
Shell, BVIs, & | ||||||||||||||
Gas Distribution | Gas Pipeline Installation | Eliminations | Total | |||||||||||
Sales Revenue | $ | 36,831,797 | $ | 20,999,486 | $ | -15,659,746 | $ | 42,171,537 | ||||||
Cost of Revenue | -32,985,800 | -10,534,983 | 15,659,746 | -27,861,037 | ||||||||||
Gross Profit | 3,845,997 | 10,464,503 | - | 14,310,500 | ||||||||||
Operating Expense | -1,730,742 | -4,709,146 | -1,431,726 | -7,871,614 | ||||||||||
Operating Income/(Loss) | 2,115,255 | 5,755,357 | -1,431,726 | 6,438,886 | ||||||||||
Other Income/(Loss) | -641,641 | -926,368 | -819,463 | -2,387,472 | ||||||||||
Earnings before tax | 1,473,614 | 4,828,989 | -2,251,189 | 4,051,414 | ||||||||||
Income tax | -297,803 | -975,891 | - | -1,273,694 | ||||||||||
Gain/(loss) from discontinued operation, net of tax | - | - | - | - | ||||||||||
Net Income | $ | 1,175,811 | $ | 3,853,098 | $ | -2,251,189 | $ | 2,777,720 | ||||||
Financial Position Segment Report | ||||||||||||||
As of December 31, 2012 | ||||||||||||||
Shell, BVIs, & | ||||||||||||||
Gas Distribution | Gas Pipeline Installation | Eliminations | Total | |||||||||||
Assets | ||||||||||||||
Current Assets | $ | 21,479,047 | $ | 12,910,983 | $ | 2,320,987 | $ | 36,711,017 | ||||||
Non-Current Assets | 43,458,777 | 72,299,153 | 7,297,281 | 123,055,212 | ||||||||||
Total Assets | 64,937,824 | 85,210,136 | 9,618,268 | 159,766,229 | ||||||||||
Liabilities | ||||||||||||||
Current Liabilities | 8,089,999 | 52,244,847 | - | 60,334,845 | ||||||||||
Non-current Liabilities | 1,549,723 | 10,008,042 | - | 11,557,765 | ||||||||||
Total Liabilities | 9,639,722 | 62,252,889 | - | 71,892,611 | ||||||||||
Net Assets | 55,298,102 | 22,957,247 | 9,618,268 | 87,873,617 | ||||||||||
Liabilities & Equities | $ | 64,937,824 | $ | 85,210,136 | $ | 9,618,268 | $ | 159,766,228 | ||||||
Operation Result Segment Report | ||||||||||||||
For the nine months ended September 30, 2012 | ||||||||||||||
Shell, BVIs, & | ||||||||||||||
Gas Distribution | Gas Pipeline Installation | Eliminations | Total | |||||||||||
Sales Revenue | $ | 30,273,792 | $ | 18,091,039 | -15,364,457 | 33,000,374 | ||||||||
Cost of Revenue | -38,506,689 | -7,126,400 | 15,364,457 | -20,268,632 | ||||||||||
Gross Profit | 1,767,103 | 10,964,639 | - | 12,731,742 | ||||||||||
Operating Expense | -728,637 | -4,521,094 | -646,383 | -5,896,114 | ||||||||||
Operating Income/(Loss) | 1,038,466 | 6,443,545 | -646,383 | 6,835,628 | ||||||||||
Other Income/(Loss) | -313,341 | -954,421 | -979,820 | -2,257,583 | ||||||||||
Earnings before tax | 725,125 | 5,479,124 | -1,626,204 | 4,578,045 | ||||||||||
Income tax | -136,517 | -1,031,534 | - | -1,168,051 | ||||||||||
Gain/(loss) from discontinued operation, net of tax | - | - | - | |||||||||||
- | ||||||||||||||
Net Income | $ | 588,608 | $ | 4,447,590 | -1,626,204 | 3,409,994 | ||||||||
The Company’s operations are located in the PRC. All revenue is from customers in the PRC. All of the Company’s assets are located in the PRC. Sales of natural gas and gas pipeline construction are carried out in the PRC. Accordingly, no analysis of the Company’s sales and assets by geographical market is presented. No other measures of segment profit or loss and assets have been provided or reviewed by the Company’s officers. | ||||||||||||||
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Earnings Per Share [Text Block] | ' | ||||||||
16 | EARNINGS PER SHARE | ||||||||
Nine months Ended | |||||||||
Ref | 9/30/13 | 9/30/12 | |||||||
Basic Earnings Per Share Numerator: | |||||||||
Net Income | $ | 2,777,720 | 3,409,994 | ||||||
Income from continued operations | 2,777,720 | - | |||||||
Income/(loss) from discontinued operations | - | - | |||||||
Less: | |||||||||
Preferred Dividends | - | - | |||||||
Constructive Preferred Dividends | - | - | |||||||
income attributed to non-controlling interest | -1,498 | 957 | |||||||
Net income available to Common Stockholders | $ | 2,779,218 | $ | 3,410,951 | |||||
Income from continued operations available to Common Stockholders | $ | 2,779,218 | $ | 3,410,951 | |||||
Income/(loss) from discontinued operations available to Common Stockholders | - | - | |||||||
Diluted Earnings Per Share Numerator: | |||||||||
Add: | |||||||||
Interest Expense for Convertible Bonds, net of tax | 1,022,334 | 979,857 | |||||||
Net income available to Common Stockholders | 3,801,552 | 4,390,808 | |||||||
Income from continued operations available to Common Stockholders | 3,801,552 | 4,390,808 | |||||||
Income/(loss) from discontinued operations available to Common Stockholders | - | - | |||||||
Original Shares | 31,802,382 | 31,793,698 | |||||||
Addition to Common Stock | 848,431 | - | |||||||
Basic Weighted Average Shares Outstanding | 32,650,813 | 31,793,698 | |||||||
Potentially Dilutive Securities: | |||||||||
Addition to Common Stock from Conversion of Preferred Stock B | -1 | - | |||||||
Addition to Common Stock from Conversion of Preferred Stock B-1 | -2 | - | |||||||
Addition to Common Stock from Conversion of Convertible Bonds | - | 9,262,889 | |||||||
Addition to Common Stock from Exercise of Warrants | -3 | - | |||||||
Diluted Weighted Average Shares Outstanding | 32,650,813 | 41,056,587 | |||||||
Earnings Per Share | |||||||||
Basic: - Net income | $ | 0.085 | $ | 0.11 | |||||
- Income from continued operation | 0.085 | $ | 0.11 | ||||||
- Income from discontinued operation | 0,00 | 0 | |||||||
Diluted: - Net income | $ | 0.085 | $ | 0.11 | |||||
- Income from continued operation | 0.085 | $ | 0.11 | ||||||
- Income from discontinued operation | 0 | 0 | |||||||
Weighted Average Shares Outstanding | |||||||||
- Basic | 32,650,813 | 31,793,698 | |||||||
- Diluted | 32,650,813 | 41,056,587 | |||||||
-1 | The applications of conversion of preferred stock B into common stock were anti-dilutive for the nine months ended September 30, 2013 and 2012. | ||||||||
-2 | The applications of conversion of preferred stock B-1 into common stock were anti-dilutive for the nine months ended September 30, 2013 and 2012. | ||||||||
-3 | The exercises of warrants to common stock were anti-dilutive for the nine months ended September 30, 2013 and 2012. | ||||||||
-4 | The applications of conversion of convertible bonds into common stock were anti-dilutive for the nine months ended September 30, 2013 and 2012. | ||||||||
DISCONTINUED_OPERATION
DISCONTINUED OPERATION | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | ' | ||||||||||||||||
17 | DISCONTINUED OPERATION | ||||||||||||||||
The Company through its indirectly wholly owned subsidiary Beijing Gas executed share transfer agreements and other related agreements (the “Agreements”) with Hebei Natural Gas Co., Ltd. (“Hebei Gas”) to sell assets and ownership of three of its subsidiaries, a) Xinji Zhongchen Gas Co., Ltd., (“Xinji Gas”) b) Jinzhou Weiye Gas Co., Ltd. (“Jinzhou Gas”) and c) Shenzhou Weiye Gas Co., Ltd. (“Shenzhou Gas”) for total consideration of RMB 44.8 million (approximately USD $7.04 million). Upon the completion of registered capital transfer filed with local government’s industrial and commercial administration, the disposition took effect on June 8, 2011. In December, 2012, the Company also shut down Sishui Weiye Gas Col, Ltd. (“Sishui Gas”), which has had no operating activities since 2007. The Company has accounted for the disposition of the assets of discontinued operation in accordance with SFAS 144 (“FASB ASC 360”), “Accounting for the Impairment or Disposal of Long-Lived Assets”. A total gain of $654,053 was recorded in the Company’s statement of income for the year ended December 31, 2012. | |||||||||||||||||
(a) | The following tabulation presents the calculation of gain from the disposal of the three subsidiaries: | ||||||||||||||||
Valuation of | Buyer’s | ||||||||||||||||
Disposition | Acquisition Price | Gain/(Loss) | |||||||||||||||
Jinzhou Gas | $ | 3,217,742 | $ | 3,043,930 | $ | -173,812 | |||||||||||
Shenzhou Gas | 1,357,326 | 1,312,914 | -44,412 | ||||||||||||||
Xinji Gas | 1,334,980 | 2,681,980 | 1,347,000 | ||||||||||||||
Sishui Gas | 474,723 | - | -474,723 | ||||||||||||||
$ | 6,384,771 | $ | 7,038,824 | $ | 654,053 | ||||||||||||
(b) | The following tabulation summarizes the operational results of the four disposal subsidiaries for the period ended June 8, 2011 and December 31, 2012, which was also accounted as income from discontinued operations net of tax in the statement of income. | ||||||||||||||||
Condensed Income Statements | |||||||||||||||||
Jinzhou Gas | Shenzhou Gas | Xinji Gas | Sishui Gas | Total | |||||||||||||
Revenue | $ | 359,787 | $ | 277,453 | $ | 9,569 | $ | - | $ | 646,809 | |||||||
Cost of revenue | 217,313 | 224,412 | 8,224 | - | 449,949 | ||||||||||||
Gross profit | 142,473 | 53,041 | 1,346 | - | 196,860 | ||||||||||||
Operating expenses | 18,246 | 16,009 | 35,138 | - | 69,393 | ||||||||||||
Operating income | 124,227 | 37,032 | -33,792 | - | 127,467 | ||||||||||||
Other income/(expenses) | -241 | -226 | -3,218 | - | -3,685 | ||||||||||||
Earnings before tax | 123,986 | 36,806 | -37,010 | - | 123,782 | ||||||||||||
- | |||||||||||||||||
Income tax | -6,197 | -11,167 | -114 | - | -17,477 | ||||||||||||
Net income | $ | 117,789 | $ | 25,640 | $ | -37,124 | $ | - | $ | 106,305 | |||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Basis of Accounting, Policy [Policy Text Block] | ' | |||||||||||||
(a) | Method of Accounting | |||||||||||||
The Company maintains its general ledger and journals with the accrual method of accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements. | ||||||||||||||
Use of Estimates, Policy [Policy Text Block] | ' | |||||||||||||
(b) | Use of estimates | |||||||||||||
The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates. | ||||||||||||||
Economic and Political Risks [Policy Text Block] | ' | |||||||||||||
(c) | Economic and political risks | |||||||||||||
The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environment in the PRC, and by the general state of the PRC economy. | ||||||||||||||
The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment, and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to law and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. | ||||||||||||||
Consolidation, Policy [Policy Text Block] | ' | |||||||||||||
(d) | Principles of Consolidation | |||||||||||||
The consolidated financial statements include the accounts of the Company and its subsidiaries (the “Group”). Significant inter-company transactions have been eliminated in consolidation. Investments in which the Company has a 20 percent to 50 percent voting interest and where the Company exercises significant influence over the investor are accounted for using the equity method. | ||||||||||||||
The Company owned its subsidiaries after inception and continued to acquire equity interests throughout the reporting periods. The following table depicts the identities of the consolidating subsidiaries as of September 30, 2013: | ||||||||||||||
Name of Company | Place of Incorporation | Date of Incorporation | Beneficial Interest % | Equity Interest % | Registered Capital | |||||||||
GAS Investment China Co., Ltd. | The British Virgin Islands | 6/19/03 | 100 | 100 | USD 10,000,000 | |||||||||
Sino Gas Construction, Ltd. | The British Virgin Islands | 1/9/07 | 51 | 51 | USD 98,039 | |||||||||
Sino Gas Investment Development, Ltd. | The British Virgin Islands | 1/9/07 | 100 | 100 | USD 50,000 | |||||||||
Tongyuan International Holding Limited | Hong Kong | 12/20/11 | 51 | 51 | HKD 10,000 | |||||||||
Beijing Zhong Ran Weiye Gas Co., Ltd. | PRC | 8/29/01 | 100 | 100 | RMB 206,000,000 | |||||||||
Beijing Chenguang Gas Co., Ltd. | PRC | 10/30/02 | 100 | 100 | RMB 35,239,600 | |||||||||
Guannan Weiye Gas Co., Ltd. | PRC | 6/19/03 | 100 | 100 | RMB 9,510,000 | |||||||||
Ningjin Weiye Gas Co., Ltd. | PRC | 12/3/03 | 100 | 100 | RMB 3,000,000 | |||||||||
Yutian Zhongran Weiye Gas Co., Ltd. | PRC | 12/19/03 | 100 | 100 | RMB 3,000,000 | |||||||||
Xingtang Weiye Gas Co., Ltd. | PRC | 2/18/04 | 100 | 100 | RMB 3,000,000 | |||||||||
Wuqiao Gas Co., Ltd. | PRC | 6/30/04 | 100 | 100 | RMB 2,000,000 | |||||||||
Sihong Weiye Gas Co., Ltd. | PRC | 12/3/04 | 100 | 95 | RMB 10,000,000 | |||||||||
Langfang Weiye Dangerous Goods Transportation Co., Ltd. | PRC | 3/22/05 | 100 | 95 | RMB 1,000,000 | |||||||||
Linzhang Weiye Gas Co., Ltd. | PRC | 7/6/05 | 100 | 100 | RMB 1,000,000 | |||||||||
Jiangsu Weiye Gas Co., Ltd. | PRC | 8/22/05 | 100 | 98.9 | RMB 45,694,900 | |||||||||
Zhangjiakou City Xiahuayuan Jinli Gas Co., Ltd. | PRC | 9/30/05 | 100 | 100 | RMB 2,000,000 | |||||||||
Longyao Zhongran Weiye Gas Co., Ltd. | PRC | 10/13/05 | 100 | 100 | RMB 3,000,000 | |||||||||
Yuxian Jinli Gas Co., Ltd. | PRC | 11/8/05 | 100 | 100 | RMB 9,500,000 | |||||||||
Hengshui Weiye Gas Co., Ltd. | PRC | 12/20/05 | 100 | 100 | RMB 3,000,000 | |||||||||
Changli Weiye Gas Co., Ltd. | PRC | 12/8/06 | 100 | 100 | RMB 3,000,000 | |||||||||
Chenan Chenguang Gas Co., Ltd. | PRC | 1/23/07 | 100 | 100 | RMB 1,500,000 | |||||||||
Wuhe Weiye Gas Co., Ltd. | PRC | 1/30/07 | 100 | 100 | RMB 3,000,000 | |||||||||
Gucheng Weiye Gas Co., Ltd. | PRC | 3/21/07 | 100 | 100 | RMB 3,000,000 | |||||||||
Luquan Chenguang Gas Co., Ltd. | PRC | 4/27/07 | 100 | 100 | RMB 2,000,000 | |||||||||
Shijiazhuang Chenguang Gas Co., Ltd. | PRC | 6/14/07 | 100 | 100 | RMB 2,000,000 | |||||||||
Nangong Weiye Gas Co., Ltd. | PRC | 6/25/07 | 100 | 100 | RMB 3,000,000 | |||||||||
Sixian Weiye Gas Co., Ltd. | PRC | 9/3/07 | 100 | 100 | RMB 3,000,000 | |||||||||
Baishan Weiye Gas Co., Ltd. | PRC | 7/13/07 | 100 | 100 | RMB 15,000,000 | |||||||||
Xinhe Weiye Gas Co., Ltd. | PRC | 7/2/09 | 100 | 100 | RMB 300,000 | |||||||||
Hebei Weiye Gas (Group) Co., Ltd. | PRC | 12/18/09 | 100 | 100 | RMB 75,439,270 | |||||||||
Gaocheng Weiye Gas Co., Ltd. | PRC | 1/27/10 | 100 | 100 | RMB 200,000 | |||||||||
Jiangsu Zhong Ran Weiye Energy Investment Co., Ltd. | PRC | 3/10/11 | 100 | 99 | RMB 200,000,000 | |||||||||
Fusong Weiye Gas Co., Ltd. | PRC | 7/29/11 | 100 | 90 | RMB 10,000,000 | |||||||||
Jize Weiye Gas Co., Ltd. | PRC | 9/20/11 | 100 | 100 | RMB 1,000,000 | |||||||||
Baishan Weiye Cheyong Gas Co., Ltd. | PRC | 8/13/12 | 100 | 100 | RMB 1,000,000 | |||||||||
Baishan Weiye Wuzi Co., Ltd. | PRC | 11/5/12 | 100 | 100 | RMB 1,000,000 | |||||||||
Baishan Liquefied Gas Co., Ltd. | PRC | 8/31/12 | 100 | 100 | RMB 2,000,000 | |||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | |||||||||||||
(e) | Cash and Cash Equivalents | |||||||||||||
