Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | 19-May-14 | Jun. 28, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'Keyuan Petrochemicals, Inc. | ' | ' |
Entity Central Index Key | '0001326396 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Entity Well-Known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $8,884,171 |
Entity Common Stock, Shares Outstanding | ' | 57,520,012 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Current assets: | ' | ' | ||
Cash | $12,309 | [1] | $23,378 | [1] |
Pledged bank deposits | 336,363 | [2] | 201,252 | [2] |
Bills receivable | 25 | [3] | 3,968 | [3] |
Accounts receivable | 7,517 | [4] | 14,248 | [4] |
Inventories | 69,914 | [5] | 48,634 | [5] |
Prepayments to suppliers | 33,842 | [6] | 23,476 | [6] |
Consumption tax recoverable | 46,072 | [7] | 51,334 | [7] |
Amounts due from related parties | 43 | [8] | 40 | [8] |
Other current assets | 65,189 | [9] | 56,320 | [9] |
Deferred income tax assets | 2,641 | [10] | 2,801 | [10] |
Total current assets | 573,915 | 425,451 | ||
Property, plant and equipment, net | 285,506 | [11] | 227,603 | [11] |
Intangible assets, net | 986 | [12] | 880 | [12] |
Land use rights | 10,663 | [13] | 10,708 | [13] |
VAT recoverable | 3,012 | 2,232 | ||
Total assets | 874,082 | 666,874 | ||
Current Liabilities: | ' | ' | ||
Short-term bank borrowings | 424,436 | [14] | 295,146 | [14] |
Bills payable | 261,524 | [3] | 102,650 | [3] |
Accounts payable | 59,043 | 130,387 | ||
Advances from customers | 10,820 | [15] | 24,405 | [15] |
Accrued expenses and other payables | 23,767 | [16] | 26,833 | [16] |
Income tax payable | 1,849 | [17] | 2,344 | [17] |
Dividends payable | 2,382 | 2,382 | ||
Amounts due to related parties | ' | [8] | 479 | [8] |
Total liabilities, all current | 783,821 | 584,626 | ||
Series B convertible preferred stock: Par value: $0.001; Authorized: 8,000,000 shares, Issued and outstanding:5,333,340 shares, liquidation preference $20,250 | 16,868 | [18] | 16,452 | [18] |
Commitments and contingencies | ' | [10] | ' | [10] |
Stockholders' equity: | ' | ' | ||
Common stock: Par value: $0.001; Authorized: 100,000,000 shares Issued and outstanding: 57,646,160 and 57,520,012 shares, respectively, as at December 31, 2013 and 2012 | 58 | 58 | ||
Additional paid-in capital | 51,555 | 50,653 | ||
Statutory reserve | 5,749 | [19] | 4,071 | [19] |
Accumulated other comprehensive income | 10,245 | 7,491 | ||
Retained earnings | 5,929 | 3,523 | ||
Treasury stock, at cost, 126,148 shares at December 31, 2013 | -143 | ' | ||
Total stockholders' equity | 73,393 | 65,796 | ||
Total liabilities and stockholders' equity | $874,082 | $666,874 | ||
[1] | Note 2(d) | |||
[2] | Note 2(e) | |||
[3] | 2(k) | |||
[4] | 2(g) | |||
[5] | 3 | |||
[6] | 5 | |||
[7] | 6 | |||
[8] | 22 | |||
[9] | 7 | |||
[10] | 18 | |||
[11] | 8 | |||
[12] | 9 | |||
[13] | 10 | |||
[14] | 11 | |||
[15] | 4 | |||
[16] | 12 | |||
[17] | 19 | |||
[18] | 13 | |||
[19] | 16 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Balance Sheets [Abstract] | ' | ' |
Series B convertible preferred stock, par value | $0.00 | $0.00 |
Series B convertible preferred stock, shares authorized | 8,000,000 | 8,000,000 |
Series B convertible preferred stock, share issued | 5,333,340 | 5,333,340 |
Series B convertible preferred stock, shares outstanding | 5,333,340 | 5,333,340 |
Series B convertible preferred stock, Liquidation preference value | $20,250 | $20,250 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 57,646,160 | 57,520,012 |
Common stock, shares outstanding | 57,646,160 | 57,520,012 |
Treasury Stock, Shares | 126,148 | ' |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Statements Of Comprehensive Loss [Abstract] | ' | ' | ||
Sales | $646,549 | $750,628 | ||
Cost of sales | 620,040 | 721,519 | ||
Gross profit | 26,509 | 29,109 | ||
Selling expenses | 1,563 | 1,132 | ||
General and administration expenses | 14,736 | 12,510 | ||
Total operating expenses | 16,299 | 13,642 | ||
Income from operations | 10,210 | 15,467 | ||
Other income (expense): | ' | ' | ||
Interest income | 8,422 | 5,940 | ||
Interest expense | -18,809 | -25,065 | ||
Foreign exchange gain (loss) , net | 10,118 | -1,319 | ||
Other (expense) income, net | -1,833 | -79 | ||
Total other expense, net | -2,102 | -20,523 | ||
Income (loss) before income taxes | 8,108 | -5,056 | ||
Income tax expense | 3,476 | [1] | 794 | [1] |
Net Income (loss) attributable to Keyuan Petrochemicals Inc. stockholders | 4,632 | -5,850 | ||
Dividends to Series B convertible preferred stockholders | 548 | ' | ||
Net Income (loss) attributable to Keyuan Petrochemicals Inc. common stockholders | 4,084 | -5,850 | ||
Other comprehensive income (loss): | ' | ' | ||
Foreign currency translation adjustment | 2,754 | 945 | ||
Comprehensive income (loss) | $7,386 | ($4,905) | ||
Earnings (loss) per share: Attributable to common stock: | ' | ' | ||
- Basic | $0.07 | ($0.10) | ||
- Diluted | $0.07 | ($0.10) | ||
Weighted average number of shares of common stock used in calculation | ' | ' | ||
Basic | 57,551,991 | 57,646,160 | ||
Diluted | 57,551,991 | 57,646,160 | ||
[1] | 19 |
Consolidated_Statements_Stockh
Consolidated Statements Stockholders' Equity (USD $) | Total | Common stock | Additional paid-in capital | Statutory reserve | Accumulated other comprehensive income | Retained earnings | Treasury Stock |
In Thousands, except Share data | |||||||
Beginning Balance at Dec. 31, 2011 | $69,246 | $58 | $49,198 | $3,744 | $6,546 | $9,700 | ' |
Beginning Balance (Shares) at Dec. 31, 2011 | ' | 57,646,160 | ' | ' | ' | ' | ' |
Share-based compensation | 1,455 | ' | 1,455 | ' | ' | ' | ' |
Net income (loss) | -5,850 | ' | ' | ' | ' | -5,850 | ' |
Statutory Reserve | ' | ' | ' | 327 | ' | -327 | ' |
Other comprehensive income - Foreign currency translation loss | 945 | ' | ' | ' | 945 | ' | ' |
Ending Balance at Dec. 31, 2012 | 65,796 | 58 | 50,653 | 4,071 | 7,491 | 3,523 | ' |
Ending Balance, Shares at Dec. 31, 2012 | ' | 57,646,160 | ' | ' | ' | ' | ' |
Fixed dividends for series B Convertible preferred stockholders | -548 | ' | ' | ' | ' | -548 | ' |
Share-based compensation | 770 | ' | 770 | ' | ' | ' | ' |
Change in fair value of the Series C and Series D warrants | 132 | ' | 132 | ' | ' | ' | ' |
Net income (loss) | 4,632 | ' | ' | ' | ' | 4,632 | ' |
Treasury Stock | -143 | ' | ' | ' | ' | ' | -143 |
Treasury Stock, Shares | ' | -126,148 | ' | ' | ' | ' | ' |
Statutory Reserve | ' | ' | ' | 1,678 | ' | -1,678 | ' |
Other comprehensive income - Foreign currency translation loss | 2,754 | ' | ' | ' | 2,754 | ' | ' |
Ending Balance at Dec. 31, 2013 | $73,393 | $58 | $51,555 | $5,749 | $10,245 | $5,929 | ($143) |
Ending Balance, Shares at Dec. 31, 2013 | ' | 57,520,012 | ' | ' | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | ' | ' |
Net income (loss) | $4,632 | ($5,850) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' |
Depreciation | 11,232 | 11,927 |
Amortization | 121 | 107 |
Land use rights amortization | 461 | 452 |
Deferred income tax expense (benefit) | 245 | -2,763 |
Share-based compensation expense | 770 | 1,590 |
Changes in operating assets and liabilities: | ' | ' |
Bills receivable | 2,283 | -2,379 |
Accounts receivable | 7,303 | -12,249 |
Inventories | -19,488 | -9,363 |
Prepayments to suppliers | -10,199 | -6,877 |
Consumption tax recoverable | 6,790 | 4,934 |
Other current assets | -7,330 | -9,958 |
Accounts payable | -43,268 | 281 |
Advances from (to) customers | -14,128 | 16,993 |
Income taxes payable | -562 | 2,155 |
Accrued expenses and other payables | 8,045 | 3,905 |
Net cash used in operating activities | -53,093 | -7,095 |
Cash flows from investing activities: | ' | ' |
Purchase of property, plant and equipment | -73,341 | -54,417 |
Net cash used in investing activities | -73,341 | -54,417 |
Cash flows from financing activities: | ' | ' |
Pledged bank deposits used for bank borrowings | -127,080 | -43,629 |
Proceeds from short-term bank borrowings | 1,199,005 | 827,950 |
Repayment of short-term bank borrowings | -1,111,878 | -729,531 |
Proceeds from bank notes | 373,265 | 198,125 |
Repayments of bank notes | -217,938 | -159,562 |
Repayments of long-term bank borrowings | ' | -15,865 |
Repurchase of treasury stock | -143 | ' |
Net cash provided by financing activities | 115,231 | 77,488 |
Effect of foreign currency exchange rate changes on cash | 134 | 77 |
Net increase (decrease) in cash | -11,069 | 16,053 |
Cash at beginning of period | 23,378 | 7,325 |
Cash at end of period | 12,309 | 23,378 |
Supplemental disclosure of cash flow information: | ' | ' |
Income tax paid | 3,867 | 1,914 |
Interest paid, net of capitalized interest | ' | 843 |
Non cash investing and financing activities: | ' | ' |
Payable for purchase of property, plant and equipment (net of VAT) | 13,845 | 18,653 |
Dividends on Series B convertible preferred stock | ($548) | ' |
Organization_and_Nature_of_Bus
Organization and Nature of Business, Recent Events, and Going Concern and Management's Plans | 12 Months Ended |
Dec. 31, 2013 | |
Organization and Nature Of Business, Recent Events, and Going Concern and Management's Plans [Abstract] | ' |
ORGANIZATION AND NATURE OF BUSINESS, RECENT EVENTS, AND GOING CONCERN AND MANAGEMENT'S PLANS | ' |
1 ORGANIZATION AND NATURE OF BUSINESS, RECENT EVENTS, AND GOING CONCERN AND MANAGEMENT’S PLANS | |
(a) Organization and Nature of business | |
Keyuan Petrochemicals, Inc. (the “Company”) was incorporated in the State of Texas on May 4, 2004 in the former name of Silver Pearl Enterprises, Inc. The Company, through its wholly-owned subsidiary, Sinotech Group Limited, (“Sinotech”) and its indirect subsidiaries, Keyuan Group Limited (“Keyuan HK”), Ningbo Keyuan Plastics Co., Ltd. (“Ningbo Keyuan”), Ningbo Keyuan Petrochemicals Co., Ltd. (Ningbo Keyuan Petrochemicals), Ningbo Keyuan Synthetic Rubbers Co., Ltd. (“Ningbo Keyuan Synthetic Rubbers”), and Guangxi Keyuan New Materials Co., Ltd. (“Guangxi Keyuan”) (collectively referred herein below as “the Group” ) are engaged in the manufacture and sale of petrochemical and rubber products in the People’s Republic of China (“PRC”). | |
Sinotech is an investment holding company and was incorporated in the British Virgin Islands in 2009. | |
Keyuan HK was established in Hong Kong in 2009, and is a holding company with no significant assets. | |
Ningbo Keyuan was established in April 2007 as a wholly foreign-owned enterprise in Ningbo, PRC. | |
On August 8, 2010, Keyuan HK established Ningbo Keyuan Petrochemicals, a wholly-owned subsidiary in the PRC. | |
On March 7, 2012, Keyuan HK and Ningbo Keyuan established Guangxi Keyuan, a wholly-owned subsidiary in the PRC. Commencing from April 15, 2013, Guangxi Keyuan is owned by Sinotech (75%) and Ningbo Keyuan (25%). | |
On June 15, 2012, Ningbo Keyuan established Ningbo Keyuan Synthetic Rubbers, a wholly-owned subsidiary in the PRC. | |
(b) Other Events | |
The Company, with its PRC legal counsel, evaluated the matters identified in a 2010 Independent Investigation to determine the extent to which the Company may be exposed to fines and penalties in China. The Independent Investigation was conducted by the Audit Committee, and identified, among other matters, possible violations of PRC or U.S. laws. The Company has concluded that the extent to which it may be exposed to fines and penalties in the PRC is limited, and to date, has not received any PRC governmental or regulatory communication or inquiry related to these matters. However, management is currently unable to determine the final outcome of these matters and their possible effects on the consolidated financial statements. | |
On July 2, 2013, the United District Court for the District of Columbia issued a final judgment approving a settlement reached between the Company and the Securities and Exchange Commission (“SEC”). The settlement was reached on February 28, 2013 in a case filed by the SEC in the United States District Count for the District of Columbia against the Company, alleging it violated Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933, Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, and Rules 12b-20 and 13a-13 thereunder. Under the terms of the settlement, the Company, without admitting or denying the allegation of the complaint, paid a civil penalty of $1million and was permanently enjoined from violating certain securities law. | |
(c) Going concern and management’s plans | |
For the year ended December 31, 2013, the Company reported net income of approximately $4.6 million and cash flow used in operations of approximately $53.8 million. At December, 31, 2013, the Company had a working capital deficit of approximately $209.7 million. | |
Although the Company continues to finance its operations primarily through short-term bank borrowings, management’s realignment of product profiles, along with the general stabilization of the petrochemical industry in China, resulted in net income of $ 4.6 million in 2013 compared to a net loss of $5.9 million in 2012. | |
Short-term bank borrowings and bills payable amounted to approximately $688 million at December 31, 2013. Management expects that short-term bank financing will continue to be available through at least December 31, 2014. Furthermore, management expects that the petrochemical industry in China will continue to stabilize, and that demand for downstream products (such as auto, home appliances and dyes) will grow following several years of contraction, As such, management expects that the Company’s overall profits will also grow. | |
As further described in Note 6 (below), the Company continues to benefit from favorable PRC tax policies related to consumption tax. As of December 31, 2013, the Company had consumption tax recoverable of approximately $46.1 million. In April 2014, approximately $36.1 million was refunded and management expects that additional consumption tax deposits of approximately $0.4 million will be refunded in May 2014, and that approximately $9.6 million will be deductible against future consumption tax obligations. | |
The Company’s management believes that the Company’s cash, working capital, and access to cash through its bank loans provide adequate capital resources to fund its operations and working capital needs through at least the end of 2014. | |
The Company is also exploring sources of additional financing, including short-term financing from its vendors and other parties. In addition, the Company is closely monitoring its cash balances, cash needs and expense levels. | |
The ability of the Company to continue as a going concern is dependent upon management’s ability to implement its strategic plan, obtain additional capital and generate net income and positive cash flows from operations. There can be no assurance that these plans will be sufficient or that additional financing will be available in amounts or terms acceptable to the Company, if at all. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |
Dec. 31, 2013 | ||
Summary Of Significant Accounting Policies [Abstract] | ' | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
(a) Principles of consolidation and basis of presentation | ||
The accompanying consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the financial statements of the Group. | ||
All significant intercompany transactions and balances are eliminated on consolidation. | ||
(b) Use of estimates | ||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment; the fair value determination of financial and equity instruments; the realizability of inventories; and the recoverability of property, plant and equipment and accounts receivable. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. | ||
(c) Foreign currency transactions and translation | ||
The functional currency of the Company, Sinotech and Keyuan HK is the U.S. dollar. The functional currency of the PRC operating subsidiaries is the Renminbi (“RMB”). Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at each balance sheet date, and non-monetary items are translated at historical rates. The resulting exchange differences on these transactions are recorded in foreign exchange gain (loss), net in the consolidated statements of comprehensive income. | ||
The Group’s reporting currency is the U.S. dollar. Assets and liabilities of the PRC operating subsidiaries are translated into the U.S. dollar using the exchange rates at each balance sheet date. Revenue and expenses of the PRC operating subsidiaries are translated at average rates prevailing during the reporting period. Shareholders’ equity is translated at historical rates. Adjustments resulting from translating the financial statements of the PRC operating subsidiaries into the U.S. dollar are recorded as a separate component of accumulated other comprehensive income in stockholders’ equity. | ||
(d) Cash | ||
Cash consists of cash on hand and cash at banks. As of December 31, 2013 and 2012, cash of $12.3 million and $23.3 million, respectively, was held in major financial institutions located in the PRC. Management performs periodic evaluations of the relative credit standings of those financial institutions, and believes that they have high credit ratings. | ||
(e) Pledged bank deposits | ||
Pledged bank deposits represent amounts held by financial institutions, which are not available for the Group’s use, as security for issuances of bills payable to the Group’s suppliers, or as security for short-term bank borrowings. Upon maturity of the bills, which generally occurs within three to six months after the issuance of the bills, or upon the repayment of short-term bank borrowings, the deposits are released by the financial institutions and become available for use by the Group. Pledged bank deposits related to the purchase of inventories are reported within cash flows from operating activities and pledged bank deposits related to short-term bank borrowings are reported within cash flows from financing activities in the consolidated statements of cash flows. | ||
(f) Inventories | ||
Inventory is stated at the lower of cost or market. Cost is determined using the weighted-average cost method. Provisions are made for excess, slow moving and obsolete inventory as well as inventory whose carrying value is in excess of net realizable value. Management continually evaluates the recoverability based on assumptions about customer demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory reserves or write-downs may be required. The Group did not record any provision for slow-moving and obsolete inventory as of December 31, 2013 and 2012. | ||
(g) Accounts receivable | ||
With the approval of the Company’s general manager, the Company occasionally extends unsecured credit to its long-term customers with a good credit rating. An allowance for doubtful accounts is established and recorded based on management’s assessment of its analysis of trade receivables, customers’ credit-worthiness, past collection history, and changes in customers’ payment records. The Company writes-off accounts receivable when accounts are deemed uncollectible. At December 31, 2013 and 2012, the Group considers all of its accounts receivable to be collectible and no provision for doubtful accounts has been made in the consolidated financial statements. | ||
(h) Property, plant and equipment | ||
Property, plant and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, taking into consideration the assets’ estimated residual value. When items are retired or otherwise disposed of, income is charged or credited for the difference between the net book value and proceeds received thereon. Ordinary maintenance and repairs are charged to expense as incurred. | ||
The estimated useful lives of property, plant and equipment are as follows: | ||
Buildings | 45 years | |
Plant, machinery and equipment | 5 to 20 years | |
Vehicles | 5 years | |
Office equipment and furniture | 3 to 10 years | |
