Document And Entity Information
Document And Entity Information | 12 Months Ended |
Jun. 30, 2018shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2018 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | Hollysys Automation Technologies, Ltd. |
Entity Central Index Key | 1,357,450 |
Current Fiscal Year End Date | --06-30 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Trading Symbol | HOLI |
Entity Common Stock, Shares Outstanding | 60,342,099 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 265,675 | $ 197,640 |
Time deposits with maturities over three months | 139,433 | 96,214 |
Restricted cash | 20,233 | 39,534 |
Accounts receivable, net of allowance for doubtful accounts of $ 48,089 and $49,094 as of June 30, 2017 and 2018, respectively | 275,216 | 246,552 |
Costs and estimated earnings in excess of billings, net of allowance for doubtful accounts of $8,660 and $9,929 as of June 30, 2017 and 2018, respectively | 161,012 | 162,096 |
Other receivables, net of allowance for doubtful accounts of $1,448 and $4,946 as of June 30, 2017 and 2018, respectively | 30,467 | 20,036 |
Advances to suppliers | 9,685 | 9,964 |
Amounts due from related parties | 33,678 | 34,142 |
Inventories | 58,074 | 45,660 |
Prepaid expenses | 713 | 619 |
Income tax recoverable | 6,712 | 5,169 |
Deferred tax assets | 0 | 7,730 |
Total current assets | 1,000,898 | 865,356 |
Non-current assets: | ||
Restricted cash | 1,401 | 522 |
Property, plant and equipment, net | 80,210 | 80,529 |
Prepaid land leases | 10,172 | 10,206 |
Intangible assets, net | 3,186 | 1,928 |
Investments in equity investees | 53,389 | 47,242 |
Investments in cost investees | 4,195 | 4,024 |
Goodwill | 48,359 | 47,326 |
Deferred tax assets | 8,318 | 1,121 |
Total non-current assets | 209,230 | 192,898 |
Total assets | 1,210,128 | 1,058,254 |
Current liabilities (including amounts of the VIE without recourse to the primary beneficiary of $14,051 and $19,234 as of June 30, 2017 and 2018, respectively): | ||
Derivative financial liability | 412 | 487 |
Short-term bank loans | 2,865 | 8,121 |
Current portion of long-term loans | 350 | 420 |
Accounts payable | 129,477 | 122,714 |
Construction costs payable | 304 | 383 |
Deferred revenue | 137,692 | 107,407 |
Accrued payroll and related expenses | 14,299 | 13,600 |
Income tax payable | 3,746 | 3,371 |
Warranty liabilities | 5,622 | 5,386 |
Other tax payables | 7,801 | 10,488 |
Accrued liabilities | 25,133 | 23,950 |
Amounts due to related parties | 5,353 | 2,301 |
Deferred tax liabilities | 0 | 4,350 |
Total current liabilities | 333,054 | 302,978 |
Accrued liabilities | 2,410 | 2,220 |
Long-term loans | 20,709 | 20,581 |
Deferred tax liabilities | 9,366 | 6,689 |
Warranty liabilities | 2,236 | 2,246 |
Total non-current liabilities | 34,721 | 31,736 |
Total liabilities | 367,775 | 334,714 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized; 60,342,099 shares issued and outstanding as of June 30, 2017 and 2018, respectively | 60 | 60 |
Additional paid-in capital | 223,396 | 222,189 |
Statutory reserves | 45,970 | 41,130 |
Retained earnings | 578,079 | 482,999 |
Accumulated other comprehensive income | (5,453) | (22,859) |
Total Hollysys Automation Technologies Ltd. Stockholders' equity | 842,052 | 723,519 |
Non-controlling interest | 301 | 21 |
Total equity | 842,353 | 723,540 |
Total liabilities and equity | $ 1,210,128 | $ 1,058,254 |
CONSOLIDATED BALANCE SHEETS _Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Allowance for doubtful accounts, accounts receivable | $ 49,094 | $ 48,089 |
Allowance for doubtful accounts of costs and estimated earnings in excess of billings | 9,929 | 8,660 |
Allowance for doubtful accounts, other receivables | $ 4,946 | $ 1,448 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 60,342,099 | 60,342,099 |
Common stock, shares outstanding (in shares) | 60,342,099 | 60,342,099 |
Liabilities, Current | $ 333,054 | $ 302,978 |
Variable Interest Entity, Not Primary Beneficiary [Member] | ||
Liabilities, Current | $ 19,234 | $ 14,051 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net revenues | |||
Integrated contract revenue (including revenue from related parties of $3,871, $2,442 and $996 for the years ended June 30, 2016, 2017 and 2018, respectively) | $ 466,461 | $ 385,500 | $ 477,790 |
Product sales (including revenue from related parties of $868, $9,447 and $10,834 for the years ended June 30, 2016, 2017 and 2018, respectively) | 40,233 | 32,665 | 54,546 |
Revenue from services | 34,074 | 13,778 | 11,989 |
Total net revenues | 540,768 | 431,943 | 544,325 |
Costs of integrated contracts (including purchases from related parties of $22, $762 and $88 for the years ended June 30, 2016, 2017 and 2018, respectively) | 314,233 | 277,476 | 310,545 |
Costs of products sold (including purchases from related parties of $370, $24 and $5 for the years ended June 30, 2016, 2017 and 2018, respectively) | 10,770 | 9,971 | 24,023 |
Costs of services rendered | 9,885 | 4,025 | 4,031 |
Gross profit | 205,880 | 140,471 | 205,726 |
Operating expenses | |||
Selling (including expenses from related parties of $517, nil and nil for the years ended June 30, 2016, 2017 and 2018, respectively) | 27,158 | 24,412 | 25,637 |
General and administrative | 46,323 | 44,297 | 45,832 |
Goodwill impairment charge | 0 | 11,211 | 0 |
Research and development | 36,605 | 30,109 | 36,564 |
VAT refunds and government subsidies | (24,450) | (29,828) | (22,890) |
Total operating expenses | 85,636 | 80,201 | 85,143 |
Income from operations | 120,244 | 60,270 | 120,583 |
Other income, net (including other income from related parties of $40, $602 and $731 for the years ended June 30, 2016, 2017 and 2018, respectively) | 4,349 | 1,722 | 4,061 |
Foreign exchange loss | (1,099) | (135) | (299) |
Gains on deconsolidation of the Company's interests in Beijing Hollycon Electronic Technology Co., Ltd ("Hollycon") | 0 | 14,514 | 0 |
Gains on disposal of a subsidiary | 0 | 628 | 0 |
Share of net income (loss) of equity investees | (1,571) | 3,607 | 7,834 |
Interest income | 7,318 | 3,687 | 5,858 |
Interest expenses | (692) | (938) | (1,404) |
Dividend income from a cost investee | 1,093 | 0 | 1,109 |
Income before income taxes | 129,642 | 83,355 | 137,742 |
Income tax expenses | 22,205 | 14,386 | 14,238 |
Net income | 107,437 | 68,969 | 123,504 |
Less: net income attributable to non-controlling interests | 276 | 25 | 5,033 |
Net income attributable to Hollysys Automation Technologies Ltd. | 107,161 | 68,944 | 118,471 |
Other comprehensive income, net of tax of nil | |||
Translation adjustments | 17,410 | (14,428) | (48,841) |
Comprehensive income | 124,847 | 54,541 | 74,663 |
Less: comprehensive income attributable to non-controlling interests | 280 | (11) | 2,244 |
Comprehensive income attributable to Hollysys Automation Technologies Ltd. | $ 124,567 | $ 54,552 | $ 72,419 |
Net income per ordinary share: | |||
Basic | $ 1.77 | $ 1.15 | $ 2 |
Diluted | $ 1.75 | $ 1.14 | $ 1.97 |
Shares used in income per share computation: | |||
Weighted average number of ordinary shares | 60,434,019 | 60,189,004 | 59,170,050 |
Weighted average number of diluted ordinary shares | 61,248,565 | 61,011,510 | 60,611,456 |
CONSOLIDATED STATEMENTS OF COM5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Parenthetical] - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Integrated contract revenue from related parties | $ 996 | $ 2,442 | $ 3,871 |
Products sales revenue from related parties | 10,834 | 9,447 | 868 |
Costs of integrated contracts purchase from related parties | 88 | 762 | 22 |
Costs of Products Sold Purchase From Related Parties | 5 | 24 | 370 |
Selling Expenses From Related Parties | 0 | 0 | 517 |
Other Income From Related Parties | $ 731 | $ 602 | $ 40 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 107,437 | $ 68,969 | $ 123,504 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation of property, plant and equipment | 8,217 | 8,752 | 6,266 |
Amortization of prepaid land leases | 270 | 261 | 281 |
Amortization of intangible assets | 801 | 623 | 818 |
Allowance for doubtful accounts | 8,033 | 9,760 | 10,918 |
Loss (gain) on disposal of long-lived assets | (2,053) | 596 | 224 |
Impairment loss on property, plant and equipment | 0 | 361 | 0 |
Goodwill impairment charge | 0 | 11,211 | 0 |
Share of net (income) loss of equity investees | 1,571 | (3,607) | (7,834) |
Gains on deconsolidation of the Company's interests in HollyCon | 0 | (14,514) | 0 |
Gain on disposal of a subsidiary | 0 | (628) | 0 |
Share-based compensation expenses | 1,207 | 464 | 3,860 |
Deferred income tax (benefit) expenses | (1,525) | 2,133 | (462) |
Acquisition-related consideration fair value adjustments | 0 | 0 | (1,745) |
Accretion of convertible bond | 230 | 230 | 230 |
Fair value adjustments of a bifurcated derivative | (75) | 89 | 93 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (28,283) | (23,441) | (16,413) |
Costs and estimated earnings in excess of billings | 1,817 | 21,945 | (36,971) |
Inventories | (11,429) | (10,701) | (4,607) |
Advances to suppliers | 232 | 881 | 2,497 |
Other receivables | (9,973) | (6,767) | (2,481) |
Deposits and other assets | 19,389 | (12,698) | (674) |
Due from related parties | 1,286 | (6,819) | 8,226 |
Accounts payable | 4,113 | 23,563 | 8,272 |
Deferred revenue | 28,150 | 28,168 | (47,637) |
Accruals and other payables | (3,163) | (21,013) | 5,015 |
Due to related parties | 3,023 | 801 | 351 |
Income tax payable | (1,124) | (1,779) | (4,558) |
Other tax payables | (2,959) | (7,027) | (436) |
Net cash provided by operating activities | 125,192 | 69,813 | 46,737 |
Cash flows from investing activities: | |||
Time deposits placed with banks | (179,194) | (154,810) | (107,118) |
Purchases of property, plant and equipment | (2,304) | (3,711) | (7,887) |
Maturity of time deposits | 137,839 | 89,262 | 112,013 |
Proceeds from disposal of property, plant and equipment | 376 | 64 | 74 |
Investment of equity/cost investees | (5,882) | (2,654) | 0 |
Net cash reduced upon deconsolidation of a subsidiary | 0 | (16,140) | 0 |
Acquisition of a subsidiary, net of cash acquired | (583) | (1,652) | 0 |
Return of investment from a cost investee | 0 | 88 | 0 |
Proceeds from sale of shares of a subsidiary | 0 | 0 | 464 |
Net cash used in investing activities | (49,748) | (89,553) | (2,454) |
Cash flows from financing activities: | |||
Proceeds from short-term bank loans | 5,942 | 10,061 | 4,138 |
Repayments of short-term bank loans | (11,334) | (4,932) | (17,020) |
Proceeds from long-term bank loans | 984 | 461 | 2,606 |
Repayments of long-term bank loans | (548) | (7,350) | (9,681) |
Proceeds from exercise of options | 0 | 6,322 | 5,441 |
Payment of dividends | (7,241) | (11,975) | 0 |
Proceeds from issuance of shares of a subsidiary | 0 | 0 | 7,736 |
Net cash used in financing activities | (12,197) | (7,413) | (6,780) |
Effect of foreign exchange rate changes | 4,788 | (4,302) | (16,242) |
Net increase (decrease) in cash and cash equivalents | 68,035 | (31,455) | 21,261 |
Cash and cash equivalents, beginning of year | 197,640 | 229,095 | 207,834 |
Cash and cash equivalents, end of year | 265,675 | 197,640 | 229,095 |
Supplementary disclosures of cash flow information: | |||
Interest | 462 | 727 | 1,048 |
Income tax | 24,896 | 13,918 | 19,099 |
Supplementary disclosures of significant non-cash transactions: | |||
Acquisition of property, plant and equipment included in construction costs payable and accrued liabilities | 4,374 | 7,266 | 4,439 |
Issuance of ordinary shares as purchase consideration in connection with the acquisition of Bond Group | $ 0 | $ 0 | $ 13,336 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Ordinary shares [Member] | Additional Paid-in Capital [Member] | Statutory Reserves [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Total Hollysys Automation Technologies Ltd. Stockholders' Equity [Member] | Non-controlling Interest [Member] | |
Balance at Jun. 30, 2015 | $ 585,385 | $ 58 | $ 192,768 | $ 30,248 | $ 318,441 | $ 37,585 | $ 579,100 | $ 6,285 | |
Balance (in shares) at Jun. 30, 2015 | 58,358,521 | ||||||||
Share-based compensation | 3,860 | $ 0 | 3,860 | 0 | 0 | 0 | 3,860 | 0 | |
Issuance of ordinary shares upon exercise of options | 5,441 | $ 1 | [1] | 5,440 | 0 | 0 | 0 | 5,441 | 0 |
Issuance of ordinary shares upon exercise of options (in shares) | 612,000 | ||||||||
Issuance of Incentive Shares and Premium Shares for Bond Group | 13,336 | $ 1 | [1] | 13,335 | 0 | 0 | 0 | 13,336 | 0 |
Issuance of Incentive Shares and Premium Shares for Bond Group (in shares) | 627,578 | ||||||||
Net income for the year | 123,504 | $ 0 | 0 | 0 | 118,471 | 0 | 118,471 | 5,033 | |
Appropriations to statutory reserves | 0 | 0 | 0 | 6,285 | (6,285) | 0 | 0 | 0 | |
Translation adjustments | (48,841) | 0 | 0 | 0 | 0 | (46,052) | (46,052) | (2,789) | |
Balance at Jun. 30, 2016 | 682,685 | $ 60 | 215,403 | 36,533 | 430,627 | (8,467) | 674,156 | 8,529 | |
Balance (in shares) at Jun. 30, 2016 | 59,598,099 | ||||||||
Share-based compensation | 464 | $ 0 | 464 | 0 | 0 | 0 | 464 | 0 | |
Issuance of ordinary shares upon exercise of options | 6,322 | $ 0 | 6,322 | 0 | 0 | 0 | 6,322 | 0 | |
Issuance of ordinary shares upon exercise of options (in shares) | 744,000 | ||||||||
Net income for the year | 68,969 | $ 0 | 0 | 0 | 68,944 | 0 | 68,944 | 25 | |
Appropriations to statutory reserves | 0 | 0 | 0 | 4,993 | (4,993) | 0 | 0 | 0 | |
Dividend paid | (11,975) | 0 | 0 | 0 | (11,975) | 0 | (11,975) | 0 | |
Deconsolidation of a subsidiary | (8,497) | 0 | 0 | (396) | 396 | 0 | 0 | (8,497) | |
Translation adjustments | (14,428) | 0 | 0 | 0 | 0 | (14,392) | (14,392) | (36) | |
Balance at Jun. 30, 2017 | 723,540 | $ 60 | 222,189 | 41,130 | 482,999 | (22,859) | 723,519 | 21 | |
Balance (in shares) at Jun. 30, 2017 | 60,342,099 | ||||||||
Share-based compensation | 1,207 | $ 0 | 1,207 | 0 | 0 | 0 | 1,207 | 0 | |
Net income for the year | 107,437 | 0 | 0 | 0 | 107,161 | 0 | 107,161 | 276 | |
Appropriations to statutory reserves | 0 | 0 | 0 | 4,840 | (4,840) | 0 | 0 | 0 | |
Dividend paid | (7,241) | 0 | 0 | 0 | (7,241) | 0 | (7,241) | 0 | |
Translation adjustments | 17,410 | 0 | 0 | 0 | 0 | 17,406 | 17,406 | 4 | |
Balance at Jun. 30, 2018 | $ 842,353 | $ 60 | $ 223,396 | $ 45,970 | $ 578,079 | $ (5,453) | $ 842,052 | $ 301 | |
Balance (in shares) at Jun. 30, 2018 | 60,342,099 | ||||||||
[1] | The share capital increase for the issuance of ordinary shares upon exercise of options, restricted share and Incentive and Premium Shares for Bond are less than $1. |
ORGANIZATION AND BUSINESS BACKG
ORGANIZATION AND BUSINESS BACKGROUND | 12 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND Hollysys Automation Technologies Ltd. (“Hollysys” or the “Company”) was established under the laws of the British Virgin Islands (“BVI”) on February 6, 2006. As of June 30, 2018, the Company had subsidiaries incorporated in countries and jurisdictions including the People’s Republic of China (“PRC”), Singapore, Malaysia, Macau, Hong Kong, BVI, India, Qatar and Indonesia. The Company makes a determination at the inception of each arrangement whether an entity in which the Company has made an investment or in which the Company has other variable interests is considered a variable interest entity (“VIE”). The Company consolidates a VIE when it is deemed to be the primary beneficiary. The primary beneficiary of a VIE is the party that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, the Company determines whether any changes occurred requiring a reassessment of whether it is the primary beneficiary of a VIE. If the Company is not deemed to be the primary beneficiary in a VIE, the investment or other variable interests in a VIE is accounted for in accordance with applicable GAAP. In November 2015, CECL was established in Doha, Qatar, by CCPL, a wholly-owned subsidiary of the Company incorporated under the laws of Singapore, and a Qatar citizen as a nominee shareholder, with 49% and 51% of equity interest in CECL, respectively. Through a series of contractual arrangements signed in November 2015 and September 2016, CCPL is entitled to appoint majority of directors of CECL who have the power to direct the activities that significantly impact CECL’s economic performance. In addition, CCPL is entitled to 95% of the variable returns or loss from CECL’s operations. In accordance with ASC 810, Consolidation The carrying amounts and classifications of the assets and liabilities of the VIE are as follows: June 30, 2017 2018 Current assets $ 14,331 $ 25,209 Non-current assets 239 299 Total assets 14,570 25,508 Current liabilities $ 14,178 $ 19,533 Total liabilities 14,178 19,533 Year ended June 30, 2017 2018 Revenue $ 6,914 $ 42,287 Cost of revenue 5,753 35,353 Net profit 494 5,521 Net cash provided by (used in) operating activities 8,721 (2,947 ) Net cash used in investing activities (216 ) (184 ) Net cash provided by financing activities $ - $ - As of June 30, 2018, the current assets of the VIE included amounts due from subsidiaries of the Group amounting to $5,443 (June 30, 2017: $1,629), and the current liabilities of the VIE included amounts due to subsidiaries of the Group amounting to $299 (June 30, 2017: $127), which were all eliminated upon consolidation by the Company. Creditors of the VIE do not have recourse to the general credit of the Company for the liabilities of the VIE. The Company is obligated to absorb the VIE’s expected losses and to provide financial support to the VIE if required. For the years ended June 30, 2017 and 2018, the Company has not provided financial support other than that which it was contractually required to provide. The Company believes that there are no assets of the VIE that can be used only to settle obligations of the VIE. In July 2017, Bond Corporation Pte. Ltd (“BCPL”), a wholly-owned Singapore subsidiary of the Company, and a Malaysian citizen (the “Trustee”) entered into a trust deed, under which, 49.1% of BCPL’s equity interests in Bond M & E Sdn. Bhd. (“BMJB”), a Malaysian company, which previously was a 100% subsidiary of BCPL, was transferred to the Trustee. According to the trust deed, all of the beneficial interests in BMJB belong to BCPL and the Trustee shall hold the legal title of the transferred shares on trust for and act on behalf of B PL absolutely. Any dividend, interest and other benefits received or receivable by the Trustee will be transferred to B PL. The Trustee shall exercise the managerial rights and voting power in a manner directed by a prior written notice from B PL. The Trustee shall be obligated to vote in the same manner as B PL in the absence of any written notice. In addition, an undated Form of Transfer of Securities with the transferee’s name left blank was duly executed by the Trustee and delivered to B PL. Therefore, B PL can transfer the 49.1% of equity interests to any party at any time without further approval by the Trustee. Accordingly, the Company believes it holds all beneficial rights, obligation and the power of the 100% equity interest in BMJB, and therefore consolidates 100% of equity interests in BMJB into its financial statements. The Company, its subsidiaries and the VIE, are principally engaged in the manufacture, sale and provision of integrated automation systems and services, mechanical and electrical solution services and installation services in the PRC, Southeast Asia and the Middle East. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Principles of Consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and a VIE. All inter-company transactions and balances between the Company, its subsidiaries, and the VIE are eliminated upon consolidation. The Company included the results of operations of acquired businesses from the respective dates of acquisition. Use of estimates The preparation of financial statements in conformity with US 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates estimates, including those related to the expected total costs of integrated contracts, expected gross margins of integrated solution contracts, allowance for doubtful accounts, fair values of share options, fair value of bifurcated derivative, fair value of retained non-controlling investment in the former subsidiary, warranties, purchase price allocation with respect to business combinations, valuation allowance of deferred tax assets and impairment of goodwill and other long-lived assets. Management bases the estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ materially from those estimates. Foreign currency translations and transactions The Company’s functional currency is the United States dollars (“US dollars” or “$”); whereas the Company’s subsidiaries and VIE use the primary currency of the economic environment in which their operations are conducted as their functional currency. According to the criteria of Accounting Standards Codification (“ASC”) Topic 830 (“ASC 830”), the Company uses the US dollars as its reporting currency. The Company translates the assets and liabilities into US dollars using the rate of exchange prevailing at the balance sheet date, and the statements of comprehensive income are translated at average rates during the reporting period. Adjustments resulting from the translation of financial statements from the functional currency into US dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. Transactions dominated in currencies other than the functional currency are translated into functional currency at the exchange rates prevailing on the transaction dates, and the exchange gains or losses are reflected in the consolidated statements of comprehensive income for the reporting period. Transactions denominated in foreign currencies are measured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the exchange rates prevailing at the balance sheet date. Exchange gains and losses are included in earnings, except for those raised from intercompany transactions with investment nature, which are recorded in other comprehensive income. Business combinations The Company accounts for its business combinations using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and non-controlling interests is based on various assumptions and valuation methodologies requiring considerable management judgment. The most significant variables in these valuations are discount rates, terminal values, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons. Terminal values are based on the expected life of assets and forecasted cash flows over that period. Acquisition-related costs are recognized as general and administrative expenses in the statements of comprehensive income as incurred. Cash and cash equivalents Cash and cash equivalents consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. All highly liquid investments that are readily convertible to known amounts of cash with original stated maturities of three months or less are classified as cash equivalents. Time deposits with original maturities over three months Time deposits with original maturities over three months consist of deposits placed with financial institutions with original maturity terms from four months to one year. As of June 30, 2018, $133,723, $4,249, and $1,461 of time deposits with original maturities over three months were placed in financial institutions in the PRC, Singapore, and Malaysia, respectively. As of June 30, 2017, $80,507, $11,690, $3,935 and $82 of time deposits with original maturities over three months were placed in financial institutions in the PRC, Singapore, Malaysia and India, respectively. Restricted cash Restricted cash mainly consists of the cash deposited in banks pledged for performance guarantees, or bank loans. These cash balances are not available for use until these guarantees are expired or cancelled, or the loans are repaid. Revenue recognition Integrated solutions contracts Revenues generated from designing, building, and delivering customized integrated industrial automation systems are recognized over the contractual terms based on the percentage of completion method. The contracts for designing, building, and delivering customized integrated industrial automation systems are legally enforceable and binding agreements between the Company and customers. The duration of contracts depends on the contract size and ranges from 6 months to 5 years excluding the warranty period. The majority of the contract duration is longer than one year. Revenue generated from mechanical and electrical solution contracts for the construction or renovation of buildings, rail or infrastructure facilities are also recognized over the contractual terms based on the percentage of completion method. The contracts for mechanical and electrical solution are legally enforceable and binding agreements between the Company and customers. The duration of contracts depends on the contract size and the complexity of the construction work and ranges from 6 months to 3 years excluding the warranty period. The majority of the contract duration is longer than one year. In accordance with ASC 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts The Company reviews and updates the estimated total costs of integrated solutions contracts at least annually. The Company accounts for revisions to contract revenue and estimated total costs of integrated solution contracts, including the impact due to approved change orders, in the period in which the facts that cause the revision become known as changes in estimates. Unapproved change orders are considered claims. Claims are recognized only when it has been awarded by customers. During the years ended June 30, 2016, 2017 and 2018, the Company did not recognize any revenue related to claims. Excluding the impact of change orders, if the estimated total costs of integrated solution contracts, which were revised during the years ended June 30, 2016, 2017 and 2018, had been used as a basis of recognition of integrated contract revenue since the contract commencement, net income for the years ended June 30, 2016, 2017 and 2018 would have been decreased by $30,270, $12,062, and $10,466 respectively; basic net income per share for years ended June 30, 2016, 2017 and 2018 would have been decreased by $0.51, $0.20, and $0.17, respectively; and diluted net income per share for the years ended June 30, 2016, 2017 and 2018, would have decreased by $0.50, $0.20, and $0.17, respectively. Revisions to the estimated total costs for the years ended June 30, 2016, 2017 and 2018 were made in the ordinary course of business. The Company combines a group of contracts as one project if they are closely related and are, in substance, parts of a single project with an overall profit margin. The Company segments a contract into several projects, when they are of different business substance, for example, with different business negotiation, solutions, implementation plans and margins. Revenue in excess of billings on the contracts is recorded as costs and estimated earnings in excess of billings. Billings in excess of revenues recognized on the contracts are recorded as deferred revenue until the above revenue recognition criteria are met. Recognition of accounts receivable and costs and estimated earnings in excess of billings are discussed below. The Company generally recognizes 100% of the contractual revenue when the customer acceptance has been obtained and no further major costs are estimated to be incurred, and normally this is also when the warranty period commences. Revenues are presented net of taxes collected on behalf of the government. Product sales Revenue generated from sales of products is recognized when the following four revenue recognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured. Service rendered The Company has in recent years extended its service offerings as described below. The Company mainly provides two types of services: Revenue from one-off services: the Company provides different types of one-off services, which are generally completed on customers’ site. Revenue is recognized when the Company has completed all the respective services described in the contracts, there is persuasive evidence of an arrangement, the fee is fixed or determinable and collection is reasonably assured. Revenue from services covering a period of time: the Company also separately sells extended warranties to their integrated solution customers for a fixed period. Such arrangements are negotiated separately from the corresponding integrated solution system and are usually entered into upon the expiration of the warranty period attached to the integrated solution contract. During the extended warranty period, the Company is responsible for addressing issues related to the system. Part replacement is not covered in such services. The Company recognizes revenue on a pro-rata basis over the contractual term. Accounts receivable and costs and estimated earnings in excess of billings Performance of the integrated contracts will often extend over long periods and the Company’s right to receive payments depends on its performance in accordance with the contractual agreements. There are different billing practices in the PRC, overseas operating subsidiaries and the VIE (Concord and Bond Groups). For the Company’s PRC subsidiaries, billings are issued based on milestones specified in contracts negotiated with customers. In general, there are four milestones: 1) project commencement, 2) system manufacturing and delivery, 3) installation, trial-run and customer acceptance, and 4) expiration of the warranty period. The amounts to be billed at each milestone are specified in the contract. All contracts have the first milestone, but not all contracts require prepayments. The length of each interval between two continuous billings under an integrated contract varies depending on the duration of the contract (under certain contracts, the interval lasts more than a year) and the last billing to be issued for an integrated solution contract is scheduled at the end of a warranty period. For Concord and Bond Groups, billing claims rendered are subject to the further approval and certification of the customers or their designated consultants. Payments are made to Concord or Bond Groups based on the certified billings according to the payment terms mutually agreed between the customers and Concord or Bond Groups. Certain amounts are retained by the customer and payable to Concord and Bond Groups upon satisfaction of final quality inspection or at the end of the warranty period. The retained amounts which were recorded as accounts receivable were $12,838 and $18,203 for the two years ended June 30, 2017 and 2018, respectively. Prepayments received are recorded as deferred revenue. The deferred revenue will be recognized as revenue under the percentage of completion method along with the progress of a contract. The carrying value of the Company’s accounts receivable and costs and estimated earnings in excess of billings, net of the allowance for doubtful accounts, represents their estimated net realizable value. An allowance for doubtful accounts is recognized when it’s probable that the Company will not collect the amount and is written off in the period when deemed uncollectible. The Company periodically reviews the status of contracts and decides how much of an allowance for doubtful accounts should be made based on factors surrounding the credit risk of customers and historical experience. The Company does not require collateral from its customers and does not charge interest for late payments by its customers. Inventories Inventories are composed of raw materials, work in progress, purchased and manufactured finished goods and low value consumables. Inventories are stated at the lower of cost and net realizable value. The Company elected to use weighted average cost method as inventory costing method. The Company assesses the lower of cost and net realizable value for non-saleable, excess or obsolete inventories based on its periodic review of inventory quantities on hand and the latest forecasts of product demand and production requirements from its customers. The Company writes down inventories for non-saleable, excess or obsolete raw materials, work-in-process and finished goods by charging such write-downs to cost of integrated contracts and/or costs of products sold. Warranties Warranties represent a major term under an integrated contract, which will last, in general, for one to three years or otherwise specified in the terms of the contract. The Company accrues warranty liabilities under an integrated contract as a percentage of revenue recognized, which is derived from its historical experience, in order to recognize the warranty cost for an integrated contract throughout the contract period. Property, plant and equipment, net Property, plant and equipment, other than construction in progress, are recorded at cost and are stated net of accumulated depreciation and impairment, if any. Depreciation expense is determined using the straight-line method over the estimated useful lives of the assets as follows: Buildings 30 -50 years Machinery 5 - 10 years Software 3 - 5 years Vehicles 5- 6 years Electronic and other equipment 3 - 10 years Construction in progress represents uncompleted construction work of certain facilities which, upon completion, management intends to hold for production purposes. In addition to costs under construction contracts, other costs directly related to the construction of such facilities, including duty and tariff, equipment installation and shipping costs, and borrowing costs are capitalized. Depreciation commences when the asset is placed in service. Maintenance and repairs are charged directly to expenses as incurred, whereas betterment and renewals are capitalized in their respective accounts. When an item is retired or otherwise disposed of, the cost and applicable accumulated depreciation are removed and the resulting gain or loss is recognized for the reporting period. Prepaid land leases, net Prepaid land lease payments, for the land use right of three parcels of land in the PRC, three parcels of leasehold land in Malaysia and one parcel of leasehold land in Singapore, are initially stated at cost and are subsequently amortized on a straight-line basis over the lease terms of 49 to 88 years. Intangible assets, net Intangible assets are carried at cost less accumulated amortization and any impairment. Intangible assets acquired in a business combination are recognized initially at fair value at the date of acquisition. Intangible assets are amortized using a straight-line method. The estimated useful lives for the intangible assets are as follows: Category Estimated useful life Customer relationship 57 - 60 months Order backlog 21 - 33 months Patents and copyrights 60 - 120 months Residual values are considered nil. Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired. The Company assesses goodwill for impairment in accordance with ASC subtopic 350-20 (“ASC 350-20”), Intangibles – Goodwill and Other, which requires that goodwill is not amortized but to be tested for impairment at the reporting unit level at least annually and more frequently upon the occurrence of certain events, as defined by ASC 350-20. The Company’s goodwill outstanding at June 30, 2018 was related to the acquisitions of Concord Group, Bond Group, and Beijing Hollysys Industrial Software Company Ltd (“Hollysys Industrial Software”), which was 100% acquired by a subsidiary of the Company in July 2017 with a cash consideration of approximately $2,380. The Company has the option to assess qualitative factors first to determine whether it is necessary to perform the two-step test in accordance with ASC 350-20. If the Company believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the two-step quantitative impairment test described above is required. Otherwise, no further testing is required. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing the two-step quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quoted market prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired and the Company is not required to perform further testing. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, then the Company must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized as an impairment loss. The Company elected to assess goodwill for impairment using the two-step process for Concord Group for the years ended June 30, 2017 and 2018, with assistances from a third-party appraiser. Concord Group’s management judgment is involved in determining these estimates and assumptions, and actual results may differ from those used in valuations. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit which could trigger future impairment. The judgment in estimating the fair value of reporting units includes forecasts of future cash flows, which are based on management’s best estimate of future revenue, gross profit, operating expenses growth rates, future capital expenditure and working capital level, as well as discount rate determined by Weighted Average Cost of Capital approach and the selection of comparable companies operating in similar businesses. The Company also reviewed marketplace and/or historical data to assess the reasonableness of assumptions such as discount rate and working capital level. The carrying amount of Concord Group exceeded its fair value as of June 30, 2017, and a goodwill impairment charge of $11,211 was recorded in the statement of comprehensive income for the year ended June 30, 2017 based on the second step testing result. The fair value of Concord Group exceeded its carrying amount (net of accumulated impairment charges) as of June 30, 2018 based on the first step testing result, and the Company concluded no additional goodwill impairment charge was needed for the year ended June 30, 2018. There are uncertainties surrounding the amount and timing of future expected cash flows as they may be impacted by negative events such as a slowdown in the mechanical and electrical engineering sector, deteriorating economic conditions in the geographical areas Concord Group operates in, political, economic and social uncertainties in the Middle East, increasing competitive pressures and fewer than expected mechanical and electrical solution contracts awarded to Concord Group. These events can negatively impact demand for Concord Group’s services and result in actual future cash flows being less than forecasted or delays in the timing of when those cash flows are expected to be realized. Further, the timing of when actual future cash flows are received could differ from the Company’s estimates, which are based on historical trends and does not factor in unexpected delays in project commencement or execution. The Company also performed qualitative assessments with respect to Bond Group and Hollysys Industrial Software, to determine if it is more likely than not that the fair values of Bond Group and Hollysys Industrial Software are less than their carrying amounts. By identifying the most relevant drivers of fair value and significant events, and weighing the identified factors, the Company concluded that there was no impairment loss on goodwill related to Bond Group as of June 30, 2017 and 2018, or related to Hollysys Industrial Software as of June 30, 2018. Impairment of long-lived assets other than goodwill The Company evaluates its long-lived assets or asset group including acquired intangibles with finite lives for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of a group of long-lived assets may not be fully recoverable. When these events occur, the Company evaluates the impairment by comparing the carrying amount of the assets to future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company recognizes an impairment loss based on the excess of the carrying amount of the asset group over its fair value, generally based upon discounted cash flows or quoted market prices. Shipping and handling costs All shipping and handling fees charged to customers are included in net revenue. Shipping and handling costs incurred are included in cost of integrated contracts and/or costs of products sold as appropriate. Income taxes The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate. The Company adopted ASU 2015-17 on July 1, 2017 on a prospective basis. As a result, current portion of deferred income tax liabilities and assets have been reclassified to noncurrent liabilities and assets. Prior periods were not retrospectively adjusted and all future adjustments will be reported as noncurrent. The Company adopted ASC 740, Income Taxes , Research and development costs Research and development costs consist primarily of salaries, bonuses and benefits for research and development personnel. Research and development costs also include travel expenses of research and development personnel as well as depreciation of hardware equipment and software tools and other materials used in research and development activities. Research and development costs are expensed as incurred. Software development costs are also expensed as incurred as the costs qualifying for capitalization have been insignificant. VAT refunds and government subsidies Pursuant to the laws and regulations of the PRC, the Company remits 17% of its sales as valued added tax (“VAT”), and then is entitled to a refund of the portion that the Company’s actual VAT burden exceeding 3% levied on all sales containing internally developed software products. VAT refunds are recognized in the statements of comprehensive income when cash refunds or the necessary approval from the tax authority has been received. Certain subsidiaries of the Company located in the PRC receive government subsidies from local PRC government agencies. Government subsidies are recognized in the statement of comprehensive income when the attached conditions have been met. Government grants received for the years ended June 30, 2016, 2017 and 2018 amounted to $6,085, $10,238 and $5,931, respectively, of which $2,886, $12,885 and $4,784 were included as a credit to operating expenses in the statements of comprehensive income for the years ended June 30, 2016, 2017 and 2018, respectively. Appropriations to statutory reserve Under the corporate law and relevant regulations in the PRC, all of the subsidiaries of the Company located in the PRC are required to appropriate a portion of its retained earnings to statutory reserve. All subsidiaries located in the PRC are required to appropriate 10% of its annual after-tax income each year to the statutory reserve until the statutory reserve balance reaches 50% of the registered capital. In general, the statutory reserve shall not be used for dividend distribution purposes. In Dubai and Qatar, companies are required to appropriate 10% of its annual after-tax income each year to the statutory reserve and the appropriation may be suspended by the shareholders if the reserve reaches 50% of the registered capital. The statutory reserve can be used to cover the losses of the companies or to increase the capital of the companies with a decision by the general assembly of CCDB and CECL. Segment reporting In accordance with ASC 280, Segment reporting Comprehensive income Comprehensive income is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. In accordance with ASC 220, Comprehensive Income Investments in cost and equity investees The Company accounts for its equity investments under either the cost method or the equity method by considering the Company’s rights and ability to exercise significant influence over the investees. Under the cost method, investments are initially carried at cost. In the event that the fair value of the investment falls below the initial cost and the decline is considered as other-than-temporary, the Company recognizes an impairment charge, equal to the difference between the cost basis and the fair value of the investment. A variety of factors are considered when determining if a decline in fair value below carrying value is other than temporary, including, among others, the financial condition and prospects of the investee. The investments in entities over which the Company has the ability to exercise significant influence are accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of the investee between 20% and 50%. Other factors, such as representation on the investee’s board of directors and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. Under the equity method, original investments are recorded at cost and adjusted by the Company’s share of undistributed earnings or losses of these entities, by the amortization of any basis difference between the amount of the Company’s investment and its share of the net assets of the investee, and by dividend distributions or subsequent investments. Unrealized inter-company profits and losses related to equity investees are eliminated. An impairment charge, being the difference between the carrying amount and the fair value of the equity investee, is recognized in the consolidated statements of comprehensive income when the decline in value is considered other than temporary. Capitalization of interest Interest incurred on borrowings for the Company’s construction of facilities and assembly line projects during the active construction period are capitalized. The capitalization of interest ceases once a project is substantially complete. The amount to be capitalized is determined by applying the weighted-average interest rate of the Company’s outstanding borrowings to the average amount of accumulated capital expenditures for assets under construction during the year and is added to the cost of the underlying assets and amortized over their respective useful lives. Income per share Income per share is computed in accordance with ASC 260, Earnings Per Share Share-based compensation The Company accounts for share-based compensation in accordance with ASC 718, Compensation-Stock Compensation For share-based awards that are subject to performance-based vesting conditions in addition to time-based vesting, the Company recognizes the estimated grant-date fair value of performance-based awards, net of estimated forfeitures, as share-based compensation expense over the vesting period based upon the Company’s determination of whether it is probable that the performance-based criteria will be achieved. At each reporting period, the Company reassesses the probability of achieving the performance-based criteria. Determining whether the performance-based criteria will be achieved involves judgment, and the estimate of share-based compensation expense may be revised periodically based on changes in the probability of achieving the performance-based criteria. Revisions are reflected in the period in which the estimate is changed. If the performance-based criteria are not met, no share-based compensation expense is recognized, and, to the extent share-based compensation expense was previously recognized, such share-based compensation expense is reversed. Fair value measurements The Company has adopted ASC 820, Fair Value Measurements and Disclosures Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation te |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | NOTE 3 - INVENTORIES Components of inventories are as follows: June 30, 2017 2018 Raw materials $ 15,781 $ 19,047 Work in progress 19,525 26,425 Finished goods 10,354 12,602 $ 45,660 $ 58,074 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | NOTE 4 - ACCOUNTS RECEIVABLE June 30, 2017 2018 Accounts receivable $ 294,641 $ 324,310 Allowance for doubtful accounts (48,089 ) (49,094 ) $ 246,552 $ 275,216 The movements in allowance for doubtful accounts are as follows: June 30, 2016 2017 2018 Balance at the beginning of year $ 34,259 $ 42,471 $ 48,089 Additions 12,000 7,400 3,407 Deconsolidation of a subsidiary - (160 ) - Written off (714 ) (784 ) (3,527 ) Translation adjustment (3,074 ) (838 ) 1,125 Balance at the end of year $ 42,471 $ 48,089 $ 49,094 |
COSTS AND ESTIMATED EARNINGS IN
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS | 12 Months Ended |
Jun. 30, 2018 | |
Costs In Excess Of Billings and Billings In Excess Of Costs Incurred [Abstract] | |
Costs In Excess Of Billings and Billings In Excess Of Costs Incurred [Text Block] | NOTE 5 - COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS June 30, 2017 2018 Contracts costs incurred plus estimated earnings $ 810,327 $ 954,786 Less: Progress billings (639,571 ) (783,845 ) Cost and estimated earnings in excess of billings 170,756 170,941 Less: Allowance for doubtful accounts (8,660 ) (9,929 ) $ 162,096 $ 161,012 The movements in allowance for doubtful accounts are as follows: June 30, 2016 2017 2018 Balance at the beginning of year $ 8,850 $ 6,383 $ 8,660 Additions (1,823 ) 2,404 1,038 Translation adjustment (644 ) (127 ) 231 Balance at the end of the year $ 6,383 $ 8,660 $ 9,929 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | NOTE 6 - PROPERTY, PLANT AND EQUIPMENT A summary of property, plant and equipment is as follows: June 30, 2017 2018 Buildings $ 70,029 $ 72,257 Machinery 10,892 14,070 Software 10,004 11,892 Vehicles 4,378 4,717 Electronic and other equipment 29,321 31,310 Construction in progress 4,113 1,824 $ 128,737 $ 136,070 Less: Accumulated depreciation and impairment (48,208 ) (55,860 ) $ 80,529 $ 80,210 Buildings with a total carrying value of $991 and nil were pledged to secure short-term bank loans (note 12) as of June 30, 2017 and 2018, respectively. Buildings with a total carrying value of $3,209 and $3,121 were pledged to secure lines of credits from various banks in the Singapore and Malaysia as of June 30, 2017 and 2018, respectively. Buildings and vehicles with a total carrying value of $1,703 and $2,870 were pledged to secure long-term bank loans as of June 30, 2017 and 2018, respectively (note 13). Construction in progress consists of capital expenditures and capitalized interest charges related to the construction of facilities and assembly line projects and the expenditures related to the Company’s information system constructions. The depreciation expenses for the years ended June 30, 2016, 2017 and 2018 were $6,266, $8,752 and $8,217, respectively. Assets leased to others under operating leases The Company has entered into operating lease contracts related to certain buildings owned with the carrying amount as shown below: June 30, 2017 2018 Buildings leased to others - at original cost $ 13,925 $ 14,255 Less: accumulated depreciation (4,261 ) (4,714 ) Buildings leased to others - net $ 9,664 $ 9,541 |
PREPAID LAND LEASES
PREPAID LAND LEASES | 12 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Land Leases [Text Block] | NOTE 7 - PREPAID LAND LEASES A summary of prepaid land leases is as follows: June 30, 2017 2018 Prepaid land leases $ 12,335 $ 12,611 Less: Accumulated amortization (2,129 ) (2,439 ) $ 10,206 $ 10,172 The amortization for the years ended June 30, 2016, 2017 and 2018 were $281, $261 and $270, respectively. The annual amortization of prepaid land leases for each of the five succeeding years is as follows: Year ending June 30, 2019 $ 267 2020 267 2021 267 2022 267 2023 267 $ 1,335 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Jun. 30, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets Disclosure [Text Block] | NOTE 8 - INTANGIBLE ASSETS, NET June 30, 2017 2018 Gross Accumulated Net Gross Accumulated Net Customer relationships $ 3,086 (2,811 ) 275 $ 3,114 (3,114 ) - Patents and copyrights 1,695 (42 ) 1,653 3,752 (566 ) 3,186 $ 4,781 (2,853 ) 1,928 $ 6,866 (3,680 ) 3,186 The customer relationships and order backlog were related to the acquisition of Concord and Bond Groups, which were acquired on July 1, 2011 and April 1, 2013, respectively. The amortization for the years ended June 30, 2016, 2017 and 2018 were $818, $623 and $279, respectively. Upon acquisition of 100% of Hollysys Industrial Software in July 2017, the Company recognized $2,071 patents and copyrights related to the acquisition of Hollysys Industrial Software for the year ended June 30, 2018 was $319. The annual amortization expense relating to the existing intangible assets for the five succeeding years is as follow: Year ending June 30, 2019 $ 491 2020 491 2021 491 2022 491 2023 491 $ 2,455 |
GOODWILL
GOODWILL | 12 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Disclosure [Text Block] | NOTE 9 - GOODWILL The changes in the carrying amount of goodwill are as follows: June 30, 2017 2018 Balance at beginning of year $ 59,847 $ 47,326 Goodwill upon acquisition - 607 Goodwill impairment charge (11,211 ) - Translation adjustment (1,310 ) 426 Balance at the end of year $ 47,326 $ 48,359 Concord Group, as a component of the M&E operating segment, is considered to be a reporting unit for goodwill impairment purposes as Concord Group constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of Concord Group. The amount of goodwill allocated to Concord Group was $24,595 and $24,817 as of June 30, 2017 and 2018, respectively, before any impairment charges. The Company engaged an independent third-party appraiser to assist in the goodwill impairment test. For the year ended June 30, 2017, the Company concluded that the carrying amount of Concord Group exceeded its fair value and recorded a goodwill impairment charge of $11,211 under the caption of “Goodwill impairment charge” in the statement of comprehensive income For the year ended June 30, 2018, the Company’s step one impairment test indicated that the carrying amount of Concord Group does not exceed its fair value and no impairment of goodwill was noted. Based on the testing results, the amount of goodwill allocated to Concord Group after impairment was $11,488 and $11,592 as of June 30, 2017 and 2018. Estimating the fair value of Concord Group requires the Company to make assumptions and estimates regarding its future plans, market share, industry and economic conditions of the various geographical areas in which it operates which includes Singapore, Malaysia and the Middle East. In applying the discounted cash flow approach, key assumptions include the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. The Company estimates future expected cash flows for each geographical area in which it operates and calculates the net present value of those estimated cash flows using risk adjusted discount rates ranging from 12.7% to 16.0% (2017: 12.7% to 16.9%) and a terminal value growth rate was 2% (2017: 2%). If the discount rates adopted in 2018 increased or decreased by 1%, the fair value of Concord Group would decrease or increase by $1,672 and $1,980, respectively. If the terminal value growth rates adopted in 2018 increased or decreased by 1%, the fair value of Concord Group would increase or decrease by $808 and $697, respectively. There are uncertainties surrounding the amount and timing of future expected cash flows as they may be impacted by negative events such as a slowdown in the mechanical and electrical engineering sector, deteriorating economic conditions in the geographical areas Concord Group operates in, political, economic and social uncertainties in the Middle East, increasing competitive pressures and fewer than expected mechanical and electrical solution contracts awarded to Concord Group. These events can negatively impact demand for Concord Group’s services and result in actual future cash flows being less than forecasted or delays in the timing of when those cash flows are expected to be realized. Further, the timing of when actual future cash flows are received could differ from the Company’s estimates, which are based on historical trends and does not factor in unexpected delays in project commencement or execution. |