The Company considers all cash and other highly liquid investments with initial maturities of three months or less to be cash equivalents. | ||||||||||||||
Trade and Other Accounts Receivable, Policy [Policy Text Block] | ' | |||||||||||||
(f) | Accounts Receivable | |||||||||||||
Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as needed. The Company extends unsecured credit to customers in the normal course of business and does not accrue interest on trade accounts receivable. | ||||||||||||||
Advances To Suppliers [Policy Text Block] | ' | |||||||||||||
(g) | Advances to Suppliers | |||||||||||||
Advances to suppliers represent the cash paid in advance for purchasing raw materials. The advances to suppliers are interest free and unsecured. | ||||||||||||||
Investment, Policy [Policy Text Block] | ' | |||||||||||||
(h) | Investments in Equity Securities | |||||||||||||
The equity method of accounting was used to account for the Company’s investment in equity securities for which the Company did not have controlling equity interest. A non-controlling equity interest for the Company is typically a position of less than 50% beneficial ownership. | ||||||||||||||
The consolidated statement of income includes the Company’s share of the post-acquisition results of the investment’s performance for the year. In the consolidated balance sheet, investments in equity securities are stated at the Company’s share of the net assets of the investments plus any potential premium, or less discounts paid at the time of acquisition, and less any identified impairment loss. | ||||||||||||||
The Company did not record any goodwill when it acquired its equity positions in Xiangke Oil Gas and Qujing Gas. Accordingly, in accordance with SFAS 142, the Company has not taken an amortization expense of goodwill during the time it has carried stakes in their equity securities. | ||||||||||||||
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | ' | |||||||||||||
(i) | Accounting for the Impairment of Long-Lived Assets | |||||||||||||
The Company has adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”), ASC 360-10-35. The Company evaluates its long lived assets for impairment when indicators of impairment are present or annually, whichever occurs sooner. In the event that there are indications of impairment, the Company will record a loss to statements of income equal to the difference between the carrying value and the fair value of the long lived asset. The Company typically, but not exclusively, uses the expected future discounted flows method to determine fair value of long lived asset subject to impairment. The fair value of long lived assets held for disposition will include the cost of disposal. | ||||||||||||||
The Company’s long-lived assets are grouped by their presentation on the consolidated balance sheets, and further segregated by their operating and asset type. Long-lived assets subject to impairment include buildings, equipment, vehicles, accounting software licenses, and franchise and land use rights. The Company makes its determinations based on various factors that impact those assets. | ||||||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | |||||||||||||
(j) | Property, Plant and Equipment | |||||||||||||
Property, plant and equipment, other than construction in progress, are stated at cost less accumulated depreciation and impairment loss. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the property, plant and equipment are as follows: | ||||||||||||||
Assets Class | Estimated Useful Life | |||||||||||||
Gas Pipelines (Up to December 31, 2007) | 25 years | |||||||||||||
Gas Pipelines (Starting from January 1, 2008) | 50 years | |||||||||||||
Buildings | 25 years | |||||||||||||
Leasehold Improvements | 25 years | |||||||||||||
Machinery & Equipment | 20 years | |||||||||||||
Motor Vehicles | 10 years | |||||||||||||
Office Equipment | 8 years | |||||||||||||
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized. | ||||||||||||||
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | ' | |||||||||||||
(k) | Intangible Assets | |||||||||||||
Intangible assets are stated at cost less accumulated amortization and impairment loss. Amortization is provided over their estimated useful lives using the straight-line method. Estimated useful lives of the intangibles are as follows: | ||||||||||||||
Asset Class | Estimated Useful Life | |||||||||||||
Land use rights | 20 - 50 years | |||||||||||||
Franchises | 30 years | |||||||||||||
Accounting software | 3 years | |||||||||||||
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | ' | |||||||||||||
(l) | Goodwill | |||||||||||||
Goodwill impairment tests are performed annually and more frequently whenever events or changes in circumstances indicate goodwill carrying values exceed estimated reporting unit fair values. Upon indication that the carrying values of such assets may not be recoverable, the Company recognizes an impairment loss as a charge against current operations. | ||||||||||||||
Construction In Progress [Policy Text Block] | ' | |||||||||||||
(m) | Construction in Progress | |||||||||||||
Construction in progress represents the cost of constructing pipelines and is stated at cost. Costs are comprised of direct and indirect incremental costs of acquisition or construction. Completed items are transferred from construction in progress to the gas pipelines of fixed assets when they are ready for their intended use. The major cost of construction relates to construction materials, direct labor wages, and other overhead. Construction of pipeline, through which to distribute natural gas, is one of the Group’s principal businesses. The Group builds city main pipeline networks and branch pipeline networks to make gas connections to residential users, industrial and commercial users, with the objective of generating revenue on gas connections and gas usage fees collected from these customers. These projects, once completed, will significantly increase the gas supply capacity. | ||||||||||||||
Unearned Revenue [Policy Text Block] | ' | |||||||||||||
(n) | Unearned Revenue | |||||||||||||
Unearned revenue represents prepayments by customers for gas purchases and advance payments on construction and installation of pipeline contracts. The Company records such prepayments as unearned revenue when the payments are received. | ||||||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | |||||||||||||
(o) | Financial Instruments | |||||||||||||
The Company adopted ASC 820-10, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for using fair value to measure assets and liabilities, and expands disclosures about fair value measurements. | ||||||||||||||
ASC 820-10 includes a fair value hierarchy that is intended to increase the consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing an asset or liability based upon their own market assumptions. The fair value hierarchy consists of the following three levels: | ||||||||||||||
Level 1 – inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. | ||||||||||||||
Level 2 – observable inputs other than level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||
Level 3 – instrument valuations are obtained without observable market values and require a high-level of judgment to determine the fair value. | ||||||||||||||
The Company’s financial instruments consist mainly of cash, bank notes receivable, and debt obligations. Based on the borrowing rates currently available to the Company for loans and similar terms and average maturities, the fair value of debt obligations also approximates its carrying value due to the short-term nature of the instruments. While the Company believes its valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. | ||||||||||||||
The following tables present the Company’s financial assets and liabilities at fair value in accordance with ASC 820-10: | ||||||||||||||
At September 30, | Quoted in | Significant | ||||||||||||
2013:00:00 | Active Markets | Other | Significant | |||||||||||
for Identical | Observable | Unobservable | ||||||||||||
Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||
Financial assets: | ||||||||||||||
Cash | $ | 4,534,930 | $ | - | $ | - | $ | 4,534,930 | ||||||
Notes receivable | 325,129 | - | - | 325,129 | ||||||||||
Total financial assets | $ | 4,860,059 | $ | - | $ | - | $ | 4,860,059 | ||||||
Financial liabilities: | ||||||||||||||
Notes payable | $ | - | $ | - | $ | - | $ | - | ||||||
Total financial liabilities | $ | - | $ | - | $ | - | $ | - | ||||||
At December 31, | ||||||||||||||
2012:00:00 | Quoted in Active Markets | Significant Other | Significant | |||||||||||
for Identical | Observable | Unobservable | ||||||||||||
Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||
Financial assets: | ||||||||||||||
Cash | $ | 13,836,027 | $ | - | $ | - | $ | 13,836,027 | ||||||
Restricted cash | 65,254 | - | - | 65,254 | ||||||||||
Total financial assets | $ | 13,901,281 | $ | - | $ | - | $ | 13,901,281 | ||||||
Financial liabilities: | ||||||||||||||
Notes payable | $ | - | $ | - | $ | - | $ | - | ||||||
Total financial liabilities | $ | - | $ | - | $ | - | $ | - | ||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | ' | |||||||||||||
(p) | Foreign Currency Translation | |||||||||||||
The accompanying financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (“RMB”). The financial statements are translated into United States dollars from RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. | ||||||||||||||
9/30/13 | 12/31/12 | |||||||||||||
Years end RMB : US$ exchange rate | 6.1514 | 6.3161 | ||||||||||||
Average yearly RMB : US$ exchange rate | 6.2215 | 6.3198 | ||||||||||||
The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation. | ||||||||||||||
Revenue Recognition, Policy [Policy Text Block] | ' | |||||||||||||
(q) | Revenue Recognition | |||||||||||||
The Company has two sources of revenue: (a) sales of natural gas and (b) connection fees for constructing connections to the natural gas distribution network. In accordance with FASB ASC 605-10, the Company recognizes gas distribution revenue when natural gas is rendered to customers, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Connection fees are recognized when the outcome of a contract can be estimated reliably and the stage of completion at the balance sheet date can be measured reliably. | ||||||||||||||
Payments received before all of the relevant criteria for revenue recognition satisfied are recorded as unearned revenue. | ||||||||||||||
Cost Of Revenue [Policy Text Block] | ' | |||||||||||||
(r) | Cost of Revenue | |||||||||||||
The cost for distribution of natural gas is comprised of raw materials, delivery cost, and other overhead. The cost of connection fees consists of construction materials, direct labor wages, and other overhead. | ||||||||||||||
Investment Income [Policy Text Block] | ' | |||||||||||||
(s) | Investment Income | |||||||||||||
Investment income represents the Company’s share of post-acquisition results of its investment in equity securities for the year. | ||||||||||||||
Income Tax, Policy [Policy Text Block] | ' | |||||||||||||
(t) | Income Taxes | |||||||||||||
The Company uses the accrual method of accounting to determine and report its taxable reduction of income taxes for the year in which they are available. The Company has implemented Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. Income tax liabilities computed according to the United States, and People’s Republic of China tax laws are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes primarily related to differences between the basis of fixed assets and intangible assets for financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes. A valuation allowance is created to evaluate deferred tax assets, whether it is more likely than not that these items will expire either before the Company is able to realize that tax benefit, or that future realization is uncertain. | ||||||||||||||
In respect of the Company’s subsidiaries domiciled and operated in China and British Virgin Islands, the taxation of these entities is summarized below: | ||||||||||||||
· | All of the operating companies are located in the PRC; GAS Investment China Co., Ltd., Sino Gas Construction, Ltd., and Sino Gas Investment Development, Ltd. are located in the British Virgin Islands; and Tongyuan International Holdings Limited is located in Hong Kong. All of these entities are subject to the relevant tax laws and regulations of the PRC, Hong Kong, and the British Virgin Islands in which the related entities are domiciled. The maximum tax rates of the subsidiaries pursuant to the countries in which they are domiciled are: | |||||||||||||
Subsidiary | Country of Domicile | Income Tax Rate | ||||||||||||
PRC Operating Companies (per Note 2. (d) Principals of Consolidation) | PRC | 25 | % | |||||||||||
i. GAS Investment China Co., Ltd. | BVI | 0 | % | |||||||||||
ii. Sino Gas Construction, Ltd. | BVI | 0 | % | |||||||||||
iii. Sino Gas Investment Development, Ltd | BVI | 0 | % | |||||||||||
iv. Tongyuan International Holdings Limited | Hong Kong | 16.5 | % | |||||||||||
· | Effective January 1, 2008, the PRC government implemented a new 25% tax rate for all enterprises regardless of whether it was a domestic or foreign enterprise, without any tax holiday, which is defined as “two-year exemption followed by three-year half exemption” hitherto enjoyed by tax payers. As a result of the new tax law, the standard 15% tax rate preference terminated as of December 31, 2007. However, the PRC government has established a set of transition rules to allow enterprises that utilized the tax holidays prior to January 1, 2008 to continue utilizing the tax preference. | |||||||||||||
· | Since Sino Gas International Holdings, Inc. is primarily a holding company without any business activities in the United States, the Company shall not be subject to United States income tax for nine months ended September 30, 2013. | |||||||||||||
Advertising Costs, Policy [Policy Text Block] | ' | |||||||||||||
(u) | Advertising | |||||||||||||
The Company expensed all advertising costs as incurred. | ||||||||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' | |||||||||||||
(v) | Risk | |||||||||||||
· | Concentration of Credit Risk | |||||||||||||
Concentration of credit risk is limited to accounts receivable and is subject to the financial conditions of major customers. The Company does not require collateral or other security to support accounts receivable. The Company conducts periodic reviews of its clients’ financial condition and customers’ payment practices to minimize collection risk on accounts receivable. | ||||||||||||||