During January 2013, management performed an assessment of the useful lives of certain machinery and equipment. In evaluating the useful lives, management considered the historical life of the assets, operational strategy, and related functionality. Management concluded that machinery and equipment would remain in service longer than the depreciable life assigned. Effective February 1, 2013, the Group changed the time period over which it depreciates machinery and equipment to 20 years from 15 years. Management believes that this change more clearly and appropriately reflects the state of the machinery and equipment and thus, more reasonably and accurately reports the value of the machinery and equipment on the balance sheet. This change is being accounted for as a change in estimate. This change in estimate resulted in a reduction of depreciation expense of approximately $3.1 million, or approximately $0.05 per share, for the year ended December, 2013. | ||
Construction-in-progress is stated at cost. Cost comprises nonrefundable prepayments during the period of the construction of the plant or installation of equipment. Costs included in construction-in-progress are transferred to their respective categories of property, plant and equipment when the assets are ready for their intended use, at which time depreciation commences. | ||
(i) Long-Lived Assets | ||
In accordance with Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 360-10, the Group reviews the recoverability of its long-lived assets on a periodic basis in order to identify business conditions, which may indicate a possible impairment. The assessment for potential impairment is based primarily on the Group’s ability to recover the carrying value of its long-lived assets from expected future undiscounted cash flows. If the total of the expected future undiscounted cash flows is less than the total carrying value of the assets, a loss is recognized for the difference between the fair value (computed based upon the expected future discounted cash flows) and the carrying value of the assets. No impairment is believed to exist at December 31, 2013. | ||
(j) Land use rights | ||
Land use rights represent the exclusive right to occupy and use a piece of land in the PRC for a specified contractual term. Land use rights are recorded at cost and amortized on a straight-line basis over the terms of the land use rights of 15 to 50 years. | ||
(k) Bills receivable and bills payable | ||
The Group utilizes banker’s acceptances in the form of bills receivable and bills payable. | ||
For certain major customers, the Group accepts their payment for the Group’s products by bills receivable. Bills receivable represent short-term notes receivable issued either by the customer or by the customer and an accepting bank that entitles the Group to receive the full face amount from the customer or the accepting bank at maturity, which is generally six months from the date of issuance. Bills receivable are typically sold at a discount prior to maturity, and the discount is included in interest expense. Historically, the Group has experienced no losses on bills receivable. | ||
In connection with the Company’s financing transactions, the Group may also obtain bills receivable in exchange for cash or payables. These bills, which are sold at a discount prior to maturity, include provisions whereby the Group agrees to reimburse the accepting bank in the event that the counterparty fails to honor its liability to the accepting bank. At December 31, 2013 and 2012, discounted bills receivable subject to reimbursement amounted to approximately $1.8 and $4.0 million, respectively. Historically, the Group has not suffered any losses under these reimbursement agreements. | ||
Bills payable represent bills issued by an accepting bank in favor of the Group’s suppliers. The Group’s suppliers receive payments from the accepting bank directly upon maturity of the bills, and the Group is obliged to repay the face value of the bills to the accepting bank. Bills that are not remitted directly by the Group to its suppliers may be sold by the Group to other accepting banks for cash prior to their maturity. Discounts paid are recorded as a component of interest expense. | ||
(l) Revenue recognition | ||
The Group derives its revenue primarily from the sale of petrochemical products. In accordance with the provisions of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 104, codified in FASB ASC Topic 480, revenue should not be recognized until it is realized or realizable and earned. Revenues are considered to have been earned when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. The Group recognizes revenue when the products are delivered and the customer takes ownership and assumes risks of losses, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. Written sales agreements, which specify price, product, and quantity, are generally used as evidence of an arrangement. Customer acceptance is generally evidenced by a carrier signed shipment notification form. | ||
In the PRC, value added tax (“VAT”) of 17% on invoiced amounts, and consumption tax of $133 per ton on certain sales, are collected on behalf of tax authorities. Revenue is recorded net of VAT and consumption tax. VAT and consumption tax paid for purchases, net of VAT and consumption tax collected from customers, is recorded in other current assets and consumption tax recoverable, respectively, in the consolidated balance sheets as of December 31, 2013 and 2012. | ||
(m) Share-based compensation | ||
The Group accounts for share-based payments under the provisions of FASB ASC Topic 718, “Compensation-Stock Compensation”, or ASC Topic 718. Under ASC Topic 718, the Group measures the costs of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the costs over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. | ||
The Group accounts for equity instruments issued to non-employee vendors in accordance with the provisions of FASB ASC Subtopic 505-50, “Equity-Based Payments to Non-Employees”. All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the equity instrument issued. The measurement date for the fair value of the equity instruments issued is the date on which the counterparty’s performance is completed. | ||
(n) Employee benefit plans | ||
Pursuant to relevant PRC regulations, Ningbo Keyuan, Ningbo Keyuan Petrochemicals, Ningbo Keyuan Synthetic Rubbers and Guangxi Keyuan are required to make contributions to various defined contribution plans organized by municipal and provincial PRC governments. The contributions are made for each PRC employee at rates ranging from 26.7% to 28.7% on a standard salary base as determined by the local social security bureau. | ||
Contributions to the defined contribution plans are charged to the consolidated statements of comprehensive income (loss) when the related service is provided. For each of the years ended December 31, 2013 and 2012, contributions to the defined contribution plans were approximately $0.5 million. | ||
The Group has no other obligation for the payment of employee benefits associated with these plans beyond the contributions described above. | ||
(o) Income taxes | ||
Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss carry forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to reduce the carrying amount of deferred income tax assets if it is considered more likely than not that some portion, or all, of the deferred income tax assets will not be realized. | ||
The Group recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Group has elected to classify interest related to unrecognized tax benefits as part of income tax expense in the consolidated statements of comprehensive income. | ||
(p) Fair value measurements | ||
The Group utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Group determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: | ||
· | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group has the ability to access at the measurement date. | |
· | Level 2 inputs are inputs other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. | |
· | Level 3 inputs are unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. | |
The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. | ||
(q) Earnings (loss) per share | ||
Basic earnings (loss) per share is computed by dividing net income (loss) attributable to the Company’s common stockholders by the weighted average number of common stock outstanding during the year. | ||
Diluted earnings (loss) per share is calculated by dividing net income (loss) attributable to the Company’s stockholders as adjusted for the effect of dilutive common stock equivalents, if any, by the weighted average number of common stock and dilutive common stock equivalents outstanding during the year. Common stock equivalents consist of the common stock issuable upon the conversion of the Group’s Series B convertible preferred stock (using the if–converted method) and common stock issuable upon the exercise of outstanding stock options and stock purchase warrants (using the treasury stock method). Potential dilutive securities are not included in the calculation of dilutive earnings (loss) per share if the effect is anti-dilutive. A total of 4,014,605 and 7,190,766 warrants and options were excluded from diluted earnings per share for the years ended December 31, 2013, and 2012, respectively, as their effect was anti-dilutive. | ||
(r) Segment reporting | ||
The Group’s chief operating decision maker has been identified as its Chief Executive Officer (CEO). | ||
The Group has two operating segments; the manufacture and sale of petrochemical products (petrochemical segment) and the manufacture and sale of rubber products (rubber segment), established in 2012. Substantially all of the Company’s operations and customers are located in the PRC. Consequently, no geographic information is presented. | ||
(s) Contingencies | ||
In the normal course of business, the Group is subject to loss contingencies, such as legal proceedings and claims arising out of its business. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. | ||
(t) Recent accounting pronouncements | ||
Effective January 1, 2013, the Company adopted Accounting Standards Update (“ASU”) No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” The adoption of ASU 2013-02 concerns presentation and disclosure only and did not have an impact on the Company’s consolidated financial position or results of operations. | ||
In July 2013, the FASB, issued Accounting Standards Update (ASU) No. 2013-11 “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” Under ASU 2013-11, an entity is required to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. If a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance affects presentation only and, therefore, it is not expected to have a material impact on the Company's financial condition, results of operations or cash flows. |
Inventories
Inventories | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventories [Abstract] | ' | ||||||||
INVENTORIES | ' | ||||||||
3 INVENTORIES | |||||||||
Inventories consist of the following: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Raw materials | $ | 37,747 | $ | 26,433 | |||||
Finished goods | 30,823 | 21,701 | |||||||
Work-in-process | 1,344 | 500 | |||||||
Total | $ | 69,914 | $ | 48,634 | |||||
Advances_from_Customers
Advances from Customers | 12 Months Ended |
Dec. 31, 2013 | |
Advances From Customers [Abstract] | ' |
ADVANCES FROM CUSTOMERS | ' |
4 ADVANCES FROM CUSTOMERS | |
The Group generally requires a prepayment of 100% of the sales contract price from its customers shortly before products are delivered. Such prepayments are recorded as “advances from customers” in the Group’s consolidated balance sheet, until products are delivered and customers take ownership and assume the risk of loss. Approved by the Company’s general manager, the Company occasionally extends credit to its long-term customers with good credit ratings. As of December 31, 2013 and December 31, 2012, the balance of accounts receivable was approximately $7.5 million and $14.2 million, respectively. |
Prepayments_to_Suppliers
Prepayments to Suppliers | 12 Months Ended |
Dec. 31, 2013 | |
Prepayments To Suppliers [Abstract] | ' |
PREPAYMENTS TO SUPPLIERS | ' |
5 PREPAYMENTS TO SUPPLIERS | |
The Group makes prepayments to suppliers in connection with purchases of raw materials. Prepayments to suppliers are reclassified to inventories or expense and applied to related purchases of materials after invoices of such purchases are received. |
Consumption_Tax_Recoverable
Consumption Tax Recoverable | 12 Months Ended |
Dec. 31, 2013 | |
Consumption Tax Recoverable [Abstract] | ' |
CONSUMPTION TAX RECOVERABLE | ' |
6 CONSUMPTION TAX RECOVERABLE | |
The PRC government enacted a regulation pursuant to which domestically purchased heavy oil to be used for producing ethylene and aromatics products was exempted from consumption tax. In addition, the consumption tax paid for imported heavy oil is to be refunded if it is used for producing ethylene and aromatics products. Given all the Group’s purchased heavy oils are, or are to be, used for producing ethylene and aromatics products, the Group recognizes a consumption tax recoverable when a consumption tax for heavy oils has been paid and the relevant heavy oils have been used for production of ethylene and aromatics products. As of December 31, 2013 and 2012, the Group recorded an estimated consumption tax recoverable amounting to approximately $46.1 million and $51.3 million, respectively. | |
Approximately $36.1 million of consumption tax was refunded in April 2014. In addition, management expects approximately $0.4 million of consumption tax to be refunded in May 2014, and that approximately $9.6 million will be deductible against future consumption tax obligations. |
Other_Current_Assets
Other Current Assets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Current Assets [Abstract] | ' | ||||||||
OTHER CURRRENT ASSETS | ' | ||||||||
7 OTHER CURRENT ASSETS | |||||||||
Other current assets consist of the following: | |||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
VAT recoverable | $ | 56,667 | $ | 31,751 | |||||
Customs deposits for imported inventories | 3,680 | 21,648 | |||||||
Other | 4,842 | 2,921 | |||||||
$ | 65,189 | $ | 56,320 | ||||||
Management estimates the deductible input VAT using vendor contracts, engineering and other estimates, as well as historical experience. Approximately $3.0 million and $2.2 million was included in non-current assets as of December 31, 2013 and 2012, respectively. | |||||||||
Customs deposits for imported inventories represent amounts paid to the local customs office in connection with the import of raw materials inventories. Upon approval by the customs authorities, these amounts become refundable by the local tax authority and are reclassified as VAT recoverable or consumption tax recoverable (Note 6). |
Property_Plant_and_Equipment
Property, Plant and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
PROPERTY, PLANT AND EQUIPMENT | ' | ||||||||
8 PROPERTY, PLANT AND EQUIPMENT | |||||||||
Property, plant and equipment consist of the following: | |||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Buildings | $ | 6,303 | $ | 3,920 | |||||
Plant, machinery and equipment | 253,728 | 239,222 | |||||||
Vehicles | 1,274 | 950 | |||||||
Office equipment and furniture | 309 | 296 | |||||||
Construction-in-progress | 65,267 | 12,292 | |||||||
326,881 | 256,680 | ||||||||
Less: accumulated depreciation | (41,375 | ) | (29,077 | ) | |||||
$ | 285,506 | $ | 227,603 | ||||||
Depreciation expense on property, plant and equipment is allocated to the following items: | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Cost of sales | $ | 10,370 | $ | 13,254 | |||||
Selling, general and administrative expenses | 862 | 189 | |||||||
$ | 11,232 | $ | 13,443 | ||||||
For the years ended December 31, 2013 and 2012, interest capitalized amounted to approximately nil and $0.8 million, respectively. |
Intangible_Assets
Intangible Assets | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Intangible Assets [Abstract] | ' | |||||||||||
INTANGIBLE ASSETS | ' | |||||||||||
9 INTANGIBLE ASSETS | ||||||||||||
Intangible assets consist of the following: | ||||||||||||
Amortization | As of December 31, | |||||||||||
Period | 2013 | 2012 | ||||||||||
Years | ($’000) | ($’000) | ||||||||||
Licensing agreements | 20-Oct | $ | 1,758 | $ | 1,508 | |||||||
Less: Accumulated amortization | (772 | ) | (628 | ) | ||||||||
$ | 986 | $ | 880 | |||||||||
Licensing agreements consist of technology utilization rights for petrochemical production. For each of the years ended December 31, 2013 and 2012, amortization expense for intangible assets amounted to approximately $0.1 million. Amortization expense for each of the next five years is estimated to be approximately $0.1 million. |
Land_Use_Rights
Land Use Rights | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Land Use Rights [Abstract] | ' | ||||||||
LAND USE RIGHTS | ' | ||||||||
10 LAND USE RIGHTS | |||||||||
Land use rights consist of the following: | |||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Land use rights | $ | 12,754 | $ | 12,282 | |||||
Less: Accumulated amortization | (2,091 | ) | (1,574 | ) | |||||
$ | 10,663 | $ | 10,708 | ||||||
For the years ended December 31, 2013 and 2012, amortization expense related to land use rights was approximately $0.5 million and $0.4 million, respectively. |
ShortTerm_Bank_Borrowings
Short-Term Bank Borrowings | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Short-Term Bank Borrowings [Abstract] | ' | ||||||||
SHORT-TERM BANK BORROWINGS | ' | ||||||||
11 SHORT-TERM BANK BORROWINGS | |||||||||
Short-term bank borrowings consist of the following: | |||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Bank borrowings-secured/guaranteed | $ | 424,436 | $ | 295,146 | |||||
As of December 31, 2013, short−term bank borrowings carried a weighted average interest rate of 5.63% (2012: 6.21%) for bank loans in RMB; and a weighted average interest rate of 2.72% (2012: 3.97%) for bank loans in USD, and had maturity terms ranging from two to twelve months and interest rates ranging from 1.0% to 7.2% (2012: 1.27% to 7.93%). | |||||||||
As of December 31, 2013, approximately $33 million included in short term bank borrowings was payable to Shanghai Pudong Development Bank, and was secured by a one-year fixed term deposit and pledged deposits with a carrying amount of $9 million. In addition, as of December 31, 2013, $137 million payable to Bank of China was secured by a one-year fixed term deposit with a carrying amount of $78 million; $103 million payable to China Construction Bank was secured by a one-year fixed term deposit with a carrying amount of $43 million; $33 million payable to Agricultural Bank of China was secured by a one-year fixed term deposit with a carrying amount of $20 million; $5 million payable to Ningbo Commerce Bank was secured by a one-year fixed term deposit with a carrying amount of $5 million; $24 million payable to Bank of Communication was secured by a one-year fixed term deposit with a carrying amount of $3 million; and $4 million payable to Guangdong Development Bank was secured by a one-year fixed term deposit with a carrying amount of $5 million. Furthermore, $30 million payable to the Bank of Ningbo was secured by a one-year fixed term deposit with a carrying amount of $1 million; $33 million payable to China Merchant Bank was secured by a one-year fixed term deposit with a carrying amount of $23 million; $22 million payable to Shenzhen Development Bank was secured by a one-year fixed term deposit with a carrying amount of $23 million.Among the rest of the Group's short-term borrowing, as of December 31, 2013, $95 million was guaranteed by related party and third-party entities and individuals, and $24 million was secured by the Group’s land, buildings and equipment with a carrying amount of $91 million. |
Accrued_Expenses_and_Other_Pay
Accrued Expenses and Other Payables | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accrued Expenses and Other Payables [Abstract] | ' | ||||||||
ACCRUED EXPENSES AND OTHER PAYABLES | ' | ||||||||
12 ACCRUED EXPENSES AND OTHER PAYABLES | |||||||||