INVESTMENTS IN EQUITY AND COST
INVESTMENTS IN EQUITY AND COST INVESTEES | 12 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment [Text Block] | NOTE 10 - INVESTMENTS IN EQUITY AND COST INVESTEES The following long-term investments were accounted for under either the equity method or the cost method as indicated: June 30, 2017 Interest Long-term Share of Advance Total Equity method Beijing Hollycon Medicine & Technology Co., Ltd. 30.00 % $ 22,737 1,773 - 24,510 China Techenergy Co., Ltd. 40.00 % 8,847 2,503 43 11,393 Beijing Hollysys Electric Motor Co., Ltd. 40.00 % 781 4,262 - 5,043 Beijing IPE Biotechnology Co., Ltd. 22.02 % 1,454 2,241 - 3,695 Shenzhen HollySys Intelligent Technologies Co., Ltd. 60.00 % 2,654 (159 ) - 2,495 Southcon Development Sdn Bhd. 30.00 % 210 (104 ) - 106 Beijing Hollysys Machine Automation Co., Ltd. 30.00 % 442 (442 ) - - $ 37,125 10,074 43 47,242 Cost method Shenhua Hollysys Information Technology Co., Ltd. 20.00 % $ 2,338 - - 2,338 Heilongjiang Ruixing Technology Co., Ltd. 6.00 % 1,598 - - 1,598 Zhejiang Sanxin Technology Co., Ltd. 6.00 % 88 - - 88 Zhongjijing Investment Consulting Co., Ltd. 5.00 % - - - - $ 4,024 - - 4,024 June 30, 2018 Interest Long-term Share of Advance Total Equity method Beijing Hollycon Medicine & Technology Co., Ltd. 30.00 % $ 23,276 3,091 - 26,367 China Techenergy Co., Ltd. 40.00 % 9,057 3,642 45 12,744 Beijing Hollysys Electric Motor Co., Ltd. 40.00 % 799 4,757 - 5,556 Beijing IPE Biotechnology Co., Ltd. 22.02 % 1,489 2,162 - 3,651 Beijing Hollysys Digital Technology Co.,Ltd. 25.00 % 3,729 (192 ) - 3,537 Shenzhen HollySys Intelligent Technologies Co., Ltd. 60.00 % 2,717 (1,445 ) - 1,272 Beijing AIRmaker Technology Co., Ltd. 20.00 % 151 - - 151 Southcon Development Sdn Bhd. 30.00 % 223 (112 ) - 111 Beijing Hollysys Machine Automation Co., Ltd. 30.00 % 453 (453 ) - - Beijing Jing Yi Intelligent Technologies Innovation Center Co., Ltd. 46.00 % - - - - Ningbo Hollysys Intelligent Technologies Co., Ltd. 40.00 % - - - - $ 41,894 11,450 45 53,389 Cost method Shenhua Hollysys Information Technology Co., Ltd. 20.00 % $ 2,393 - - 2,393 Heilongjiang Ruixing Technology Co., Ltd. 6.00 % 1,636 - - 1,636 Zhejiang Sanxin Technology Co., Ltd. 6.00 % 91 - - 91 Beijing Hetaitong Technologies Co., Ltd. 10.00 % 75 - - 75 Zhongjijing Investment Consulting Co., Ltd. 5.00 % - - - - Qingdao Lanjing Technology Co., Ltd. 10.00 % - - - - $ 4,195 - - 4,195 In July 2016, Beijing Hollycon Medicine& Technology. Co., Ltd. (“Hollycon”), previously one of the Company’s subsidiaries, issued new shares for an aggregate cash consideration of $30,943 to two new third party investors. At the same time, the Company disposed 0.6% of its equity interest in Hollycon for cash consideration of $464. These two transactions resulted in dilution of the Company’s equity interest in Hollycon from 51% to 30%. According to the revised article of association, Hollycon will be managed by a board of directors comprising of a total 5 members, of which, the Company can appoint two directors while the other three shareholders can appoint one director each. The Company can also appoint the chairman of the board. All major management and operation decision need be approved by the board and requires approval by at least 2/3 of board directors. Profits is allocated to shareholders based on the percentage of respective initial investment. The Company lost control over Hollycon upon the completion of the two transactions set out above, but maintained significant influence over Hollycon, and accounted for the investment in Hollycon under equity method. Upon the deconsolidation date, the Company recorded the retained non-controlling equity investee at fair value of $22,737 and recognized a gain of $14,514. The fair value of retained non-controlling interest in Hollycon was measured using a discounted cash flow approach. Key estimates and assumptions include the amount and timing of future expected cash flows, terminal value growth rates, and discount rate. Shenzhen Hollysys Intelligent Technologies Co., Ltd. (“Shenzhen Hollysys”) was set up in October 2016. The Company holds a 60% equity interest of Shenzhen Hollysys, but uses the equity method to account for the investment as the Company does not control Shenzhen Hollysys since: 1) Only one out of the three board representatives is elected by the Company and the remaining two are elected by other two shareholders; 2) Based on the articles of association of Shenzhen Hollysys, all major decisions in the normal business operation and appointment of key managements of Shenzhen Hollysys is subject to approval by at least two-third vote of the Board of Directors. In August 2017, the Company acquired 25% of equity interest in Beijing Hollysys Digital Technology Co., Ltd (“Digital Technology”), a third party managed by a board of directors comprising of a total 7 members, of which, the Company can appoint two directors. All major management and operation decisions should be approved by at least 50% of the directors. The Company believed it has significant influence over Digital Technology, and therefore accounted for the investment in Digital Technology under equity method. In October 2017, Beijing Jing Yi Intelligent Technologies Innovation Center Co., Ltd. (“Intelligent Center”) was established with a registered capital RMB50,000 (equivalent to $7,612), 46% of which will be contributed by the Company. Intelligent Center was managed by a board of directors comprising of a total 5 members, of which, the Company can appoint two directors. All major management and operation decisions should be approved by at least 50% of the directors. The Company believed it has significant influence over Intelligent Center, and therefore accounted for the investment in Intelligent Center under equity method. As of June 30, 2018, Intelligent Center had no operation, and neither shareholders made capital contributions. In December 2017, Beijing AIRmaker Technology Co., Ltd. (“AIRmaker”) was established with a registered capital RMB5,000 (equivalent to $755), 20% of which amounting to RMB1,000 (equivalent $151) was contributed by the Company. AIRmaker was managed by a board of directors comprising of a total 3 members, of which, the Company can appoint one director. All major management and operation decisions should be approved by at least 50% of the directors. The Company believed it has significant influence over AIRmaker, and accounted for this investment using the equity method. As of June 30, 2018, AIRmaker has no operation, and neither shareholders made capital contributions. In June 2018, Ningbo Hollysys Intelligent Technology Company Limited (“Ningbo Hollysys”) was established with a registered capital RMB250,000 (equivalent to $38,060) by the Company and a third party with the equity interests of 40% and 60%, respectively. The Company believed it had a significant influence over Ningbo Hollysys and therefore accounted for the investment under equity method. As of June 30, 2018, Ningbo Hollysys had no operation, and neither shareholders made capital contributions. The Company holds a 20% equity interest of Shenhua Hollysys Information Technology Co., Ltd. (“Shenhua Information”), but uses the cost method to account for the investment since: 1) Only one out of the five board representatives is elected by the Company and the remaining 80% equity interest is held by a large state-owned company which, in the view of the management, operates Shenhua Information without regards to the views of the Company; 2) Key management of Shenhua Information including the chief executive officer, chief financial officer, chief operating officer and head of accounting are all appointed by the other shareholder. 3) Based on the articles of association of Shenhua Information, there are no matters that require unanimous approval of all shareholders and there are no participating rights for non-controlling shareholders. The Company reduced the investment in Zhongjijing Investment Consulting Co., Ltd. (“Zhongjijing”) to nil since June 30, 2014. The Company expects that the recoverable amount of the investment in Zhongjijing to be nil. There were no impairment indicators for these cost method investments and no impairment loss was recognized for the year ended June 30. 2016, 2017 and 2018, except for Zhongjijing. In November 2017, Qingdao Lanjing Technology Co., Ltd (“Qingdao Lanjing”) was established. According to the revised article of association dated May 2018, the Company will contribute RMB5,000 (equivalent to $755) for 10% equity interest in Qingdao Lanjing. The Company accounted for this investment using the cost method. As of June 30, 2018, Qingdao Lanjing had no operation, and neither shareholders made capital contributions. In May 2018, Beijing Hetaitong Technologies Co., Ltd. (“Hetaitong”) was established with a registered capital RMB5,000 (equivalent to $755), of which RMB500 (equivalent $75) was contributed by the Company. The Company held a 10% equity interest in Hetaitong, and accounted for this investment using the cost method. |
WARRANTY LIABILITIES
WARRANTY LIABILITIES | 12 Months Ended |
Jun. 30, 2018 | |
Product Warranties Disclosures [Abstract] | |
Product Warranty Disclosure [Text Block] | NOTE 11 - WARRANTY LIABILITIES June 30, 2017 2018 Beginning balance $ 10,360 $ 7,632 Deconsolidation of a subsidiary (227 ) - Expense accrued 1,547 3,211 Expense incurred (3,836 ) (3,165 ) Translation adjustment (212 ) 180 $ 7,632 $ 7,858 Less: current portion of warranty liabilities (5,386 ) (5,622 ) Long-term warranty liabilities $ 2,246 $ 2,236 |
SHORT-TERM BANK LOANS
SHORT-TERM BANK LOANS | 12 Months Ended |
Jun. 30, 2018 | |
Short-term Debt [Abstract] | |
Short-term Debt [Text Block] | NOTE 12 - SHORT-TERM BANK LOANS On June 30, 2017, the Company’s short-term bank borrowings consisted of revolving bank loans of $8,121 from several banks, which were subject to annual interest rates ranging from 3.09% to 4.85%, with a weighted average interest rate of 3.53%. Some of the short-term loans are secured by the pledge of restricted cash and buildings with carrying values of $16,410 and $991 as of June 30, 2017, respectively. On June 30, 2018, the Company’s short-term bank borrowings consisted of revolving bank loans of $2,865 from several banks, which were subject to annual interest rates ranging from 4.60% to 5.66%, with a weighted average interest rate of 4.71%. Some of the short-term loans are secured by the pledge of restricted cash $1,007 as of June 30, 2018, respectively. For the years ended June 30, 2016, 2017, and 2018, interest expenses on short-term bank loans amounted to $211, $178 and $376, respectively. As of June 30, 2017, the Company had available lines of credit from various banks in the PRC, Singapore and Malaysia amounting to $257,670, of which $78,910 was utilized and $178,760 is available for use. These lines of credit were secured by the pledge of restricted cash and buildings with a carrying value of $4,954 and $3,209, respectively. As of June 30, 2018, the Company had available lines of credit from various banks in the PRC, Singapore and Malaysia amounting to $340,006, of which $151,254 was utilized and $188,752 is available for use. These lines of credit were secured by the pledge of restricted cash and buildings with a carrying value of $2,279 and $3,121, respectively. |
LONG-TERM LOANS
LONG-TERM LOANS | 12 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-term Debt [Text Block] | NOTE 13 - LONG-TERM LOANS June 30, 2017 2018 MYR denominated loan (i) 782 1,016 SGD denominated loan (ii) 187 177 Convertible Bond (iii) 20,032 19,866 $ 21,001 $ 21,059 Less: current portion (420 ) (350 ) $ 20,581 $ 20,709 i. The MYR denominated loans are repayable in 3 to 75 installments with the last installment due in December 2041. For the year ended June 30, 2018, the effective interest rates ranged from 2.19% to 5.68% per annum. The borrowings are secured by the mortgages of buildings, vehicles in Malaysia, with an aggregate carrying value of $1,396 and $2,666 as of June 30, 2017 and 2018, respectively. ii. The SGD denominated loans are repayable in 10 to 31 installments with the last installment due on March 15, 2024. For the year ended June 30, 2018, the effective interest rates ranged from 2.68% to 5.44% per annum. The borrowing is secured by vehicles with a total carrying value of $307 and $204 as of June 30, 2017 and 2018, respectively. iii. Convertible Bond On May 30, 2014, the Company entered into a Convertible Bond agreement with International Finance Corporation ("IFC"), under which the Company borrowed $20,000 from IFC (the “Convertible Bond”) with an interest rate of 2.1% per annum and commitment fee of 0.5% per annum paid in arrears semi-annually. The Convertible Bond has a five year term and was drawn down on August 30, 2014 and is repayable in full on August 29, 2019. The loan may not be prepaid before it is due. Conversion rate The initial conversion rate at the time of the agreement is 38 ordinary shares per $1, and the initial conversion price is $26.35 per share. The initial conversion rate and conversion price are subject to subsequent adjustments with events that may dilute the unit price per share. Since the Company paid out a cash dividend of $0.40 per share in March 2015, $0.20 per share in November 2016, and $0.12 per share in 2017, the conversion rate and conversion price was adjusted to 39.44 ordinary shares per $1 and $25.35 per share, respectively. Conversion The Convertible Bond has both voluntary and mandatory conversion terms. IFC may at its option convert, in $1,000 increments, the Convertible Bond in whole or in part, into the Company’s ordinary shares at any time on or prior to the maturity date at a conversion rate and a conversion price in effect at such time. The conversion rate is subject to anti-dilution. According to the Convertible Bond agreement, 50% of the principal amount of the Convertible Bond then outstanding will be mandatorily converted into ordinary shares of the Company at the conversion rate and conversion price then in effect if at any time, with respect to the period of 30 consecutive trading days ending at such time, the volume weighted average prices for 20 trading days or more in such 30 consecutive trading day period is equal to or more than 150% of the conversion price in effect at such time. In addition, 100% of the principal amount of the Convertible Bond then outstanding will be mandatorily converted into ordinary shares at the conversion rate and conversion price then in effect if at any time, with respect to the period of 30 consecutive trading days ending at such time, the volume weighted average prices for 20 trading days or more in such 30 consecutive trading day period is equal to or more than 200% of the conversion price in effect at such time. Non-conversion compensation feature In the event that there remains any outstanding principal of the Convertible Bond not converted by IFC into ordinary shares at the maturity date, the Company shall pay to IFC an additional amount equal to 4% of such outstanding principle (“non-conversion compensation feature”). The non-conversion compensation feature is bifurcated as a derivative liability and measured at the fair value in each reporting period. Registration rights agreement The Company has filed a shelf-registration statement with the United States Securities and Exchange Commission with respect to the resale of any ordinary shares issued or issuable upon conversion of the Convertible Loan. The Company shall maintain the effectiveness of the registration statement for so long as any registrable securities remain issued and outstanding. In the event that the registration statement is not declared effective or ceases to remain continuously effective such that IFC is not able to utilize the prospectus to resell its ordinary shares, the Company shall pay a penalty equal to 0.5% of the aggregate principal amount of the Convertible Bond that was converted into unregistered ordinary shares then held by IFC. The maximum aggregate penalty payable to IFC shall be 5% of the aggregate principal amount of the Convertible Bond that was converted. In accounting for the issuance of the Convertible Bond, the Company bifurcated the non-conversion compensation feature from the Convertible Bond in accordance with ASC 815-15-30-2. The bifurcated feature is accounted for as a liability at its fair value in each reporting period. The Company did not bifurcate the conversion option, as it is considered indexed to the entity’s own stock and meets the equity classification guidance in ASC 815-40-25, it is eligible for a scope exception from ASC 815 and does not need to be bifurcated from the underlying debt host instrument. At the commitment date, there was no beneficial conversion as the conversion price was higher than the stock price. The fees and expenses associated with the issuance of the Convertible Bond are recorded as a discount to the debt liability in accordance with ASU 2015-03, which the Company has early adopted in fiscal year ended June 30, 2015. The Convertible Bond, which is the proceeds net of fees and expenses payable to the creditor and the fair value of the bifurcated derivative, will be accreted to the redemption value on the maturity date using the effective interest method over the estimated life of the debt instrument. The registration right liability is accounted for in accordance with ASC 450-20 which defines that a liability should be recorded in connection with the registration rights agreement when it becomes probable that a payment under the registration rights agreement would be required and the amount of payment can be reasonably estimated. As of June 30, 2018, the Company did not recognize any liability related to the registration right. The Company paid up-front fees related to the issuance of the Convertible Bond amounting to $349. For fiscal year 2016, 2017 and 2018, the accretion of the Convertible Bond was $230, $230 and $230, respectively. Scheduled principal payments for all outstanding long-term loans as of June 30, 2018 are as follows: Year ending June 30, 2019 $ 826 2020 20,267 2021 239 2022 167 2023 and onwards 295 $ 21,794 For the years ended June 30, 2016, 2017, and 2018, interest expenses of long-term loans incurred amounted to $1,193, $760 and $316, respectively, and nil was capitalized as construction in progress for either of these three years. As of June 30, 2018, the Company is in compliance with debt covenant requirements under Convertible Bond. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | NOTE 14 - FAIR VALUE MEASUREMENT Financial instruments include cash and cash equivalents, time deposits with maturities over three months, accounts receivable, other receivables, amounts due to or from related parties, accounts payable, short-term bank loans, long-term bank loans and bifurcated derivative. The carrying values of these financial instruments, other than long-term bank loans and a bifurcated derivative (which is a recurring fair value measurement), approximate their fair values due to their short-term maturities. The carrying value of the Company’s long-term bank loans other than the Convertible Bond approximates its fair value as the long-term bank loans are subject to floating interest rates. These assets and liabilities, excluding cash and cash equivalents (which fall into level 1 of the fair value hierarchy), fall into level 2 of the fair value hierarchy. The carrying value of the Convertible Bond is $20,032 and $19,866 as of June 30, 2017 and 2018, respectively; whereas the fair value is $15,359 and $17,119 as of June 30, 2017 and 2018, respectively. The fair value measurement of the Convertible Bond falls into level 3 of the fair value hierarchy. Assets and liabilities measured at fair value on a recurring basis as of June 30, 2017, and 2018 are stated below: June 30, 2017 Quoted prices Significant Significant (Level 1) (Level 2) (Level 3) Total Liabilities: Derivative financial liability (i) $ - $ - $ 487 $ 487 Total liabilities measured at fair value on a recurring basis $ - $ - $ 487 $ 487 June 30, 2018 Quoted prices Significant Significant (Level 1) (Level 2) (Level 3) Total Liabilities: Derivative financial liability (i) $ - $ - $ 412 $ 412 Total liabilities measured at fair value on a recurring basis $ - $ - $ 412 $ 412 (i) The derivative financial liability represents the fair value of the non-conversion compensation feature (note 13). The Company engaged an independent third-party appraiser to assist with the valuation of the feature. The Company is ultimately responsible for the fair value of the non-conversion compensation feature recorded in the consolidated financial statements. The Company adopted the binomial model to assess the fair value of such feature as of year-end. The non-conversion compensation feature is equal to the difference between the fair value of the whole Convertible Bond with the non-conversion compensation feature and the whole Convertible Bond without the non-conversion feature. The significant unobservable inputs used in the fair value measurement of the non-conversion compensation feature includes the risk-free rate of return, expected volatility, expected life of the Convertible Bond and expected ordinary dividend yield. The changes in fair value of the non-conversion compensation feature during fiscal year 2017 and 2018 are shown in the following table. Fair value measurements as of June (Level 3) Non-conversion compensation feature Balance as at June 30, 2017 $ 487 Change in fair-value (included within other expenses, net) (75 ) Balance as of June 30, 2018 $ 412 Assets measured at fair value on a nonrecurring basis as of June 30, 2017 are stated below: June 30, 2017 Quoted prices in Significant other Significant (Level 1) (Level 2) (Level 3) Total Assets: Retained non-controlling interest in a former subsidiary (i) $ - $ - $ 22,737 $ 22,737 Goodwill - - 11,488 11,488 Total assets measured at fair value on a non-recurring basis $ - $ - $ 34,225 $ 34,225 (i) During the year ended June 30, 2017, the investment in Hollycon was measured based on significant unobservable inputs (Level 3), using a discounted cash flow approach assuming a certain terminal growth rate and discount rate (Note 10). (ii) As of June 30, 2017, the Company’s goodwill of $11,488 was related to the acquisition of Concord Group and $35,838 was related to the acquisition of Bond Group. The Company engaged an independent third-party appraiser to assist with the valuation of the goodwill related to the Concord and Bond Groups. The Company is ultimately responsible for the fair value of the goodwill recorded in the consolidated financial statements. For the purposes of step one of the goodwill impairment test, the Company has adopted the income approach, in particular the discounted cash flow approach, to evaluate the fair value of the reporting unit. In applying the discounted cash flow approach, key assumptions include the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. For the purpose of step two of the goodwill impairment test, the Company has allocated the fair value of the reporting unit derived in step one to the assets and liabilities of the reporting unit, as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. The Company adopted the multi-period excess earnings model to evaluate the fair value of the intangible assets of the reporting unit, which was then used to compute the implied fair value of the goodwill via a residual approach. As a result, the Company recorded a goodwill impairment charge of $11,211 (Note 9). June 30, 2018 Quoted prices in Significant other Significant (Level 1) (Level 2) (Level 3) Total Assets: Intangible asset (i) $ - $ - $ 1,752 $ 1,752 Total assets measured at fair value on a non-recurring basis $ - $ - $ 1,752 $ 1,752 (i) Upon the acquisition of 100% of Hollysys Industrial Software in July 2017, the Company recognized $2,071 patents and copyrights based on significant unobservable inputs (Level 3), using a discounted cash flow approach assuming a certain terminal growth rate and discount rate. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 15 - STOCKHOLDERS’ EQUITY In August 2010, the Board of Directors adopted the 2010 Rights Plan. The 2010 Rights Plan provides for a dividend distribution of one preferred share purchase (the “Right”), for each outstanding ordinary share. Each Right entitles the shareholder to buy one share of the Class A Preferred Stock at an exercise price of $160. The Right will become exercisable if a person or group announces an acquisition of 20% or more of the outstanding ordinary shares of the Company, or announces commencement of a tender offer for 20% or more of the ordinary shares. In that event, the Right permits shareholders, other than the acquiring person, to purchase the Company’s ordinary shares having a market value of twice the exercise price of the Right, in lieu of the Class A Preferred Stock. In addition, in the event of certain business combinations, the Right permits the purchase of the ordinary shares of an acquiring person at a 50% discount. Right held by the acquiring person become null and void in each case. Unless terminated earlier by the Board of Directors, the 2010 Rights Plan will expire on September 27, 2020. There is no accounting impact related to the Right. On September 26, 2016, the Company declared a regular cash dividend of $0.20 per share to the holders of the Company’s ordinary shares. The record date was October 26, 2016, and the dividend was paid on November 11, 2016. On September 26, 2017, the Company declared a regular cash dividend of $0.12 per share to the holders of the Company’s ordinary shares. The record date was October 16, 2017, and the dividend was paid on November 6, 2017. |
SHARE-BASED COMPENSATION EXPENS
SHARE-BASED COMPENSATION EXPENSES | 12 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | NOTE 16 - SHARE-BASED COMPENSATION EXPENSES On September 20, 2007, the Company adopted the 2006 Stock Plan (the “2006 Plan”) which allows the Company to offer a variety of incentive awards to employees, officers, directors and consultants. Options to purchase 3,000,000 ordinary shares are authorized under the 2006 Plan. The Company issues new shares to employees, officers, directors and consultants upon share option exercise or share unit conversion. On May 14, 2015, the Board of Directors approved the 2015 Equity Incentive Plan (the “2015 Equity Plan”). The 2015 Equity Plan provided for 5,000,000 ordinary shares, and it will terminate ten years following the date that it was adopted by the Board of Directors. The purposes of the 2015 Equity Plan are similar as the 2006 Plan, which is used to promote the long-term growth and profitability of the Company and its affiliates by stimulating the efforts of employees, directors and consultants of the Company and its affiliates who are selected to be participants, aligning the long-term interests of participants with those of shareholders, heightening the desire of participants to continue in working toward and contributing to the success of the Company, attracting and retaining the best available personnel for positions of substantial responsibility, and generally providing additional incentive for them to promote the success of the Company’s business through the grant of awards of or pertaining to the Company’s ordinary shares. The 2015 Equity Plan permits the grant of incentive share options, non-statutory share options, restricted shares, restricted share units, share appreciation rights, performance units and performance shares as the Company may determine. Performance options Performance share options granted in 2012 (“2012 Performance Options”) The Company granted 1,476,000 share options to certain employees under the terms of the 2006 Plan in 2012. All the share options had been vested and exercised by June 30, 2017. The Company recorded share-based compensation expense relating to 2012 performance share options of $251, nil and nil which is included in general and administrative expenses, for the years ended June 30, 2016, 2017 and 2018, respectively. Performance options granted in 2015 (“2015 Performance Options”) On May 14, 2015, certain employees of the Company were granted share-based compensation awards totaling 1,740,000 performance share options to purchase ordinary shares according to the terms of the 2015 Equity Plan. The exercise price of these options is $22.25 per share. The exercise price of the option will be adjusted in the event dividends are paid by the Company. On the 24, 36, 48 month anniversary of the grant date, 30%, 30%, 40% of 1,160,000 performance share options will vest if the Company’s annual growth rate of Non-GAAP diluted EPS for fiscal years 2015, 2016 and 2017 equals or exceeds 15% per annum. On the 48 month anniversary of the grant date, 50% of the remaining 580,000 options will vest if the Company’s CAGR of Non-GAAP diluted EPS for fiscal years 2015 to 2017 equals or exceeds 20%, and another 50% of the 580,000 performance options will vest if he Company’s CAGR of Non-GAAP diluted EPS for fiscal years 2015 to 2017 equals or exceeds 25%. Moreover, for option grantees who are responsible for individual businesses, they have to meet the following additional criteria in each year, from fiscal years 2015 to 2017, to exercise the options in that particular year. The annual revenue growth rate compared to prior fiscal year must equal to or exceed 15%, 5%, 15% and 50% respectively for industrial automation (“IA”), rail transportation (“Rail”), mechanical and electrical solutions (“M&E”) and medical (“Medical”) revenue streams. The vesting schedule for such performance share options is as below: EPS Threshold Number of vested Months after the grant date 24 months 36 months 48 months Annual growth rate over 15% but below 20% 1,160,000 348,000 348,000 464,000 CAGR equals or over 20% but below 25% Additional 290,000 - - 290,000 CAGR equals 25% or above Additional 290,000 - - 290,000 Total 348,000 348,000 1,044,000 The 2015 Performance Options will remain exercisable from the vesting date until the 60 month anniversary of the grant date. The EPS threshold and the revenue growth thresholds for Rail and Medical were met for fiscal years ended June 30, 2015 and 2016, however, the revenue growth thresholds of IA and M&E was not achieved. The annual growth rate of Non-GAAP diluted EPS for fiscal year 2017 failed to fall between 15% and 20%, in addition, the revenue growth thresholds were not met for all revenue streams. Based on this performance, 396,000 out of 1,740,000 2015 performance options are vested. A summary of the 2015 performance option activity for the year ended June 30, 2018 is as shown below: 2015 Performance Number of Weighted Weighted average Aggregate Outstanding as at June 30, 2017 396,000 22.05 2.87 - Vested and expected to vest at June 30, 2018 396,000 22.05 1.87 546 Vested and exercisable at June 30, 2018 396,000 22.05 1.87 546 The weighted averaged grant-date fair value of the 2015 performance options granted in fiscal year 2015 was $10.07. The Company recorded share-based compensation expense relating to the 2015 performance options in the amount of $3,190, $(263) and $588 which is included in general and administrative expenses, in fiscal year 2016, 2017 and 2018, respectively. As of June 30, 2018, all the share-based compensation expense related to the 2015 Performance Options was recognized. For the 2015 performance options, the Company engaged an independent third-party appraiser to assist with the valuation of the option. The Company has adopted the binomial option pricing model to assess the fair value as of the valuation date. The major inputs to the binomial model are as follows: For options granted on May 14, 2015 Risk-free rate of return 1.51 % Weighted average expected volatility 53.42 % Expected life (in years) 5 years Expected ordinary dividend yield nil Restricted shares During the year ended June 30, 2014, the Company granted 52,500 restricted ordinary shares to certain directors under the 2006 Plan. All shares were granted on June 23, 2014. These restricted shares vest quarterly over a three-year period starting from the directors’ respective service inception date. Fair value of the restricted shares was determined with reference to the market closing price at grant date. During the year ended June 30, 2017, the Company granted 67,500 restricted ordinary shares to certain directors under the 2015 Plan. All shares were granted on December 10, 2016. These restricted shares vest quarterly over a three-year period starting from the directors’ respective service inception date. Fair value of the restricted shares was determined with reference to the market closing price at grant date. A summary of the restricted share activity for the year ended June 30, 2018 is as follows: Number of restricted shares Weighted average grant-date fair value Un-vested at June 30, 2017 63,125 20.09 Vested at June 30, 2018 (22,500 ) 20.09 Un-vested at June 30, 2018 40,625 20.09 The aggregated grant-date fair value of restricted shares vested during the years ended June 30, 2016, 2017 and 2018 were $419, $432 and $452 respectively. $419, $727 and $619 were recorded in general and administrative expenses as restricted share compensation expenses, for the years ended June 30, 2016, 2017 and 2018, respectively. As of June 30, 2018, the aggregated unrecognized compensation expense of $285 related to the restricted shares is expected to be recognized over a weighted-average vesting period of 1.63 years. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Compensation and Employee Benefit Plans [Text Block] | NOTE 17 - EMPLOYEE BENEFITS The Company contributes to a state pension scheme run by the Chinese government in respect of its employees in China, a central provision fund run by the Singapore government in respect of its employees in Singapore, and an employment provident fund in respect of its employees in Malaysia. The expenses related to these plans were $18,235, $17,568 and $18,994 for the years ended June 30, 2016, 2017 and 2018, respectively. These schemes were accounted for as defined contribution plans. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | NOTE 18 - INCOME TAX BVI Hollysys and its subsidiaries incorporated in the BVI are not subject to income tax under the relevant regulations. Singapore The Company’s wholly owned subsidiaries incorporated in Singapore are subject to Singapore corporate tax at a rate of 17% on the assessable profits arising from Singapore. Malaysia The Company’s wholly owned subsidiaries incorporated in Malaysia are subject to Malaysia corporate income tax at a rate of 24% on the assessable profits arising from Malaysia. Dubai The branch of the Company’s wholly owned subsidiary is a tax exempt company incorporated in Dubai, and no tax provision has been made for each of the years ended June 30, 2016, 2017 and 2018. Hong Kong The Company’s wholly owned subsidiaries incorporated in Hong Kong are subject to Hong Kong profits tax at a rate of 16.5% on the assessable profits arising from Hong Kong . No provision for Hong Kong profits tax has been made in the statement of comprehensive income as there were sustained taxable losses arising from Hong Kong for each of the years ended June 30, 2016, and 2017. Macau The Company’s wholly owned subsidiary incorporated in Macau is subject to the Macau corporate income tax at a rate of 12% on the assessable profits arising from Macau, with an exemption up to MOP600. No provision for Macau profits tax has been made in the statement of comprehensive income for each of the years ended June 30, 2016, 2017 and 2018. India The Company’s wholly owned subsidiary incorporated in India is subject to India corporate tax at a rate of 30% on its worldwide income. No provision for India profits tax has been made in the statement of comprehensive income as there were no taxable profits noted for each of the years ended June 30, 2016, 2017 and 2018. Qatar CECL is subject to the Qatar Corporate income tax at a rate of 10% on the assessable profit arising from Qatar. Indonesia The Company’s wholly owned subsidiary incorporated in Indonesia is subject to the Indonesia Corporate income tax at a rate of 25% on the assessable profit arising from Indonesia. No provision for Indonesia tax has been made in the statement of comprehensive income as there were no assessable profits noted for the year ended June 30, 2018. PRC The Company’s subsidiaries incorporated in the PRC are subject to PRC enterprise income tax (“EIT”) on their respective taxable incomes as adjusted in accordance with relevant PRC income tax laws. The PRC statutory EIT rate is 25%. The Company’s PRC subsidiaries are subject to the statutory tax rate except for the followings: Beijing Hollysys Co., Ltd Beijing Hollysys was certified as a High and New Technology Enterprise (“HNTE”) which provides a preferential EIT rate of 15% for three calendar years from 2017 to 2019. Further, Beijing Hollysys was qualified for the Key Software Enterprise (“KSE”) status in calendar year 2017 and was entitled to the preferential tax rate of 10% for . Hangzhou Hollysys Automation Co., Ltd Hangzhou Hollysys was certified as a HNTE which provides a preferential EIT rate of 15% for three calendar years from 2017 to 2019. Further, Hangzhou Hollysys was qualified for the KSE status in calendar year 2017 and was entitled to the preferential tax rate of 10% for . Beijing Hollysys Industrial Software Company Ltd. (“Hollysys Industrial Software”) Hollysys Industrial Software was certified as a HNTE which provides a preferential EIT rate of 15% for three calendar years from 2016 to 2018. The Company’s income before income taxes consists of: Year ended June 30, 2016 2017 2018 PRC $ 142,900 $ 105,331 $ 127,301 Non-PRC (5,158 ) (21,976 ) 2,341 $ 137,742 $ 83,355 $ 129,642 Income tax expense, most of which is incurred in the PRC, consists of: Year ended June 30, 2016 2017 2018 Current income tax expense (benefit) PRC 10,590 12,911 17,268 Non-PRC 4,110 (658 ) 6,462 $ 14,700 $ 12,253 $ 23,730 Deferred income tax (benefit) expense PRC (196 ) 2,616 (1,348 ) Non-PRC (266 ) (483 ) (177 ) $ (462 ) 2,133 (1,525 ) $ 14,238 $ 14,386 $ 22,205 Reconciliation of the income tax expenses as computed by applying the PRC statutory tax rate of 25% to income before income taxes and the actual income tax expenses is as follows: Year ended June 30, 2016 2017 2018 Income before income taxes $ 137,742 $ 83,355 $ 129,642 Expected income tax expense at statutory tax rate in the PRC 34,436 20,838 32,410 Effect of different tax rates in various jurisdictions 2,109 2,627 (521 ) Effect of preferential tax treatment (12,296 ) (10,650 ) (11,678 ) Effect of non-taxable income (4,985 ) - (284 ) Effect of additional deductible research and development expenses (4,716 ) (2,385 ) (4,260 ) Effect of non-deductible expenses 5,569 4,608 3,046 Effect of change in tax rate (6,613 ) (4,835 ) (4,801 ) Change in valuation allowance 540 3,964 2,359 Tax rate differential on deferred tax items (587 ) 2,056 - Withholding tax on dividend paid by subsidiaries 1,252 (2,799 ) 4,784 Others (471 ) 962 1,150 Total $ 14,238 $ 14,386 $ 22,205 The breakdown of deferred tax assets/liabilities caused by the temporary difference is shown as below: June 30, 2017 Deferred tax assets, current Allowance for doubtful accounts $ 9,172 Inventory provision 179 Provision for contract loss 694 Long-term assets 13 Deferred revenue 3,220 Deferred subsidies 1,654 Warranty liabilities 829 Recognition of intangible assets (2 ) Accrued payroll 998 Net operating loss carry forward 9,801 Valuation allowance (10,160 ) Total deferred tax assets, current $ 16,398 Deferred tax liabilities, current Costs and estimated earnings in excess of billings $ (10,071 ) Recognition of intangible assets - PRC dividend withholding tax (2,949 ) Others 2 Total deferred tax liabilities, current $ (13,018 ) Net deferred tax assets, current $ 7,730 Net deferred tax liabilities, current $ (4,350 ) Deferred tax assets, non-current Long-term assets $ 112 Deferred subsidies 333 Net operating loss carryforward 1,573 Warranty liabilities 332 Others 192 Total deferred tax assets, non-current $ 2,542 Deferred tax liabilities, non-current Share of net gains of equity investees $ (2,520 ) Property, plant and equipment (38 ) Intangible assets and other non-current assets (5,552 ) Total deferred tax liabilities, non-current $ (8,110 ) Net deferred tax assets-non-current $ 1,121 Net deferred tax liabilities-non-current $ (6,689 ) June 30, 2018 Deferred tax assets Allowance for doubtful accounts $ 9,600 Costs and estimated earnings in excess of billings (8,544 ) Deferred revenue 3,562 Deferred subsidies 1,809 Warranty liabilities 882 Accrued payroll 1,029 Net operating loss carry forward 12,739 Long-term assets 296 Warranty liabilities 324 Share of net gains(loss) of equity investees (2,038 ) Inventory provision 713 Provision for contract loss 70 Recognition of intangible assets 11 Others 387 Long-term assets - Valuation allowance (12,522 ) Total deferred tax assets-non-current $ 8,318 Deferred tax liabilities Withholding tax on capital repayment $ (3,019 ) Intangible assets and other non-current assets (6,327 ) Property, plant and equipment (20 ) Total deferred tax assets, non-current $ (9,366 ) As of June 30, 2018 the Company had incurred net losses of approximately $7,994, $34,634, $800 derived from entities in the PRC, Singapore and Indonesia, respectively. The net losses in the PRC can be carried forward for five years, to offset future net profit for income tax purposes. The net losses in Singapore and Indonesia can be carried forward without an expiration date. For the amount as of June 30, 2018, $264 will expire, if not utilized, from calendar years ending December 31, 2018 to 2022. The valuation allowance is considered on an individual entity basis. Under the EIT Law and the implementation rules, profits of the Company’s PRC subsidiaries earned on or after January 1, 2008 and distributed by the PRC subsidiaries to their respective foreign holding companies are subject to a withholding tax at 10% unless reduced by tax treaty. As of June 30, 2017 and 2018, the aggregate undistributed earnings from the Company’s PRC subsidiaries that are available for distribution are approximately RMB3,654,625 (equivalent to $557,093) and RMB4,089,013 (equivalent to $623,213), respectively. The Company expects to distribute a portion of the earnings (approximately RMB200,000 or $30,190) to the holding companies located outside mainland China, and has hence accrued a withholding tax of $3,019 as of June 30, 2018. The remaining undistributed earnings of the Company’s PRC subsidiaries are intended to be permanently reinvested, and accordingly, no deferred tax liabilities have been provided for the PRC dividend withholding taxes that would be payable upon the distribution of those amounts to the Company. As of June 30, 2017 and June 30, 2018, the undistributed retained earnings generated from periods prior to January 1, 2008 were approximately $63,716 which are not subject to PRC dividend withholding taxes. Accordingly, as of June 30, 2017 and June 30, 2018, the total amounts of undistributed earnings generated from the Company’s PRC subsidiaries for which no withholding tax has been accrued were $484,314 and $552,937, respectively. Deferred tax liabilities subject to recognize would have been approximately $42,060 and $48,922 respectively, if all such undistributed earnings planned to be distributed to the Company in full as of June 30, 2017 and June 30, 2018. The Chinese tax law grants the tax authorities the rights to further inspect companies’ tax returns retroactively in a three-year period (up to five years under certain special conditions), which means theoretically the tax authorities can still review the PRC subsidiaries’ tax returns for the years ended December 31, 2012 through 2016. The tax law also states that companies will be liable to additional tax, interest charges and penalties if errors are found in their tax returns and such errors have led to an underpayment of tax. As of June 30, 2017 and 2018, the Company concluded that there was no significant unrecognized tax benefits requiring recognition in its financial statements. The amount of unrecognized tax benefits may change in the next 12 months, pending clarification of current tax law or audit by the tax authorities. However, an estimate of the range of the possible change cannot be made at this time. As of June 30, 2017 and 2018, no unrecognized tax benefits, if ultimately recognized, will impact the effective tax rate. The Company recorded no penalty or interest for the years ended June 30, 2017 and 2018, respectively. As of June 30, 2018, the Company’s tax years ended December 31, 2007 through 2018 remain open for statutory examination by tax authorities. |
INCOME PER SHARE
INCOME PER SHARE | 12 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | NOTE 19 - INCOME PER SHARE The following table sets forth the computation of basic and diluted net income per share attributable to Hollysys for the years indicated: Year ended June 30, 2016 2017 2018 Numerator: Net income attributable to the Company - basic $ 118,471 $ 68,944 $ 107,161 Net income attributable to the Company - diluted (i) $ 119,121 $ 69,605 $ 107,425 Denominator: Weighted average ordinary shares outstanding used in computing basic income per share 59,170,050 60,189,004 60,434,019 Effect of dilutive securities Convertible Bond 776,800 784,400 788,800 Share options 642,184 - - Restricted shares 22,422 38,106 25,746 Weighted average ordinary shares outstanding used in computing diluted income per share 60,611,456 61,011,510 61,248,565 Income per share - basic $ 2.00 1.15 1.77 Income per share - diluted $ 1.97 1.14 1.75 (i) For the year ended June 30, 2016, 2017 and 2018, interest accretion related to the Convertible Bond of $650, $661 and $264, respectively, is added back to derive net income attributable to the Company for computing diluted income per share. Vested and unissued restricted shares of 75,066, 72,263 and 91,920 shares are included in the computation of basic and diluted income per share for the years ended June 30, 2016, 2017 and 2018, respectively. The effects of share options have been excluded from the computation of diluted income per share for the year ended June 30, 2018 as their effects would be anti-dilutive. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 20 - RELATED PARTY TRANSACTIONS The related party relationships and related party transactions are listed as follows: Related party relationships Name of related parties Relationship with the Company Shenhua Hollysys Information Technology Co., Ltd. (“Shenhua Information”) 20% owned by Beijing Hollysys China Techenergy Co., Ltd. (“China Techenergy”) 40% owned by Beijing Hollysys Beijing Hollysys Electric Motor Co., Ltd. (“Electric Motor”) 40% owned by Beijing Hollysys Beijing Hollysys Machine Automation Co., Ltd. (“Hollysys Machine”) 30% owned by Hollysys (Beijing) Investment Co., Ltd. (“Hollysys Investment”) Heilongjiang Ruixing Technology Co., Ltd. (“Heilongjiang Ruixing”) 6% owned by Beijing Hollysys Beijing IPE Biotechnology Co., Ltd. (“Beijing IPE”) 22.02% owned by Beijing Hollysys Beijing Hollycon Medicine & Technology. Co., Ltd. (“Hollycon”) 30% owned by Hollysys Group Co., Ltd.(“Hollysys Group”) Shenzhen HollySys Intelligent Technologies Co., Ltd. (“Shenzhen HollySys”) 60% owned by Beijing Hollysys Intelligent Technologies Co., Ltd. (“Hollysys Intelligent”) Due from related parties June 30, 2017 2018 China Techenergy $ 28,778 $ 29,182 Shenhua Information 3,267 3,570 Hollysys Machine 965 853 Hollycon 79 51 Shenzhen HollySys 2 22 Heilongjiang Ruixing 1,049 - Beijing IPE 2 - $ 34,142 $ 33,678 The Company’s management believes that the collection of amounts due from related parties is reasonably assured and accordingly and no provision had been made for these balances. Due to related parties June 30, 2017 2018 China Techenergy $ 1,117 $ 4,141 Hollysys Machine 817 828 Shenhua Information 353 348 Electric Motor 11 34 Beijing IPE 2 2 Hollycon 1 - $ 2,301 $ 5,353 Transactions with related parties Purchases of goods and services from: Year ended June 30, 2016 2017 2018 Electric Motor $ 354 $ 29 $ 77 Hollycon - 8 16 Hollysys Machine 555 749 - $ 909 $ 786 $ 93 Sales of goods and integrated solutions to: Year ended June 30, 2016 2017 2018 China Techenergy $ 3,657 $ 10,842 $ 11,519 Hollycon - 108 225 Shenhua Information 847 765 86 Hollysys Machine 235 167 - Beijing IPE - 7 - $ 4,739 $ 11,889 $ 11,830 Operating lease income from: Year ended June 30, 2016 2017 2018 Hollycon - 602 731 Hollysys Machine 40 - - $ 40 $ 602 $ 731 The Company sells automation control systems to China Techenergy which is used for non-safety operations control in the nuclear power industry. China Techenergy incorporates the Company’s non-safety automation control systems with their proprietary safety automated control systems to provide an overall automation and control system for nuclear power stations in China. The Company is not a party to the integrated sales contracts executed between China Techenergy and its customers. The Company’s pro rata shares of the intercompany profits and losses are eliminated until realized through a sale to outside parties, as if China Techenergy were a consolidated subsidiary. The Company sells automation control systems to Shenhua Information which is used for operations control in the information automation industry. Shenhua Information incorporates the Company’s automation control systems with their proprietary automated remote control systems to provide an overall automation and control system to its customers. The Company is not a party to the integrated sales contracts executed between Shenhua Information and its customers. The Company’s pro rata shares of the intercompany profits and losses are eliminated until realized through a sale to an outside party as if Shenhua Information were a consolidated subsidiary. The Company engages Hollysys Machine to sell the Company’s products to end customers. The Company pays commission to Hollysys Machine in exchange for its services. The amount of the commission is determined based on the value of the products sold by Hollysys Machine during the year. The Company entered into an operating lease agreement with Hollycon to lease part of its one building located in Beijing. The lease term is for 1 year from the commencement date of July 1, 2017 to June 30, 2018. Amounts due from and due to the related parties relating to the above transactions are unsecured, non-interest bearing and repayable on demand. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 21 - COMMITMENTS AND CONTINGENCIES Operating lease commitments The Company leases premises under various operating leases. Rental expenses under operating leases included in the consolidated statements of comprehensive income were $1,811, $2,718 and $2,295 for the years ended June 30, 2016, 2017 and 2018, respectively. Future minimum lease payments under non-cancelable operating leases with initial terms of one year or more consist of the following: Years ending June 30, Minimum lease payments 2019 $ 2,283 2020 1,058 2021 520 2022 520 2023 and onwards 520 Total minimum lease payments $ 4,901 The Company’s lease arrangements have no renewal or purchase options, rent escalation clauses, restriction or contingent rents and are all conducted with third parties. Capital commitments As of June 30, 2018, the Company had approximately $243 in capital obligations for the coming fiscal year, mainly for the Company’s information system construction. Purchase obligation As of June 30, 2018, the Company had $188,558 purchase obligations for the coming fiscal year, for purchases of inventories, mainly for fulfillment of in-process or newly entered contracts resulting from the expansion of the Company’s operations. Performance guarantee and standby letters of credit The Company had stand-by letters of credit of $25,782 and outstanding performance guarantees of $51,744 as of June 30, 2018, with restricted cash of $6,404 pledged to banks. The purpose of the stand-by letter of credit and performance guarantees is to guarantee that the performance of the Company’s deliveries reach the pre-agreed requirements specified in the integrated solutions contracts. The guarantee is to ensure the functionality of the Company’s own work. The disclosed amount of stand-by letters of credit and outstanding performance guarantees represent the maximum potential amount of future payments the Company could be required to make under such guarantees. The Company accounts for performance guarantees and stand-by letters of credit in accordance with ASC topic 460 (“ASC 460”), Guarantees. Both the performance guarantees and the stand-by letters of credit are for the Company’s commitment of its own future performance, and the outcome of which is within its own control. As a result, performance guarantees and stand-by letters of credit are subject to ASC 460 disclosure requirements only. |
OPERATING LEASES AS LESSOR
OPERATING LEASES AS LESSOR | 12 Months Ended |
Jun. 30, 2018 | |
Leases [Abstract] | |