· | Environmental risks | |||||||||||||
The Company has procured environmental licenses required by the PRC government. The Company has both a water treatment facility for water used in its production process and secure transportation to remove waste off site. In the event of an accident, the Company has purchased insurance to cover potential harm to employees, equipment, and the local environment. | ||||||||||||||
· | Inflation Risk | |||||||||||||
Management monitors changes in prices levels. Historically inflation has not materially impacted the Company’s financial statements; however, significant increases in the price of raw materials and labor that cannot be passed on to the Company’s customers could adversely impact the Company’s results of operations. | ||||||||||||||
· | Economic and Political Risks | |||||||||||||
The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC. | ||||||||||||||
The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. | ||||||||||||||
Statutory Reserves [Policy Text Block] | ' | |||||||||||||
(w) | Statutory Reserves | |||||||||||||
As stipulated by the Company Law of the People’s Republic of China as applicable to Chinese companies with foreign ownership, net income after taxation can only be distributed as dividends after appropriation has been made for the following: | ||||||||||||||
i. | Making up cumulative prior years’ losses, if any; | |||||||||||||
ii. | Allocations to the “Statutory reserve” of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company’s registered capital; | |||||||||||||
iii. | Allocations to the discretionary surplus reserve, if approved in the shareholders’ general meeting. | |||||||||||||
Comprehensive Income, Policy [Policy Text Block] | ' | |||||||||||||
(x) | Comprehensive Income | |||||||||||||
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other consolidated financial statements. The Company’s current component of other comprehensive income is the foreign currency translation adjustment. | ||||||||||||||
The Company uses FASB ASC Topic 220, “Reporting Comprehensive Income”. Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders. Comprehensive income for the years ended December 31, 2012 and 2011 included net income and foreign currency translation adjustments. | ||||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |||||||||||||
(y) | Recent Accounting Pronouncements | |||||||||||||
On July 27, 2012, the FASB issued ASU 2012-02, “Intangibles-Goodwill and Other (Topic 350) – Testing Indefinite-Lived Intangible Assets for Impairment”. The ASU provides entities with an option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired. If an entity concludes that it is more than 50% likely that an indefinite-lived intangible asset is not impaired, no further analysis is required. However, if an entity concludes otherwise, it would be required to determine the fair value of the indefinite-lived intangible asset to measure the amount of actual impairment, if any, as currently required under US GAAP. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of this pronouncement will not have a material impact on its financial statements. | ||||||||||||||
In October, 2012, the FASB issued ASU No. 2012-04, “Technical Corrections and Improvements” (“ASU 2012-04”). The amendments cover a wide range of topics in the FASB ASC. The amendments are incorporated into two sections: a. Technical corrections and improvements and b. Conforming amendments related to fair value measurements. | ||||||||||||||
a. | The amendments in the technical corrections and improvements section are categorized as follows: | |||||||||||||
· | Source literature amendments. These amendments are considered necessary due to differences between source literature and the FASB ASC. The amendments primarily carry forward legacy document guidance and/or subsequent amendments into the FASB ASC. Often, either writing style or phrasing in the legacy documents did not directly relate to the FASB ASC format and style so that the meaning of certain guidance might have been unintentionally altered. | |||||||||||||
· | Guidance clarification and reference corrections. These amendments include updated wording or corrected references, or a combination of both. | |||||||||||||
• | Relocated guidance. These amendments primarily move authoritative literature guidance from one location to another location that is deemed more appropriate within the FASB ASC. | |||||||||||||
b. | On the fair value measurements issue, the guidance in ASU 2012-04 identifies when the use of the term “fair value” should be linked to the definition of fair value included in FASB ASC 820, entitled Fair Value Measurement. Most of the amendments are of a nonsubstantive nature. Many of the amendments relate to conforming wording to be consistent with the terminology in FASB ASC 820 for example, references to market value and current market value have been changed to appropriately refer to fair value so that the literature is consistent throughout. | |||||||||||||
In October 2012, the FASB issued ASU No. 2012-06, “Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution” (“ASU 2012-06”). This amendment requires that indemnification assets recognized in accordance with Subtopic 805-20, Business Combinations—Identifiable Assets and Liabilities, and Any Noncontrolling Interest, as a result of a government-assisted acquisition of a financial institution involving an indemnification agreement should be subsequently measured on the same basis as the asset subject to indemnification. For public and nonpublic entities, the amendments in this Update are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2012. Management does not expect the adoption of this standard has a significant effect on the Company’s consolidated financial position or results of operations. | ||||||||||||||
In January 2013, the FASB issued ASU No. 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities” (“ASU 2013-01”). The Update clarifies that ordinary trade receivables and receivables are not in the scope of Accounting Standards Update No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. Specifically, Update 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in FASB Accounting Standards Codification® or subject to a master netting arrangement or similar agreement. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. Management does not expect the adoption of this standard has a significant effect on the Company’s consolidated financial position or results of operations. | ||||||||||||||
As of September 30, 2013, there are no other recently issued accounting standards not yet adopted that would have a material effect on the Company’s consolidated financial statements. | ||||||||||||||
Earnings Per Share, Policy [Policy Text Block] | ' | |||||||||||||
(z) | Earnings per Share | |||||||||||||
The Company computes earnings per share (“EPS”) in accordance with FASB ASC 260 “Earnings per share”. SFAS No. 128 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., contingent shares, convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. | ||||||||||||||
Subsequent Events, Policy [Policy Text Block] | ' | |||||||||||||
(aa) | Subsequent Events | |||||||||||||
The Company evaluates subsequent events that have occurred after the consolidated balance sheet date but before the consolidated financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. The Company has identified no subsequent events that would require disclosure to the consolidated financial statements. | ||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Table Text Block] | ' | |||||||||||||
The Company owned its subsidiaries after inception and continued to acquire equity interests throughout the reporting periods. The following table depicts the identities of the consolidating subsidiaries as of September 30, 2013: | ||||||||||||||
Name of Company | Place of Incorporation | Date of Incorporation | Beneficial Interest % | Equity Interest % | Registered Capital | |||||||||
GAS Investment China Co., Ltd. | The British Virgin Islands | 6/19/03 | 100 | 100 | USD 10,000,000 | |||||||||
Sino Gas Construction, Ltd. | The British Virgin Islands | 1/9/07 | 51 | 51 | USD 98,039 | |||||||||
Sino Gas Investment Development, Ltd. | The British Virgin Islands | 1/9/07 | 100 | 100 | USD 50,000 | |||||||||
Tongyuan International Holding Limited | Hong Kong | 12/20/11 | 51 | 51 | HKD 10,000 | |||||||||
Beijing Zhong Ran Weiye Gas Co., Ltd. | PRC | 8/29/01 | 100 | 100 | RMB 206,000,000 | |||||||||
Beijing Chenguang Gas Co., Ltd. | PRC | 10/30/02 | 100 | 100 | RMB 35,239,600 | |||||||||
Guannan Weiye Gas Co., Ltd. | PRC | 6/19/03 | 100 | 100 | RMB 9,510,000 | |||||||||
Ningjin Weiye Gas Co., Ltd. | PRC | 12/3/03 | 100 | 100 | RMB 3,000,000 | |||||||||
Yutian Zhongran Weiye Gas Co., Ltd. | PRC | 12/19/03 | 100 | 100 | RMB 3,000,000 | |||||||||
Xingtang Weiye Gas Co., Ltd. | PRC | 2/18/04 | 100 | 100 | RMB 3,000,000 | |||||||||
Wuqiao Gas Co., Ltd. | PRC | 6/30/04 | 100 | 100 | RMB 2,000,000 | |||||||||
Sihong Weiye Gas Co., Ltd. | PRC | 12/3/04 | 100 | 95 | RMB 10,000,000 | |||||||||
Langfang Weiye Dangerous Goods Transportation Co., Ltd. | PRC | 3/22/05 | 100 | 95 | RMB 1,000,000 | |||||||||
Linzhang Weiye Gas Co., Ltd. | PRC | 7/6/05 | 100 | 100 | RMB 1,000,000 | |||||||||
Jiangsu Weiye Gas Co., Ltd. | PRC | 8/22/05 | 100 | 98.9 | RMB 45,694,900 | |||||||||
Zhangjiakou City Xiahuayuan Jinli Gas Co., Ltd. | PRC | 9/30/05 | 100 | 100 | RMB 2,000,000 | |||||||||
Longyao Zhongran Weiye Gas Co., Ltd. | PRC | 10/13/05 | 100 | 100 | RMB 3,000,000 | |||||||||
Yuxian Jinli Gas Co., Ltd. | PRC | 11/8/05 | 100 | 100 | RMB 9,500,000 | |||||||||
Hengshui Weiye Gas Co., Ltd. | PRC | 12/20/05 | 100 | 100 | RMB 3,000,000 | |||||||||
Changli Weiye Gas Co., Ltd. | PRC | 12/8/06 | 100 | 100 | RMB 3,000,000 | |||||||||
Chenan Chenguang Gas Co., Ltd. | PRC | 1/23/07 | 100 | 100 | RMB 1,500,000 | |||||||||
Wuhe Weiye Gas Co., Ltd. | PRC | 1/30/07 | 100 | 100 | RMB 3,000,000 | |||||||||
Gucheng Weiye Gas Co., Ltd. | PRC | 3/21/07 | 100 | 100 | RMB 3,000,000 | |||||||||
Luquan Chenguang Gas Co., Ltd. | PRC | 4/27/07 | 100 | 100 | RMB 2,000,000 | |||||||||
Shijiazhuang Chenguang Gas Co., Ltd. | PRC | 6/14/07 | 100 | 100 | RMB 2,000,000 | |||||||||
Nangong Weiye Gas Co., Ltd. | PRC | 6/25/07 | 100 | 100 | RMB 3,000,000 | |||||||||
Sixian Weiye Gas Co., Ltd. | PRC | 9/3/07 | 100 | 100 | RMB 3,000,000 | |||||||||
Baishan Weiye Gas Co., Ltd. | PRC | 7/13/07 | 100 | 100 | RMB 15,000,000 | |||||||||
Xinhe Weiye Gas Co., Ltd. | PRC | 7/2/09 | 100 | 100 | RMB 300,000 | |||||||||
Hebei Weiye Gas (Group) Co., Ltd. | PRC | 12/18/09 | 100 | 100 | RMB 75,439,270 | |||||||||
Gaocheng Weiye Gas Co., Ltd. | PRC | 1/27/10 | 100 | 100 | RMB 200,000 | |||||||||
Jiangsu Zhong Ran Weiye Energy Investment Co., Ltd. | PRC | 3/10/11 | 100 | 99 | RMB 200,000,000 | |||||||||
Fusong Weiye Gas Co., Ltd. | PRC | 7/29/11 | 100 | 90 | RMB 10,000,000 | |||||||||
Jize Weiye Gas Co., Ltd. | PRC | 9/20/11 | 100 | 100 | RMB 1,000,000 | |||||||||
Baishan Weiye Cheyong Gas Co., Ltd. | PRC | 8/13/12 | 100 | 100 | RMB 1,000,000 | |||||||||
Baishan Weiye Wuzi Co., Ltd. | PRC | 11/5/12 | 100 | 100 | RMB 1,000,000 | |||||||||
Baishan Liquefied Gas Co., Ltd. | PRC | 8/31/12 | 100 | 100 | RMB 2,000,000 | |||||||||
Property Plant And Equipment Useful Life [Table Text Block] | ' | |||||||||||||
Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the property, plant and equipment are as follows: | ||||||||||||||
Assets Class | Estimated Useful Life | |||||||||||||
Gas Pipelines (Up to December 31, 2007) | 25 years | |||||||||||||
Gas Pipelines (Starting from January 1, 2008) | 50 years | |||||||||||||
Buildings | 25 years | |||||||||||||
Leasehold Improvements | 25 years | |||||||||||||
Machinery & Equipment | 20 years | |||||||||||||
Motor Vehicles | 10 years | |||||||||||||
Office Equipment | 8 years | |||||||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | ' | |||||||||||||
Amortization is provided over their estimated useful lives using the straight-line method. Estimated useful lives of the intangibles are as follows: | ||||||||||||||
Asset Class | Estimated Useful Life | |||||||||||||
Land use rights | 20 - 50 years | |||||||||||||
Franchises | 30 years | |||||||||||||
Accounting software | 3 years | |||||||||||||
Fair Value, by Balance Sheet Grouping [Table Text Block] | ' | |||||||||||||
The following tables present the Company’s financial assets and liabilities at fair value in accordance with ASC 820-10: | ||||||||||||||
At September 30, | Quoted in | Significant | ||||||||||||
2013:00:00 | Active Markets | Other | Significant | |||||||||||
for Identical | Observable | Unobservable | ||||||||||||
Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||
Financial assets: | ||||||||||||||
Cash | $ | 4,534,930 | $ | - | $ | - | $ | 4,534,930 | ||||||
Notes receivable | 325,129 | - | - | 325,129 | ||||||||||
Total financial assets | $ | 4,860,059 | $ | - | $ | - | $ | 4,860,059 | ||||||
Financial liabilities: | ||||||||||||||
Notes payable | $ | - | $ | - | $ | - | $ | - | ||||||
Total financial liabilities | $ | - | $ | - | $ | - | $ | - | ||||||
At December 31, | Quoted in Active Markets | Significant Other | Significant | |||||||||||
2012:00:00 | for Identical | Observable | Unobservable | |||||||||||
Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||
Financial assets: | ||||||||||||||
Cash | $ | 13,836,027 | $ | - | $ | - | $ | 13,836,027 | ||||||
Restricted cash | 65,254 | - | - | 65,254 | ||||||||||
Total financial assets | $ | 13,901,281 | $ | - | $ | - | $ | 13,901,281 | ||||||
Financial liabilities: | ||||||||||||||
Notes payable | $ | - | $ | - | $ | - | $ | - | ||||||
Total financial liabilities | $ | - | $ | - | $ | - | $ | - | ||||||
Schedule of Intercompany Foreign Currency Balances [Table Text Block] | ' | |||||||||||||
The financial statements are translated into United States dollars from RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. | ||||||||||||||
9/30/13 | 12/31/12 | |||||||||||||
Years end RMB : US$ exchange rate | 6.1514 | 6.3161 | ||||||||||||
Average yearly RMB : US$ exchange rate | 6.2215 | 6.3198 | ||||||||||||
Investments Federal Income Tax Note, Schedule of Investments [Table Text Block] | ' | |||||||||||||
The maximum tax rates of the subsidiaries pursuant to the countries in which they are domiciled are: | ||||||||||||||
Subsidiary | Country of Domicile | Income Tax Rate | ||||||||||||