Accrued expenses and other payables consist of the following: | |||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Purchase of property, plant and equipment | $ | 15,266 | $ | 19,261 | |||||
Accrued payroll and welfare | 1,075 | 1,156 | |||||||
Liquidated damages | 2,493 | 2,493 | |||||||
Other accruals and payables | 4,933 | 3,923 | |||||||
$ | 23,767 | $ | 26,833 | ||||||
Series_B_Convertible_Preferred
Series B Convertible Preferred Stock and Related Financing Agreements | 12 Months Ended |
Dec. 31, 2013 | |
Equity [Abstract] | ' |
SERIES B CONVERTIBLE PREFERRED STOCK AND RELATED FINANCING AGREEMENTS | ' |
13 SERIES B CONVERTIBLE PREFFERED STOCK AND RELATED FINANCING AGREEMENTS | |
The significant terms of the Series B convertible preferred stock are as follows: | |
Conversion: | |
At any time on or after the issuance date, at the election of the holders, each share of the Series B convertible preferred stock may be converted into shares of the Company’s common stock, at a conversion price of $3.75 per share, subject to certain ownership limitations. | |
The conversion price is subject to certain anti-dilutive adjustments, including adjustments for stock splits, dividends and distributions, and reorganization, merger or consolidation. In addition, the conversion price may be adjusted down. | |
The Series B convertible preferred stock shall be automatically converted into common stock (for the same conversion price as described above) upon the third year anniversary of the issuance date of the Series B convertible preferred stock on September 28, 2013. In the event the Company shall issue or sell any additional shares of common stock at a price per share less than the then-applicable conversion price or without consideration, then the conversion price upon each such issuance shall be reduced to that price (the “Round Down Provision”). On September 24, 2013, the Company and the sole holder of Series B convertible preferred stock agreed to extend the automatic conversion date of Series B preferred stock from September 28, 2013 to September 28, 2014. | |
Management evaluated the terms and conditions of the embedded conversion features and determined that there was no beneficial conversion features for the Series B convertible preferred stocks because the effective conversion price is equal to or higher than the fair value at the date of issuance. | |
Redemption: | |
As a result of the Round Down Provision, and in accordance with ASR 268 “Presentation in Financial Statement of Redeemable Preferred Stock”, the Series B convertible preferred stock has been classified as temporary equity as the Company does not control the events necessary to issue the maximum number of shares that could be required should the redemption feature be triggered. In the event the Company has insufficient authorized registered shares of common stock to effect a conversion request from the Series B investors, the Company, at its sole discretion, may elect to satisfy such conversion request by either redeeming the preferred stock at its liquidation preference of $3.75 per share, or by issuing restricted shares of the Company’s common stock. | |
The Series B convertible preferred stock is redeemable at the option of their holders simultaneously with the occurrence of the following events: | |
(i) Merger or consolidation where the holders of the Company’s outstanding voting securities prior to such merger or consolidation do not own over 50% of the outstanding voting securities of the merged or consolidated entity immediately after such merger or consolidation; or (ii) the sale of all or substantially all of the Company’s properties or assets (collectively, an “Organic Change”). | |
Management considers the occurrence of the Organic Change is solely within the control of the Company. | |
Voting Rights: | |
The Series B convertible preferred stock has no voting rights with the common stock or other equity securities of the Company other than certain class voting rights, as outlined in the related agreement. | |
Fixed dividends were accrued and cumulative for one year from the date of the initial issuance of the Series B convertible preferred stock, and are payable on a quarterly basis. Annual dividends were determined as 6% of $3.75 for each share of the Series B convertible preferred stock. Fixed dividends are no longer payable on the series B convertible preferred stock. | |
Tolling agreement : | |
The Company and Dragon State Limited (“Dragon State”), the sole holder of series B convertible preferred stock and the majority holder of Series C warrants and Series D warrants, entered into a tolling agreement, dated September 24, 2013 (the “Tolling Agreement”). Pursuant to the Tolling Agreement, all periods of limitation, repose and laches which are or may be applicable to any or all claims and remedies at contract, tort and statute, including but not limited to all claims arising out of the securities purchase agreement dated September 28, 2010 and out of Dragon State’s purchase of the securities of the Company, whether described therein or not (collectively, “Tolled Claims”), that Dragon State has or may have against the Company and its Chairman of the Board and Chief Executive Officer, Mr. Tao, are tolled and suspended as of September 8, 2013 through and including September 28, 2014. | |
Together with the Tolling Agreement, the Company and Dragon State agreed to amend certain terms in the certificate of designations, preferences and rights of Series B convertible preferred stock, Series C warrants and Series D warrants issued in Series B financing in September 2010 (the “Amendments”). | |
Pursuant to the Amendments, i) the date of maturity (a.k.a. the date of mandatory conversion) of series B convertible preferred stock was extended from September 28, 2013 to September 28, 2014; ii) the term of Series C warrant was extended from three years to four years and expire on September 28, 2014; and iii) the term of Series D warrant was extended from three years to four years and expire on September 28, 2014. | |
The Company considered the fair value of series B convertible preferred stock, Series C warrants and Series D warrants immediately before and after the Amendments and determined that the Amendments constitute modification of the Series B convertible preferred stock, Series C warrants and Series D warrants, resulting in the transfer of value from the Company’s common shareholders to Series B preferred stockholders. The estimated fair value of the value transferred is approximately $548,000 and is reflected as a deemed dividend in the statement of comprehensive income for the the year ended December 31, 2013. | |
The fair value was estimated as of September 24, 2013 (date of modification) using the Black Scholes option-pricing model utilizing the following assumptions: stock price of $0.70 per share; no dividends; a risk free rate of 0.1%, which equals the one -year yield on Treasury bonds at constant (or fixed); and volatility of 126.36%. | |
Escrow shares agreement : | |
In connection with the Series B financing, the Company entered into an escrow share agreement with the representatives of the Series B investors, Delight Reward (the majority owner of the Company), and Anslow&Jaclin, LLP (the “Escrow Agreement”), pursuant to which 3,400,000 shares of the Company’s common stock (the “Escrow Shares”) held by Delight Reward were delivered to the Escrow Agent. The Escrow Shares were to be released back to Delight Reward upon the Company’s achievement of no less than 95% of a net income of $33 million for the year ended December 31, 2010 (the “Performance Threshold”). The Performance Threshold was achieved and the 3,400,000 shares were released on November 6, 2013. |
Common_Stock_Purchase_Warrants
Common Stock Purchase Warrants | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Common Stock Purchase Warrants [Abstract] | ' | ||||||||||
COMMON STOCK PURCHASE WARRANTS | ' | ||||||||||
14 COMMON STOCK PURCHASE WARRANTS | |||||||||||
In conjunction with the Company’s Series A and Series B financings, the Company previously issued the following warrants to purchase the Company’s common stock: | |||||||||||
Maximum number | |||||||||||
of shares of | Exercise | ||||||||||
Issuance dates | common stock | prices | |||||||||
Series A Warrants | April 22 and May 18, 2010 | 748,704 | $ | 4.5 | |||||||
Series B Warrants | April 22 and May 18, 2010 | 748,704 | $ | 5.25 | |||||||
Series C Warrants | 28-Sep-10 | 810,002 | $ | 4.5 | |||||||
Series D Warrants | 28-Sep-10 | 810,002 | $ | 5.25 | |||||||
Placement agent warrants | |||||||||||
-Series A Private Placement | April 22 and May 18, 2010 | 718,755 | $ | 3.50~$5.25 | |||||||
-Series B Private Placement | 28-Sep-10 | 561,601 | $ | 3.75~$5.25 | |||||||
Series A warrants and Series B warrants, including placement agent warrants issued in the Series A financing, expired in 2013. | |||||||||||
On September 24, 2013, the Company and Dragon State, the majority holder of Series C warrants and Series D warrants agreed to extend the term of Series C and Series D warrants from three years to four years expiring on September 28, 2014. | |||||||||||
Series C and Series D warrants entitle the holders to purchase shares of the Company’s common stock at any time after their respective issuance dates and shall expire on September 28, 2014. The Series C and Series D warrants are not callable. |
ShareBased_Payments
Share-Based Payments | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Share-Based Payments [Abstract] | ' | |||||||||||||||
SHARE-BASED PAYMENTS | ' | |||||||||||||||
15 SHARE-BASED PAYMENTS | ||||||||||||||||
(a) Employee stock option grants | ||||||||||||||||
The Board of Directors approved the Company’s 2010 Equity Incentive Plan (the “Plan”). The maximum number of shares of common stock of the Company issuable pursuant to the Plan is 6,000,000 shares. The Plan shall be administered by the Board; provided however, that the Board may delegate such administration to a Plan Committee (the “Committee”). | ||||||||||||||||
Subject to the provisions of the Plan, the Board and/or the Committee shall have authority to determine the type or types of awards to be granted to each participant under the Plan. The exercise price of options to purchase shares of the Company’s common stock granted under the Plan shall be determined by the Board or the Committee, provided, however that the exercise price of any incentive stock option shall not be less than 100% of the fair market value of a share on the date of grant. The term of each option shall be fixed by the Board or the Committee, provided that no incentive stock option shall have a term greater than 10 years. | ||||||||||||||||
On June 30, 2010, the Company granted a total of 3,000,000 stock options to certain senior management employees with a contractual term of 5 years. The exercise price of these stock options is $4.20 per share and the grant-date fair value of these stock options amounted to approximately $3.3 million. A total of 2,810,000 stock options vest over three years as follows: 30% shall vest and become exercisable one year after grant date, 40% shall vest and become exercisable two years after grant date, and 30% shall vest and become exercisable three years after grant date. For the remaining 190,000 stock options: 40% shall vest and become exercisable one year after grant date and 60% shall vest and become exercisable two years after grant date. | ||||||||||||||||
On July 1, 2010, the Company granted a total of 80,000 stock options to two independent directors with contractual terms of 5 years. The exercise price of these stock options is $4.20 per share and the grant-date fair value of these stock options amounted to approximately $0.1 million. A total of 40,000 options shall vest and become exercisable one year after the grant date and the remaining 40,000 options shall vest and become exercisable two years after the grant date, provided that the independent directors are re-elected for successive one year terms one year after the stock options issuance date. | ||||||||||||||||
On August 4, 2010, the Company granted a total of 700,000 stock options to employees with a contractual term of 5 years. The exercise price of these stock options was $4.50 per share and the grant-date fair value of these stock options amounted to approximately $1.3 million. These stock options were to vest over three years as follows: 30% shall vest and become exercisable one year after the grant date, 40% shall vest and become exercisable two years after the grant date and 30% shall vest and become exercisable three years after the grant date. On December 29, 2010, 600,000 of these stock options were cancelled. As compensation for such cancellation, the Company committed to pay these employees incremental cash payments during the period through August 2013. The fair value of the committed cash payment at the date of commitment was approximately $0.4 million and no incremental compensation cost resulted from the cancellation of these stock options. | ||||||||||||||||
There is no unrecognized compensation cost related to employee stock options as of December 31, 2013. | ||||||||||||||||
There were no share options granted during the years ended December 31, 2013 and 2012. A summary of the share options activity during the year ended December 31, 2013 is as follows: | ||||||||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||||||||
options | average | average | intrinsic | |||||||||||||
exercise price | remaining | value | ||||||||||||||
contractual term | ||||||||||||||||
Balance as of January 1, 2013 | 2,333,000 | 4.2 | ||||||||||||||
Forfeited | (540,000 | ) | 4.2 | |||||||||||||
Balance as of December 31, 2013 | 1,793,000 | $ | 4.2 | 0.5 | $ | 0 | ||||||||||
Exercisable as of December 31, 2013 | 1,793,000 | $ | 4.2 | 0.5 | $ | 0 | ||||||||||
The total fair value of stock options that vested during the year ended December 31, 2013 was approximately $0.7 million. | ||||||||||||||||
(b) Non-employee stock option grants | ||||||||||||||||
A summary of stock options granted to non-employees as of December 31, 2013 is as follows: | ||||||||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||||||||
options | average | average | intrinsic | |||||||||||||
exercise price | remaining | value | ||||||||||||||
contractual term | ||||||||||||||||
Outstanding as of December 31, 2013 | 40,000 | $ | 4.2 | 1.5 years | $ | - | ||||||||||
Exercisable as of December 31, 2013 | 40,000 | $ | 4.2 | 1.5 years | $ | - |
Statutory_Reserves
Statutory Reserves | 12 Months Ended |
Dec. 31, 2013 | |
Statutory Reserves [Abstract] | ' |
STATUTORY RESERVES | ' |
16 STATUTORY RESERVES | |
Ningbo Keyuan, Ningbo Keyuan Petrochemicals, Ningbo Keyuan Synthetic Rubbers and Guangxi Keyuan are required to allocate at least 10% of their after tax profits as determined under generally accepted accounting principles in the PRC to a statutory surplus reserve until the reserve balances reach 50% of their respective registered capitals. As of December 31, 2013 and 2012, Ningbo Keyuan, Ningbo Keyuan Petrochemicals, Ningbo Keyuan Synthetic Rubbers and Guangxi Keyuan had made appropriations to this statutory reserve of approximately $5.7 million and $4.1 million, respectively. |
Stock_Repurchase_Program
Stock Repurchase Program | 12 Months Ended |
Dec. 31, 2013 | |
Equity [Abstract] | ' |
STOCK REPURCHASE PROGRAM | ' |
17 STOCK REPURCHASE PROGRAM | |
On September 17, 2012, our Board of Directors authorized the repurchase of $2 million of the Company’s common stock for up to $1.50 per share. Through December 31, 2013 the Company had purchased 126,148 shares for approximately $143,000 Shares of common stock repurchased by the Company are recorded at cost as treasury stock and result in a reduction of shareholders' equity in the consolidated balance sheets. Treasury shares may be reissued as part of the Company’s stock-based compensation programs. There were no reissuances during the year ended December 31, 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
18 COMMITMENTS AND CONTINGENCIES | |
(a) Operating commitments | |
The Group had outstanding Letter’s of Credit as of December 31, 2013 of approximately $174 million. | |
(b) Capital commitments | |
As of December 31, 2013, the Group had contractual capital commitments of approximately $15.3 million for purchases of equipment. The capital commitments relate primarily to manufacturing equipment updates. | |
(c) Litigation | |
On November 15, 2011, the Company and several of its officers were named in a securities class action, alleging violation of federal securities laws by issuing materially false and misleading statements and omitting material facts with regard to disclosure of related party transactions and effectiveness of internal controls in past public filings. The case is currently at the discovery stage and management believes that there is no basis to the suit and intends to contest the case vigorously. | |
On February 13, 2014, the Brown Law Firm filed a derivative action suit on behalf of the Company, alleging certain and former current officers and directors of the Company had violated their fiduciary duties between at least April 22, 2010 to October 20, 2011. The case is currently at the discovery stage and management believes that there is no basis to the suit and intends to contest the case vigorously | |
The Group, from time to time, is involved in various legal actions arising in the ordinary course of business. Management does not currently believe that there are any pending legal actions where the outcome of such legal actions would have a material adverse effect on the Group’s consolidated financial statements. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Income Taxes [Abstract] | ' | ||||||||||||||||
INCOME TAXES | ' | ||||||||||||||||
19 INCOME TAXES | |||||||||||||||||
The Company and its subsidiaries file separate income tax returns. | |||||||||||||||||
The United States of America | |||||||||||||||||
The Company is incorporated in the State of Nevada in the U.S., and is subject to U.S. federal corporate income tax at progressive rates ranging from 15% to 35%. The state of Nevada does not impose any state corporate income tax. | |||||||||||||||||
British Virgin Islands | |||||||||||||||||
Sinotech is incorporated in the British Virgin Islands (“BVI”). Under the current laws of the BVI, Sinotech is not subject to tax on income or capital gains. In addition, upon payments of dividends by Sinotech, no BVI withholding tax is imposed. | |||||||||||||||||
Hong Kong | |||||||||||||||||
Keyuan HK is incorporated in Hong Kong. Keyuan HK did not earn any income that was derived in Hong Kong for the years ended December 31, 2013 and 2012, and therefore was not subject to Hong Kong Profits Tax. The payments of dividends by Hong Kong companies are not subject to any Hong Kong withholding tax. | |||||||||||||||||
PRC | |||||||||||||||||
Ningbo Keyuan, Ningbo Keyuan Petrochemicals, Ningbo Keyuan Synthetic Rubbers and Guanxi Keyuan are all incorporated in the PRC and the applicable PRC statutory income tax rate for these companies is 25%. | |||||||||||||||||
Components of loss before income tax expense (benefit) consist of the following jurisdictions: | |||||||||||||||||
Year ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
PRC | $ | 12,344 | $ | 1,303 | |||||||||||||
U.S. | (1,671 | ) | (3,512 | ) | |||||||||||||
Hong Kong and BVI | (2,565 | ) | (2,847 | ) | |||||||||||||
Income (loss) before income taxes | $ | 8,108 | $ | (5,056 | ) | ||||||||||||
The Group’s income tax expense (benefit) in the consolidated statements of comprehensive income (loss) consists of the following: | |||||||||||||||||
Year ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Current income tax expense | $ | 3,224 | $ | 3,595 | |||||||||||||
Deferred income tax (benefit) expense | 252 | (2,801 | ) | ||||||||||||||
Total income tax expense | $ | 3,476 | $ | 794 | |||||||||||||
Reconciliation between income tax expense and the amounts computed by applying the PRC statutory income tax rate of 25% to income (loss) before income taxes is as follows: | |||||||||||||||||