Operating Leases Of Lessor Disclosure [Text Block] | NOTE 22 - OPERATING LEASES AS LESSOR On April 3, 2013, Beijing Hollysys entered into an operating lease agreement to lease out one of its buildings located in Beijing. The lease term is for a period of 10 years from the commencement date of September 1, 2013 and will end on August 31, 2023. On July 1, 2017, the Company entered into an operating lease agreement with Hollycon to lease a part of a building located in Beijing. The lease term was for one year and ended on June 30, 2018, the renewed lease agreement is from July 1, 2018 to June 30, 2019. The minimum rental income in the next five years is shown as below: Year ending June 30, Minimum lease payments 2019 $ 1,558 2020 1,604 2021 1,653 2022 1,702 2023 1,753 Total minimum lease payments to be received in the next five years $ 8,270 The minimum lease payment receivable after five years is $297. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | NOTE 23 - SEGMENT REPORTING The chief operating decision makers have been identified as the Chairman, Chief Executive Officer and Chief Financial Officer of the Company. The Company organizes its internal financial reporting structure based on its main product and service offerings. Based on the criteria established by ASC 280, Segment Reporting Summarized information by segments for the years ended June 30, 2016, 2017, and 2018 is as follows: Year ended June 30, 2016 IA Rail M&E Miscellaneous Consolidated Revenues from external customers $ 182,901 240,310 95,277 25,837 544,325 Costs of revenue 113,314 131,043 82,900 11,342 338,599 Gross profit $ 69,587 109,267 12,377 14,495 205,726 Year ended June 30, 2017 IA Rail M&E Miscellaneous Consolidated Revenues from external customers $ 172,667 155,732 103,544 - 431,943 Costs of revenue 106,583 86,128 98,761 - 291,472 Gross profit $ 66,084 69,604 4,783 - 140,471 Year ended June 30, 2018 IA Rail M&E Miscellaneous Consolidated Revenues from external customers $ 224,793 190,645 125,330 - 540,768 Costs of revenue 135,633 90,574 108,681 - 334,888 Gross profit $ 89,160 100,071 16,649 - 205,880 The Company’s assets are shared among the segments thus no assets have been designated to specific segments. The majority of the Company’s revenues and long-lived assets other than goodwill and intangible assets are derived from and located in the PRC. The following table sets forth the revenues by geographical area: Year ended June 30, 2016 2017 2018 Revenues: PRC $ 443,256 $ 326,713 $ 412,933 Non-PRC 101,069 105,230 127,775 $ 544,325 $ 431,943 $ 540,768 The following table sets forth the long-lived assets other than goodwill and intangible assets by geographical area: June 30, 2017 2018 Long-lived assets other than goodwill and acquired intangible assets PRC $ 131,625 $ 135,450 Non-PRC 12,029 12,516 $ 143,654 $ 147,966 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 24 - SUBSEQUENT EVENTS In August 2018, the Company agreed to contribute its 100% equity interest in Hollysys Intelligent, a subsidiary, as the capital contribution of its 40% equity interest in Ningbo Hollysys. The Company completed the transfer in September 2018 and the Article of Association of Ningbo Hollysys was revised accordingly. |
ENDORSEMENT OF NOTE RECEIVABLES
ENDORSEMENT OF NOTE RECEIVABLES | 12 Months Ended |
Jun. 30, 2018 | |
Endorsement Of Note Receivables [Abstract] | |
Endorsement Of Note Receivables [Text Block] | NOTE 25 - ENDORSEMENT OF NOTE RECEIVABLES The Company endorsed bank acceptance bills to its suppliers as a way of settling accounts payable. The total endorsed but not yet due bank acceptance bills amounted to $25,462 and $42,559 as of June 30, 2017 and 2018, respectively. The endorsement of bank acceptance bills qualify as deemed sales of financial assets according to ASC 860, Transfer and Servicing |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 12 Months Ended |
Jun. 30, 2018 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Financial Information of Parent Company Only Disclosure [Text Block] | NOTE 26 - CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY Under the PRC laws and regulations, the Company’s PRC subsidiaries’ ability to transfer net assets in the form of dividend payments, loans, or advances are restricted. The amount restricted was RMB569,279 (equivalent to $84,091) and RMB 601,064 (equivalent to $88,930) as of June 30, 2017, and 2018, respectively. The following represents condensed unconsolidated financial information of the parent company only: CONDENSED BALANCE SHEETS June 30, 2017 2018 ASSETS Current assets: Cash and cash equivalents $ 13,103 $ 21,578 Amounts due from subsidiaries 59,920 53,503 Prepaid expenses 61 61 Total current assets 73,084 75,142 Investments in subsidiaries 726,837 869,706 Total assets $ 799,921 $ 944,848 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accrued payroll and related expense $ 14 $ 28 Derivative financial liability 487 412 Amounts due to subsidiaries 55,869 82,491 Total current liabilities 56,370 82,931 Long-term loan 20,032 19,865 Total liabilities 76,402 102,796 Equity: Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized; 60,342,099 shares issued and outstanding as of June 30, 2017 and 2018, respectively 60 60 Additional paid-in capital 222,189 223,396 Retained earnings 524,129 624,049 Accumulated other comprehensive loss (22,859 ) (5,453 ) Total equity 723,519 842,052 Total liabilities and equity $ 799,921 $ 944,848 CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Year Ended June 30, 2016 2017 2018 General and administrative expenses $ 4,484 $ 1,062 $ 1,751 Loss from operations (4,484 ) (1,062 ) (1,751 ) Other expense, net (93 ) (89 ) - Interest income 80 4 - Interest expenses (705 ) (1,074 ) (748 ) Foreign exchange losses (719 ) (740 ) (97 ) Equity in profit of subsidiaries $ 124,392 $ 71,905 $ 109,757 Income before income taxes 118,471 68,944 107,161 Income tax expenses - - - Net income 118,471 68,944 107,161 Other comprehensive income, net of tax of nil Translation adjustment (46,052 ) (14,392 ) 17,406 Comprehensive income $ 72,419 $ 54,552 $ 124,567 CONDENSED STATEMENTS OF CASH FLOWS Year ended June 30, 2016 2017 2018 Cash flows from operating activities: Net income $ 118,471 $ 68,944 $ 107,161 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Share of net (income) of equity investees (124,392 ) (71,905 ) (109,757 ) Share-based compensation expenses 3,860 464 1,207 Accretion of convertible bond 230 230 230 Fair value adjustments of a bifurcated derivative 93 89 (75 ) Accrued liabilities 41 1,248 14 Net cash used in operating activities $ (1,697 ) $ (930 ) $ (1,220 ) Cash flows from investing activities: Collection of loans from subsidiaries - 2,316 50,649 Loans to subsidiaries (729 ) (2,712 ) (5,000 ) Maturity of time deposits 14,713 - - Investment in subsidiaries (2,594 ) - (15,707 ) Net cash provided by (used in) investing activities $ 11,390 $ (396 ) $ 29,942 Cash flows from financing activities: Proceeds of loans from subsidiaries - 11,938 - Payment of dividends - (11,975 ) (7,241 ) Repayment of loans from subsidiaries (15,000 ) (428 ) (13,006 ) Proceeds from exercise of options 5,441 6,323 - Net cash (used in) provided by financing activities $ (9,559 ) $ 5,858 $ (20,247 ) Net increase in cash and cash equivalents $ 134 $ 4,532 $ 8,475 Cash and cash equivalents, beginning of period 8,437 8,571 13,103 Cash and cash equivalents, end of period $ 8,571 $ 13,103 $ 21,578 Basis of presentation For the presentation of the parent company only condensed financial information, the Company records its investment in subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments—Equity Method and Joint Ventures Commitments The Company does not have significant commitments or long-term obligations as of the period end presented. |
SUMMARY OF SIGNIFICANT ACCOUN34
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Principles Of Consolidation and Basis Of Presentation [Policy Text Block] | Basis of Presentation The consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and a VIE. All inter-company transactions and balances between the Company, its subsidiaries, and the VIE are eliminated upon consolidation. The Company included the results of operations of acquired businesses from the respective dates of acquisition. |
Use of Estimates, Policy [Policy Text Block] | Use of estimates The preparation of financial statements in conformity with US 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates estimates, including those related to the expected total costs of integrated contracts, expected gross margins of integrated solution contracts, allowance for doubtful accounts, fair values of share options, fair value of bifurcated derivative, fair value of retained non-controlling investment in the former subsidiary, warranties, purchase price allocation with respect to business combinations, valuation allowance of deferred tax assets and impairment of goodwill and other long-lived assets. Management bases the estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ materially from those estimates. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign currency translations and transactions The Company’s functional currency is the United States dollars (“US dollars” or “$”); whereas the Company’s subsidiaries and VIE use the primary currency of the economic environment in which their operations are conducted as their functional currency. According to the criteria of Accounting Standards Codification (“ASC”) Topic 830 (“ASC 830”), the Company uses the US dollars as its reporting currency. The Company translates the assets and liabilities into US dollars using the rate of exchange prevailing at the balance sheet date, and the statements of comprehensive income are translated at average rates during the reporting period. Adjustments resulting from the translation of financial statements from the functional currency into US dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. Transactions dominated in currencies other than the functional currency are translated into functional currency at the exchange rates prevailing on the transaction dates, and the exchange gains or losses are reflected in the consolidated statements of comprehensive income for the reporting period. Transactions denominated in foreign currencies are measured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the exchange rates prevailing at the balance sheet date. Exchange gains and losses are included in earnings, except for those raised from intercompany transactions with investment nature, which are recorded in other comprehensive income. |
Business Combinations Policy [Policy Text Block] | Business combinations The Company accounts for its business combinations using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and non-controlling interests is based on various assumptions and valuation methodologies requiring considerable management judgment. The most significant variables in these valuations are discount rates, terminal values, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons. Terminal values are based on the expected life of assets and forecasted cash flows over that period. Acquisition-related costs are recognized as general and administrative expenses in the statements of comprehensive income as incurred. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents Cash and cash equivalents consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. All highly liquid investments that are readily convertible to known amounts of cash with original stated maturities of three months or less are classified as cash equivalents. |
Time Deposits With Original Maturities Over Three Months [Policy Text Block] | Time deposits with original maturities over three months Time deposits with original maturities over three months consist of deposits placed with financial institutions with original maturity terms from four months to one year. As of June 30, 2018, $133,723, $4,249, and $1,461 of time deposits with original maturities over three months were placed in financial institutions in the PRC, Singapore, and Malaysia, respectively. As of June 30, 2017, $80,507, $11,690, $3,935 and $82 of time deposits with original maturities over three months were placed in financial institutions in the PRC, Singapore, Malaysia and India, respectively. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted cash Restricted cash mainly consists of the cash deposited in banks pledged for performance guarantees, or bank loans. These cash balances are not available for use until these guarantees are expired or cancelled, or the loans are repaid. |
Revenue Recognition, Policy [Policy Text Block] | Revenue recognition Integrated solutions contracts Revenues generated from designing, building, and delivering customized integrated industrial automation systems are recognized over the contractual terms based on the percentage of completion method. The contracts for designing, building, and delivering customized integrated industrial automation systems are legally enforceable and binding agreements between the Company and customers. The duration of contracts depends on the contract size and ranges from 6 months to 5 years excluding the warranty period. The majority of the contract duration is longer than one year. Revenue generated from mechanical and electrical solution contracts for the construction or renovation of buildings, rail or infrastructure facilities are also recognized over the contractual terms based on the percentage of completion method. The contracts for mechanical and electrical solution are legally enforceable and binding agreements between the Company and customers. The duration of contracts depends on the contract size and the complexity of the construction work and ranges from 6 months to 3 years excluding the warranty period. The majority of the contract duration is longer than one year. In accordance with ASC 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts The Company reviews and updates the estimated total costs of integrated solutions contracts at least annually. The Company accounts for revisions to contract revenue and estimated total costs of integrated solution contracts, including the impact due to approved change orders, in the period in which the facts that cause the revision become known as changes in estimates. Unapproved change orders are considered claims. Claims are recognized only when it has been awarded by customers. During the years ended June 30, 2016, 2017 and 2018, the Company did not recognize any revenue related to claims. Excluding the impact of change orders, if the estimated total costs of integrated solution contracts, which were revised during the years ended June 30, 2016, 2017 and 2018, had been used as a basis of recognition of integrated contract revenue since the contract commencement, net income for the years ended June 30, 2016, 2017 and 2018 would have been decreased by $30,270, $12,062, and $10,466 respectively; basic net income per share for years ended June 30, 2016, 2017 and 2018 would have been decreased by $0.51, $0.20, and $0.17, respectively; and diluted net income per share for the years ended June 30, 2016, 2017 and 2018, would have decreased by $0.50, $0.20, and $0.17, respectively. Revisions to the estimated total costs for the years ended June 30, 2016, 2017 and 2018 were made in the ordinary course of business. The Company combines a group of contracts as one project if they are closely related and are, in substance, parts of a single project with an overall profit margin. The Company segments a contract into several projects, when they are of different business substance, for example, with different business negotiation, solutions, implementation plans and margins. Revenue in excess of billings on the contracts is recorded as costs and estimated earnings in excess of billings. Billings in excess of revenues recognized on the contracts are recorded as deferred revenue until the above revenue recognition criteria are met. Recognition of accounts receivable and costs and estimated earnings in excess of billings are discussed below. The Company generally recognizes 100% of the contractual revenue when the customer acceptance has been obtained and no further major costs are estimated to be incurred, and normally this is also when the warranty period commences. Revenues are presented net of taxes collected on behalf of the government. Product sales Revenue generated from sales of products is recognized when the following four revenue recognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured. Service rendered The Company has in recent years extended its service offerings as described below. The Company mainly provides two types of services: Revenue from one-off services: the Company provides different types of one-off services, which are generally completed on customers’ site. Revenue is recognized when the Company has completed all the respective services described in the contracts, there is persuasive evidence of an arrangement, the fee is fixed or determinable and collection is reasonably assured. Revenue from services covering a period of time: the Company also separately sells extended warranties to their integrated solution customers for a fixed period. Such arrangements are negotiated separately from the corresponding integrated solution system and are usually entered into upon the expiration of the warranty period attached to the integrated solution contract. During the extended warranty period, the Company is responsible for addressing issues related to the system. Part replacement is not covered in such services. The Company recognizes revenue on a pro-rata basis over the contractual term. |
Accounts Receivable and Cost and Estimated Earnings In Excess Of Billings [Policy Text Block] | Accounts receivable and costs and estimated earnings in excess of billings Performance of the integrated contracts will often extend over long periods and the Company’s right to receive payments depends on its performance in accordance with the contractual agreements. There are different billing practices in the PRC, overseas operating subsidiaries and the VIE (Concord and Bond Groups). For the Company’s PRC subsidiaries, billings are issued based on milestones specified in contracts negotiated with customers. In general, there are four milestones: 1) project commencement, 2) system manufacturing and delivery, 3) installation, trial-run and customer acceptance, and 4) expiration of the warranty period. The amounts to be billed at each milestone are specified in the contract. All contracts have the first milestone, but not all contracts require prepayments. The length of each interval between two continuous billings under an integrated contract varies depending on the duration of the contract (under certain contracts, the interval lasts more than a year) and the last billing to be issued for an integrated solution contract is scheduled at the end of a warranty period. For Concord and Bond Groups, billing claims rendered are subject to the further approval and certification of the customers or their designated consultants. Payments are made to Concord or Bond Groups based on the certified billings according to the payment terms mutually agreed between the customers and Concord or Bond Groups. Certain amounts are retained by the customer and payable to Concord and Bond Groups upon satisfaction of final quality inspection or at the end of the warranty period. The retained amounts which were recorded as accounts receivable were $12,838 and $18,203 for the two years ended June 30, 2017 and 2018, respectively. Prepayments received are recorded as deferred revenue. The deferred revenue will be recognized as revenue under the percentage of completion method along with the progress of a contract. The carrying value of the Company’s accounts receivable and costs and estimated earnings in excess of billings, net of the allowance for doubtful accounts, represents their estimated net realizable value. An allowance for doubtful accounts is recognized when it’s probable that the Company will not collect the amount and is written off in the period when deemed uncollectible. The Company periodically reviews the status of contracts and decides how much of an allowance for doubtful accounts should be made based on factors surrounding the credit risk of customers and historical experience. The Company does not require collateral from its customers and does not charge interest for late payments by its customers. |