PRC Operating Companies (per Note 2. (d) Principals of Consolidation) | PRC | 25.00% | ||||||||||||
i. GAS Investment China Co., Ltd. | BVI | 0.00% | ||||||||||||
ii. Sino Gas Construction, Ltd. | BVI | 0.00% | ||||||||||||
iii. Sino Gas Investment Development, Ltd | BVI | 0.00% | ||||||||||||
iv. Tongyuan International Holdings Limited | Hong Kong | 16.50% | ||||||||||||
ACCOUNTS_RECEIVABLE_Tables
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Receivables [Abstract] | ' | |||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | ' | |||||||
The Company has not experienced any material delinquent accounts that were uncollectible and has not written off a material balance against the allowance for doubtful accounts. | ||||||||
Accounts Receivable | ||||||||
9/30/13 | 12/31/12 | |||||||
Accounts receivable | $ | 11,710,072 | $ | 12,072,689 | ||||
Less: Allowance for bad debt | -117,101 | -120,727 | ||||||
Accounts receivable, net | $ | 11,592,971 | $ | 11,951,962 | ||||
Schedule Of Allowance For Bad Debts [Table Text Block] | ' | |||||||
Allowance for Bad Debt | ||||||||
9/30/13 | 12/31/12 | |||||||
Beginning balance | $ | -120,727 | $ | -104,323 | ||||
Allowance provided | - | -16,404 | ||||||
Charge against allowance | 3,626 | - | ||||||
Reversals | - | - | ||||||
Ending balance | $ | -117,101 | $ | -120,727 | ||||
Past Due Financing Receivables [Table Text Block] | ' | |||||||
Accounts Receivable Aging Analysis | ||||||||
9/30/13 | 12/31/12 | |||||||
<30 Days | $ | 5,813,898 | $ | 4,264,620 | ||||
30-60 Days | 131,352 | 1,122,384 | ||||||
60-90 Days | 1,114,469 | 2,253,942 | ||||||
90-180 Days | 1,770,459 | 480,993 | ||||||
180-360 Days | 1,813,652 | 95,569 | ||||||
>360 Days | 1,066,242 | 3,855,181 | ||||||
Total | $ | 11,710,072 | $ | 12,072,689 | ||||
Accounts Receivable [Table Text Block] | ' | |||||||
The increase in accounts receivable aged 180-360 days primarily reflects sales recorded during the current year. The decrease in accounts receivable aged over 360 days reflects receipt of payments of amounts that had been due. | ||||||||
Our top ten customers accounted for 39.34% of the total accounts receivable as of September 30, 2013: | ||||||||
Beijing Langfa Oil and Gas Technology Co., Ltd. | $ | 321,271 | 2.74 | % | ||||
Beijing Tongzhou Ayou Liquefied Gas Station | 395,361 | 3.38 | % | |||||
Beijing Yinzuo Hezhi Real Estate Development Co., Ltd. | 373,844 | 3.2 | % | |||||
Hebei Dihua Real Estate Co., Ltd. | 518,451 | 4.43 | % | |||||
Hebei Natural Gas Co., Ltd. | 616,881 | 5.28 | % | |||||
Hebei Zhonggang Steel Co., Ltd. | 594,588 | 5.09 | % | |||||
Jiangsu Zhonghuang Real Estate Co., Ltd. | 505,657 | 4.32 | % | |||||
Lianyun Port Zhaolong Home Development Co., Ltd. | 515,883 | 4.41 | % | |||||
Shanghai Datun Energy Co., Ltd. (Jiangsu Branch) | 338,663 | 2.9 | % | |||||
Zaoqiang Taihe Real Estate Co., Ltd. | 419,417 | 3.59 | % | |||||
$ | 4,600,016 | 39.34 | % | |||||
OTHER_RECEIVABLES_Tables
OTHER RECEIVABLES (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Other Receivables [Abstract] | ' | |||||||
Other Receivable [Table Text Block] | ' | |||||||
9/30/13 | 12/31/12 | |||||||
Employee travel advance | $ | 1,190,692 | $ | 323,463 | ||||
Advance for consultant service | 550,866 | 786,404 | ||||||
Short term security deposit for construction pipeline | 247,358 | 186,090 | ||||||
Others | 4,440,897 | 1,932,817 | ||||||
$ | 6,429,813 | $ | 3,228,774 | |||||
INVESTMENT_Tables
INVESTMENT (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Schedule of Investments [Abstract] | ' | |||||||||
Schedule of Equity Method Investments [Table Text Block] | ' | |||||||||
Ref. | 9/30/13 | 12/31/12 | ||||||||
-1 | Beijing Zhongran Xiangke Oil Gas Technology Co., Ltd. | $ | 10,212,856 | $ | 9,938,953 | |||||
-2 | Qujing City Fuel Gas Co., Ltd. | 9,157,282 | 9,157,282 | |||||||
-3 | Tongshan Hengxin Jiaye Gas Co., Ltd. | 4,194,586 | 4,085,207 | |||||||
-4 | China Construction Bank | 32,513 | 31,665 | |||||||
Total | $ | 23,597,237 | $ | 23,213,107 | ||||||
-1 | The Company through its wholly owned subsidiary Beijing Gas invested $2,189,038 (RMB 13,465,648) in the acquisition of a 40% equity position in Xiangke Oil Gas. The $10,212,856 investment as of September 30, 2013 consisted of principal and accumulated post-acquisition investment income attributed to Xiangke Oil Gas’ operation results. | |||||||||
-2 | Along with two local partners in Qujing city, the second largest city in Yunnan province of PRC, Beijing Gas established Qujing City Fuel Gas Co., Ltd. with registered capital of $4,387,761 (RMB 30,000,000). Beijing Gas’ original investment of $1,746,764 (RMB 11,700,000) represented 39% equity ownership of Qujing Gas. | |||||||||
-3 | On April 23, 2008, Beijing Gas entered into an agreement to acquire a 100% equity interest in Tongshan Hengxin Jiaye Natural Gas Co., Ltd. (“Tongshan Gas”), for a purchase price of $4,660,000 (RMB 32,600,000). Tongshan is a regional natural gas distributor and developer of natural gas distribution networks in Jiangsu province of the PRC. As of September 30, 2013, the Company has not finished the registration of the equity transfer with the Tongshan City Industrial and Commercial Administration. Therefore, acquisition payments of $4,194,586 for Tongshan Gas were classified as investment as of that date. | |||||||||
-4 | The Company purchased a $32,513 (RMB 200,000) long-term fund with the Bank of Construction in an effort to maintain a favorable relationship and enhance further credit facility. | |||||||||
Investment In Gas Companies [Table Text Block] | ' | |||||||||
Investment | Xiangke Oil Gas | Qujing Gas | ||||||||
Investment Cost | $ | 2,189,038 | $ | 7,766,760 | ||||||
Prior years investment income | 4,494,221 | 232,393 | ||||||||
2011 investment income | 858,264 | 512,387 | ||||||||
2012 investment income | 26,713,323 | 645,742 | ||||||||
$ | 10,212,856 | $ | 9,157,282 | |||||||
PROPERTY_PLANT_AND_EQUIPMENT_T
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||
Property, Plant and Equipment [Table Text Block] | ' | ||||||||||
Property, Plant, and Equipment consisted of the following as of September 30, 2013 and December 31, 2012: | |||||||||||
9/30/13 | At Cost | Accumulated Depreciation | Net | ||||||||
Gas Pipelines | $ | 52,602,053 | $ | 4,697,718 | $ | 47,904,335 | |||||
Motor Vehicles | 7,306,639 | 3,207,476 | 4,099,163 | ||||||||
Machinery & Equipment | 2,165,572 | 529,671 | 1,635,901 | ||||||||
Buildings | 2,105,503 | 448,982 | 1,656,521 | ||||||||
Leasehold Improvements | 88,581 | 53,680 | 34,901 | ||||||||
Office Equipment | 384,179 | 186,431 | 197,748 | ||||||||
Total | $ | 64,652,527 | $ | 9,123,958 | $ | 55,528,569 | |||||
12/31/12 | At Cost | Accumulated Depreciation | Net | ||||||||
Gas Pipelines | $ | 50,028,098 | $ | 3,961,187 | $ | 47,904,335 | |||||
Motor Vehicles | 6,628,442 | 2,835,134 | 3,793,308 | ||||||||
Machinery & Equipment | 2,180,403 | 484,195 | 1,696,208 | ||||||||
Buildings | 1,862,560 | 378,184 | 1,484,376 | ||||||||
Leasehold Improvements | 88,071 | 68,158 | 19,913 | ||||||||
Office Equipment | 374,355 | 167,875 | 206,480 | ||||||||
Total | $ | 61,161,929 | $ | 7,894,733 | $ | 53,267,196 | |||||
GOODWILL_Tables
GOODWILL (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Schedule of Goodwill [Table Text Block] | ' | |||||||
The Company has determined there were no impairments to goodwill as of September 30, 2013 and December 31, 2012. | ||||||||
9/30/13 | 12/31/12 | |||||||
Yuxian Gas | $ | 10,954 | $ | 10,954 | ||||
Guannan Gas | 409,963 | 409,963 | ||||||
Chengguang Gas | 1,257,058 | 1,257,058 | ||||||
Baishan Gas | 2,920,346 | - | ||||||
$ | 4,598,321 | $ | 1,677,975 | |||||
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||
Schedule of Impaired Intangible Assets [Table Text Block] | ' | ||||||||||
Intangible assets consisted of the following as of September 30, 2013 and December 31, 2012: | |||||||||||
9/30/13 | At Cost | Accumulated Amortization | Net | ||||||||
Land Use rights | $ | 1,107,117 | $ | 153,414 | $ | 953,703 | |||||
Franchises | 406,412 | 406,412 | - | ||||||||
Accounting Software | 51,152 | 48,793 | 2,359 | ||||||||
$ | 1,564,680 | $ | 608,618 | $ | 956,062 | ||||||
12/31/12 | At Cost | Accumulated Amortization | Net | ||||||||
Land Use Rights | $ | 1,009,020 | $ | 108,115 | $ | 900,905 | |||||
Franchises | 395,813 | 395,813 | - | ||||||||
Accounting Software | 105,260 | 56,178 | 49,082 | ||||||||
$ | 1,510,093 | $ | 560,106 | $ | 949,987 | ||||||
LOANS_Tables
LOANS (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Receivables [Abstract] | ' | ||||||||||||||
Schedule of Short-term Debt [Table Text Block] | ' | ||||||||||||||
(a) SHORT-TERM BANK LOANS | |||||||||||||||
Name of Bank | Note | Due Date | Interest Rate | 9/30/13 | 12/31/12 | ||||||||||
China Minsheng Banking Corp., Ltd. - Pinganli Branch | 1 | 2/28/13 | 9.512 | % | $ | - | $ | 1,108,279 | |||||||
China Merchants Bank - Beijing Shouti Branch | 5 | 6/14/13 | 7.888 | % | - | 1,583,255 | |||||||||
Bank of China - Baishan Branch | 4 | 6/19/14 | 6.65 | % | 1,950,775 | 1,424,930 | |||||||||
Bank of China - Shijiazhuang Branch | 3 | 6/6/14 | 7.2 | % | 1,625,646 | 1,583,255 | |||||||||
Nanjing Bank | 6 | 1/17/13 | 7.5 | % | - | 357,627 | |||||||||
Nanjing Bank | 6 | 1/17/13 | 8.8 | % | - | 799,386 | |||||||||
Wuhe Yongtai Bank | 6/20/14 | 9.9 | % | 812,823 | 759,963 | ||||||||||
Bank of Beijing – Zhongguancun Haidian Park Branch | 8/29/14 | 7.2 | % | 812,823 | 791,628 | ||||||||||
Baishan Dinghe Small Loan Co., Ltd. | On Demand | 43.2 | % | - | 316,651 | ||||||||||
Nanjing Bank | 6 | 10/24/13 | 7.5 | % | 1,487,466 | 1,448,679 | |||||||||
Dalian Bank - Beijing Branch | 2 | 12/31/13 | 8.1 | % | 4,876,939 | 1,345,767 | |||||||||
China Development Bank - Beijing Branch | 7 | 12/26/13 | 6.9 | % | 8,128,231 | 7,916,277 | |||||||||
Pudong Development Bank - Shijiazhuang Branch | 10/30/13 | 7.8 | % | 2,438,469 | 2,374,883 | ||||||||||
Pudong Development Bank - Shijiazhuang Branch | 1/7/14 | 7.8 | % | 812,823 | - | ||||||||||
Nanjing Bank | 6 | 2/21/14 | 7.5 | % | 1,763,826 | - | |||||||||
Industrial and Commercial Bank of China – Zhongguancun Branch | 6/25/14 | 5 | % | 975,388 | - | ||||||||||
China Merchants Bank | 6/26/14 | 8.1 | % | 1,625,646 | - | ||||||||||
Bank of China - Baishan Branch | 8/30/14 | 6.45 | % | 325,129 | - | ||||||||||
Baishan Huida Investment Management Co, Ltd. | 9/5/14 | 6.25 | % | 390,156 | - | ||||||||||
Peixuan Rural Credit Cooperation | 7/18/14 | 11.674 | % | 4,876,939 | - | ||||||||||
Total | $ | 32,903,079 | $ | 21,810,580 | |||||||||||
Note: | |||||||||||||||
-1 | The loan provided by China Minsheng Bank Corp., Ltd. was guaranteed by the CEO Mr. Liu Yuchuan’s personal credit. | ||||||||||||||
-2 | The loans provided by Bank of Dalian were secured by the Company’s subsidiary Chengguang Gas’ registered capital, CEO Mr. Liu Yuchuan and COO Mr. Zhou Zhicheng’s personal home properties, which have been appraised at total fair market value of $933,254 (RMB 6,380,854). | ||||||||||||||
-3 | The loan provided by Bank of China – Shijiazhuang Branch was guaranteed by Hebei Desheng Guarantee Co., Ltd. (“Hebei Desheng”). In connection with this collateralization, the Company was required to pay approximately $45,000 (RMB 300,000) as a financial service fee to Hebei Desheng. | ||||||||||||||
-4 | The loan provided by Bank of China – Baishan Branch was secured by the Company’s subsidiary Beijing Zhongran Weiye Gas Co., Ltd. with the authority of gas payment collection and Baishan Weiye Gas Co. Ltd. with liability. | ||||||||||||||
-5 | The loan provided by China Merchants Bank was guaranteed by the CEO Mr. Liu Yuchuan with unlimited liability, and the management Mr. Wang Weidong and Ms. Song Erxin with $154,703 (RMB 1,000,000) liabilities each. | ||||||||||||||
-6 | The loan provided by Nanjing Bank was secured by Beijing Zhongyou Sanhuan Technology Development Co., Ltd. and CEO Mr. Liu Yuchuan. | ||||||||||||||
-7 | The Company obtained the loans from China Development Bank via a collateralized agent Zhongyuan Guoxin Credit Guarantee Co., Ltd. (the “Guarantor”). The Guarantor guaranteed to the banks the entire principal and accrued interest. The Company pledged all of Beijing Gas’ subsidiaries and deposited $1,028,464 (RMB 6,800,000), which was classified as non-current asset deposits, with the Guarantor, and was required to pay 2% of the outstanding loans as a financial service fee to the Guarantor per annum. Because the Company lacked the favorable credit history to directly establish a credit facility with the banks, the credit collateralization from Guarantor was chosen as a financing solution. | ||||||||||||||
Schedule Of Long Term Bank Loans [Table Text Block] | ' | ||||||||||||||
(b) | LONG-TERM BANK LOANS | ||||||||||||||
Name of Bank | Due Date | Interest Rate | 9/30/13 | 12/31/12 | |||||||||||
Bank of China - Baishan Branch | 6/24/15 | 6.65 | % | $ | 1,950,776 | $ | 2,849,860 | ||||||||
Baishan Huida Investment Management Co, Ltd. | 12/31/30 | 6.25 | % | 3,283,805 | 3,958,139 | ||||||||||
Bank of China - Baishan Branch | 8/30/16 | 6.45 | % | 2,275,905 | - | ||||||||||
Pudong Development Bank - Shijiazhuang Branch | 7/25/18 | 6.85 | % | 2,438,469 | - | ||||||||||
Peixuan Rural Credit Cooperation | 7/18/14 | 11.674 | % | - | 4,749,766 | ||||||||||
Total | $ | 9,948,955 | $ | 11,557,765 | |||||||||||
OTHER_PAYABLES_Tables
OTHER PAYABLES (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Payables and Accruals [Abstract] | ' | |||||||||
Current Other Payables [Table Text Block] | ' | |||||||||
(a) | Current other payables consisted of the following at September 30, 2013 and December 31, 2012: | |||||||||
Ref. | 9/30/13 | 12/31/12 | ||||||||
-1 | Amount due to Employees | $ | 1,357,532 | $ | 3,241,752 | |||||
-2 | Tax Payable | 926,095 | 1,256,502 | |||||||
-3 | Payables to Subcontractors | 276,435 | 3,614,959 | |||||||
-4 | Others | 2,714,568 | 1,465,234 | |||||||
Total | $ | 5,274,630 | $ | 9,578,447 | ||||||
-1 | Amounts due to employees included accrual payroll, welfare payable, continued education training program cost and individual travel advance. All of these amounts were unsecured, interest free, and have no fixed repayment terms. | |||||||||
-2 | The tax payable consists of value added tax, sales tax, income tax and local tax payables. | |||||||||
-3 | Payables to subcontractors are unbilled liabilities. | |||||||||
CONVERTIBLE_BONDS_AND_BOND_WAR1
CONVERTIBLE BONDS AND BOND WARRANTS (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Convertible Bonds and Bond Warrants [Abstract] | ' | ||||||||