Year ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Loss before income taxes | $ | 8,108 | $ | (5,056 | ) | ||||||||||||
Computed expected | |||||||||||||||||
Income tax expense (benefit) | 2,027 | 25 | % | (1,264 | ) | 25 | % | ||||||||||
Tax loss not recognized | 1,110 | 13.7 | % | 1,485 | (29.4 | %) | |||||||||||
Effect of different tax rates | (51 | ) | (0.6 | %) | 105 | (2.1 | %) | ||||||||||
Other | 30 | 0.4 | % | 126 | (2.5 | %) | |||||||||||
Permanent differences | 360 | 4.4 | % | 342 | (6.8 | %) | |||||||||||
Actual income tax expense | $ | 3,476 | 42.9 | % | $ | 794 | (15.7 | %) | |||||||||
The PRC income tax rate has been used because the majority of the Group’s consolidated income (loss) before income taxes arises in the PRC. | |||||||||||||||||
The tax effects of the temporary differences that give rise to significant portions of deferred income tax assets are presented below: | |||||||||||||||||
As of December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Net operating loss carry forwards | $ | 7,415 | $ | 6,356 | |||||||||||||
Depreciation | 1,199 | 963 | |||||||||||||||
Interest income receivable on pledged bank deposits | - | - | |||||||||||||||
Prepaid expenses and other current assets | 1,461 | 1,439 | |||||||||||||||
Accrued bonus | 4 | 183 | |||||||||||||||
Other | (23 | ) | 216 | ||||||||||||||
Total deferred income tax assets | 10,056 | 9,157 | |||||||||||||||
Valuation allowance | (7,415 | ) | (6,356 | ) | |||||||||||||
Net deferred tax assets | $ | 2,641 | $ | 2,801 | |||||||||||||
Deferred tax assets arising from net operating loss carry forwards (“NOL’S”) from the Group’s operations outside of the PRC were approximately $7.4 and $6.4 million as of December 31, 2013 and 2012, respectively. Management has determined that it is more likely than not that they will not generate sufficient taxable income in those jurisdictions to realize the deferred tax asset. Accordingly, a valuation allowance for the full amount was provided. As of December 31, 2013, NOL’S and their expiration dates arose in the following jurisdictions: | |||||||||||||||||
Expiration date | |||||||||||||||||
US | $ | (17,054 | ) | 31-Dec-13 | |||||||||||||
Hong Kong | (9,095 | ) | Not applicable | ||||||||||||||
BVI | (211 | ) | Not applicable | ||||||||||||||
$ | (26,360 | ) | |||||||||||||||
According to the prevailing PRC income tax law and its relevant regulations, non-PRC-resident enterprises are levied withholding tax at 10%, unless reduced by tax treaties or similar arrangements, on dividends from their PRC-resident investees for earnings accumulated beginning on January 1, 2008, and undistributed earnings generated prior to January 1, 2008 are exempted from such withholding tax. Further, the Group’s distributions from its PRC subsidiaries are subject to U.S. federal income tax at 34%, less any applicable qualified foreign tax credits. Due to the Group’s policy of reinvesting permanently its earnings in its PRC business, the Group has not provided for deferred income tax liabilities of $11.1 million and $9.4 million for U.S. federal income tax purposes on its PRC subsidiaries’ undistributed earnings of $44.5 million and $37.7 million as of December 31, 2013 and 2012, respectively. | |||||||||||||||||
For each of the years ended December 31, 2013 and 2012, the Group did not have unrecognized tax benefits, and therefore no interest or penalties related to unrecognized tax benefits were accrued. Management does not expect that the amount of unrecognized tax benefits will change significantly within the next twelve months. | |||||||||||||||||
The Group mainly files income tax returns in the United States and the PRC. The Company is subject to U.S. federal income tax examination by tax authorities for tax years beginning in 2010. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances where the underpayment of taxes is more than RMB100,000 ($15,000). In the case of transfer pricing issues, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. The PRC tax returns for the Company’s PRC subsidiaries are open to examination by the PRC state and local tax authorities for the tax years beginning in 2008. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value Measurements [Abstract] | ' |
FAIR VALUE MEASUREMENTS | ' |
20 FAIR VALUE MEASUREMENTS | |
The Company did not have any assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2013 and 2012. | |
The fair values of cash, pledged bank deposits, bills receivable, accounts receivable, short-term bank borrowings, bills payable, and accounts payable approximate their respective carrying amounts due to their short-term nature. Amounts due from related parties are not practicable to estimate due to the related party nature of the underlying transactions. |
Significant_Concentrations_and
Significant Concentrations and Risks | 12 Months Ended |
Dec. 31, 2013 | |
Significant Concentrations and Risks [Abstract] | ' |
SIGNIFICANT CONCENTRATIONS AND RISKS | ' |
21 SIGNIFICANT CONCENTRATIONS AND RISKS | |
As of December 31, 2013 and December 31, 2012, the Group held cash and pledged bank deposits in financial institutions of approximately $349 million and $225 million, respectively. They were primarily held in major financial institutions located in mainland China and the Hong Kong Special Administrative Region, which management believes have high credit ratings. | |
During the year ended December 31, 2013, no sales to individual customers exceeded 10% of the Group’s total net revenues. Sales to one individual customer comprised approximately 13 % of the Group's total net revenue for the year ended December 31, 2012. At December 31, 2013, two customers accounted for 25% and 47% of accounts receivable. At December 31, 2012, two customers accounted for 100% of accounts receivable. | |
The Group currently buys a majority of its heavy oil, an important component of its products, from three suppliers. Although there are a limited number of suppliers of a particular heavy oil used in production, management believes that other suppliers could provide similar heavy oil on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which would affect operating results adversely. Purchases (net of VAT) from the largest three suppliers for the years ended December 31, 2013 and 2012 were approximately $459 million and $549 million, respectively. These purchases represented 80% and 78%, respectively of all of the Group’s purchases for the years ended December 31, 2013 and 2012. The Company’s largest supplier accounted for approximately $358 million and $474 million, or 57% and 68% of total purchases for the years ended December 2013 and 2012, respectively. In addition, the supplier provided short-term financing to the Company of approximately $29 million during 2012, of which $20 million was included in accounts payable at December 31, 2012 and was repaid in January 21, 2013. Interest paid for this financing amounted to approximately $0.43 million. In addition, on December 27, 2012, the supplier provided a non-interest bearing advance of approximately $10 million to the Company, that was repaid in full on January 8, 2013. | |
The Company commenced trading of heavy oil in April 2013¼ whereby the Company functions as an agent on behalf of a Hong Kong-based customer. For the year ended December 31, 2013, the trading of heavy oil consists of purchases of approximately $416.1 million, and sales of approximately $414.5 million, resulting in a loss of $1.6 million, that has been included in cost of sales in the statement of comprehensive income. | |
The Group’s operations are carried out in the PRC. Accordingly, the Group’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC, as well as by the general state of the PRC’s economy. The business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittances abroad, and rates and methods of taxation, among other things. |
Related_Party_Transactions_and
Related Party Transactions and Relationships and Transactions With Certain Other Parties | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Related Party Transactions and Relationships and Transactions With Certain Other Parties [Abstract] | ' | ||||||||||||||||
RELATED PARTY TRANSACTIONS AND RELATIONSHIPS AND TRANSACTIONS WITH CERTAIN OTHER PARTIES | ' | ||||||||||||||||
22 RELATED PARTY TRANSACTIONS AND RELATIONSHIPS AND TRANSACTIONS WITH CERTAIN OTHER PARTIES | |||||||||||||||||
(A) Related Party Transactions | |||||||||||||||||
The Company considers all transactions with the following parties to be related party transactions. | |||||||||||||||||
Name of parties | Relationship | ||||||||||||||||
Mr. Chunfeng Tao | Majority stockholder | ||||||||||||||||
Mr. Jicun Wang | Principal stockholder | ||||||||||||||||
Mr. Peijun Chen | Principal stockholder | ||||||||||||||||
Ms. Sumei Chen | Member of the Company’s Board of Supervisors and spouse of Mr. Wang | ||||||||||||||||
Ms. Yushui Huang | Vice President of Administration, Ningbo Keyuan | ||||||||||||||||
Ningbo Pacific Ocean Shipping Co., Ltd (Ningbo Pacific) | 100% ownership by Mr. Wang | ||||||||||||||||
Ningbo Hengfa Metal Product Co., Ltd (Ningbo Hengfa, former name “Ningbo Tenglong”) | 100% ownership by Mr. Chen | ||||||||||||||||
Related party transactions and amounts outstanding with the related parties as of and for the years ended December 31, 2013 and 2012, are summarized as follows: | |||||||||||||||||
Year ended December 31 | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Guarantee for bank borrowings (a) | $ | - | $ | 34,399 | |||||||||||||
Loan guarantee fee (a) | $ | 103 | $ | 307 | |||||||||||||
Advance payments to related parties (b) | $ | 43 | $ | 40 | |||||||||||||
(a) | Guarantees for Bank Loans | ||||||||||||||||
Guarantees for bank loans provided by related parties during the year ended December 31, 2013 and 2012 are as follows: | |||||||||||||||||
Guarantee provided | |||||||||||||||||
during year ended | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Mr. Tao | $ | - | $ | 16,645 | |||||||||||||
Jicun Wang and Sumei Chen | - | 17,754 | |||||||||||||||
Total | $ | - | $ | 34,399 | |||||||||||||
Bank loans Guaranteed as of | |||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Jicun Wang and Sumei Chen | $ | - | $ | 13,054 | |||||||||||||
Ningbo Pacific | - | 25,426 | |||||||||||||||
Total | $ | - | $ | 38,480 | |||||||||||||
(a) Beginning in 2011, loan guarantee fees of 0.3% of the loan principal guaranteed are to be paid quarterly. In the year ended December 31, 2013, loan guarantee fees were approximately $0.1 million for Ningbo Pacific. In 2012, loan guarantee fees were approximately $0.1 million and $0.2 million for Ningbo Hengfa and Ningbo Pacific, respectively. | |||||||||||||||||
(b) Advance payments to related parties consist of Mr. Tao for advances made for business purposes. These amounts are unsecured interest free and due on demand. | |||||||||||||||||
(B) Relationships and transactions with certain other parties | |||||||||||||||||
The Group has the following relationships and transactions with certain other parties: | |||||||||||||||||
Name of parties | Relationship | ||||||||||||||||
Ningbo Xinhe Logistic Co., Ltd (Ningbo Xinhe) | 10% ownership by Ms. Huang | ||||||||||||||||
Ningbo Litong Petrochemical Co., Ltd (Ningbo Litong) | Former 12.75% nominee shareholder of Ningbo Keyuan | ||||||||||||||||
Ningbo Anqi Petrochemical Co., Ltd (Ningbo Anqi) | A related party through September 2011 when control transferred | ||||||||||||||||
Ningbo Lide Investment Co., Ltd. (Ningbo Lide) (formerly Ningbo Kewei) | A related party through September 2011 when control transferred | ||||||||||||||||
Ningbo Kunde Petrochemical Co, Ltd. (Ningbo Kunde) | A related party through September 2011 when control transferred | ||||||||||||||||
Transactions and amounts outstanding with these parties for the years ended December 31, 2013 and 2012 are summarized as follows: | |||||||||||||||||
Year ended December 31 | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Sales of products (c) | $ | 69,476 | $ | 146,716 | |||||||||||||
Purchase of raw materials (d) | $ | 65,713 | $ | 41,312 | |||||||||||||
Purchase of transportation services (e) | $ | 3,613 | $ | 2,813 | |||||||||||||
Guarantee for bank borrowings (f) | $ | 280,332 | $ | 365,184 | |||||||||||||
Loan guarantee fees (f) | $ | 2,474 | $ | 1,411 | |||||||||||||
Amounts due to these parties(g) | $ | 369 | $ | - | |||||||||||||
Advance payments to these parties (h) | $ | 11,055 | $ | - | |||||||||||||
Advance Received from these parties (i) | $ | 218 | $ | - | |||||||||||||
(c) The Group sold finished products of approximately $30.7 million and $45.4 million to Ningbo Litong for the years ended December 31, 2013 and 2012, respectively. The Group sold finished products of approximately $38.0 million and $98.2 million to Ningbo Kunde for the years ended December 31, 2013 and 2012, respectively. The Group sold finished products of approximately $0.8 million and $3.1 million to Ningbo Lide for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
(d) The Group purchased raw materials of approximately $15.8 million and $26.0 from Ningbo Litong for the years ended December 31, 2013 and 2012, respectively. The Group purchased raw materials of approximately $2.7 million and $11.6 from Ningbo Kunde for the years ended December 31, 2013 and 2012, respectively. The Group purchased raw materials of approximately $47.2 million and $3.7 from Ningbo Lide for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
(e) The Group purchased transportation services of $3.6 million and approximately $2.8 million from Ningbo Xinhe during the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
(f) Guarantees for Bank Loans | |||||||||||||||||
Guarantee provided | Bank loans | ||||||||||||||||
during the year ended | Guaranteed as of | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
($’000) | ($’000) | ($’000) | ($’000) | ||||||||||||||
Ningbo Litong | $ | 148,507 | $ | 103,805 | $ | 150,483 | $ | 30,710 | |||||||||
Ningbo Lide | 131,825 | 261,379 | 133,579 | 122,651 | |||||||||||||
Total | $ | 280,332 | $ | 365,184 | $ | 284,062 | $ | 153,361 | |||||||||
Beginning in January 2011, loan guarantee fees was approximately 0.3% of the loan principal guaranteed. Guarantee fees payable to Litong and Lide were approximately $1.1 million and $1.4 million, respectively, for the year ended December 31, 2013. Guarantee fees payable to Litong and Lide were approximately $0.7 million each for the year ended December 31, 2012. | |||||||||||||||||
(g) At December 31, 2013, approximately $0.4 million was due to Xinhe. | |||||||||||||||||
(h) At December 31, 2013, advance payments to these parties consist of payments to Litong, Lide and Xinhe of $3.8 million, $7.2 million, and $0.01 million, respectively. | |||||||||||||||||
(i) At December 31, 2013, advances received from these parties consist of amounts received from Litong of $0.2 million. |
Consolidated_Segment_Data
Consolidated Segment Data | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Consolidated Segment Data [Abstract] | ' | ||||||||||||||||||||||||
Consolidated Segment Data | ' | ||||||||||||||||||||||||
23 CONSOLIDATED SEGMENT DATA | |||||||||||||||||||||||||
Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. The segment data presented reflects this segment structure. The Company reports financial and operating information in the following two segments: | |||||||||||||||||||||||||
(a) Petrochemicals Segment: Manufacturing and sales of mixed light aromatics, mixed heavy aromatics, fine propylene, propane, butane, liquefied petroleum gas (LPG), methyl tert-butyl ether, styrene, etc. | |||||||||||||||||||||||||
(b) Rubber Segment: Manufacturing and sales of various rubber products. | |||||||||||||||||||||||||
Segment information for the years ended December 31, 2013 and 2012 is as follows: | |||||||||||||||||||||||||
Year end December 31, 2013 | Year end December 31, 2012 | ||||||||||||||||||||||||
Petrochemical | Rubber | Total | Petrochemical | Rubber | Total | ||||||||||||||||||||
($’000) | ($’000) | ($’000) | ($’000) | ($’000) | ($’000) | ||||||||||||||||||||
Revenue | $ | 568,562 | $ | 77,987 | $ | 646,549 | $ | 679,636 | $ | 70,992 | $ | 750,628 | |||||||||||||
Income from operations | $ | 4,609 | $ | 5,601 | $ | 10,210 | $ | 9,501 | $ | 5,962 | $ | 15,467 | |||||||||||||
Interest income | $ | 8,342 | $ | 80 | $ | 8,422 | $ | 5,938 | $ | 2 | $ | 5,940 | |||||||||||||
Interest expense | $ | 18,809 | $ | - | $ | 18,809 | $ | 25,065 | $ | - | $ | 25,065 | |||||||||||||
Depreciation | $ | 7,784 | $ | 3,448 | $ | 11,232 | $ | 9,307 | $ | 2,620 | $ | 11,927 | |||||||||||||
Amortization | $ | 582 | $ | - | $ | 582 | $ | 559 | $ | - | $ | 559 | |||||||||||||
Income tax expense | $ | 1,976 | $ | 1,500 | $ | 3,476 | $ | (295 | ) | $ | 1,089 | $ | 794 | ||||||||||||
Deferred tax assets | $ | 2,461 | $ | 180 | $ | 2,641 | $ | 2,758 | $ | 43 | $ | 2,801 | |||||||||||||
Total assets | $ | 756,446 | $ | 117,636 | $ | 874,082 | $ | 577,202 | $ | 89,672 | $ | 666,874 | |||||||||||||
Keyuan_Petrochemicals_Inc_Pare
Keyuan Petrochemicals, Inc. (Parent Company) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Keyuan Petrochemicals, Inc. (Parent Company) [Abstract] | ' | ||||||||
Keyuan Petrochemicals, Inc. (Parent Company) | ' | ||||||||
24 Keyuan Petrochemicals, Inc. (Parent Company) | |||||||||
Relevant PRC statutory laws and regulation permit payments of dividends by the Company’s subsidiaries in the PRC only out of their retained earnings, if any, as determined in accordance with the PRC accounting standards and regulations. | |||||||||
Under the Law of the PRC on Enterprises with Wholly Owned Foreign Investment, the Company’s subsidiaries in the PRC are required to allocate at least 10% of their after tax profits, after making good their accumulated losses as reported in their PRC statutory financial statements, to the general reserve fund and have the right to discontinue allocations to the general reserve fund if the balance of such reserve has reached 50% of their registered capital. These statutory reserves are not available for distribution to the shareholders (except in liquidation) and may not be transferred in the form of loans, advances, or cash dividends. | |||||||||
As of December 31, 2013, approximately $5.7 million (2012:$4.1 million) was appropriated from retained earnings and set aside for the statutory reserve by the Company’s subsidiaries in the PRC. | |||||||||
As a result of these PRC laws and regulations, the Company’s subsidiaries in the PRC are restricted in their ability to transfer a portion of their net assets, either in the form of dividends, loans or advances, and consisting of paid-in capital and statutory reserves amounting to approximately $135.0 million as of December 31, 2013 (2012: $60.1 million). | |||||||||
The following presents condensed unconsolidated financial information of the Parent Company only: | |||||||||
Condensed Balance Sheets: | |||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Cash | $ | 5 | $ | 5 | |||||
Other current assets | 328 | 21 | |||||||
Investment in subsidiaries | 41,774 | 41,774 | |||||||
Total assets | 42,107 | 41,800 | |||||||
Accounts payable | 272 | 272 | |||||||
Accrued expenses and other payables | 2,925 | 3,814 | |||||||
Inter-company liabilities | 12,112 | 9,872 | |||||||
Dividends payable | 2,382 | 2,382 | |||||||
Series B convertible preferred stock | 16,868 | 16,452 | |||||||
Total stockholders' equity | 7,548 | 9,008 | |||||||
Total liabilities and stockholders' equity | $ | 42,107 | $ | 41,800 | |||||
Consolidated Statements Of operations: | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
General and administrative expenses | $ | 1,671 | $ | 3,512 | |||||
Interest expense | - | - | |||||||
Net loss | $ | 1,671 | $ | 3,512 | |||||
Condensed Statements of Cash Flows: | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Cash flows from operating activities | |||||||||
Net Loss | $ | (1,671 | ) | $ | (3,512 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Share-based compensation expense | 770 | 1,590 | |||||||
Decrease in other assets | (889 | ) | 372 | ||||||
Decrease in accounts payable, accrued expenses and other payables | - | 608 | |||||||
(1,790 | ) | (942 | ) | ||||||
Net cash used in operating activities | |||||||||
Cash flows from financing activities | |||||||||
Advance from inter-group company | 1,790 | 942 | |||||||
Net cash provided by financing activities | 1,790 | 942 | |||||||
Net decrease in cash | - | - | |||||||
Cash at beginning of year | 5 | 5 | |||||||
Cash at end of year | $ | 5 | $ | 5 | |||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
25 SUBSEQUENT EVENTS | |
From January 1, 2014 through March 31, 2014, the Company purchased 184,276 shares of common stock through the stock repurchase program at an averge purchase price of $0.94 per share. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2013 | ||
Summary Of Significant Accounting Policies [Abstract] | ' | |
Principles of consolidation and basis of presentation | ' | |
(a) Principles of consolidation and basis of presentation | ||
The accompanying consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the financial statements of the Group. | ||
All significant intercompany transactions and balances are eliminated on consolidation. | ||
Use of estimates | ' | |
(b) Use of estimates | ||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment; the fair value determination of financial and equity instruments; the realizability of inventories; and the recoverability of property, plant and equipment and accounts receivable. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. | ||
Foreign currency transactions and translation | ' | |
(c) Foreign currency transactions and translation | ||
The functional currency of the Company, Sinotech and Keyuan HK is the U.S. dollar. The functional currency of the PRC operating subsidiaries is the Renminbi (“RMB”). Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at each balance sheet date, and non-monetary items are translated at historical rates. The resulting exchange differences on these transactions are recorded in foreign exchange gain (loss), net in the consolidated statements of comprehensive income. | ||
The Group’s reporting currency is the U.S. dollar. Assets and liabilities of the PRC operating subsidiaries are translated into the U.S. dollar using the exchange rates at each balance sheet date. Revenue and expenses of the PRC operating subsidiaries are translated at average rates prevailing during the reporting period. Shareholders’ equity is translated at historical rates. Adjustments resulting from translating the financial statements of the PRC operating subsidiaries into the U.S. dollar are recorded as a separate component of accumulated other comprehensive income in stockholders’ equity. | ||
Cash | ' | |
(d) Cash | ||
Cash consists of cash on hand and cash at banks. As of December 31, 2013 and 2012, cash of $12.3 million and $23.3 million, respectively, was held in major financial institutions located in the PRC. Management performs periodic evaluations of the relative credit standings of those financial institutions, and believes that they have high credit ratings. | ||
Pledged bank deposits | ' | |
(e) Pledged bank deposits | ||
Pledged bank deposits represent amounts held by financial institutions, which are not available for the Group’s use, as security for issuances of bills payable to the Group’s suppliers, or as security for short-term bank borrowings. Upon maturity of the bills, which generally occurs within three to six months after the issuance of the bills, or upon the repayment of short-term bank borrowings, the deposits are released by the financial institutions and become available for use by the Group. Pledged bank deposits related to the purchase of inventories are reported within cash flows from operating activities and pledged bank deposits related to short-term bank borrowings are reported within cash flows from financing activities in the consolidated statements of cash flows. | ||
Inventories | ' | |
(f) Inventories | ||
Inventory is stated at the lower of cost or market. Cost is determined using the weighted-average cost method. Provisions are made for excess, slow moving and obsolete inventory as well as inventory whose carrying value is in excess of net realizable value. Management continually evaluates the recoverability based on assumptions about customer demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory reserves or write-downs may be required. The Group did not record any provision for slow-moving and obsolete inventory as of December 31, 2013 and 2012. | ||
Accounts receivable | ' | |
(g) Accounts receivable | ||
With the approval of the Company’s general manager, the Company occasionally extends unsecured credit to its long-term customers with a good credit rating. An allowance for doubtful accounts is established and recorded based on management’s assessment of its analysis of trade receivables, customers’ credit-worthiness, past collection history, and changes in customers’ payment records. The Company writes-off accounts receivable when accounts are deemed uncollectible. At December 31, 2013 and 2012, the Group considers all of its accounts receivable to be collectible and no provision for doubtful accounts has been made in the consolidated financial statements. | ||
Property, plant and equipment | ' | |
(h) Property, plant and equipment | ||
Property, plant and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, taking into consideration the assets’ estimated residual value. When items are retired or otherwise disposed of, income is charged or credited for the difference between the net book value and proceeds received thereon. Ordinary maintenance and repairs are charged to expense as incurred. | ||
The estimated useful lives of property, plant and equipment are as follows: | ||
Buildings | 45 years | |
Plant, machinery and equipment | 5 to 20 years | |
Vehicles | 5 years | |
Office equipment and furniture | 3 to 10 years | |
During January 2013, management performed an assessment of the useful lives of certain machinery and equipment. In evaluating the useful lives, management considered the historical life of the assets, operational strategy, and related functionality. Management concluded that machinery and equipment would remain in service longer than the depreciable life assigned. Effective February 1, 2013, the Group changed the time period over which it depreciates machinery and equipment to 20 years from 15 years. Management believes that this change more clearly and appropriately reflects the state of the machinery and equipment and thus, more reasonably and accurately reports the value of the machinery and equipment on the balance sheet. This change is being accounted for as a change in estimate. This change in estimate resulted in a reduction of depreciation expense of approximately $3.1 million, or approximately $0.05 per share, for the year ended December, 2013. | ||
Construction-in-progress is stated at cost. Cost comprises nonrefundable prepayments during the period of the construction of the plant or installation of equipment. Costs included in construction-in-progress are transferred to their respective categories of property, plant and equipment when the assets are ready for their intended use, at which time depreciation commences. | ||
Long-Lived Assets | ' | |
(i) Long-Lived Assets | ||
In accordance with Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 360-10, the Group reviews the recoverability of its long-lived assets on a periodic basis in order to identify business conditions, which may indicate a possible impairment. The assessment for potential impairment is based primarily on the Group’s ability to recover the carrying value of its long-lived assets from expected future undiscounted cash flows. If the total of the expected future undiscounted cash flows is less than the total carrying value of the assets, a loss is recognized for the difference between the fair value (computed based upon the expected future discounted cash flows) and the carrying value of the assets. No impairment is believed to exist at December 31, 2013. | ||
Land use rights | ' | |
(j) Land use rights | ||
Land use rights represent the exclusive right to occupy and use a piece of land in the PRC for a specified contractual term. Land use rights are recorded at cost and amortized on a straight-line basis over the terms of the land use rights of 15 to 50 years. | ||
Bills receivable and bills payable | ' | |
(k) Bills receivable and bills payable | ||
The Group utilizes banker’s acceptances in the form of bills receivable and bills payable. | ||
For certain major customers, the Group accepts their payment for the Group’s products by bills receivable. Bills receivable represent short-term notes receivable issued either by the customer or by the customer and an accepting bank that entitles the Group to receive the full face amount from the customer or the accepting bank at maturity, which is generally six months from the date of issuance. Bills receivable are typically sold at a discount prior to maturity, and the discount is included in interest expense. Historically, the Group has experienced no losses on bills receivable. | ||
In connection with the Company’s financing transactions, the Group may also obtain bills receivable in exchange for cash or payables. These bills, which are sold at a discount prior to maturity, include provisions whereby the Group agrees to reimburse the accepting bank in the event that the counterparty fails to honor its liability to the accepting bank. At December 31, 2013 and 2012, discounted bills receivable subject to reimbursement amounted to approximately $1.8 and $4.0 million, respectively. Historically, the Group has not suffered any losses under these reimbursement agreements. | ||
Bills payable represent bills issued by an accepting bank in favor of the Group’s suppliers. The Group’s suppliers receive payments from the accepting bank directly upon maturity of the bills, and the Group is obliged to repay the face value of the bills to the accepting bank. Bills that are not remitted directly by the Group to its suppliers may be sold by the Group to other accepting banks for cash prior to their maturity. Discounts paid are recorded as a component of interest expense. | ||
Revenue recognition | ' | |
(l) Revenue recognition | ||
The Group derives its revenue primarily from the sale of petrochemical products. In accordance with the provisions of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 104, codified in FASB ASC Topic 480, revenue should not be recognized until it is realized or realizable and earned. Revenues are considered to have been earned when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. The Group recognizes revenue when the products are delivered and the customer takes ownership and assumes risks of losses, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. Written sales agreements, which specify price, product, and quantity, are generally used as evidence of an arrangement. Customer acceptance is generally evidenced by a carrier signed shipment notification form. | ||
In the PRC, value added tax (“VAT”) of 17% on invoiced amounts, and consumption tax of $133 per ton on certain sales, are collected on behalf of tax authorities. Revenue is recorded net of VAT and consumption tax. VAT and consumption tax paid for purchases, net of VAT and consumption tax collected from customers, is recorded in other current assets and consumption tax recoverable, respectively, in the consolidated balance sheets as of December 31, 2013 and 2012. | ||
Share-based compensation | ' | |
(m) Share-based compensation | ||
The Group accounts for share-based payments under the provisions of FASB ASC Topic 718, “Compensation-Stock Compensation”, or ASC Topic 718. Under ASC Topic 718, the Group measures the costs of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the costs over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. | ||
The Group accounts for equity instruments issued to non-employee vendors in accordance with the provisions of FASB ASC Subtopic 505-50, “Equity-Based Payments to Non-Employees”. All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the equity instrument issued. The measurement date for the fair value of the equity instruments issued is the date on which the counterparty’s performance is completed. | ||
Employee benefit plans | ' | |
(n) Employee benefit plans | ||
Pursuant to relevant PRC regulations, Ningbo Keyuan, Ningbo Keyuan Petrochemicals, Ningbo Keyuan Synthetic Rubbers and Guangxi Keyuan are required to make contributions to various defined contribution plans organized by municipal and provincial PRC governments. The contributions are made for each PRC employee at rates ranging from 26.7% to 28.7% on a standard salary base as determined by the local social security bureau. | ||
Contributions to the defined contribution plans are charged to the consolidated statements of comprehensive income (loss) when the related service is provided. For each of the years ended December 31, 2013 and 2012, contributions to the defined contribution plans were approximately $0.5 million. | ||
The Group has no other obligation for the payment of employee benefits associated with these plans beyond the contributions described above. | ||
Income taxes | ' | |
(o) Income taxes | ||
Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss carry forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to reduce the carrying amount of deferred income tax assets if it is considered more likely than not that some portion, or all, of the deferred income tax assets will not be realized. | ||
The Group recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Group has elected to classify interest related to unrecognized tax benefits as part of income tax expense in the consolidated statements of comprehensive income. | ||
Fair value measurements | ' | |
(p) Fair value measurements | ||
The Group utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Group determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: | ||
· | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group has the ability to access at the measurement da | |
· | Level 2 inputs are inputs other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. | |
· | Level 3 inputs are unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. | |
The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. | ||
Earnings (loss) per share | ' | |
(q) Earnings (loss) per share | ||
Basic earnings (loss) per share is computed by dividing net income (loss) attributable to the Company’s common stockholders by the weighted average number of common stock outstanding during the year. | ||
Diluted earnings (loss) per share is calculated by dividing net income (loss) attributable to the Company’s stockholders as adjusted for the effect of dilutive common stock equivalents, if any, by the weighted average number of common stock and dilutive common stock equivalents outstanding during the year. Common stock equivalents consist of the common stock issuable upon the conversion of the Group’s Series B convertible preferred stock (using the if–converted method) and common stock issuable upon the exercise of outstanding stock options and stock purchase warrants (using the treasury stock method). Potential dilutive securities are not included in the calculation of dilutive earnings (loss) per share if the effect is anti-dilutive. A total of 4,014,605 and 7,190,766 warrants and options were excluded from diluted earnings per share for the years ended December 31, 2013, and 2012, respectively, as their effect was anti-dilutive. | ||
Segment reporting | ' | |
(r) Segment reporting | ||
The Group’s chief operating decision maker has been identified as its Chief Executive Officer (CEO). | ||
The Group has two operating segments; the manufacture and sale of petrochemical products (petrochemical segment) and the manufacture and sale of rubber products (rubber segment), established in 2012. Substantially all of the Company’s operations and customers are located in the PRC. Consequently, no geographic information is presented. | ||
Contingencies | ' | |
(s) Contingencies | ||
In the normal course of business, the Group is subject to loss contingencies, such as legal proceedings and claims arising out of its business. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. | ||
Recent accounting pronouncements | ' | |
(t) Recent accounting pronouncements | ||
Effective January 1, 2013, the Company adopted Accounting Standards Update (“ASU”) No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” The adoption of ASU 2013-02 concerns presentation and disclosure only and did not have an impact on the Company’s consolidated financial position or results of operations. | ||
In July 2013, the FASB, issued Accounting Standards Update (ASU) No. 2013-11 “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” Under ASU 2013-11, an entity is required to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. If a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance affects presentation only and, therefore, it is not expected to have a material impact on the Company's financial condition, results of operations or cash flows. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |
Dec. 31, 2013 | ||
Summary Of Significant Accounting Policies [Abstract] | ' | |
Estimated useful lives of property, plant and equipment | ' | |
Buildings | 45 years | |
Plant, machinery and equipment | 5 to 20 years | |
Vehicles | 5 years | |
Office equipment and furniture | 3 to 10 years |
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventories [Abstract] | ' | ||||||||
Schedule of Inventory | ' | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Raw materials | $ | 37,747 | $ | 26,433 | |||||
Finished goods | 30,823 | 21,701 | |||||||
Work-in-process | 1,344 | 500 | |||||||
Total | $ | 69,914 | $ | 48,634 |
Other_Current_Assets_Tables
Other Current Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Current Assets [Abstract] | ' | ||||||||
Other current assets | ' | ||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
VAT recoverable | $ | 56,667 | $ | 31,751 | |||||
Customs deposits for imported inventories | 3,680 | 21,648 | |||||||
Other | 4,842 | 2,921 | |||||||
$ | 65,189 | $ | 56,320 | ||||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Summary of property, plant and equipment | ' | ||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Buildings | $ | 6,303 | $ | 3,920 | |||||
Plant, machinery and equipment | 253,728 | 239,222 | |||||||
Vehicles | 1,274 | 950 | |||||||
Office equipment and furniture | 309 | 296 | |||||||
Construction-in-progress | 65,267 | 12,292 | |||||||
326,881 | 256,680 | ||||||||
Less: accumulated depreciation | (41,375 | ) | (29,077 | ) | |||||
$ | 285,506 | $ | 227,603 | ||||||
Depreciation expense on property, plant and equipment | ' | ||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Cost of sales | $ | 10,370 | $ | 13,254 | |||||
Selling, general and administrative expenses | 862 | 189 | |||||||
$ | 11,232 | $ | 13,443 | ||||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Intangible Assets [Abstract] | ' | |||||||||||
Summary of intangible assets | ' | |||||||||||
Amortization | As of December 31, | |||||||||||
Period | 2013 | 2012 | ||||||||||
Years | ($’000) | ($’000) | ||||||||||
Licensing agreements | 20-Oct | $ | 1,758 | $ | 1,508 | |||||||
Less: Accumulated amortization | (772 | ) | (628 | ) | ||||||||
$ | 986 | $ | 880 | |||||||||
Land_Use_Rights_Tables
Land Use Rights (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Land Use Rights [Abstract] | ' | ||||||||
Land Use Rights | ' | ||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Land use rights | $ | 12,754 | $ | 12,282 | |||||
Less: Accumulated amortization | (2,091 | ) | (1,574 | ) | |||||
$ | 10,663 | $ | 10,708 | ||||||
ShortTerm_Bank_Borrowings_Tabl
Short-Term Bank Borrowings (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Short-Term Bank Borrowings [Abstract] | ' | ||||||||