Schedule of Debt [Table Text Block] | ' | ||||||||
The convertible bonds payable, net consisted of the followings: | |||||||||
9/30/13 | 12/31/12 | ||||||||
Ref. | 8M Bonds | 8M Bonds | |||||||
-1 | Convertible Bonds Payable – principal | $ | - | $ | 8,000,000 | ||||
-2 | Less: Interest Discount - Warrants | - | - | ||||||
-3 | Less: Interest Discount - Beneficial Conversion Feature | - | -258,065 | ||||||
-4 | Less: Bond Discount - Issuance Cost | - | - | ||||||
-5 | Accretion of Interest Discount - Warrants | - | - | ||||||
-6 | Accretion of Interest Discount - Beneficial Conversion Feature | - | 258,065 | ||||||
-7 | Accretion of Bond Discount - Issuance Cost | - | - | ||||||
-8 | Accretion of Interest Discount - Redemption | - | 20,825 | ||||||
Convertible Bonds Payable, net | $ | - | $ | 8,020,825 | |||||
-1 | The principal amounts listed above represent the face amount of the convertible notes. | ||||||||
-2 | The proceeds were allocated between the convertible bonds and warrants based on their relative fair value. See Note 13 Capital Stock for the calculation of fair value of convertible bonds detachable warrants. | ||||||||
-3 | Because the conversion price is $0.31, which is lower than the fair market value of common stock on the date of issuance, the beneficial conversion feature was applied. Since the $8M bond will expire in one year, the beneficial conversion feature was amortized immediately. | ||||||||
-4 | The bond has no issuance cost. | ||||||||
-5 | Based on a 15% per annum redemption rate, the redemption values were determined to be $800,000. | ||||||||
CAPITAL_STOCK_Tables
CAPITAL STOCK (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Stockholders' Equity Note [Abstract] | ' | |||||||
Schedule Of Outstanding Securities [Table Text Block] | ' | |||||||
The following table depicts the Company’s outstanding securities as of September 30, 2013: | ||||||||
Authorized Shares | Shares issued and outstanding | |||||||
Common Stock | 250,000,000 | 57,608,833 | ||||||
Convertible Preferred Stock A | 20,000,000 | - | ||||||
Convertible Preferred Stock B | 5,000,000 | 200,997 | ||||||
Convertible Preferred Stock B-1 | 3,000,000 | - | ||||||
INCOME_TAX_Tables
INCOME TAX (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||
Schedule Of Income Tax and Deferred Tax [Table Text Block] | ' | |||||||||
The following tabulation presents the income tax and deferred tax of the Company and its individual subsidiaries for the nine months ended September 30, 2013 and 2012: | ||||||||||
September 30, | September 30, | |||||||||
Description | 2013 | 2012 | ||||||||
Income (loss) before taxes: | ||||||||||
US | $ | -1,317,744 | -1,116,402 | |||||||
BVI | -1,129,454 | -509,801 | ||||||||
PRC | 6,498,612 | 6,204,248 | ||||||||
Total income before taxes | $ | 4,051,414 | $ | 4,578,045 | ||||||
Provision for taxes:- | ||||||||||
Current: | ||||||||||
US | - | - | ||||||||
BVI | - | - | ||||||||
PRC | -1,273,694 | 1,168,051 | ||||||||
-1,273,694 | 1,168,051 | |||||||||
Deferred: | ||||||||||
US | - | - | ||||||||
BVI | - | - | ||||||||
PRCs | - | - | ||||||||
Valuation allowance | - | - | ||||||||
- | - | |||||||||
Total provision for taxes | -1,273,694 | 1,168,051 | ||||||||
Effective tax rate | 31.44 | % | 25.51 | % | ||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | ' | |||||||||
The differences between the U.S. federal statutory income tax rates and the Company’s effective tax rate for the nine months ended September 30, 2013 and 2012 are shown in the following table: | ||||||||||
September 30, | September 30, | |||||||||
2013 | 2012 | |||||||||
U.S. federal statutory income tax rate | 34 | % | 34 | |||||||
Lower rates in PRC, net | -9 | % | -9 | % | ||||||
Tax holiday | 6.44 | % | 0.51 | % | ||||||
Accruals in foreign jurisdictions | N/A | N/A | ||||||||
Effective tax rate | 31.44 | % | 25.51 | % | ||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | ' | |||||||||||||
Financial Position Segment Report | ||||||||||||||
As of September 30, 2013 | ||||||||||||||
Shell, BVIs, & | ||||||||||||||
Gas Distribution | Gas Pipeline Installation | Eliminations | Total | |||||||||||
Assets | ||||||||||||||
Current Assets | $ | 21,785,682 | $ | 12,421,010 | $ | 427,013 | $ | 34,633,705 | ||||||
Non-Current Assets | 48,375,086 | 84,846,900 | 4,925,781 | 138,147,767 | ||||||||||
Total Assets | 70,160,768 | 97,267,910 | 5,352,794 | 172,781,472 | ||||||||||
Liabilities | ||||||||||||||
Current Liabilities | 16,299,344 | 44,348,595 | - | 60,647,939 | ||||||||||
Non-current Liabilities | 2,673,816 | 7,275,139 | - | 9,948,955 | ||||||||||
Total Liabilities | 18,973,160 | 51,623,734 | - | 70,596,894 | ||||||||||
Net Assets | 51,187,608 | 45,644,176 | 5,352,794 | 102,184,578 | ||||||||||
Liabilities & Equities | $ | 70,160,768 | $ | 97,267,910 | $ | 5,352,794 | $ | 172,781,472 | ||||||
Operation Result Segment Report | ||||||||||||||
For the nine months ended September 30, 2013 | ||||||||||||||
Shell, BVIs, & | ||||||||||||||
Gas Distribution | Gas Pipeline Installation | Eliminations | Total | |||||||||||
Sales Revenue | $ | 36,831,797 | $ | 20,999,486 | $ | -15,659,746 | $ | 42,171,537 | ||||||
Cost of Revenue | -32,985,800 | -10,534,983 | 15,659,746 | -27,861,037 | ||||||||||
Gross Profit | 3,845,997 | 10,464,503 | - | 14,310,500 | ||||||||||
Operating Expense | -1,730,742 | -4,709,146 | -1,431,726 | -7,871,614 | ||||||||||
Operating Income/(Loss) | 2,115,255 | 5,755,357 | -1,431,726 | 6,438,886 | ||||||||||
Other Income/(Loss) | -641,641 | -926,368 | -819,463 | -2,387,472 | ||||||||||
Earnings before tax | 1,473,614 | 4,828,989 | -2,251,189 | 4,051,414 | ||||||||||
Income tax | -297,803 | -975,891 | - | -1,273,694 | ||||||||||
Gain/(loss) from discontinued operation, net of tax | - | - | - | - | ||||||||||
Net Income | $ | 1,175,811 | $ | 3,853,098 | $ | -2,251,189 | $ | 2,777,720 | ||||||
Financial Position Segment Report | ||||||||||||||
As of December 31, 2012 | ||||||||||||||
Shell, BVIs, & | ||||||||||||||
Gas Distribution | Gas Pipeline Installation | Eliminations | Total | |||||||||||
Assets | ||||||||||||||
Current Assets | $ | 21,479,047 | $ | 12,910,983 | $ | 2,320,987 | $ | 36,711,017 | ||||||
Non-Current Assets | 43,458,777 | 72,299,153 | 7,297,281 | 123,055,212 | ||||||||||
Total Assets | 64,937,824 | 85,210,136 | 9,618,268 | 159,766,229 | ||||||||||
Liabilities | ||||||||||||||
Current Liabilities | 8,089,999 | 52,244,847 | - | 60,334,845 | ||||||||||
Non-current Liabilities | 1,549,723 | 10,008,042 | - | 11,557,765 | ||||||||||
Total Liabilities | 9,639,722 | 62,252,889 | - | 71,892,611 | ||||||||||
Net Assets | 55,298,102 | 22,957,247 | 9,618,268 | 87,873,617 | ||||||||||
Liabilities & Equities | $ | 64,937,824 | $ | 85,210,136 | $ | 9,618,268 | $ | 159,766,228 | ||||||
Operation Result Segment Report | ||||||||||||||
For the nine months ended September 30, 2012 | ||||||||||||||
Shell, BVIs, & | ||||||||||||||
Gas Distribution | Gas Pipeline Installation | Eliminations | Total | |||||||||||
Sales Revenue | $ | 30,273,792 | $ | 18,091,039 | -15,364,457 | 33,000,374 | ||||||||
Cost of Revenue | -38,506,689 | -7,126,400 | 15,364,457 | -20,268,632 | ||||||||||
Gross Profit | 1,767,103 | 10,964,639 | - | 12,731,742 | ||||||||||
Operating Expense | -728,637 | -4,521,094 | -646,383 | -5,896,114 | ||||||||||
Operating Income/(Loss) | 1,038,466 | 6,443,545 | -646,383 | 6,835,628 | ||||||||||
Other Income/(Loss) | -313,341 | -954,421 | -979,820 | -2,257,583 | ||||||||||
Earnings before tax | 725,125 | 5,479,124 | -1,626,204 | 4,578,045 | ||||||||||
Income tax | -136,517 | -1,031,534 | - | -1,168,051 | ||||||||||
Gain/(loss) from discontinued operation, net of tax | - | - | - | |||||||||||
- | ||||||||||||||
Net Income | $ | 588,608 | $ | 4,447,590 | -1,626,204 | 3,409,994 | ||||||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | ||||||||
Nine months Ended | |||||||||
Ref | 9/30/13 | 9/30/12 | |||||||
Basic Earnings Per Share Numerator: | |||||||||
Net Income | $ | 2,777,720 | 3,409,994 | ||||||
Income from continued operations | 2,777,720 | - | |||||||
Income/(loss) from discontinued operations | - | - | |||||||
Less: | |||||||||
Preferred Dividends | - | - | |||||||
Constructive Preferred Dividends | - | - | |||||||
income attributed to non-controlling interest | -1,498 | 957 | |||||||
Net income available to Common Stockholders | $ | 2,779,218 | $ | 3,410,951 | |||||
Income from continued operations available to Common Stockholders | $ | 2,779,218 | $ | 3,410,951 | |||||
Income/(loss) from discontinued operations available to Common Stockholders | - | - | |||||||
Diluted Earnings Per Share Numerator: | |||||||||
Add: | |||||||||
Interest Expense for Convertible Bonds, net of tax | 1,022,334 | 979,857 | |||||||
Net income available to Common Stockholders | 3,801,552 | 4,390,808 | |||||||
Income from continued operations available to Common Stockholders | 3,801,552 | 4,390,808 | |||||||
Income/(loss) from discontinued operations available to Common Stockholders | - | - | |||||||
Original Shares | 31,802,382 | 31,793,698 | |||||||
Addition to Common Stock | 848,431 | - | |||||||
Basic Weighted Average Shares Outstanding | 32,650,813 | 31,793,698 | |||||||
Potentially Dilutive Securities: | |||||||||
Addition to Common Stock from Conversion of Preferred Stock B | -1 | - | |||||||
Addition to Common Stock from Conversion of Preferred Stock B-1 | -2 | - | |||||||
Addition to Common Stock from Conversion of Convertible Bonds | - | 9,262,889 | |||||||
Addition to Common Stock from Exercise of Warrants | -3 | - | |||||||
Diluted Weighted Average Shares Outstanding | 32,650,813 | 41,056,587 | |||||||
Earnings Per Share | |||||||||
Basic: - Net income | $ | 0.085 | $ | 0.11 | |||||
- Income from continued operation | 0.085 | $ | 0.11 | ||||||
- Income from discontinued operation | 0,00 | 0 | |||||||
Diluted: - Net income | $ | 0.085 | $ | 0.11 | |||||
- Income from continued operation | 0.085 | $ | 0.11 | ||||||
- Income from discontinued operation | 0 | 0 | |||||||
Weighted Average Shares Outstanding | |||||||||
- Basic | 32,650,813 | 31,793,698 | |||||||
- Diluted | 32,650,813 | 41,056,587 | |||||||
-1 | The applications of conversion of preferred stock B into common stock were anti-dilutive for the nine months ended September 30, 2013 and 2012. | ||||||||
-2 | The applications of conversion of preferred stock B-1 into common stock were anti-dilutive for the nine months ended September 30, 2013 and 2012. | ||||||||
-3 | The exercises of warrants to common stock were anti-dilutive for the nine months ended September 30, 2013 and 2012. | ||||||||
-4 | The applications of conversion of convertible bonds into common stock were anti-dilutive for the nine months ended September 30, 2013 and 2012. | ||||||||
DISCONTINUED_OPERATION_Tables
DISCONTINUED OPERATION (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | ' | ||||||||||||||||
(a) | The following tabulation presents the calculation of gain from the disposal of the three subsidiaries: | ||||||||||||||||
Valuation of | Buyer’s | ||||||||||||||||
Disposition | Acquisition Price | Gain/(Loss) | |||||||||||||||
Jinzhou Gas | $ | 3,217,742 | $ | 3,043,930 | $ | -173,812 | |||||||||||
Shenzhou Gas | 1,357,326 | 1,312,914 | -44,412 | ||||||||||||||
Xinji Gas | 1,334,980 | 2,681,980 | 1,347,000 | ||||||||||||||
Sishui Gas | 474,723 | - | -474,723 | ||||||||||||||
$ | 6,384,771 | $ | 7,038,824 | $ | 654,053 | ||||||||||||
Schedule Of Disposal Group Including Discontinuing Operations Gains [Table Text Block] | ' | ||||||||||||||||
(b) | The following tabulation summarizes the operational results of the four disposal subsidiaries for the period ended June 8, 2011 and December 31, 2012, which was also accounted as income from discontinued operations net of tax in the statement of income. | ||||||||||||||||
Condensed Income Statements | |||||||||||||||||
Jinzhou Gas | Shenzhou Gas | Xinji Gas | Sishui Gas | Total | |||||||||||||
Revenue | $ | 359,787 | $ | 277,453 | $ | 9,569 | $ | - | $ | 646,809 | |||||||
Cost of revenue | 217,313 | 224,412 | 8,224 | - | 449,949 | ||||||||||||
Gross profit | 142,473 | 53,041 | 1,346 | - | 196,860 | ||||||||||||
Operating expenses | 18,246 | 16,009 | 35,138 | - | 69,393 | ||||||||||||
Operating income | 124,227 | 37,032 | -33,792 | - | 127,467 | ||||||||||||
Other income/(expenses) | -241 | -226 | -3,218 | - | -3,685 | ||||||||||||
Earnings before tax | 123,986 | 36,806 | -37,010 | - | 123,782 | ||||||||||||
- | |||||||||||||||||
Income tax | -6,197 | -11,167 | -114 | - | -17,477 | ||||||||||||
Net income | $ | 117,789 | $ | 25,640 | $ | -37,124 | $ | - | $ | 106,305 | |||||||
ORGANIZATION_AND_PRINCIPAL_ACT1
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details Textual) | 0 Months Ended | |
Sep. 07, 2006 | Sep. 30, 2013 | |
Stock Issued During Period, Shares, Acquisitions | 14,361,646 | ' |
Equity Method Investment, Ownership Percentage | ' | 49.00% |
Oil and Gas Delivery Commitments and Contracts, Daily Production | 156,000 | ' |
Sino Gas Construction Ltd [Member] | ' | ' |
Equity Method Investment, Ownership Percentage | 51.00% | ' |
Beijing Chenguang Gas Co Ltd [Member] | ' | ' |
Equity Method Investment, Ownership Percentage | 100.00% | ' |
Gas Distribution [Member] | ' | ' |
Number Of Cities | 34 | ' |
Number Of Residential Customers | 293,758 | ' |
Number Of Industrial Customers | 7 | ' |
Pipeline Kilometers | 2,039 | ' |
Minimum [Member] | Subsidiary of Common Parent [Member] | ' | ' |
Equity Method Investment, Ownership Percentage | 90.00% | ' |
Maximum [Member] | Subsidiary of Common Parent [Member] | ' | ' |
Equity Method Investment, Ownership Percentage | 100.00% | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
GAS Investment China Co Ltd [Member] | Sino Gas Construction Ltd [Member] | Sino Gas Investment Development Ltd [Member] | Tongyuan International Holding Limited [Member] | Beijing Zhong Ran Weiye Gas Co Ltd [Member] | Beijing Chenguang Gas Co Ltd [Member] | Guannan Weiye Gas Co Ltd [Member] | Ningjin Weiye Gas Co Ltd [Member] | Yutian Zhongran Weiye Gas Co Ltd [Member] | Xingtang Weiye Gas Co Ltd [Member] | Wuqiao Gas Co Ltd [Member] | Sihong Weiye Gas Co Ltd [Member] | Langfang Weiye Dangerous Goods Transportation Co Ltd [Member] | Linzhang Weiye Gas Co Ltd [Member] | Jiangsu Weiye Gas Co Ltd [Member] | Zhangjiakou City Xiahuayuan Jinli Gas Co Ltd [Member] | Longyao Zhongran Weiye Gas Co Ltd [Member] | Yuxian Jinli Gas Co Ltd [Member] | Hengshui Weiye Gas Co Ltd [Member] | Changli Weiye Gas Co Ltd [Member] | Chenan Chenguang Gas Co Ltd [Member] | Wuhe Weiye Gas Co Ltd [Member] | Gucheng Weiye Gas Co Ltd [Member] | Luquan Chenguang Gas Co Ltd [Member] | Shijiazhuang Chenguang Gas Co Ltd [Member] | Nangong Weiye Gas Co Ltd [Member] | Sixian Weiye Gas Co Ltd [Member] | Baishan Weiye Gas Co Ltd [Member] | Xinhe Weiye Gas Co Ltd [Member] | Hebei Weiye Gas (Group) Co Ltd [Member] | Gaocheng Weiye Gas Co Ltd [Member] | Jiangsu Zhong Ran Weiye Energy Investment Co Ltd [Member] | Fusong Weiye Gas Co Ltd [Member] | Jize Weiye Gas Co Ltd [Member] | Baishan Weiye Cheyong Gas Co Ltd [Member] | Baishan Weiye Wuzi Co Ltd [Member] | Baishan Liquified Gas Co Ltd [Member] | ||