Summary of short-term bank borrowings | ' | ||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Bank borrowings-secured/guaranteed | $ | 424,436 | $ | 295,146 | |||||
Accrued_Expenses_and_Other_Pay1
Accrued Expenses and Other Payables (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accrued Expenses and Other Payables [Abstract] | ' | ||||||||
Accrued expenses and other payables | ' | ||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Purchase of property, plant and equipment | $ | 15,266 | $ | 19,261 | |||||
Accrued payroll and welfare | 1,075 | 1,156 | |||||||
Liquidated damages | 2,493 | 2,493 | |||||||
Other accruals and payables | 4,933 | 3,923 | |||||||
$ | 23,767 | $ | 26,833 | ||||||
Common_Stock_Purchase_Warrants1
Common Stock Purchase Warrants (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Common Stock Purchase Warrants [Abstract] | ' | ||||||||||
Schedule of warrants issued to purchase the Company's common stock | ' | ||||||||||
Maximum number | |||||||||||
of shares of | Exercise | ||||||||||
Issuance dates | common stock | prices | |||||||||
Series A Warrants | April 22 and May 18, 2010 | 748,704 | $ | 4.5 | |||||||
Series B Warrants | April 22 and May 18, 2010 | 748,704 | $ | 5.25 | |||||||
Series C Warrants | 28-Sep-10 | 810,002 | $ | 4.5 | |||||||
Series D Warrants | 28-Sep-10 | 810,002 | $ | 5.25 | |||||||
Placement agent warrants | |||||||||||
-Series A Private Placement | April 22 and May 18, 2010 | 718,755 | $ | 3.50~$5.25 | |||||||
-Series B Private Placement | 28-Sep-10 | 561,601 | $ | 3.75~$5.25 | |||||||
ShareBased_Payments_Tables
Share-Based Payments (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Employee Stock Option [Member] | ' | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | |||||||||||||||
Summary of the share options activity | ' | |||||||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||||||||
options | average | average | intrinsic | |||||||||||||
exercise price | remaining | value | ||||||||||||||
contractual term | ||||||||||||||||
Balance as of January 1, 2013 | 2,333,000 | 4.2 | ||||||||||||||
Forfeited | (540,000 | ) | 4.2 | |||||||||||||
Balance as of December 31, 2013 | 1,793,000 | $ | 4.2 | 0.5 | $ | 0 | ||||||||||
Exercisable as of December 31, 2013 | 1,793,000 | $ | 4.2 | 0.5 | $ | 0 | ||||||||||
Non employee stock option grants [Member] | ' | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | |||||||||||||||
Summary of the share options activity | ' | |||||||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||||||||
options | average | average | intrinsic | |||||||||||||
exercise price | remaining | value | ||||||||||||||
contractual term | ||||||||||||||||
Outstanding as of December 31, 2013 | 40,000 | $ | 4.2 | 1.5 years | $ | - | ||||||||||
Exercisable as of December 31, 2013 | 40,000 | $ | 4.2 | 1.5 years | $ | - |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Income Taxes [Abstract] | ' | ||||||||||||||||
Components of income (loss) before income tax expense (benefit) by jurisdiction | ' | ||||||||||||||||
Year ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
PRC | $ | 12,344 | $ | 1,303 | |||||||||||||
U.S. | (1,671 | ) | (3,512 | ) | |||||||||||||
Hong Kong and BVI | (2,565 | ) | (2,847 | ) | |||||||||||||
Income (loss) before income taxes | $ | 8,108 | $ | (5,056 | ) | ||||||||||||
Group's income tax expense | ' | ||||||||||||||||
Year ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Current income tax expense | $ | 3,224 | $ | 3,595 | |||||||||||||
Deferred income tax (benefit) expense | 252 | (2,801 | ) | ||||||||||||||
Total income tax expense | $ | 3,476 | $ | 794 | |||||||||||||
Reconciliation between income tax expense (benefit) and the amounts computed by applying the PRC statutory income tax rate | ' | ||||||||||||||||
Year ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Loss before income taxes | $ | 8,108 | $ | (5,056 | ) | ||||||||||||
Computed expected | |||||||||||||||||
Income tax expense (benefit) | 2,027 | 25 | % | (1,264 | ) | 25 | % | ||||||||||
Tax loss not recognized | 1,110 | 13.7 | % | 1,485 | (29.4 | %) | |||||||||||
Effect of different tax rates | (51 | ) | (0.6 | %) | 105 | (2.1 | %) | ||||||||||
Other | 30 | 0.4 | % | 126 | (2.5 | %) | |||||||||||
Permanent differences | 360 | 4.4 | % | 342 | (6.8 | %) | |||||||||||
Actual income tax expense | $ | 3,476 | 42.9 | % | $ | 794 | (15.7 | %) | |||||||||
Income tax effects of temporary differences | ' | ||||||||||||||||
As of December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Net operating loss carry forwards | $ | 7,415 | $ | 6,356 | |||||||||||||
Depreciation | 1,199 | 963 | |||||||||||||||
Interest income receivable on pledged bank deposits | - | - | |||||||||||||||
Prepaid expenses and other current assets | 1,461 | 1,439 | |||||||||||||||
Accrued bonus | 4 | 183 | |||||||||||||||
Other | (23 | ) | 216 | ||||||||||||||
Total deferred income tax assets | 10,056 | 9,157 | |||||||||||||||
Valuation allowance | (7,415 | ) | (6,356 | ) | |||||||||||||
Net deferred tax assets | $ | 2,641 | $ | 2,801 | |||||||||||||
Net operating loss deferred tax assets | ' | ||||||||||||||||
Expiration date | |||||||||||||||||
US | $ | (17,054 | ) | 31-Dec-13 | |||||||||||||
Hong Kong | (9,095 | ) | Not applicable | ||||||||||||||
BVI | (211 | ) | Not applicable | ||||||||||||||
(26,360 | ) | ||||||||||||||||
Related_Party_Transactions_and1
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Related Party Transactions and Relationships and Transactions With Certain Other Parties [Abstract] | ' | ||||||||||||||||
Related party transactions, Relationships | ' | ||||||||||||||||
Name of parties | Relationship | ||||||||||||||||
Mr. Chunfeng Tao | Majority stockholder | ||||||||||||||||
Mr. Jicun Wang | Principal stockholder | ||||||||||||||||
Mr. Peijun Chen | Principal stockholder | ||||||||||||||||
Ms. Sumei Chen | Member of the Company’s Board of Supervisors and spouse of Mr. Wang | ||||||||||||||||
Ms. Yushui Huang | Vice President of Administration, Ningbo Keyuan | ||||||||||||||||
Ningbo Pacific Ocean Shipping Co., Ltd (Ningbo Pacific) | 100% ownership by Mr. Wang | ||||||||||||||||
Ningbo Hengfa Metal Product Co., Ltd (Ningbo Hengfa, former name “Ningbo Tenglong”) | 100% ownership by Mr. Chen | ||||||||||||||||
Related party transactions and amounts outstanding with the related parties | ' | ||||||||||||||||
Year ended December 31 | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Guarantee for bank borrowings (a) | $ | - | $ | 34,399 | |||||||||||||
Loan guarantee fee (a) | $ | 103 | $ | 307 | |||||||||||||
Advance payments to related parties (b) | $ | 43 | $ | 40 | |||||||||||||
(a) | Guarantees for Bank Loans | ||||||||||||||||
Guarantee provided | |||||||||||||||||
during year ended | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Mr. Tao | $ | - | $ | 16,645 | |||||||||||||
Jicun Wang and Sumei Chen | - | 17,754 | |||||||||||||||
Total | $ | - | $ | 34,399 | |||||||||||||
Bank loans Guaranteed as of | |||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Jicun Wang and Sumei Chen | $ | - | $ | 13,054 | |||||||||||||
Ningbo Pacific | - | 25,426 | |||||||||||||||
Total | $ | - | $ | 38,480 | |||||||||||||
(a) Beginning in 2011, loan guarantee fees of 0.3% of the loan principal guaranteed are to be paid quarterly. In the year ended December 31, 2013, loan guarantee fees were approximately $0.1 million for Ningbo Pacific. In 2012, loan guarantee fees were approximately $0.1 million and $0.3 million for Ningbo Hengfa and Ningbo Pacific, respectively. | |||||||||||||||||
(b) Advance payments to related parties consist of Mr. Tao for advances made for business purposes. These amounts are unsecured interest free and due on demand. | |||||||||||||||||
Guarantees for bank loans | ' | ||||||||||||||||
Guarantee provided | |||||||||||||||||
during year ended | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Mr. Tao | $ | - | $ | 16,645 | |||||||||||||
Jicun Wang and Sumei Chen | - | 17,754 | |||||||||||||||
Total | $ | - | $ | 34,399 | |||||||||||||
Bank loans Guaranteed as of | |||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Jicun Wang and Sumei Chen | $ | - | $ | 13,054 | |||||||||||||
Ningbo Pacific | - | 25,426 | |||||||||||||||
Total | $ | - | $ | 38,480 | |||||||||||||
Relationships and transactions with certain other parties | ' | ||||||||||||||||
Name of parties | Relationship | ||||||||||||||||
Ningbo Xinhe Logistic Co., Ltd (Ningbo Xinhe) | 10% ownership by Ms. Huang | ||||||||||||||||
Ningbo Litong Petrochemical Co., Ltd (Ningbo Litong) | Former 12.75% nominee shareholder of Ningbo Keyuan | ||||||||||||||||
Ningbo Anqi Petrochemical Co., Ltd (Ningbo Anqi) | A related party through September 2011 when control transferred | ||||||||||||||||
Ningbo Lide Investment Co., Ltd. (Ningbo Lide) (formerly Ningbo Kewei) | A related party through September 2011 when control transferred | ||||||||||||||||
Ningbo Kunde Petrochemical Co, Ltd. (Ningbo Kunde) | A related party through September 2011 when control transferred | ||||||||||||||||
Transactions and amounts outstanding with certain other parties | ' | ||||||||||||||||
Year ended December 31 | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
($’000) | ($’000) | ||||||||||||||||
Sales of products (c) | $ | 69,476 | $ | 146,716 | |||||||||||||
Purchase of raw materials (d) | $ | 65,713 | $ | 41,312 | |||||||||||||
Purchase of transportation services (e) | $ | 3,613 | $ | 2,813 | |||||||||||||
Guarantee for bank borrowings (f) | $ | 280,332 | $ | 365,184 | |||||||||||||
Loan guarantee fees (f) | $ | 2,474 | $ | 1,411 | |||||||||||||
Amounts due to these parties(g) | $ | 369 | $ | - | |||||||||||||
Advance payments to these parties (h) | $ | 11,055 | $ | - | |||||||||||||
Advance Received from these parties (i) | $ | 218 | $ | - | |||||||||||||
(c) The Group sold finished products of approximately $30.7 million and $45.4 million to Ningbo Litong for the years ended December 31, 2013 and 2012, respectively. The Group sold finished products of approximately $38.0 million and $98.2 million to Ningbo Kunde for the years ended December 31, 2013 and 2012, respectively. The Group sold finished products of approximately $0.8 million and $3.1 million to Ningbo Lide for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
(d) The Group purchased raw materials of approximately $15.8 million and $26.0 from Ningbo Litong for the years ended December 31, 2013 and 2012, respectively. The Group purchased raw materials of approximately $2.7 million and $11.6 from Ningbo Kunde for the years ended December 31, 2013 and 2012, respectively. The Group purchased raw materials of approximately $47.2 million and $3.7 from Ningbo Lide for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
(e) The Group purchased transportation services of $3.6 million and approximately $2.8 million from Ningbo Xinhe during the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
(f) Guarantees for Bank Loans | |||||||||||||||||
Guarantee provided | Bank loans | ||||||||||||||||
during the year ended | Guaranteed as of | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
($’000) | ($’000) | ($’000) | ($’000) | ||||||||||||||
Ningbo Litong | $ | 148,507 | $ | 103,805 | $ | 150,483 | $ | 30,710 | |||||||||
Ningbo Lide | 131,825 | 261,379 | 133,579 | 122,651 | |||||||||||||
Total | $ | 280,332 | $ | 365,184 | $ | 284,062 | $ | 153,361 | |||||||||
Beginning in January 2011, loan guarantee fees was approximately 0.3% of the loan principal guaranteed. Guarantee fees payable to Litong and Lide were approximately $1.1 million and $1.4 million, respectively, for the year ended December 31, 2013. Guarantee fees payable to Litong and Lide were approximately $0.7 million each for the year ended December 31, 2012. | |||||||||||||||||
(g) At December 31, 2013, approximately $0.4 million was due to Xinhe. | |||||||||||||||||
(h) At December 31, 2013, advance payments to these parties consist of payments to Litong, Lide and Xinhe of $3.8 million, $7.2 million, and $0.01 million, respectively. | |||||||||||||||||
(i) At December 31, 2013, advances received from these parties consist of amounts received from Litong of $0.2 million. | |||||||||||||||||
Guarantees for bank loans with certain other parties | ' | ||||||||||||||||
Guarantee provided | Bank loans | ||||||||||||||||
during the year ended | Guaranteed as of | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
($’000) | ($’000) | ($’000) | ($’000) | ||||||||||||||
Ningbo Litong | $ | 148,507 | $ | 103,805 | $ | 150,483 | $ | 30,710 | |||||||||
Ningbo Lide | 131,825 | 261,379 | 133,579 | 122,651 | |||||||||||||
Total | $ | 280,332 | $ | 365,184 | $ | 284,062 | $ | 153,361 | |||||||||
Consolidated_Segment_Data_Tabl
Consolidated Segment Data (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Consolidated Segment Data [Abstract] | ' | ||||||||||||||||||||||||
Summary of selected information in segment structure presented in following tables | ' | ||||||||||||||||||||||||
Year end December 31, 2013 | Year end December 31, 2012 | ||||||||||||||||||||||||
Petrochemical | Rubber | Total | Petrochemical | Rubber | Total | ||||||||||||||||||||
($’000) | ($’000) | ($’000) | ($’000) | ($’000) | ($’000) | ||||||||||||||||||||
Revenue | $ | 568,562 | $ | 77,987 | $ | 646,549 | $ | 679,636 | $ | 70,992 | $ | 750,628 | |||||||||||||
Income from operations | $ | 4,609 | $ | 5,601 | $ | 10,210 | $ | 9,501 | $ | 5,962 | $ | 15,467 | |||||||||||||
Interest income | $ | 8,342 | $ | 80 | $ | 8,422 | $ | 5,938 | $ | 2 | $ | 5,940 | |||||||||||||
Interest expense | $ | 18,809 | $ | - | $ | 18,809 | $ | 25,065 | $ | - | $ | 25,065 | |||||||||||||
Depreciation | $ | 7,784 | $ | 3,448 | $ | 11,232 | $ | 9,307 | $ | 2,620 | $ | 11,927 | |||||||||||||
Amortization | $ | 582 | $ | - | $ | 582 | $ | 559 | $ | - | $ | 559 | |||||||||||||
Income tax expense | $ | 1,976 | $ | 1,500 | $ | 3,476 | $ | (295 | ) | $ | 1,089 | $ | 794 | ||||||||||||
Deferred tax assets | $ | 2,461 | $ | 180 | $ | 2,641 | $ | 2,758 | $ | 43 | $ | 2,801 | |||||||||||||
Total assets | $ | 756,446 | $ | 117,636 | $ | 874,082 | $ | 577,202 | $ | 89,672 | $ | 666,874 | |||||||||||||
Keyuan_Petrochemicals_Inc_Pare1
Keyuan Petrochemicals Inc. (Parent Company) (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Keyuan Petrochemicals, Inc. (Parent Company) [Abstract] | ' | ||||||||
Condensed Balance Sheets | ' | ||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Cash | $ | 5 | $ | 5 | |||||
Other current assets | 328 | 21 | |||||||
Investment in subsidiaries | 41,774 | 41,774 | |||||||
Total assets | 42,107 | 41,800 | |||||||
Accounts payable | 272 | 272 | |||||||
Accrued expenses and other payables | 2,925 | 3,814 | |||||||
Inter-company liabilities | 12,112 | 9,872 | |||||||
Dividends payable | 2,382 | 2,382 | |||||||
Series B convertible preferred stock | 16,868 | 16,452 | |||||||
Total stockholders' equity | 7,548 | 9,008 | |||||||
Total liabilities and stockholders' equity | $ | 42,107 | $ | 41,800 | |||||
Condensed Statements of Operations | ' | ||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
General and administrative expenses | $ | 1,671 | $ | 3,512 | |||||
Interest expense | - | - | |||||||
Net loss | $ | 1,671 | $ | 3,512 | |||||
Condensed Statements of Cash Flows | ' | ||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
($’000) | ($’000) | ||||||||
Cash flows from operating activities | |||||||||
Net Loss | $ | (1,671 | ) | $ | (3,512 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Share-based compensation expense | 770 | 1,590 | |||||||
Decrease in other assets | (889 | ) | 372 | ||||||
Decrease in accounts payable, accrued expenses and other payables | - | 608 | |||||||
(1,790 | ) | (942 | ) | ||||||
Net cash used in operating activities | |||||||||
Cash flows from financing activities | |||||||||
Advance from inter-group company | 1,790 | 942 | |||||||
Net cash provided by financing activities | 1,790 | 942 | |||||||
Net decrease in cash | - | - | |||||||
Cash at beginning of year | 5 | 5 | |||||||
Cash at end of year | $ | 5 | $ | 5 | |||||
Organization_and_Nature_of_Bus1
Organization and Nature of Business, Recent Events, and Going Concern and Management's Plans (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||||
Jul. 02, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2014 | 31-May-14 | Mar. 07, 2012 | Mar. 07, 2012 | |||
Subsequent Event [Member] | Subsequent Event [Member] | Guangxi Keyuan [Member] | Ningbo Keyuan [Member] | ||||||
Organization and Nature of Business, Recent Events, and Going Concern and Management's Plans (Textual) | ' | ' | ' | ' | ' | ' | ' | ||
Ownership percent | ' | ' | ' | ' | ' | 75.00% | 25.00% | ||
Civil penalty payable under the settlement terms | $1,000,000 | ' | ' | ' | ' | ' | ' | ||
Net income (loss) | ' | 4,632,000 | -5,850,000 | ' | ' | ' | ' | ||
Net cash provided by operating activities | ' | -53,093,000 | -7,095,000 | ' | ' | ' | ' | ||
Working capital deficit | ' | 209,700,000 | ' | ' | ' | ' | ' | ||
Short-term bank borrowings and bills payable | ' | 688,000,000 | ' | ' | ' | ' | ' | ||
Consumption tax recoverable | ' | 46,072,000 | [1] | 51,334,000 | [1] | ' | ' | ' | ' |
Additional consumption tax refund | ' | 9,600,000 | ' | ' | 400,000 | ' | ' | ||
Consumption tax refund | ' | ' | ' | 36,100,000 | ' | ' | ' | ||
Net income | ' | $4,600,000 | ' | ' | ' | ' | ' | ||
[1] | 6 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Buildings [Member] | ' |
Estimated useful lives of property, plant and equipment | ' |
Estimated Useful Lives | '45 years |
Vehicles [Member] | ' |
Estimated useful lives of property, plant and equipment | ' |
Estimated Useful Lives | '5 years |
Minimum [Member] | Plant, machinery and equipment [Member] | ' |
Estimated useful lives of property, plant and equipment | ' |
Estimated Useful Lives | '5 years |
Minimum [Member] | Office equipment and furniture [Member] | ' |
Estimated useful lives of property, plant and equipment | ' |
Estimated Useful Lives | '3 years |
Maximum [Member] | Plant, machinery and equipment [Member] | ' |
Estimated useful lives of property, plant and equipment | ' |
Estimated Useful Lives | '20 years |
Maximum [Member] | Office equipment and furniture [Member] | ' |
Estimated useful lives of property, plant and equipment | ' |
Estimated Useful Lives | '10 years |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details Textual) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Feb. 01, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Segment | Land Use Rights [Member] | Machinery and equipment [Member] | Machinery and equipment [Member] | Stock Options And Warrants [Member] | Stock Options And Warrants [Member] | |||||
Summary of Significant Accounting Policies (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ||
Estimated Useful Lives | ' | ' | ' | '15 to 50 years | '20 years from 15 years | '5 to 20 years | ' | ' | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | ' | ' | ' | ' | ' | 4,014,605 | 7,190,766 | ||
Depreciation expense | $11,232,000 | $11,927,000 | ' | ' | ' | $3,100,000 | ' | ' | ||
Cash | 12,309,000 | [1] | 23,378,000 | [1] | ' | ' | ' | ' | ' | ' |
Maturity period of short term bank borrowings | 'Three to six months | ' | ' | ' | ' | ' | ' | ' | ||
Maturity period of bills receivable | '6 months | ' | ' | ' | ' | ' | ' | ' | ||
Reimbursement on discounted bill receivable | 1,800,000 | 4,000,000 | ' | ' | ' | ' | ' | ' | ||
Minimum percentage of contribution in PRC on employee salary | 26.70% | ' | ' | ' | ' | ' | ' | ' | ||
Maximum percentage of contribution in PRC on employee salary | 28.70% | ' | ' | ' | ' | ' | ' | ' | ||
Employer contribution amount | 500,000 | 500,000 | 400,000 | ' | ' | ' | ' | ' | ||
Number of operating segments | 2 | ' | ' | ' | ' | ' | ' | ' | ||
Value added tax amount | $133 | ' | ' | ' | ' | ' | ' | ' | ||
Share price | $0.05 | ' | ' | ' | ' | ' | ' | ' | ||
[1] | Note 2(d) |
Inventories_Details
Inventories (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Components of inventories | ' | ' | ||
Raw materials | $37,747 | $26,433 | ||
Finished goods | 30,823 | 21,701 | ||
Work-in-process | 1,344 | 500 | ||