USD ($) | USD ($) | USD ($) | HKD | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | ||
Entity Incorporation, State Country Name | ' | 'The British Virgin Islands | 'The British Virgin Islands | 'The British Virgin Islands | 'Hong Kong | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC | 'PRC |
Entity Incorporation, Date of Incorporation | ' | 19-Jun-03 | 9-Jan-07 | 9-Jan-07 | 20-Dec-11 | 29-Aug-01 | 30-Oct-02 | 19-Jun-03 | 3-Dec-03 | 19-Dec-03 | 18-Feb-04 | 30-Jun-04 | 3-Dec-04 | 22-Mar-05 | 6-Jul-05 | 22-Aug-05 | 30-Sep-05 | 13-Oct-05 | 8-Nov-05 | 20-Dec-05 | 8-Dec-06 | 23-Jan-07 | 30-Jan-07 | 21-Mar-07 | 27-Apr-07 | 14-Jun-07 | 25-Jun-07 | 3-Sep-07 | 13-Jul-07 | 2-Jul-09 | 18-Dec-09 | 27-Jan-10 | 10-Mar-11 | 29-Jul-11 | 20-Sep-11 | 13-Aug-12 | 5-Nov-12 | 31-Aug-12 |
Beneficiary Interest % | ' | 100.00% | 51.00% | 100.00% | 51.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
Equity Interest % | 49.00% | 100.00% | 51.00% | 100.00% | 51.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 95.00% | 95.00% | 100.00% | 98.90% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 99.00% | 90.00% | 100.00% | 100.00% | 100.00% | 100.00% |
Capital | ' | $10,000,000 | $98,039 | $50,000 | 10,000 | 206,000,000 | 35,239,600 | 9,510,000 | 3,000,000 | 3,000,000 | 3,000,000 | 2,000,000 | 10,000,000 | 1,000,000 | 1,000,000 | 45,694,900 | 2,000,000 | 3,000,000 | 9,500,000 | 3,000,000 | 3,000,000 | 1,500,000 | 3,000,000 | 3,000,000 | 2,000,000 | 2,000,000 | 3,000,000 | 3,000,000 | 15,000,000 | 300,000 | 75,439,270 | 200,000 | 200,000,000 | 10,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 2,000,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 9 Months Ended |
Sep. 30, 2013 | |
Land Use Rights [Member] | Minimum [Member] | ' |
Finite-Lived Intangible Asset, Useful Life | '20 years |
Land Use Rights [Member] | Maximum [Member] | ' |
Finite-Lived Intangible Asset, Useful Life | '50 years |
Franchise Rights [Member] | ' |
Finite-Lived Intangible Asset, Useful Life | '30 years |
Computer Software, Intangible Asset [Member] | ' |
Finite-Lived Intangible Asset, Useful Life | '3 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Financial assets: | ' | ' |
Cash | $4,534,930 | $13,836,027 |
Notes receivable | 325,129 | 65,254 |
Total financial assets | 4,860,059 | 13,901,281 |
Financial liabilities: | ' | ' |
Notes payable | 0 | 0 |
Total financial liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Financial assets: | ' | ' |
Cash | 4,534,930 | 13,836,027 |
Notes receivable | 325,129 | 65,254 |
Total financial assets | 4,860,059 | 13,901,281 |
Financial liabilities: | ' | ' |
Notes payable | 0 | 0 |
Total financial liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Financial assets: | ' | ' |
Cash | 0 | 0 |
Notes receivable | 0 | 0 |
Total financial assets | 0 | 0 |
Financial liabilities: | ' | ' |
Notes payable | 0 | 0 |
Total financial liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Financial assets: | ' | ' |
Cash | 0 | 0 |
Notes receivable | 0 | 0 |
Total financial assets | 0 | 0 |
Financial liabilities: | ' | ' |
Notes payable | 0 | 0 |
Total financial liabilities | $0 | $0 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) | Sep. 30, 2013 | Dec. 31, 2012 |
Years end RMB : US$ exchange rate | 6.1514 | 6.3161 |
Average yearly RMB : US$ exchange rate | 6.2215 | 6.3198 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 34.00% | 34.00% |
PRC Operating Companies [Member] | ' | ' |
Country Of Domicile | 'PRC | ' |
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 25.00% | ' |
GAS Investment China Co Ltd [Member] | ' | ' |
Country Of Domicile | 'BVI | ' |
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 0.00% | ' |
Sino Gas Construction Ltd [Member] | ' | ' |
Country Of Domicile | 'BVI | ' |
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 0.00% | ' |
Sino Gas Investment Development Ltd [Member] | ' | ' |
Country Of Domicile | 'BVI | ' |
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 0.00% | ' |
Tongyuan International Holding Limited [Member] | ' | ' |
Country Of Domicile | 'Hong Kong | ' |
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 16.50% | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) | 9 Months Ended |
Sep. 30, 2013 | |
Noncontrolling Interest, Ownership Percentage by Parent | 50.00% |
Effective Income Tax Rate Foreign | 25.00% |
Standard Tax Rate | 15.00% |
Transfer To Statutory Reserve Percentage | 10.00% |
Statutory Fund Percentage | 50.00% |
Minimum [Member] | ' |
Noncontrolling Interest, Ownership Percentage by Parent | 20.00% |
Maximum [Member] | ' |
Noncontrolling Interest, Ownership Percentage by Parent | 50.00% |
ACCOUNTS_RECEIVABLE_Details
ACCOUNTS RECEIVABLE (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accounts receivable | $11,710,072 | $12,072,689 | ' |
Less: Allowance for bad debt | -117,101 | -120,727 | -104,323 |
Accounts receivable, net | $11,592,971 | $11,951,962 | ' |
ACCOUNTS_RECEIVABLE_Details_1
ACCOUNTS RECEIVABLE (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Beginning balance | ' | ' | ($120,727) | ($104,323) | ($104,323) |
Allowance provided | 6,135 | 27,667 | -3,626 | 24,147 | -16,404 |
Charge against allowance | ' | ' | 3,626 | ' | 0 |
Reversals | ' | ' | 0 | ' | 0 |
Ending balance | ($117,101) | ' | ($117,101) | ' | ($120,727) |
ACCOUNTS_RECEIVABLE_Details_2
ACCOUNTS RECEIVABLE (Details 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Less than 30 Days | $5,813,898 | $4,264,620 |
30-60 Days | 131,352 | 1,122,384 |
60-90 Days | 1,114,469 | 2,253,942 |
90-180 Days | 1,770,459 | 480,993 |
180-360 Days | 1,813,652 | 95,569 |
>360 Days | 1,066,242 | 3,855,181 |
Total | $11,710,072 | $12,072,689 |
ACCOUNTS_RECEIVABLE_Details_3
ACCOUNTS RECEIVABLE (Details 3) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Account Receivable | $4,600,016 |
Concentration Risk, Percentage | 39.34% |
Beijing Langfa Oil and Gas Technolody Co Ltd [Member] | ' |
Account Receivable | 321,271 |
Concentration Risk, Percentage | 2.74% |
Beijing Tongzhou Ayou Liquified Gas Station [Member] | ' |
Account Receivable | 395,361 |
Concentration Risk, Percentage | 3.38% |
Beijing Yinzuo Hezhi Real Estate Development Co Ltd [Member] | ' |
Account Receivable | 373,844 |
Concentration Risk, Percentage | 3.20% |
Hebei Dihua Real Estate Co Ltd [Member] | ' |
Account Receivable | 518,451 |
Concentration Risk, Percentage | 4.43% |
Hebei Natural Gas Co Ltd [Member] | ' |
Account Receivable | 616,881 |
Concentration Risk, Percentage | 5.28% |
Hebei Zhonggang Steel Co Ltd [Member] | ' |
Account Receivable | 594,588 |
Concentration Risk, Percentage | 5.09% |
Jiangsu Zhonghuang Real Estate Co Ltd [Member] | ' |
Account Receivable | 505,657 |
Concentration Risk, Percentage | 4.32% |
Lianyun Port Zhaolong Home Development Co Ltd [Member] | ' |
Account Receivable | 515,883 |
Concentration Risk, Percentage | 4.41% |
Shanghai Datun Energy Co Ltd Jiangsu Branch [Member] | ' |
Account Receivable | 338,663 |
Concentration Risk, Percentage | 2.90% |
Zaoqiang Taihe Real Estate Co Ltd [Member] | ' |
Account Receivable | $419,417 |
Concentration Risk, Percentage | 3.59% |
ACCOUNTS_RECEIVABLE_Details_Te
ACCOUNTS RECEIVABLE (Details Textual) | 9 Months Ended |
Sep. 30, 2013 | |
Accounts Receivable Payment Terms Description | 'For natural gas sales, revenue is due when the gas is sold. Most residential customers settle their accounts via prepayments with debit cards, while industrial customers are billed and pay according to the contract terms ranging from 10 days to one month. |
Construction Contracts Connection Fee Collection Terms Description | 'For construction projects, connection fees are generally collected in installments. First deposits of 30% of the total contract sum are received from the client when the project commences. A second payment of 30% is received at a milestone set out in the contracts. A third payment of 30% is received after construction is completed. The remaining 10% is typically held back by the client and acts as a warranty on the quality of the project. The retained money is usually received by the company after the 1 year warranty period. |
Allowance For Doubtful Accounts Receivable Percentage | 1.00% |
Concentration Risk, Percentage | 39.34% |
Ten Customers [Member] | ' |
Concentration Risk, Percentage | 39.34% |
OTHER_RECEIVABLES_Details
OTHER RECEIVABLES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Employee travel advance | $1,190,692 | $323,463 |
Advance for consultant service | 550,866 | 786,404 |
Short term security deposit for construction pipeline | 247,358 | 186,090 |
Others | 4,440,897 | 1,932,817 |
Other Receivables Net Current Total | $6,429,813 | $3,228,774 |
RELATED_PARTY_RECEIVABLE_Detai
RELATED PARTY RECEIVABLE (Details Textual) | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
USD ($) | CNY | USD ($) | Companys Founder and Ceo Liu Yuchuan [Member] | |
USD ($) | ||||
Related party receivable | $333,257 | ' | $343,551 | $333,257 |
Loans Payable to Bank | 3,024,895 | 20,000,000 | ' | ' |
Mortgage On Property | $333,257 | 2,396,000 | ' | ' |
INVESTMENT_Details
INVESTMENT (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
Total | $23,597,237 | $23,213,107 | ||
Xiangke Oil Gas [Member] | ' | ' | ||
Total | 10,212,856 | [1] | 9,938,953 | [1] |
Qujing [Member] | ' | ' | ||
Total | 9,157,282 | [2] | 9,157,282 | [2] |
Tongshan Hengxin Jiaye Gas Co [Member] | ' | ' | ||
Total | 4,194,586 | [3] | 4,085,207 | [3] |
China Construction Bank [Member] | ' | ' | ||
Total | $32,513 | [4] | $31,665 | [4] |
[1] | The Company through its wholly owned subsidiary Beijing Gas invested $2,189,038 (RMB 13,465,648) in the acquisition of a 40% equity position in Xiangke Oil Gas. The $10,212,856 investment as of September 30, 2013 consisted of principal and accumulated post-acquisition investment income attributed to Xiangke Oil Gasb operation results. | |||
[2] | Along with two local partners in Qujing city, the second largest city in Yunnan province of PRC, Beijing Gas established Qujing City Fuel Gas Co., Ltd. with registered capital of $4,387,761 (RMB 30,000,000). Beijing Gasb original investment of $1,746,764 (RMB 11,700,000) represented 39% equity ownership of Qujing Gas. | |||
[3] | On April 23, 2008, Beijing Gas entered into an agreement to acquire a 100% equity interest in Tongshan Hengxin Jiaye Natural Gas Co., Ltd. (bTongshan Gasb), for a purchase price of $4,660,000 (RMB 32,600,000). Tongshan is a regional natural gas distributor and developer of natural gas distribution networks in Jiangsu province of the PRC. As of September 30, 2013, the Company has not finished the registration of the equity transfer with the Tongshan City Industrial and Commercial Administration. Therefore, acquisition payments of $4,194,586 for Tongshan Gas were classified as investment as of that date. | |||
[4] | The Company purchased a $32,513 (RMB 200,000) long-term fund with the Bank of Construction in an effort to maintain a favorable relationship and enhance further credit facility. |
INVESTMENT_Details_1
INVESTMENT (Details 1) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
USD ($) | USD ($) | Xiangke Oil Gas [Member] | Xiangke Oil Gas [Member] | Xiangke Oil Gas [Member] | Xiangke Oil Gas [Member] | Qujing [Member] | Qujing [Member] | Qujing [Member] | |||||
USD ($) | USD ($) | USD ($) | CNY | USD ($) | USD ($) | USD ($) | |||||||
Investment Cost | ' | ' | $2,189,038 | ' | ' | 13,465,648 | $7,766,760 | ' | ' | ||||
Prior years investment income | ' | ' | 4,494,221 | ' | ' | ' | 232,393 | ' | ' | ||||
2011 & 2012 investment income | ' | ' | ' | 26,713,323 | 858,264 | ' | ' | 645,742 | 512,387 | ||||
Investment | $23,597,237 | $23,213,107 | $10,212,856 | [1] | $9,938,953 | [1] | ' | ' | $9,157,282 | [2] | $9,157,282 | [2] | ' |
[1] | The Company through its wholly owned subsidiary Beijing Gas invested $2,189,038 (RMB 13,465,648) in the acquisition of a 40% equity position in Xiangke Oil Gas. The $10,212,856 investment as of September 30, 2013 consisted of principal and accumulated post-acquisition investment income attributed to Xiangke Oil Gasb operation results. | ||||||||||||
[2] | Along with two local partners in Qujing city, the second largest city in Yunnan province of PRC, Beijing Gas established Qujing City Fuel Gas Co., Ltd. with registered capital of $4,387,761 (RMB 30,000,000). Beijing Gasb original investment of $1,746,764 (RMB 11,700,000) represented 39% equity ownership of Qujing Gas. |
INVESTMENT_Details_Textual
INVESTMENT (Details Textual) | 9 Months Ended | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |||||||
USD ($) | CNY | USD ($) | Xiangke Oil Gas [Member] | Xiangke Oil Gas [Member] | Xiangke Oil Gas [Member] | Qujing [Member] | Qujing [Member] | Qujing Gas [Member] | Qujing Gas [Member] | Tongshan Hengxin Jiaye Gas Co [Member] | Tongshan Hengxin Jiaye Gas Co [Member] | ||||||||
USD ($) | CNY | USD ($) | USD ($) | USD ($) | USD ($) | CNY | USD ($) | USD ($) | |||||||||||
Equity Method Investment Summarized Financial Information, Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,746,764 | 11,700,000 | ' | ' | ||||||
Equity Method Investment, Ownership Percentage | 49.00% | 49.00% | ' | ' | 40.00% | 40.00% | ' | ' | ' | 39.00% | 39.00% | ' | ' | ||||||
Capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,387,761 | 30,000,000 | ' | ' | ||||||
Additional Investment | 20,425,157 | 130,000,000 | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Investment Cost | ' | ' | ' | ' | 2,189,038 | 13,465,648 | ' | 7,766,760 | ' | ' | ' | ' | ' | ||||||
Other Long-term Investments | 32,513 | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Investment | 23,597,237 | ' | ' | 23,213,107 | 10,212,856 | [1] | ' | 9,938,953 | [1] | 9,157,282 | [2] | 9,157,282 | [2] | ' | ' | 4,194,586 | [3] | 4,085,207 | [3] |
Addition to Common Stock | 848,431 | 848,431 | 0 | ' | ' | ' | ' | 48,039 | ' | ' | ' | ' | ' | ||||||
Payments to Acquire Businesses, Gross | $4,660,000 | 32,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
[1] | The Company through its wholly owned subsidiary Beijing Gas invested $2,189,038 (RMB 13,465,648) in the acquisition of a 40% equity position in Xiangke Oil Gas. The $10,212,856 investment as of September 30, 2013 consisted of principal and accumulated post-acquisition investment income attributed to Xiangke Oil Gasb operation results. | ||||||||||||||||||
[2] | Along with two local partners in Qujing city, the second largest city in Yunnan province of PRC, Beijing Gas established Qujing City Fuel Gas Co., Ltd. with registered capital of $4,387,761 (RMB 30,000,000). Beijing Gasb original investment of $1,746,764 (RMB 11,700,000) represented 39% equity ownership of Qujing Gas. | ||||||||||||||||||
[3] | On April 23, 2008, Beijing Gas entered into an agreement to acquire a 100% equity interest in Tongshan Hengxin Jiaye Natural Gas Co., Ltd. (bTongshan Gasb), for a purchase price of $4,660,000 (RMB 32,600,000). Tongshan is a regional natural gas distributor and developer of natural gas distribution networks in Jiangsu province of the PRC. As of September 30, 2013, the Company has not finished the registration of the equity transfer with the Tongshan City Industrial and Commercial Administration. Therefore, acquisition payments of $4,194,586 for Tongshan Gas were classified as investment as of that date. |
PROPERTY_PLANT_AND_EQUIPMENT_D
PROPERTY, PLANT AND EQUIPMENT (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
At Cost | $64,652,527 | $61,161,929 |
Accumulated Depreciation | 9,123,958 | 7,894,733 |
Net | 55,528,569 | 53,267,196 |
Pipelines [Member] | ' | ' |
At Cost | 52,602,053 | 50,028,098 |
Accumulated Depreciation | 4,697,718 | 3,961,187 |
Net | 47,904,335 | 47,904,335 |
Vehicles [Member] | ' | ' |
At Cost | 7,306,639 | 6,628,442 |
Accumulated Depreciation | 3,207,476 | 2,835,134 |
Net | 4,099,163 | 3,793,308 |
Machinery and Equipment [Member] | ' | ' |
At Cost | 2,165,572 | 2,180,403 |
Accumulated Depreciation | 529,671 | 484,195 |
Net | 1,635,901 | 1,696,208 |
Building [Member] | ' | ' |
At Cost | 2,105,503 | 1,862,560 |
Accumulated Depreciation | 448,982 | 378,184 |
Net | 1,656,521 | 1,484,376 |
Leaseholds and Leasehold Improvements [Member] | ' | ' |
At Cost | 88,581 | 88,071 |
Accumulated Depreciation | 53,680 | 68,158 |
Net | 34,901 | 19,913 |
Office Equipment [Member] | ' | ' |
At Cost | 384,179 | 374,355 |
Accumulated Depreciation | 186,431 | 167,875 |
Net | $197,748 | $206,480 |
PROPERTY_PLANT_AND_EQUIPMENT_D1
PROPERTY, PLANT AND EQUIPMENT (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Depreciation expense | $392,487 | $487,794 | $1,229,226 | $1,243,876 |
Old Pipelines [Member] | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | ' | ' | '25 years | ' |
New Pipelines [Member] | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | ' | ' | '50 years | ' |
Property Plant and Equipment Warranty Period | ' | ' | '50 years | ' |
GOODWILL_Details
GOODWILL (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Business Acquisition, Purchase Price Allocation, Goodwill Amount | $4,598,321 | $1,677,975 |
Yuxian Gas [Member] | ' | ' |
Business Acquisition, Purchase Price Allocation, Goodwill Amount | 10,954 | 10,954 |
Guannan Gas [Member] | ' | ' |
Business Acquisition, Purchase Price Allocation, Goodwill Amount | 409,963 | 409,963 |
Chengguang Gas [Member] | ' | ' |
Business Acquisition, Purchase Price Allocation, Goodwill Amount | 1,257,058 | 1,257,058 |
Baishan Gas [Member] | ' | ' |
Business Acquisition, Purchase Price Allocation, Goodwill Amount | $2,920,346 | $0 |
INTANGIBLE_ASSETS_Details
INTANGIBLE ASSETS (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
At Cost | $1,564,680 | $1,510,093 |
Accumulated Amortization | 608,618 | 560,106 |
Net | 956,062 | 949,987 |
Land Use Rights [Member] | ' | ' |
At Cost | 1,107,117 | 1,009,020 |
Accumulated Amortization | 153,414 | 108,115 |
Net | 953,703 | 900,905 |
Franchise Rights [Member] | ' | ' |
At Cost | 406,412 | 395,813 |
Accumulated Amortization | 406,412 | 395,813 |
Net | 0 | 0 |
Accounting Software [Member] | ' | ' |
At Cost | 51,152 | 105,260 |
Accumulated Amortization | 48,793 | 56,178 |
Net | $2,359 | $49,082 |
INTANGIBLE_ASSETS_Details_Text
INTANGIBLE ASSETS (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Amortization expense of intangible assets | $18,718 | $4,283 | $48,512 | $21,764 |
LOANS_Details
LOANS (Details) (USD $) | 9 Months Ended | |||
Sep. 30, 2013 | Dec. 31, 2012 | |||
Bank loans | $32,903,079 | $21,810,580 | ||
China Minsheng Banking Corp Ltd Pinganli Branch One [Member] | ' | ' | ||
Due Date | 28-Feb-13 | [1] | ' | |
Interest Rate | 9.51% | [1] | ' | |
Bank loans | 0 | [1] | 1,108,279 | [1] |
China Merchants Bank Beijing Shouti Branch One [Member] | ' | ' | ||
Due Date | 14-Jun-13 | [2] | ' | |
Interest Rate | 7.89% | [2] | ' | |
Bank loans | 0 | [2] | 1,583,255 | [2] |
Bank Of China Baishan Branch One [Member] | ' | ' | ||
Due Date | 19-Jun-14 | [3] | ' | |
Interest Rate | 6.65% | [3] | ' | |
Bank loans | 1,950,775 | [3] | 1,424,930 | [3] |
Bank Of China Shijiazhuang Branch One [Member] | ' | ' | ||
Due Date | 6-Jun-14 | [4] | ' | |
Interest Rate | 7.20% | [4] | ' | |
Bank loans | 1,625,646 | [4] | 1,583,255 | [4] |
Nanjing Bank One [Member] | ' | ' | ||
Due Date | 17-Jan-13 | [5] | ' | |
Interest Rate | 7.50% | [5] | ' | |
Bank loans | 0 | [5] | 357,627 | [5] |
Nanjing Bank Two [Member] | ' | ' | ||
Due Date | 17-Jan-13 | [5] | ' | |
Interest Rate | 8.80% | [5] | ' | |
Bank loans | 0 | [5] | 799,386 | [5] |
Wuhe Yongtai Bank [Member] | ' | ' | ||
Due Date | 20-Jun-14 | ' | ||
Interest Rate | 9.90% | ' | ||
Bank loans | 812,823 | 759,963 | ||
Bank Of Beijing Zhongguancun Haidian Park Branch [Member] | ' | ' | ||
Due Date | 29-Aug-14 | ' | ||
Interest Rate | 7.20% | ' | ||
Bank loans | 812,823 | 791,628 | ||
Baishan Dinghe Small Loan Co Ltd [Member] | ' | ' | ||
Interest Rate | 43.20% | ' | ||
Bank loans | 0 | 316,651 | ||
Nanjing Bank Three [Member] | ' | ' | ||
Due Date | 24-Oct-13 | [5] | ' | |
Interest Rate | 7.50% | [5] | ' | |
Bank loans | 1,487,466 | [5] | 1,448,679 | [5] |
Dalian Bank Beijing Branch [Member] | ' | ' | ||
Due Date | 31-Dec-13 | [6] | ' | |
Interest Rate | 8.10% | [6] | ' | |
Bank loans | 4,876,939 | [6] | 1,345,767 | [6] |
China Development Bank Beijing Branch One [Member] | ' | ' | ||
Due Date | 26-Dec-13 | [7] | ' | |
Interest Rate | 6.90% | [7] | ' | |
Bank loans | 8,128,231 | [7] | 7,916,277 | [7] |
Pudong Development Bank Shijiazhuang Bruanch One [Member] | ' | ' | ||
Due Date | 30-Oct-13 | ' | ||
Interest Rate | 7.80% | ' | ||
Bank loans | 2,438,469 | 2,374,883 | ||
Pudong Development Bank Shijiazhuang Bruanch Two [Member] | ' | ' | ||
Due Date | 7-Jan-14 | ' | ||
Interest Rate | 7.80% | ' | ||
Bank loans | 812,823 | 0 | ||
Nanjing Bank Four [Member] | ' | ' | ||
Due Date | 21-Feb-14 | [5] | ' | |
Interest Rate | 7.50% | [5] | ' | |
Bank loans | 1,763,826 | [5] | 0 | [5] |
Industrial And Commercial Bank of China Zhongguancun Branch [Member] | ' | ' | ||
Due Date | 25-Jun-14 | ' | ||
Interest Rate | 5.00% | ' | ||
Bank loans | 975,388 | 0 | ||
China Merchants Bank [Member] | ' | ' | ||
Due Date | 26-Jun-14 | ' | ||
Interest Rate | 8.10% | ' | ||
Bank loans | 1,625,646 | 0 | ||
Bank Of China Baishan Branch Two [Member] | ' | ' | ||
Due Date | 30-Aug-14 | ' | ||
Interest Rate | 6.45% | ' | ||
Bank loans | 325,129 | 0 | ||
Baishan Huida Investment Management Co Ltd [Member] | ' | ' | ||
Due Date | 5-Sep-14 | ' | ||
Interest Rate | 6.25% | ' | ||
Bank loans | 390,156 | 0 | ||
Peixian Rural Credit Cooperation [Member] | ' | ' | ||
Due Date | 18-Jul-14 | ' | ||
Interest Rate | 11.67% | ' | ||
Bank loans | $4,876,939 | $0 | ||
[1] | The loan provided by China Minsheng Bank Corp., Ltd. was guaranteed by the CEO Mr. Liu Yuchuanbs personal credit. | |||
[2] | The loan provided by China Merchants Bank was guaranteed by the CEO Mr. Liu Yuchuan with unlimited liability, and the management Mr. Wang Weidong and Ms. Song Erxin with $154,703 (RMB 1,000,000) liabilities each. | |||
[3] | The loan provided by Bank of China B Baishan Branch was secured by the Companybs subsidiary Beijing Zhongran Weiye Gas Co., Ltd. with the authority of gas payment collection and Baishan Weiye Gas Co. Ltd. with liability. | |||
[4] | The loan provided by Bank of China B Shijiazhuang Branch was guaranteed by Hebei Desheng Guarantee Co., Ltd. (bHebei Deshengb). In connection with this collateralization, the Company was required to pay approximately $45,000 (RMB 300,000) as a financial service fee to Hebei Desheng. | |||
[5] | The loan provided by Nanjing Bank was secured by Beijing Zhongyou Sanhuan Technology Development Co., Ltd. and CEO Mr. Liu Yuchuan. | |||
[6] | The loans provided by Bank of Dalian were secured by the Companybs subsidiary Chengguang Gasb registered capital, CEO Mr. Liu Yuchuan and COO Mr. Zhou Zhichengbs personal home properties, which have been appraised at total fair market value of $933,254 (RMB 6,380,854). | |||
[7] | The Company obtained the loans from China Development Bank via a collateralized agent Zhongyuan Guoxin Credit Guarantee Co., Ltd. (the bGuarantorb). The Guarantor guaranteed to the banks the entire principal and accrued interest. The Company pledged all of Beijing Gasb subsidiaries and deposited $1,028,464 (RMB 6,800,000), which was classified as non-current asset deposits, with the Guarantor, and was required to pay 2% of the outstanding loans as a financial service fee to the Guarantor per annum. Because the Company lacked the favorable credit history to directly establish a credit facility with the banks, the credit collateralization from Guarantor was chosen as a financing solution. |
LOANS_Details_1
LOANS (Details 1) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Total | $9,948,955 | $11,557,765 |
Bank Of China Baishan Branch One [Member] | ' | ' |
Due Date | 24-Jun-15 | ' |
Interest Rate | 6.65% | ' |
Total | 1,950,776 | 2,849,860 |
Baishan Huida Investment Management Co Ltd [Member] | ' | ' |
Due Date | 31-Dec-30 | ' |
Interest Rate | 6.25% | ' |
Total | 3,283,805 | 3,958,139 |
Bank Of China Baishan Branch Two [Member] | ' | ' |
Due Date | 30-Aug-16 | ' |
Interest Rate | 6.45% | ' |
Total | 2,275,905 | 0 |
Pudong Development Bank Shijiazhuang Branch [Member] | ' | ' |
Due Date | 25-Jul-18 | ' |
Interest Rate | 6.85% | ' |
Total | 2,438,469 | 0 |
Peixuan Rural Credit Cooperation [Member] | ' | ' |
Due Date | 18-Jul-14 | ' |
Interest Rate | 11.67% | ' |
Total | $0 | $4,749,766 |
LOANS_Details_Textual
LOANS (Details Textual) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
USD ($) | USD ($) | Beijing Gas [Member] | Beijing Gas [Member] | Hebei Desheng [Member] | Hebei Desheng [Member] | Zhou Zhicheng [Member] | Zhou Zhicheng [Member] | Mr Liu Yuchuan [Member] | Mr Liu Yuchuan [Member] | |
USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | |||
Fair Value Disclosure Mortgaged Property | ' | ' | ' | ' | ' | ' | $933,254 | 6,380,854 | ' | ' |
Other Financial Services Costs | ' | ' | ' | ' | 45,000 | 300,000 | ' | ' | ' | ' |
Long Term Debt Guarantee Liability | ' | ' | ' | ' | ' | ' | ' | ' | 154,703 | 1,000,000 |
Deposit | $703,148 | $562,790 | $1,028,464 | 6,800,000 | ' | ' | ' | ' | ' | ' |
Financial Services Fee Percentage | ' | ' | 2.00% | 2.00% | ' | ' | ' | ' | ' | ' |
OTHER_PAYABLES_Details
OTHER PAYABLES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
Amount due to Employees | $1,357,532 | [1] | $3,241,752 | [1] |
Tax Payable | 926,095 | [2] | 1,256,502 | [2] |
Payables to Subcontractors | 276,435 | [3] | 3,614,959 | [3] |
Others | 2,714,568 | 1,465,234 | ||
Total | $5,274,630 | $9,578,447 | ||
[1] | Amounts due to employees included accrual payroll, welfare payable, continued education training program cost and individual travel advance. All of these amounts were unsecured, interest free, and have no fixed repayment terms. | |||
[2] | The tax payable consists of value added tax, sales tax, income tax and local tax payables. | |||
[3] | Payables to subcontractors are unbilled liabilities. |
CONVERTIBLE_BONDS_AND_BOND_WAR2
CONVERTIBLE BONDS AND BOND WARRANTS (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | |||
Convertible Bonds Payable, net | $0 | $8,020,825 | ||
Eight M Bonds [Member] | ' | ' | ||
Convertible Bonds Payable - principal | 0 | [1] | 8,000,000 | [1] |
Less: Interest Discount - Warrants | 0 | [2] | 0 | [2] |
Less: Interest Discount - Beneficial Conversion Feature | 0 | [3] | -258,065 | [3] |
Less: Bond Discount - Issuance Cost | 0 | [4] | 0 | [4] |
Accretion of Interest Discount - Warrants | 0 | [5] | 0 | [5] |
Accretion of Interest Discount - Beneficial Conversion Feature | 0 | 258,065 | ||
Accretion of Bond Discount - Issuance Cost | 0 | 0 | ||
Accretion of Interest Discount - Redemption | 0 | 20,825 | ||
Convertible Bonds Payable, net | $0 | $8,020,825 | ||
[1] | The principal amounts listed above represent the face amount of the convertible notes. | |||
[2] | The proceeds were allocated between the convertible bonds and warrants based on their relative fair value. See Note 13 Capital Stock for the calculation of fair value of convertible bonds detachable warrants. | |||
[3] | Because the conversion price is $0.31, which is lower than the fair market value of common stock on the date of issuance, the beneficial conversion feature was applied. Since the $8M bond will expire in one year, the beneficial conversion feature was amortized immediately. | |||
[4] | The bond has no issuance cost. | |||
[5] | Based on a 15% per annum redemption rate, the redemption values were determined to be $800,000. |
CONVERTIBLE_BONDS_AND_BOND_WAR3
CONVERTIBLE BONDS AND BOND WARRANTS (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 18, 2013 | Sep. 15, 2013 | Dec. 20, 2012 | |
Lead Fame [Member] | Lead Fame [Member] | 8% Senior Secured Convertible Notes Expire On December 20, 2013 [Member] | |||||
Convertible Debt | ' | ' | ' | ' | ' | $8,000,000 | $8,000,000 |
Debt Instrument, Convertible, Conversion Price | $0.31 | ' | $0.31 | ' | $0.31 | ' | $0.31 |
Debt Conversion, Converted Instrument, Shares Issued | ' | ' | ' | ' | 25,806,451 | ' | 25,806,452 |
Subsidiary Company Shares Percentage | 100.00% | ' | 100.00% | ' | ' | ' | ' |
Debt Instrument Convertible Redemption Rate | ' | ' | 15.00% | ' | ' | ' | ' |
Debt Instrument Convertible Redemption Value | ' | ' | 800,000 | ' | ' | ' | ' |
Interest expense | 933,705 | 666,589 | 2,802,258 | 2,292,354 | ' | ' | ' |
Debt Instrument Amortization Expense Non Cash | ' | ' | 542,334 | ' | ' | ' | ' |
Interest Expense, Borrowings | ' | ' | 1,779,924 | ' | ' | ' | ' |