Total | $69,914 | [1] | $48,634 | [1] |
[1] | 3 |
Advances_from_Customers_Detail
Advances from Customers (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Advances from Customers (Textual) | ' | ' | ||
Percentage of sales contract price prepayments required from customers | 100.00% | ' | ||
Accounts receivable | $7,517 | [1] | $14,248 | [1] |
[1] | 2(g) |
Consumption_Tax_Recoverable_De
Consumption Tax Recoverable (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
Consumption Tax Recoverable (Textual) | ' | ' | ||
Consumption tax recoverable | $46,072,000 | [1] | $51,334,000 | [1] |
Additional consumption tax refund | $9,600,000 | ' | ||
[1] | 6 |
Other_Current_Assets_Details
Other Current Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Components of other current assets | ' | ' | ||
VAT recoverable | $56,667 | $31,751 | ||
Customs deposits for imported inventories | 3,680 | 21,648 | ||
Other | 4,842 | 2,921 | ||
Other current assets | $65,189 | [1] | $56,320 | [1] |
[1] | 7 |
Other_Current_Assets_Details_T
Other Current Assets (Details Textual) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other Current Assets (Textual) | ' | ' |
VAT recoverable included in non-current assets | $3,012 | $2,232 |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Property, plant and equipment | ' | ' | ||
Property, plant and equipment, Gross | $326,881 | $256,680 | ||
Less: accumulated depreciation | -41,375 | -29,077 | ||
Property, plant and equipment, Net | 285,506 | [1] | 227,603 | [1] |
Buildings [Member] | ' | ' | ||
Property, plant and equipment | ' | ' | ||
Property, plant and equipment, Gross | 6,303 | 3,920 | ||
Plant, machinery and equipment [Member] | ' | ' | ||
Property, plant and equipment | ' | ' | ||
Property, plant and equipment, Gross | 253,728 | 239,222 | ||
Vehicles [Member] | ' | ' | ||
Property, plant and equipment | ' | ' | ||
Property, plant and equipment, Gross | 1,274 | 950 | ||
Office equipment and furniture [Member] | ' | ' | ||
Property, plant and equipment | ' | ' | ||
Property, plant and equipment, Gross | 309 | 296 | ||
Construction-in-progress [Member] | ' | ' | ||
Property, plant and equipment | ' | ' | ||
Property, plant and equipment, Gross | $65,267 | $12,292 | ||
[1] | 8 |
Property_Plant_and_Equipment_D1
Property, Plant and Equipment (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Depreciation expense on property, plant and equipment | ' | ' |
Cost of sales | $10,370 | $13,254 |
Selling, general and administrative expenses | 862 | 189 |
Depreciation expense | $11,232 | $11,927 |
Property_Plant_and_Equipment_D2
Property, Plant and Equipment (Details Textual) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment (Textual) | ' | ' |
Interest capitalized | ' | $0.80 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Intangible assets | ' | ' | ||
Licensing agreements | 1,758 | 1,508 | ||
Less: Accumulated amortization | -772 | -628 | ||
Intangibles assets, net | 986 | [1] | 880 | [1] |
Licensing agreements [Member] | Minimum [Member] | ' | ' | ||
Intangible assets | ' | ' | ||
Licensing agreements, Amortization Period | '10 years | '10 years | ||
Licensing agreements [Member] | Maximum [Member] | ' | ' | ||
Intangible assets | ' | ' | ||
Licensing agreements, Amortization Period | '20 years | '20 years | ||
[1] | 9 |
Intangible_Assets_Details_Text
Intangible Assets (Details Textual) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Intangible Assets (Textual) | ' | ' |
Amortization of Intangible Assets | $0.10 | $0.10 |
Estimated amortization expense for each of the next five years | $0.10 | ' |
Land_Use_Rights_Details
Land Use Rights (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Land Use Rights | ' | ' | ||
Land use rights | $12,754 | $12,282 | ||
Less: Accumulated amortization | -2,091 | -1,574 | ||
Land use rights, Total | $10,663 | [1] | $10,708 | [1] |
[1] | 10 |
Land_Use_Rights_Details_Textua
Land Use Rights (Details Textual) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Land use rights (Textual) | ' | ' |
Amortization expense related to land use rights | $461 | $452 |
ShortTerm_Bank_Borrowings_Deta
Short-Term Bank Borrowings (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Summary of short-term bank borrowings | ' | ' | ||
Bank borrowings-secured/guaranteed | $424,436 | [1] | $295,146 | [1] |
[1] | 11 |
ShortTerm_Bank_Borrowings_Deta1
Short-Term Bank Borrowings (Details Textual) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short-term bank borrowings | $424,436,000 | [1] | $295,146,000 | [1] |
Range of maturity term | 'Two to twelve months | ' | ||
Interest range maximum | 7.20% | 7.93% | ||
Interest range minimum | 1.00% | 1.27% | ||
Short-term borrowing guaranteed by related party and third-party entities and individuals | 95,000,000 | ' | ||
Short-term borrowing guaranteed by land, buildings and equipment | 24,000,000 | ' | ||
Land buildings and equipment carrying amount | 91,000,000 | ' | ||
Shanghai Pudong Development Bank [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 33,000,000 | ' | ||
Shanghai Pudong Development Bank [Member] | One year fixed term deposit [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 9,000,000 | ' | ||
Bank of China [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 137,000,000 | ' | ||
Bank of China [Member] | One year fixed term deposit [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 78,000,000 | ' | ||
China Construction bank [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 103,000,000 | ' | ||
China Construction bank [Member] | One year fixed term deposit [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 43,000,000 | ' | ||
Agricultural Bank of China [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 33,000,000 | ' | ||
Agricultural Bank of China [Member] | One year fixed term deposit [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 20,000,000 | ' | ||
China Merchant Bank [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 33,000,000 | ' | ||
China Merchant Bank [Member] | One year fixed term deposit [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 23,000,000 | ' | ||
Ningbo Commerce Bank [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 5,000,000 | ' | ||
Ningbo Commerce Bank [Member] | One year fixed term deposit [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 5,000,000 | ' | ||
Bank Of Communication [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 24,000,000 | ' | ||
Bank Of Communication [Member] | One year fixed term deposit [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 3,000,000 | ' | ||
Guangdong Development Bank [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 4,000,000 | ' | ||
Guangdong Development Bank [Member] | One year fixed term deposit [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 5,000,000 | ' | ||
Bank Of Ningbo [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 30,000,000 | ' | ||
Bank Of Ningbo [Member] | One year fixed term deposit [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 1,000,000 | ' | ||
Shenzhen Development Bank [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | 22,000,000 | ' | ||
Shenzhen Development Bank [Member] | One year fixed term deposit [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Short term loan payable secured, carrying amount | $23,000,000 | ' | ||
Bank loans in RMB [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Weighted average interest rate | 5.63% | 6.21% | ||
Bank Loans In USD [Member] | ' | ' | ||
Short-Term Bank Borrowings (Textual) | ' | ' | ||
Weighted average interest rate | 2.72% | 3.97% | ||
[1] | 11 |
LongTerm_Bank_Borrowings_Detai
Long-Term Bank Borrowings (Details) (China Construction bank [Member], USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2011 |
China Construction bank [Member] | ' |
Long-Term Bank Borrowings (Textual) | ' |
Long term bank borrowing | $15.70 |
Interest rate on long term bank borrowing, Minimum | 7.29% |
Interest rate on long term bank borrowing, Maximum | 7.74% |
Accrued_Expenses_and_Other_Pay2
Accrued Expenses and Other Payables (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Accrued expenses and other payables | ' | ' | ||
Purchase of property, plant and equipment | $15,266 | $19,261 | ||
Accrued payroll and welfare | 1,075 | 1,156 | ||
Liquidated damages | 2,493 | 2,493 | ||
Other accruals and payables | 4,933 | 3,923 | ||
Accrued expenses and other payables | $23,767 | [1] | $26,833 | [1] |
[1] | 12 |
Series_B_Convertible_Preferred1
Series B Convertible Preferred Stock and Related Financing Agreements (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||||
Sep. 24, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | |
Series B Private Placement [Member] | Series B Private Placement [Member] | Series B convertible preferred stock [Member] | Series B convertible preferred stock [Member] | |||
Series B Investors [Member] | ||||||
Convertible Preferred Stock and Related Financing Agreements (Textual) | ' | ' | ' | ' | ' | ' |
Conversion price | ' | ' | ' | ' | $3.75 | ' |
Convertible preferred stock, conversion terms | ' | ' | ' | ' | 'The Series B convertible preferred stock shall be automatically converted into common stock (for the same conversion price as described above) upon the third year anniversary of the issuance date of the Series B convertible preferred stock. | ' |
Price per share of redeemable preferred stock | ' | ' | ' | ' | $3.75 | $3.75 |
Events required before redemption | ' | ' | ' | ' | '(1) Merger or consolidation where the holders of the Company's outstanding voting securities prior to such merger or consolidation do not own over 50% of the outstanding voting securities of the merged or consolidated entity immediately after such merger or consolidation; or the sale of all or substantially all of the Company's properties or assets (collectively, an "Organic Change").(2) Management considers the occurrence of the Organic Change is solely within the control of the Company. | ' |
Annual dividend rate | ' | ' | ' | ' | 6.00% | ' |
Distribution of annual cash dividend | ' | ' | ' | ' | ' | ' |
Description of Escrow shares released back | ' | ' | 'The Escrow Shares were to be released back to Delight Reward upon the Company's achievement of no less than 95% of a net income of $33 million for the year ended December 31, 2010 | ' | ' | ' |
Common stock issued pursuant to escrow account | ' | ' | ' | 3,400,000 | ' | ' |
Targeted net income | ' | 4,600,000 | ' | 33,000,000 | ' | ' |
Shares expected to be release on achievement of performance threshold | ' | ' | 3,400,000 | ' | ' | ' |
Amount of fair value dividend transfer | ' | $548,000 | ' | ' | ' | ' |
Fair value estimated common stock per share | 0.7 | ' | ' | ' | ' | ' |
Fair value assumptions, risk free interest rate | 0.10% | ' | ' | ' | ' | ' |
Fair value assumptions, expected volatility rate | 126.36% | ' | ' | ' | ' | ' |
Fair value assumptions, expected term | '1 year | ' | ' | ' | ' | ' |
Common_Stock_Purchase_Warrants2
Common Stock Purchase Warrants (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Series A Warrants [Member] | ' |
Schedule of issued warrants to purchase the Company's common stock | ' |
Issuance dates | 'April 22 and May 18, 2010 |
Maximum number of shares of common stock | 748,704 |
Exercise price | $4.50 |
Series B Warrants [Member] | ' |
Schedule of issued warrants to purchase the Company's common stock | ' |
Issuance dates | 'April 22 and May 18, 2010 |
Maximum number of shares of common stock | 748,704 |
Exercise price | $5.25 |
Series C Warrants [Member] | ' |
Schedule of issued warrants to purchase the Company's common stock | ' |
Issuance dates | 'September 28, 2010 |
Maximum number of shares of common stock | 810,002 |
Exercise price | $4.50 |
Series D Warrants [Member] | ' |
Schedule of issued warrants to purchase the Company's common stock | ' |
Issuance dates | 'September 28, 2010 |
Maximum number of shares of common stock | 810,002 |
Exercise price | $5.25 |
Series A Private Placement [Member] | ' |
Schedule of issued warrants to purchase the Company's common stock | ' |
Issuance dates | 'April 22 and May 18, 2010 |
Maximum number of shares of common stock | 718,755 |
Series A Private Placement [Member] | Maximum [Member] | ' |
Schedule of issued warrants to purchase the Company's common stock | ' |
Exercise price | $5.25 |
Series A Private Placement [Member] | Minimum [Member] | ' |
Schedule of issued warrants to purchase the Company's common stock | ' |
Exercise price | $3.50 |
Series B Private Placement [Member] | ' |
Schedule of issued warrants to purchase the Company's common stock | ' |
Issuance dates | 'September 28, 2010 |
Maximum number of shares of common stock | 718,755 |
Series B Private Placement [Member] | Maximum [Member] | ' |
Schedule of issued warrants to purchase the Company's common stock | ' |
Exercise price | $5.25 |
Series B Private Placement [Member] | Minimum [Member] | ' |
Schedule of issued warrants to purchase the Company's common stock | ' |
Exercise price | $3.75 |
Common_Stock_Purchase_Warrants3
Common Stock Purchase Warrants (Details Textual) | 12 Months Ended |
Dec. 31, 2013 | |
Series A Warrants [Member] | ' |
Common Stock Purchase Warrants (Textual) | ' |
Warrants Expiration Date | 'Expired in 2013. |
Series B Warrants [Member] | ' |
Common Stock Purchase Warrants (Textual) | ' |
Warrants Expiration Date | 'Expired in 2013. |
Series C Warrants [Member] | ' |
Common Stock Purchase Warrants (Textual) | ' |
Warrants Extend Term | 'Three years to four years. |
Warrants Expiration Date | 'Expire on September 28, 2014. |
Series D Warrants [Member] | ' |
Common Stock Purchase Warrants (Textual) | ' |
Warrants Extend Term | 'Three years to four years. |
Warrants Expiration Date | 'Expire on September 28, 2014. |
Series A Private Placement [Member] | ' |
Common Stock Purchase Warrants (Textual) | ' |
Warrants Expiration Date | 'Expired in 2013. |
Series B Private Placement [Member] | ' |
Common Stock Purchase Warrants (Textual) | ' |
Warrants Expiration Date | 'Expired in 2013. |
ShareBased_Payments_Details
Share-Based Payments (Details) (USD $) | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 |
Stock Options [Member] | ' |
Summary of stock option activity | ' |
Number of options, Balance as of January 1,2013 | 2,333,000 |
Number of options, Forfeited | -540,000 |
Number of options, Balance as of December 31, 2013 | 1,793,000 |
Number of options, Exercisable as of December 31, 2013 | 1,793,000 |
Weighted average exercise price, Forfeited | $4.20 |
Weighted average exercise price, Balance as of December 31, 2013 | $4.20 |
Weighted average exercise price, Exercisable as of December 31, 2013 | $4.20 |
Weighted average remaining contractual term | '6 months |
Weighted average remaining contractual term, Exercisable | '6 months |
Aggregate intrinsic value, Exercisable as of December 31, 2013 | $0 |
Non employee stock option grants [Member] | ' |
Summary of stock option activity | ' |
Number of options, Balance as of December 31, 2013 | 40,000 |
Number of options, Exercisable as of December 31, 2013 | 40,000 |
Weighted average exercise price, Balance as of December 31, 2013 | $4.20 |
Weighted average exercise price, Exercisable as of December 31, 2013 | $4.20 |
Weighted average remaining contractual term | '1 year 6 months |
Weighted average remaining contractual term, Exercisable | '1 year 6 months |
Aggregate intrinsic value, Exercisable as of December 31, 2013 | ' |
ShareBased_Payments_Details_Te
Share-Based Payments (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | |||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2010 | Jul. 01, 2010 | Aug. 04, 2010 | Dec. 31, 2010 | Dec. 31, 2012 | Jun. 30, 2010 | Jun. 30, 2010 |
Senior Management Employees [Member] | Two Independent Directors [Member] | Employees [Member] | 2010 Equity Incentive Plan [Member] | 2010 Equity Incentive Plan [Member] | Vest and Exercisable Condition 1 [Member] | Vest and Exercisable Condition 2 [Member] | ||||
Senior Management Employees [Member] | Senior Management Employees [Member] | |||||||||
Share-based payments (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Shares issuable pursuant to Equity Incentive Plan | ' | ' | ' | ' | ' | ' | ' | 6,000,000 | ' | ' |
Number of stock options granted | ' | 0 | 0 | 3,000,000 | 80,000 | 700,000 | ' | ' | ' | ' |
Contractual term of stock option | ' | ' | ' | '5 years | '5 years | '5 years | ' | ' | ' | ' |
Exercise price of stock option | ' | ' | ' | $4.20 | $4.20 | $4.50 | ' | ' | ' | ' |
Condition for stock option to vest and become exercisable | ' | ' | ' | ' | 'Independent directors are re-elected for successive one year terms one year after the stock options issuance date. | ' | ' | ' | ' | ' |
Grant date fair value of stock options | ' | ' | ' | $3.30 | $0.10 | $1.30 | ' | ' | ' | ' |
Number of stock options vested | ' | ' | ' | ' | 40,000 | ' | ' | ' | 2,810,000 | 190,000 |
Cancellation of stock option granted to certain employees | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' |
Remaining stock option subject to vest and exercisable | ' | ' | ' | ' | 40,000 | ' | ' | ' | ' | ' |
Vesting period of stock options | ' | ' | ' | ' | '1 year | '3 years | ' | ' | '3 years | ' |
Percentage of stock option vest and exercisable in year one | ' | ' | ' | ' | ' | 30.00% | ' | ' | 30.00% | 40.00% |
Percentage of stock option vest and exercisable in year two | ' | ' | ' | ' | ' | 40.00% | ' | ' | 40.00% | 60.00% |
Percentage of stock option vest and exercisable in year three | ' | ' | ' | ' | ' | 30.00% | ' | ' | 30.00% | ' |
Unrecognized compensation costs related to employee stock options | 0.7 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of incentive stock option | 'Shall not be less than 100% of the fair market value of a share on the date of grant. | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of incentive stock option | 'Not greater than 10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of committed cash payment | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' |
Statutory_Reserves_Details
Statutory Reserves (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Statutory Reserves (Textual) | ' | ' |
Minimum percentage allocation of after tax profit | 10.00% | ' |
Percentage of statutory reserve balance of registered capital | 50.00% | ' |
Statutory reserve | $5.70 | $4.10 |
Stock_Repurchase_Program_Detai
Stock Repurchase Program (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |
Sep. 17, 2012 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' | ' |
Authorized amount for stock repurchases | $2,000,000 | $2,000,000 | ' | ' |
Stock repurchase price per share | $1.50 | $1.50 | ' | $1.14 |
Number of treasury shares acquired | ' | ' | 126,148 | ' |
Treasury stock value repurchased | ' | ' | $143,000 | ' |
Commitment_and_Contingency_Det
Commitment and Contingency (Details) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Contingency (Textual) | ' |
Outstanding letter's of Credit | $174 |
Contractual capital commitments for purchases of equipment | $15.30 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Components of loss before income tax expenses (benefit) by jurisdictions: | ' | ' |
Loss before income taxes | $8,108 | ($5,056) |
PRC [Member] | ' | ' |
Components of loss before income tax expenses (benefit) by jurisdictions: | ' | ' |
Loss before income taxes | 12,344 | 1,303 |
U.S. [Member] | ' | ' |
Components of loss before income tax expenses (benefit) by jurisdictions: | ' | ' |
Loss before income taxes | -1,671 | -3,512 |
Hong Kong and BVI [Member] | ' | ' |
Components of loss before income tax expenses (benefit) by jurisdictions: | ' | ' |
Loss before income taxes | ($2,565) | ($2,847) |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Group's income tax expense | ' | ' | ||
Current income tax expense | $3,224 | $3,595 | ||
Deferred income tax expense (benefit) | 245 | -2,763 | ||
Actual (Total) income tax expense | $3,476 | [1] | $794 | [1] |
[1] | 19 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Income tax expense reconciliation | ' | ' | ||
Loss before income taxes | $8,108 | ($5,056) | ||
Computed expected | ' | ' | ||
Computed expected, Percentage | ' | ' | ||
Income tax benefit | 2,027 | -1,264 | ||
Income tax benefit, Percentage | 25.00% | 25.00% | ||
Tax loss not recognized | 1,110 | 1,485 | ||
Tax loss not recognized, percentage | 13.70% | -29.40% | ||
Effect of different tax rates | -51 | 105 | ||
Effect of different tax rates, percentage | -0.60% | -2.10% | ||
Others | 30 | 126 | ||
Others, Percentage | 0.40% | -2.50% | ||
Permanent differences | 360 | 342 | ||
Permanent differences, percentage | 4.40% | -6.80% | ||
Actual (Total) income tax expense | $3,476 | [1] | $794 | [1] |
Actual income tax expense, Percentage | 42.90% | -15.70% | ||
[1] | 19 |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Summary of deferred income tax assets | ' | ' |
Net operating loss carry forwards | $7,415 | $6,356 |
Depreciation | 1,199 | 963 |
Interest income receivable on pledged bank deposits | ' | ' |
Prepaid expenses and other current assets | 1,461 | 1,439 |
Accrued bonus | 4 | 183 |
Other | -23 | 216 |
Total deferred income tax assets | 10,056 | 9,157 |
Valuation allowance | -7,415 | -6,356 |
Net deferred tax assets | $2,641 | $2,801 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Deferred tax assets, net operating loss | ' |
Net operating loss | ($26,360) |
U.S. [Member] | ' |
Deferred tax assets, net operating loss | ' |
Net operating loss | -17,054 |
Net operating loss carryforward expiration date, description | 31-Dec-13 |
Hong kong [Member] | ' |
Deferred tax assets, net operating loss | ' |
Net operating loss | -211 |
BVI [Member] | ' |
Deferred tax assets, net operating loss | ' |
Net operating loss | ($9,095) |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) | 12 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | |
USD ($) | CNY | USD ($) | Maximum [Member] | Minimum [Member] | |
Income taxes (Textual) | ' | ' | ' | ' | ' |
Federal statutory income tax rate | 34.00% | 34.00% | ' | 35.00% | 15.00% |
Deferred income tax liabilities | $9,400,000 | ' | $11,100,000 | ' | ' |
People republic of China statutory income tax rate | 25.00% | 25.00% | ' | ' | ' |
Net operating tax loss carried forwards | 7,415,000 | ' | 6,356,000 | ' | ' |
Tax rate levied on non PRC - resident enterprises | 10.00% | 10.00% | ' | ' | ' |
Undistributed earnings | 44,500,000 | ' | 37,700,000 | ' | ' |
Statute of limitations for underpayment of taxes | '3 years | '3 years | ' | ' | ' |
Statute of limitations for underpayment of taxes more than specified limit | '5 years | '5 years | ' | ' | ' |
Underpayment of taxes | $15,000,000 | 100,000,000 | ' | ' | ' |
Statute of limitations in case of transfer pricing | '10 years | '10 years | ' | ' | ' |
Significant_Concentrations_and1
Significant Concentrations and Risks (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Customer | Customer | ||
Significant concentrations and risks (Textual) | ' | ' | ' |
Cash and pledged bank deposits in financial institutions | $349 | $225 | ' |
Percentage of revenue over that customer treated as major customer | 10.00% | 13.00% | ' |
Purchase (net of VAT) from major supplier | 459 | 549 | ' |
Purchase from major supplier percentage | 80.00% | 78.00% | ' |
Purchase from largest supplier, Amount | 358 | 474 | ' |
Purchase from largest supplier, Percentage | 57.00% | 68.00% | ' |
Short-term financing provided by supplier | ' | 29 | ' |
Accounts payable | ' | 20 | ' |
Interest paid | ' | 0.43 | ' |
Non-interest bearing advance from supplier | ' | 10 | ' |
Number of Customers | 2 | 2 | ' |
Sales to major customer, Percentage | ' | 13.00% | 18.00% |
Purchase of heavy oil | 416.1 | ' | ' |
Sale of heavy oil | 414.5 | ' | ' |
Trading loss of heavy oil | $1.60 | ' | ' |
Customer One [Member] | ' | ' | ' |
Significant concentrations and risks (Textual) | ' | ' | ' |
Sales to major customer, Percentage | 25.00% | 100.00% | ' |
Customer Two [Member] | ' | ' | ' |
Significant concentrations and risks (Textual) | ' | ' | ' |
Sales to major customer, Percentage | 47.00% | 100.00% | ' |
Related_Party_Transactions_and2
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Mr. Chunfeng Tao [Member] | ' |
Parties to the related party transactions | ' |
Relationship | 'Majority stockholder |
Mr. Jicun Wang [Member] | ' |
Parties to the related party transactions | ' |
Relationship | 'Principal stockholder |
Mr. Peijun Chen [Member] | ' |
Parties to the related party transactions | ' |
Relationship | 'Principal stockholder |
Ms. Sumei Chen [Member] | ' |
Parties to the related party transactions | ' |
Relationship | 'Member of the Company's Board of Supervisors and spouse of Mr. Wang |
Ms. Yushui Huang [Member] | ' |
Parties to the related party transactions | ' |
Relationship | 'Vice President of Administration, Ningbo Keyuan |
Ningbo Pacific Ocean Shipping Co., Ltd (Ningbo Pacific) [Member] | ' |
Parties to the related party transactions | ' |
Relationship | '100% ownership by Mr. Wang |
Ningbo Hengfa Metal Product Co., Ltd (Ningbo Hengfa, former name "Ningbo Tenglong") [Member] | ' |
Parties to the related party transactions | ' |
Relationship | '100% ownership by Mr. Chen |
Related_Party_Transactions_and3
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Details 1) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Amounts outstanding with the related parties | ' | ' | ||
Guarantee for bank borrowings (a) | ' | [1] | $34,399 | [1] |
Loan guarantee fee (a) | 103 | [1] | 307 | [1] |
Advance payments to related parties (b) | $43 | [2] | $40 | [2] |
[1] | Beginning in 2011, loan guarantee fees of 0.3% of the loan principal guaranteed are to be paid quarterly. In the year ended December 31, 2013, loan guarantee fees were approximately $0.1 million for Ningbo Pacific. In 2012, loan guarantee fees were approximately $0.1 million and $0.3 million for Ningbo Hengfa and Ningbo Pacific, respectively. | |||
[2] | Advance payments to related parties consist of Mr. Tao for advances made for business purposes. These amounts are unsecured interest free and due on demand. |
Related_Party_Transactions_and4
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Guarantees for Bank Loans | ' | ' |
Guarantee provided during the year | ' | $34,399 |
Bank loans guaranteed | ' | 38,480 |
Mr. Tao [Member] | ' | ' |
Guarantees for Bank Loans | ' | ' |
Guarantee provided during the year | ' | 16,645 |
Jicun Wang and Sumei Chen [Member] | ' | ' |
Guarantees for Bank Loans | ' | ' |
Guarantee provided during the year | ' | 17,754 |
Bank loans guaranteed | ' | 13,054 |
Ningbo Pacific [Member] | ' | ' |
Guarantees for Bank Loans | ' | ' |
Bank loans guaranteed | ' | $25,426 |
Related_Party_Transactions_and5
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Details 3) (Certain Other Parties [Member]) | 12 Months Ended |
Dec. 31, 2013 | |
Ningbo Xinhe Logistic Co., Ltd (Ningbo Xinhe) [Member] | ' |
Relationships and transactions with certain other parties | ' |
Relationship | '10% ownership by Ms. Huang |
Ningbo Litong Petrochemical Co., Ltd (Ningbo Litong) [Member] | ' |
Relationships and transactions with certain other parties | ' |
Relationship | 'Former 12.75% nominee shareholder of Ningbo Keyuan |
Ningbo Lide Investment Co., Ltd. (Ningbo Lide) (formerly Ningbo Kewei) | ' |
Relationships and transactions with certain other parties | ' |
Relationship | 'A related party through September 2011 when control transferred |
Ningbo Anqi Petrochemical Co., Ltd (Ningbo Anqi) [Member] | ' |
Relationships and transactions with certain other parties | ' |
Relationship | 'A related party through September 2011 when control transferred |
Ningbo Kunde Petrochemical Co., Ltd (Ningbo Kunde) [Member] | ' |
Relationships and transactions with certain other parties | ' |
Relationship | 'A related party through September 2011 when control transferred |
Related_Party_Transactions_and6
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Details 4) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Transactions and amounts outstanding with certain other parties | ' | ' | ||
Sales of products (c) | $69,746 | [1] | $146,761 | [1] |
Purchase of raw materials (d) | 65,713 | [2] | 41,312 | [2] |
Purchase of transportation services (e) | 3,613 | [3] | 2,813 | [3] |
Guarantee for bank borrowings (f) | 280,332 | [4] | 365,184 | [4] |
Loan guarantee fees (f) | 2,474 | [4] | 1,411 | [4] |
Amounts due to these parties(g) | 369 | [5] | ' | [5] |
Advance payments to these parties (h) | 11,055 | [6] | ' | [6] |
Advance Received from these parties (i) | 218 | [7] | ' | [7] |
Ningbo Litong [Member] | ' | ' | ||
Transactions and amounts outstanding with certain other parties | ' | ' | ||
Advance Received from these parties (i) | ' | ' | ||
[1] | The Group sold finished products of approximately $30.7 million and $45.4 million to Ningbo Litong for the years ended December 31, 2013 and 2012, respectively. The Group sold finished products of approximately $38.0 million and $98.2 million to Ningbo Kunde for the years ended December 31, 2013 and 2012, respectively. The Group sold finished products of approximately $0.8 million and $3.1 million to Ningbo Lide for the years ended December 31, 2013 and 2012, respectively. | |||
[2] | The Group purchased raw materials of approximately $15.8 million and $26.0 from Ningbo Litong for the years ended December 31, 2013 and 2012, respectively. The Group purchased raw materials of approximately $2.7 million and $11.6 from Ningbo Kunde for the years ended December 31, 2013 and 2012, respectively. The Group purchased raw materials of approximately $47.2 million and $3.7 from Ningbo Lide for the years ended December 31, 2013 and 2012, respectively. | |||
[3] | The Group purchased transportation services of $3.6 million and approximately $2.8 million from Ningbo Xinhe during the years ended December 31, 2013 and 2012, respectively. | |||
[4] | Beginning in January 2011, loan guarantee fees was approximately 0.3% of the loan principal guaranteed. Guarantee fees payable to Litong and Lide were approximately $1.1 million and $1.4 million, respectively, for the year ended December 31, 2013. Guarantee fees payable to Litong and Lide were approximately $0.7 million each for the year ended December 31, 2012. | |||
[5] | At December 31, 2013, approximately $0.4 million was due to Xinhe. | |||
[6] | At December 31, 2013, advance payments to these parties consist of payments to Litong, Lide and Xinhe of $3.8 million, $7.2 million, and $0.01 million, respectively. | |||
[7] | At December 31, 2013, advances received from these parties consist of amounts received from Litong of $0.2 million. |
Related_Party_Transactions_and7
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Details 5) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Guarantees for bank loans from other certain parties | ' | ' |
Guarantee provided during the period | $280,332 | $365,184 |
Bank loans guaranteed | 284,062 | 153,361 |
Ningbo Litong [Member] | ' | ' |
Guarantees for bank loans from other certain parties | ' | ' |
Guarantee provided during the period | 148,507 | 103,805 |
Bank loans guaranteed | 150,483 | 30,710 |
Ningbo Lide (Member) | ' | ' |
Guarantees for bank loans from other certain parties | ' | ' |
Guarantee provided during the period | 131,825 | 261,379 |
Bank loans guaranteed | $133,579 | $122,651 |
Related_Party_Transactions_and8
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Details Textual) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Textual) | ' | ' | ||
Sales of products | ' | ' | ||
Purchase of raw material | ' | ' | ||
Purchase of transportation services | ' | 2,813,000 | ||
Loan guarantee fee (a) | 103,000 | [1] | 307,000 | [1] |
Amounts due to these parties | 369,000 | [2] | ' | [2] |
Amount due from related parties | 43,000 | [3] | 40,000 | [3] |
Advances from these parties for sales | 218,000 | [4] | ' | [4] |
Ningbo Kunde Other Parties [Member] | ' | ' | ||
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Textual) | ' | ' | ||
Sales of products | 38,000,000 | 98,200,000 | ||
Purchase of raw material | 2,700,000 | 11,600,000 | ||
Zhenhai Jinchi [Member] | ' | ' | ||
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Textual) | ' | ' | ||
Sales of products | ' | ' | ||
Ningbo Xinhe [Member] | ' | ' | ||
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Textual) | ' | ' | ||
Purchase of transportation services | 3,600,000 | 2,800,000 | ||
Amount owed in respect of transport services | ' | 500,000 | ||
Amounts due to these parties | 400,000 | ' | ||
Advances from these parties for sales | 10,000 | ' | ||
Ningbo Hengfa [Member] | ' | ' | ||
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Textual) | ' | ' | ||
Loan guarantee fee (a) | ' | 100,000 | ||
Ningbo Pacific [Member] | ' | ' | ||
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Textual) | ' | ' | ||
Loan guarantee fee (a) | 100,000 | 200,000 | ||
Ningbo Lide [Member] | ' | ' | ||
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Textual) | ' | ' | ||
Sales of products | 800,000 | 3,100,000 | ||
Purchase of raw material | 47,200,000 | 3,700,000 | ||
Loan guarantee fee (a) | 1,400,000 | 700,000 | ||
Advances from these parties for sales | 7,200,000 | ' | ||
Ningbo Litong [Member] | ' | ' | ||
Related Party Transactions and Relationships and Transactions With Certain Other Parties (Textual) | ' | ' | ||
Sales of products | 30,700,000 | 45,400,000 | ||
Purchase of raw material | 15,800,000 | 26,000,000 | ||
Outstanding advance payment in advance respect to raw material purchase transaction | ' | ' | ||
Loan guarantee fee (a) | 1,100,000 | 700,000 | ||
Amounts due to these parties | ' | ' | ||
Amount due from related parties | 200,000 | ' | ||
Advances from these parties for sales | $3,800,000 | ' | ||
[1] | Beginning in 2011, loan guarantee fees of 0.3% of the loan principal guaranteed are to be paid quarterly. In the year ended December 31, 2013, loan guarantee fees were approximately $0.1 million for Ningbo Pacific. In 2012, loan guarantee fees were approximately $0.1 million and $0.3 million for Ningbo Hengfa and Ningbo Pacific, respectively. | |||
[2] | At December 31, 2013, approximately $0.4 million was due to Xinhe. | |||
[3] | Advance payments to related parties consist of Mr. Tao for advances made for business purposes. These amounts are unsecured interest free and due on demand. | |||
[4] | At December 31, 2013, advances received from these parties consist of amounts received from Litong of $0.2 million. |
Consolidated_Segment_Data_Deta
Consolidated Segment Data (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Summary of selected information in segment structure presented in following tables | ' | ' | ||
Revenues | $646,549 | $750,628 | ||
Income from operations | 10,210 | 15,467 | ||
Interest income | 8,422 | 5,940 | ||
Interest expense | -18,809 | -25,065 | ||
Depreciation expense | 11,232 | 11,927 | ||
Amortization expense | 121 | 107 | ||
Income tax expense | 3,476 | [1] | 794 | [1] |
Deferred tax assets | 2,641 | [2] | 2,801 | [2] |
Total assets | 874,082 | 666,874 | ||
Petrochemicals [Member] | ' | ' | ||
Summary of selected information in segment structure presented in following tables | ' | ' | ||
Revenues | 568,562 | 679,636 | ||
Income from operations | 4,609 | 9,501 | ||
Interest income | 8,342 | 5,938 | ||
Interest expense | 18,809 | -25,065 | ||
Depreciation expense | 7,784 | 9,307 | ||
Amortization expense | 582 | 559 | ||
Income tax expense | 1,976 | -295 | ||
Deferred tax assets | 2,461 | 2,758 | ||
Total assets | 756,446 | 577,202 | ||
Rubbers [Member] | ' | ' | ||
Summary of selected information in segment structure presented in following tables | ' | ' | ||
Revenues | 77,987 | 70,992 | ||
Income from operations | 5,601 | 5,966 | ||
Interest income | 80 | 2 | ||
Interest expense | ' | ' | ||
Depreciation expense | 3,448 | 2,620 | ||
Amortization expense | ' | ' | ||
Income tax expense | 1,500 | 1,089 | ||
Deferred tax assets | 180 | 43 | ||
Total assets | $117,636 | $89,672 | ||
[1] | 19 | |||
[2] | 18 |
Consolidated_Segment_Data_Deta1
Consolidated Segment Data (Details Textual) | 12 Months Ended |
Dec. 31, 2013 | |
Segment | |
Consolidated Segment Data (Textual) | ' |
Number of operating segments | 2 |
Keyuan_Petrochemicals_Inc_Pare2
Keyuan Petrochemicals, Inc. (Parent Company) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Condensed Balance Sheets | ' | ' | ||
Cash | $12,309 | [1] | $23,378 | [1] |
Other current assets | 65,189 | [2] | 56,320 | [2] |
Total assets | 874,082 | 666,874 | ||
Accounts payable | 59,043 | 130,387 | ||
Accrued expenses and other payables | 23,767 | [3] | 26,833 | [3] |
Dividends payable | 2,382 | 2,382 | ||
Total stockholders' equity | 73,393 | 65,796 | ||
Total liabilities and stockholders' equity | 874,082 | 666,874 | ||
Parent Company [Member] | ' | ' | ||
Condensed Balance Sheets | ' | ' | ||
Cash | 5 | 5 | ||
Other current assets | 328 | 21 | ||
Investment in subsidiaries | 41,774 | 41,774 | ||
Total assets | 42,107 | 41,800 | ||
Accounts payable | 272 | 272 | ||
Accrued expenses and other payables | 2,925 | 3,814 | ||
Inter-company liabilities | 12,112 | 9,872 | ||
Dividends payable | 2,382 | 2,382 | ||
Series B convertible preferred stock | 16,868 | 16,452 | ||
Total stockholders' equity | 7,548 | 9,008 | ||
Total liabilities and stockholders' equity | $42,107 | $41,800 | ||
[1] | Note 2(d) | |||
[2] | 7 | |||
[3] | 12 |
Keyuan_Petrochemicals_Inc_Pare3
Keyuan Petrochemicals, Inc. (Parent Company) (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed statements of operations | ' | ' |
General and administration expenses | $14,736 | $12,510 |
Interest expense | 18,809 | 25,065 |
Net income (loss) | 4,632 | -5,850 |
Parent Company [Member] | ' | ' |
Condensed statements of operations | ' | ' |
General and administration expenses | 1,671 | 3,512 |
Interest expense | ' | ' |
Net income (loss) | $1,671 | $3,512 |
Keyuan_Petrochemicals_Inc_Pare4
Keyuan Petrochemicals, Inc. (Parent Company) (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | ' | ' |
Net income (loss) | $4,632 | ($5,850) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' |
Share-based compensation expense | 770 | 1,590 |
Liquidated damages | ' | ' |
Other current assets | -7,330 | -9,958 |
Net cash (used in) provided by operating activities | -53,093 | -7,095 |
Cash flows from financing activities: | ' | ' |
Dividends paid | ' | ' |
Net cash provided by financing activities | 115,231 | 77,488 |
Net increase (decrease) in cash | -11,069 | 16,053 |
Cash at beginning of period | 23,378 | 7,325 |
Cash at end of period | 12,309 | 23,378 |
Parent Company [Member] | ' | ' |
Cash flows from operating activities: | ' | ' |
Net income (loss) | 1,671 | 3,512 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' |
Share-based compensation expense | 770 | 1,590 |
Other current assets | -889 | 372 |
Increase in accounts payable, accrued expenses and other payables | ' | 608 |
Net cash (used in) provided by operating activities | -1,790 | -942 |
Cash flows from financing activities: | ' | ' |
Advance from inter-group company | 1,790 | 942 |
Net cash provided by financing activities | 1,790 | 942 |
Net increase (decrease) in cash | ' | ' |
Cash at beginning of period | 5 | 5 |
Cash at end of period | $5 | $5 |
Keyuan_Petrochemicals_Inc_Pare5
Keyuan Petrochemicals, Inc. (Parent Company) (Details Textual) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Keyuan Petrochemicals, Inc. (Parent Company) (Textual) | ' | ' |
Minimum percentage of profit after tax to be allocated to General Reserve under PRC | 10.00% | ' |
Mandatory percentage of allocations of PAT to General Reserve to discontinue allocations under PRC | 50.00% | ' |
Statutory reserve | $5.70 | $4.10 |
Restricted in the ability to transfer a portion of their net assets to either in the form of dividends, loans or advances under PRC | $135 | $60.10 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 3 Months Ended |
Sep. 17, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | Mar. 31, 2014 | |
Subsequent Event [Member] | ||||
Subsequent Events (Textual) | ' | ' | ' | ' |
Stock Repurchase Program, Per Share Price | $1.50 | $1.50 | $1.14 | $0.94 |
Stock purchased through the stock repurchase program, shares | ' | ' | ' | 184,276 |