Convertible Bonds Coupon Expense | ' | ' | $480,000 | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Rate | ' | ' | 15.00% | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Effective Percentage | ' | ' | ' | ' | ' | 8.00% | 8.00% |
CAPITAL_STOCK_Details
CAPITAL STOCK (Details) | Sep. 30, 2013 | Dec. 31, 2012 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 57,608,833 | 31,802,382 |
Common stock, shares outstanding | 57,608,833 | 31,802,382 |
Preferred stock, shares authorized | 100,000,000 | ' |
Series A Convertible Preferred Stock [Member] | ' | ' |
Preferred stock, shares authorized | 20,000,000 | ' |
Preferred stock, shares issued | 0 | ' |
Preferred stock, shares outstanding | 0 | ' |
Series B Convertible Preferred Stock [Member] | ' | ' |
Preferred stock, shares authorized | 5,000,000 | ' |
Preferred stock, shares issued | 200,997 | ' |
Preferred stock, shares outstanding | 200,997 | ' |
Series B-1 Convertible Preferred Stock [Member] | ' | ' |
Preferred stock, shares authorized | 3,000,000 | ' |
Preferred stock, shares issued | 0 | ' |
Preferred stock, shares outstanding | 0 | ' |
CAPITAL_STOCK_Details_Textual
CAPITAL STOCK (Details Textual) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 |
Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B-1 Convertible Preferred Stock [Member] | Series B-1 Convertible Preferred Stock [Member] | Common Stock [Member] | |||
Common stock, shares authorized | 250,000,000 | 250,000,000 | ' | ' | ' | ' | ' |
Common stock, shares issued | 57,608,833 | 31,802,382 | ' | ' | ' | ' | ' |
Common stock, shares outstanding | 57,608,833 | 31,802,382 | ' | ' | ' | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 | ' | ' | ' | ' | ' |
Preferred stock, shares authorized | 100,000,000 | ' | 20,000,000 | 5,000,000 | ' | 3,000,000 | ' |
Preferred stock, shares issued | ' | ' | 0 | 200,997 | ' | 0 | ' |
Preferred stock, shares outstanding | ' | ' | 0 | 200,997 | ' | 0 | ' |
Preferred stock, par value (in dollars per share) | $0.00 | ' | ' | ' | ' | ' | ' |
Conversion of Convertible Peferred Stock to Common Stock (in shares) | ' | ' | ' | ' | 95,418 | ' | 8,684 |
Conversion of Preferred Stock B-1 to Common Stock | ' | ' | ' | ' | $4,380,413 | ' | ' |
INCOME_TAX_Details
INCOME TAX (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income (loss) before taxes: | ' | ' | ' | ' |
Total income before taxes | $2,492,791 | $2,706,567 | $4,051,414 | $4,578,045 |
Provision for taxes:- | ' | ' | ' | ' |
Current Income Tax Expense (Benefit) | ' | ' | -1,273,694 | 1,168,051 |
Deferred: | ' | ' | ' | ' |
Deferred Income Tax Expense (Benefit) | ' | ' | 0 | 0 |
Valuation allowance | 0 | 0 | 0 | 0 |
Total provision for taxes | -495,011 | -838,612 | -1,273,694 | -1,168,051 |
Effective tax rate | ' | ' | 31.44% | 25.51% |
Us Federal [Member] | ' | ' | ' | ' |
Income (loss) before taxes: | ' | ' | ' | ' |
Total income before taxes | ' | ' | -1,317,744 | -1,116,402 |
Provision for taxes:- | ' | ' | ' | ' |
Current Income Tax Expense (Benefit) | ' | ' | 0 | 0 |
Deferred: | ' | ' | ' | ' |
Deferred Income Tax Expense (Benefit) | ' | ' | 0 | 0 |
Bvi [Member] | ' | ' | ' | ' |
Income (loss) before taxes: | ' | ' | ' | ' |
Total income before taxes | ' | ' | -1,129,454 | -509,801 |
Provision for taxes:- | ' | ' | ' | ' |
Current Income Tax Expense (Benefit) | ' | ' | 0 | 0 |
Deferred: | ' | ' | ' | ' |
Deferred Income Tax Expense (Benefit) | ' | ' | 0 | 0 |
Prc [Member] | ' | ' | ' | ' |
Income (loss) before taxes: | ' | ' | ' | ' |
Total income before taxes | ' | ' | 6,498,612 | 6,204,248 |
Provision for taxes:- | ' | ' | ' | ' |
Current Income Tax Expense (Benefit) | ' | ' | -1,273,694 | 1,168,051 |
Deferred: | ' | ' | ' | ' |
Deferred Income Tax Expense (Benefit) | ' | ' | $0 | $0 |
INCOME_TAX_Details_1
INCOME TAX (Details 1) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
U.S. federal statutory income tax rate | 34.00% | 34.00% |
Lower rates in PRC, net | -9.00% | -9.00% |
Tax holiday | 6.44% | 0.51% |
Accruals in foreign jurisdictions | ' | ' |
Effective tax rate | 31.44% | 25.51% |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Current Assets | $34,633,705 | $36,711,017 |
Non-Current Assets | 138,147,767 | 123,055,211 |
Total Assets | 172,781,472 | 159,766,228 |
Liabilities | ' | ' |
Current Liabilities | 60,647,939 | 60,334,846 |
Non-current Liabilities | 9,948,955 | 11,557,765 |
Total Liabilities | 70,596,894 | 71,892,611 |
Net Assets | 102,184,578 | 87,873,617 |
Liabilities & Equities | 172,781,472 | 159,766,228 |
Gas Distribution [Member] | ' | ' |
Assets | ' | ' |
Current Assets | 21,785,682 | 21,479,047 |
Non-Current Assets | 48,375,086 | 43,458,777 |
Total Assets | 70,160,768 | 64,937,824 |
Liabilities | ' | ' |
Current Liabilities | 16,299,344 | 8,089,999 |
Non-current Liabilities | 2,673,816 | 1,549,723 |
Total Liabilities | 18,973,160 | 9,639,722 |
Net Assets | 51,187,608 | 55,298,102 |
Liabilities & Equities | 70,160,768 | 64,937,824 |
Pipeline Installation [Member] | ' | ' |
Assets | ' | ' |
Current Assets | 12,421,010 | 12,910,983 |
Non-Current Assets | 84,846,900 | 72,299,153 |
Total Assets | 97,267,910 | 85,210,136 |
Liabilities | ' | ' |
Current Liabilities | 44,348,595 | 52,244,847 |
Non-current Liabilities | 7,275,139 | 10,008,042 |
Total Liabilities | 51,623,734 | 62,252,889 |
Net Assets | 45,644,176 | 22,957,247 |
Liabilities & Equities | 97,267,910 | 85,210,136 |
Shell, Bvis, Eliminations [Member] | ' | ' |
Assets | ' | ' |
Current Assets | 427,013 | 2,320,987 |
Non-Current Assets | 4,925,781 | 7,297,281 |
Total Assets | 5,352,794 | 9,618,268 |
Liabilities | ' | ' |
Current Liabilities | 0 | 0 |
Non-current Liabilities | 0 | 0 |
Total Liabilities | 0 | 0 |
Net Assets | 5,352,794 | 9,618,268 |
Liabilities & Equities | $5,352,794 | $9,618,268 |
SEGMENT_INFORMATION_Details_1
SEGMENT INFORMATION (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Sales Revenue | $13,878,779 | $11,427,105 | $42,171,537 | $33,000,374 | ' |
Cost of revenue | -8,260,261 | -5,728,802 | -27,861,037 | -20,268,632 | ' |
Gross Profit | 5,618,518 | 5,698,303 | 14,310,500 | 12,731,742 | ' |
Operating Expenses | -2,601,184 | -2,296,349 | -7,871,614 | -5,896,114 | ' |
Operating Income/(Loss) | 3,017,334 | 3,401,954 | 6,438,886 | 6,835,628 | ' |
Other Income/(Loss) | -524,543 | -695,387 | -2,387,472 | -2,257,583 | ' |
Earnings before tax | 2,492,791 | 2,706,567 | 4,051,414 | 4,578,045 | ' |
Income tax | -495,011 | -838,612 | -1,273,694 | -1,168,051 | ' |
Gain/(loss) from discontinued operation, net of tax | ' | ' | 0 | 0 | ' |
Net Income | 1,997,780 | 1,867,955 | 2,777,720 | 3,409,994 | 6,383,440 |
Gas Distribution [Member] | ' | ' | ' | ' | ' |
Sales Revenue | ' | ' | 36,831,797 | 30,273,792 | ' |
Cost of revenue | ' | ' | -32,985,800 | -38,506,689 | ' |
Gross Profit | ' | ' | 3,845,997 | 1,767,103 | ' |
Operating Expenses | ' | ' | -1,730,742 | -728,637 | ' |
Operating Income/(Loss) | ' | ' | 2,115,255 | 1,038,466 | ' |
Other Income/(Loss) | ' | ' | -641,641 | -313,341 | ' |
Earnings before tax | ' | ' | 1,473,614 | 725,125 | ' |
Income tax | ' | ' | -297,803 | -136,517 | ' |
Gain/(loss) from discontinued operation, net of tax | ' | ' | 0 | 0 | ' |
Net Income | ' | ' | 1,175,811 | 588,608 | ' |
Pipeline Installation [Member] | ' | ' | ' | ' | ' |
Sales Revenue | ' | ' | 20,999,486 | 18,091,039 | ' |
Cost of revenue | ' | ' | -10,534,983 | -7,126,400 | ' |
Gross Profit | ' | ' | 10,464,503 | 10,964,639 | ' |
Operating Expenses | ' | ' | -4,709,146 | -4,521,094 | ' |
Operating Income/(Loss) | ' | ' | 5,755,357 | 6,443,545 | ' |
Other Income/(Loss) | ' | ' | -926,368 | -954,421 | ' |
Earnings before tax | ' | ' | 4,828,989 | 5,479,124 | ' |
Income tax | ' | ' | -975,891 | -1,031,534 | ' |
Gain/(loss) from discontinued operation, net of tax | ' | ' | 0 | 0 | ' |
Net Income | ' | ' | 3,853,098 | 4,447,590 | ' |
Shell, Bvis, Eliminations [Member] | ' | ' | ' | ' | ' |
Sales Revenue | ' | ' | -15,659,746 | -15,364,457 | ' |
Cost of revenue | ' | ' | 15,659,746 | 15,364,457 | ' |
Gross Profit | ' | ' | 0 | 0 | ' |
Operating Expenses | ' | ' | -1,431,726 | -646,383 | ' |
Operating Income/(Loss) | ' | ' | -1,431,726 | -646,383 | ' |
Other Income/(Loss) | ' | ' | -819,463 | -979,820 | ' |
Earnings before tax | ' | ' | -2,251,189 | -1,626,204 | ' |
Income tax | ' | ' | 0 | 0 | ' |
Gain/(loss) from discontinued operation, net of tax | ' | ' | 0 | 0 | ' |
Net Income | ' | ' | ($2,251,189) | ($1,626,204) | ' |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |||
Basic Earnings Per Share Numerator: | ' | ' | ' | ' | ' | ||
Net Income | $1,997,780 | $1,867,955 | $2,777,720 | $3,409,994 | $6,383,440 | ||
Income from continued operations | ' | ' | 2,777,720 | 0 | ' | ||
Income/(loss) from discontinued operations | 0 | 0 | 0 | 0 | ' | ||
Preferred Dividends | ' | ' | 0 | 0 | ' | ||
Constructive Preferred Dividends income attributed to non-controlling interest | ' | ' | -1,498 | 957 | ' | ||
Net income available to Common Stockholders | 1,997,780 | 1,867,983 | 2,779,218 | 3,410,951 | ' | ||
Income from continued operations available to Common Stockholders | ' | ' | 2,779,218 | 3,410,951 | ' | ||
Income/(loss) from discontinued operations available to Common Stockholders | ' | ' | 0 | 0 | ' | ||
Diluted Earnings Per Share Numerator: | ' | ' | ' | ' | ' | ||
Interest Expense for Convertible Bonds, net of tax | ' | ' | 1,022,334 | 979,857 | ' | ||
Net income available to Common Stockholders | ' | ' | 3,801,552 | 4,390,808 | ' | ||
Income from continued operations available to Common Stockholders | ' | ' | 3,801,552 | 4,390,808 | ' | ||
Income/(loss) from discontinued operations available to Common Stockholders | ' | ' | 0 | 0 | ' | ||
Original Shares | 31,802,382 | 31,793,698 | 31,802,382 | 31,793,698 | ' | ||
Addition to Common Stock | ' | ' | 848,431 | 0 | ' | ||
Basic Weighted Average Shares Outstanding | 32,650,813 | 31,793,698 | 32,650,813 | 31,793,698 | ' | ||
Potentially Dilutive Securities: | ' | ' | ' | ' | ' | ||
Addition to Common Stock from Conversion of Convertible Bonds | ' | ' | 0 | [1] | 9,262,889 | [1] | ' |
Addition to Common Stock from Exercise of Warrants | ' | ' | 0 | [2] | ' | [2] | ' |
Diluted Weighted Average Shares Outstanding | 32,650,813 | 31,793,698 | 32,650,813 | 31,793,698 | ' | ||
Earnings Per Share | ' | ' | ' | ' | ' | ||
Basic:- Net income (in dollars per share) | $0.06 | $0.06 | $0.09 | $0.11 | ' | ||
- Income from continued operation (in dollars per share) | ' | ' | $0.09 | $0.11 | ' | ||
- Income from discontinued operation (in dollars per share) | ' | ' | $0 | $0 | ' | ||
Diluted: - Net income (in dollars per share) | $0.06 | $0.06 | $0.09 | $0.11 | ' | ||
- Income from continued operation (in dollars per share) | ' | ' | $0.09 | $0.11 | ' | ||
- Income from discontinued operation (in dollars per share) | ' | ' | $0 | $0 | ' | ||
Weighted Average Shares Outstanding | ' | ' | ' | ' | ' | ||
- Basic (in shares) | 32,650,813 | 31,793,698 | 32,650,813 | 31,793,698 | ' | ||
- Diluted (in shares) | 32,650,813 | 31,793,698 | 32,650,813 | 31,793,698 | ' | ||
Preferred Stock B [Member] | ' | ' | ' | ' | ' | ||
Basic Earnings Per Share Numerator: | ' | ' | ' | ' | ' | ||
Net Income | ' | ' | 0 | ' | 0 | ||
Potentially Dilutive Securities: | ' | ' | ' | ' | ' | ||
Addition to Common Stock from Conversion of Preferred Stock B | ' | ' | 0 | [3] | ' | [3] | ' |
Preferred Stock B1 [Member] | ' | ' | ' | ' | ' | ||
Basic Earnings Per Share Numerator: | ' | ' | ' | ' | ' | ||
Net Income | ' | ' | $0 | ' | $0 | ||
Potentially Dilutive Securities: | ' | ' | ' | ' | ' | ||
Addition to Common Stock from Conversion of Preferred Stock B | ' | ' | 0 | [4] | ' | [4] | ' |
[1] | The applications of conversion of convertible bonds into common stock were anti-dilutive for the nine months ended September 30, 2013 and 2012. | ||||||
[2] | The exercises of warrants to common stock were anti-dilutive for the nine months ended September 30, 2013 and 2012. | ||||||
[3] | The applications of conversion of preferred stock B into common stock were anti-dilutive for the nine months ended September 30, 2013 and 2012. | ||||||
[4] | The applications of conversion of preferred stock B-1 into common stock were anti-dilutive for the nine months ended September 30, 2013 and 2012. |
DISCONTINUED_OPERATION_Details
DISCONTINUED OPERATION (Details) | 9 Months Ended | 12 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
USD ($) | USD ($) | Jinzhou Gas [Member] | Shenzhou Gas [Member] | Shenzhou Gas [Member] | Xinji Gas [Member] | Sishui Gas [Member] | |
USD ($) | USD ($) | CNY | USD ($) | USD ($) | |||
Valuation of Disposition | $6,384,771 | ' | $3,217,742 | $1,357,326 | ' | $1,334,980 | $474,723 |
Buyer's Acquisition Price | 7,038,824 | 654,053 | 3,043,930 | 1,312,914 | 44,800,000 | 2,681,980 | 0 |
Gain/(Loss) | $654,053 | ' | ($173,812) | ($44,412) | ' | $1,347,000 | ($474,723) |
DISCONTINUED_OPERATION_Details1
DISCONTINUED OPERATION (Details 1) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Revenue | $646,809 |
Cost of revenue | 449,949 |
Gross profit | 196,860 |
Operating expenses | 69,393 |
Operating income | 127,467 |
Other income/(expenses) | -3,685 |
Earnings before tax | 123,782 |
Income tax | -17,477 |
Net income | 106,305 |
Jinzhou Gas [Member] | ' |
Revenue | 359,787 |
Cost of revenue | 217,313 |
Gross profit | 142,473 |
Operating expenses | 18,246 |
Operating income | 124,227 |
Other income/(expenses) | -241 |
Earnings before tax | 123,986 |
Income tax | -6,197 |
Net income | 117,789 |
Shenzhou Gas [Member] | ' |
Revenue | 277,453 |
Cost of revenue | 224,412 |
Gross profit | 53,041 |
Operating expenses | 16,009 |
Operating income | 37,032 |
Other income/(expenses) | -226 |
Earnings before tax | 36,806 |
Income tax | -11,167 |
Net income | 25,640 |
Xinji Gas [Member] | ' |
Revenue | 9,569 |
Cost of revenue | 8,224 |
Gross profit | 1,346 |
Operating expenses | 35,138 |
Operating income | -33,792 |
Other income/(expenses) | -3,218 |
Earnings before tax | -37,010 |
Income tax | -114 |
Net income | -37,124 |
Sishui Gas [Member] | ' |
Revenue | 0 |
Cost of revenue | 0 |
Gross profit | 0 |
Operating expenses | 0 |
Operating income | 0 |
Other income/(expenses) | 0 |
Earnings before tax | 0 |
Income tax | 0 |
Net income | $0 |
DISCONTINUED_OPERATION_Details2
DISCONTINUED OPERATION (Details Textual) | 9 Months Ended | 12 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | |
USD ($) | USD ($) | Shenzhou Gas [Member] | Shenzhou Gas [Member] | |
USD ($) | CNY | |||
Buyers Acquisition Price | $7,038,824 | $654,053 | $1,312,914 | 44,800,000 |