Inventory, Policy [Policy Text Block] | Inventories Inventories are composed of raw materials, work in progress, purchased and manufactured finished goods and low value consumables. Inventories are stated at the lower of cost and net realizable value. The Company elected to use weighted average cost method as inventory costing method. The Company assesses the lower of cost and net realizable value for non-saleable, excess or obsolete inventories based on its periodic review of inventory quantities on hand and the latest forecasts of product demand and production requirements from its customers. The Company writes down inventories for non-saleable, excess or obsolete raw materials, work-in-process and finished goods by charging such write-downs to cost of integrated contracts and/or costs of products sold. |
Standard Product Warranty, Policy [Policy Text Block] | Warranties Warranties represent a major term under an integrated contract, which will last, in general, for one to three years or otherwise specified in the terms of the contract. The Company accrues warranty liabilities under an integrated contract as a percentage of revenue recognized, which is derived from its historical experience, in order to recognize the warranty cost for an integrated contract throughout the contract period. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property, plant and equipment, net Property, plant and equipment, other than construction in progress, are recorded at cost and are stated net of accumulated depreciation and impairment, if any. Depreciation expense is determined using the straight-line method over the estimated useful lives of the assets as follows: Buildings 30 -50 years Machinery 5 - 10 years Software 3 - 5 years Vehicles 5- 6 years Electronic and other equipment 3 - 10 years Construction in progress represents uncompleted construction work of certain facilities which, upon completion, management intends to hold for production purposes. In addition to costs under construction contracts, other costs directly related to the construction of such facilities, including duty and tariff, equipment installation and shipping costs, and borrowing costs are capitalized. Depreciation commences when the asset is placed in service. Maintenance and repairs are charged directly to expenses as incurred, whereas betterment and renewals are capitalized in their respective accounts. When an item is retired or otherwise disposed of, the cost and applicable accumulated depreciation are removed and the resulting gain or loss is recognized for the reporting period. |
Lease, Policy [Policy Text Block] | Prepaid land leases, net Prepaid land lease payments, for the land use right of three parcels of land in the PRC, three parcels of leasehold land in Malaysia and one parcel of leasehold land in Singapore, are initially stated at cost and are subsequently amortized on a straight-line basis over the lease terms of 49 to 88 years. |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Intangible assets, net Intangible assets are carried at cost less accumulated amortization and any impairment. Intangible assets acquired in a business combination are recognized initially at fair value at the date of acquisition. Intangible assets are amortized using a straight-line method. The estimated useful lives for the intangible assets are as follows: Category Estimated useful life Customer relationship 57 - 60 months Order backlog 21 - 33 months Patents and copyrights 60 - 120 months Residual values are considered nil. |
Goodwill Impairment [Policy Text Block] | Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired. The Company assesses goodwill for impairment in accordance with ASC subtopic 350-20 (“ASC 350-20”), Intangibles – Goodwill and Other, which requires that goodwill is not amortized but to be tested for impairment at the reporting unit level at least annually and more frequently upon the occurrence of certain events, as defined by ASC 350-20. The Company’s goodwill outstanding at June 30, 2018 was related to the acquisitions of Concord Group, Bond Group, and Beijing Hollysys Industrial Software Company Ltd (“Hollysys Industrial Software”), which was 100% acquired by a subsidiary of the Company in July 2017 with a cash consideration of approximately $2,380. The Company has the option to assess qualitative factors first to determine whether it is necessary to perform the two-step test in accordance with ASC 350-20. If the Company believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the two-step quantitative impairment test described above is required. Otherwise, no further testing is required. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing the two-step quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quoted market prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired and the Company is not required to perform further testing. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, then the Company must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized as an impairment loss. The Company elected to assess goodwill for impairment using the two-step process for Concord Group for the years ended June 30, 2017 and 2018, with assistances from a third-party appraiser. Concord Group’s management judgment is involved in determining these estimates and assumptions, and actual results may differ from those used in valuations. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit which could trigger future impairment. The judgment in estimating the fair value of reporting units includes forecasts of future cash flows, which are based on management’s best estimate of future revenue, gross profit, operating expenses growth rates, future capital expenditure and working capital level, as well as discount rate determined by Weighted Average Cost of Capital approach and the selection of comparable companies operating in similar businesses. The Company also reviewed marketplace and/or historical data to assess the reasonableness of assumptions such as discount rate and working capital level. The carrying amount of Concord Group exceeded its fair value as of June 30, 2017, and a goodwill impairment charge of $11,211 was recorded in the statement of comprehensive income for the year ended June 30, 2017 based on the second step testing result. The fair value of Concord Group exceeded its carrying amount (net of accumulated impairment charges) as of June 30, 2018 based on the first step testing result, and the Company concluded no additional goodwill impairment charge was needed for the year ended June 30, 2018. There are uncertainties surrounding the amount and timing of future expected cash flows as they may be impacted by negative events such as a slowdown in the mechanical and electrical engineering sector, deteriorating economic conditions in the geographical areas Concord Group operates in, political, economic and social uncertainties in the Middle East, increasing competitive pressures and fewer than expected mechanical and electrical solution contracts awarded to Concord Group. These events can negatively impact demand for Concord Group’s services and result in actual future cash flows being less than forecasted or delays in the timing of when those cash flows are expected to be realized. Further, the timing of when actual future cash flows are received could differ from the Company’s estimates, which are based on historical trends and does not factor in unexpected delays in project commencement or execution. The Company also performed qualitative assessments with respect to Bond Group and Hollysys Industrial Software, to determine if it is more likely than not that the fair values of Bond Group and Hollysys Industrial Software are less than their carrying amounts. By identifying the most relevant drivers of fair value and significant events, and weighing the identified factors, the Company concluded that there was no impairment loss on goodwill related to Bond Group as of June 30, 2017 and 2018, or related to Hollysys Industrial Software as of June 30, 2018. |
Impairment Of Long Lived Assets Other Than Goodwill [Policy Text Block] | Impairment of long-lived assets other than goodwill The Company evaluates its long-lived assets or asset group including acquired intangibles with finite lives for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of a group of long-lived assets may not be fully recoverable. When these events occur, the Company evaluates the impairment by comparing the carrying amount of the assets to future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company recognizes an impairment loss based on the excess of the carrying amount of the asset group over its fair value, generally based upon discounted cash flows or quoted market prices. |
Shipping and Handling Cost, Policy [Policy Text Block] | Shipping and handling costs All shipping and handling fees charged to customers are included in net revenue. Shipping and handling costs incurred are included in cost of integrated contracts and/or costs of products sold as appropriate. |
Income Tax, Policy [Policy Text Block] | Income taxes The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate. The Company adopted ASU 2015-17 on July 1, 2017 on a prospective basis. As a result, current portion of deferred income tax liabilities and assets have been reclassified to noncurrent liabilities and assets. Prior periods were not retrospectively adjusted and all future adjustments will be reported as noncurrent. The Company adopted ASC 740, Income Taxes , |
Research and Development Expense, Policy [Policy Text Block] | Research and development costs Research and development costs consist primarily of salaries, bonuses and benefits for research and development personnel. Research and development costs also include travel expenses of research and development personnel as well as depreciation of hardware equipment and software tools and other materials used in research and development activities. Research and development costs are expensed as incurred. Software development costs are also expensed as incurred as the costs qualifying for capitalization have been insignificant. |
Vat Refunds and Government Subsidies [Policy Text Block] | VAT refunds and government subsidies Pursuant to the laws and regulations of the PRC, the Company remits 17% of its sales as valued added tax (“VAT”), and then is entitled to a refund of the portion that the Company’s actual VAT burden exceeding 3% levied on all sales containing internally developed software products. VAT refunds are recognized in the statements of comprehensive income when cash refunds or the necessary approval from the tax authority has been received. Certain subsidiaries of the Company located in the PRC receive government subsidies from local PRC government agencies. Government subsidies are recognized in the statement of comprehensive income when the attached conditions have been met. Government grants received for the years ended June 30, 2016, 2017 and 2018 amounted to $6,085, $10,238 and $5,931, respectively, of which $2,886, $12,885 and $4,784 were included as a credit to operating expenses in the statements of comprehensive income for the years ended June 30, 2016, 2017 and 2018, respectively. |
Appropriations To Statutory Reserve [Policy Text Block] | Appropriations to statutory reserve Under the corporate law and relevant regulations in the PRC, all of the subsidiaries of the Company located in the PRC are required to appropriate a portion of its retained earnings to statutory reserve. All subsidiaries located in the PRC are required to appropriate 10% of its annual after-tax income each year to the statutory reserve until the statutory reserve balance reaches 50% of the registered capital. In general, the statutory reserve shall not be used for dividend distribution purposes. In Dubai and Qatar, companies are required to appropriate 10% of its annual after-tax income each year to the statutory reserve and the appropriation may be suspended by the shareholders if the reserve reaches 50% of the registered capital. The statutory reserve can be used to cover the losses of the companies or to increase the capital of the companies with a decision by the general assembly of CCDB and CECL. |
Segment Reporting, Policy [Policy Text Block] | Segment reporting In accordance with ASC 280, Segment reporting |
Comprehensive Income, Policy [Policy Text Block] | Comprehensive income Comprehensive income is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. In accordance with ASC 220, Comprehensive Income |
Equity and Cost Method Investments, Policy [Policy Text Block] | Investments in cost and equity investees The Company accounts for its equity investments under either the cost method or the equity method by considering the Company’s rights and ability to exercise significant influence over the investees. Under the cost method, investments are initially carried at cost. In the event that the fair value of the investment falls below the initial cost and the decline is considered as other-than-temporary, the Company recognizes an impairment charge, equal to the difference between the cost basis and the fair value of the investment. A variety of factors are considered when determining if a decline in fair value below carrying value is other than temporary, including, among others, the financial condition and prospects of the investee. The investments in entities over which the Company has the ability to exercise significant influence are accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of the investee between 20% and 50%. Other factors, such as representation on the investee’s board of directors and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. Under the equity method, original investments are recorded at cost and adjusted by the Company’s share of undistributed earnings or losses of these entities, by the amortization of any basis difference between the amount of the Company’s investment and its share of the net assets of the investee, and by dividend distributions or subsequent investments. Unrealized inter-company profits and losses related to equity investees are eliminated. An impairment charge, being the difference between the carrying amount and the fair value of the equity investee, is recognized in the consolidated statements of comprehensive income when the decline in value is considered other than temporary. |
Interest Capitalization, Policy [Policy Text Block] | Capitalization of interest Interest incurred on borrowings for the Company’s construction of facilities and assembly line projects during the active construction period are capitalized. The capitalization of interest ceases once a project is substantially complete. The amount to be capitalized is determined by applying the weighted-average interest rate of the Company’s outstanding borrowings to the average amount of accumulated capital expenditures for assets under construction during the year and is added to the cost of the underlying assets and amortized over their respective useful lives. |
Earnings Per Share, Policy [Policy Text Block] | Income per share Income per share is computed in accordance with ASC 260, Earnings Per Share |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Share-based compensation The Company accounts for share-based compensation in accordance with ASC 718, Compensation-Stock Compensation For share-based awards that are subject to performance-based vesting conditions in addition to time-based vesting, the Company recognizes the estimated grant-date fair value of performance-based awards, net of estimated forfeitures, as share-based compensation expense over the vesting period based upon the Company’s determination of whether it is probable that the performance-based criteria will be achieved. At each reporting period, the Company reassesses the probability of achieving the performance-based criteria. Determining whether the performance-based criteria will be achieved involves judgment, and the estimate of share-based compensation expense may be revised periodically based on changes in the probability of achieving the performance-based criteria. Revisions are reflected in the period in which the estimate is changed. If the performance-based criteria are not met, no share-based compensation expense is recognized, and, to the extent share-based compensation expense was previously recognized, such share-based compensation expense is reversed. |
Fair Value Measurement, Policy [Policy Text Block] | Fair value measurements The Company has adopted ASC 820, Fair Value Measurements and Disclosures Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. |
Revenue Recognition, Leases [Policy Text Block] | Leases Leases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets are accounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed as incurred. |
Lessor [Policy Text Block] | Accounting for lessor Minimum contractual rental from leases are recognized on a straight-line basis over the non-cancelable term of the lease. With respect to a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognized for the period. Straight-line rental revenue commences when the customer assumes control of the leased premises. Accrued straight-line rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when the contingency is removed. |
Concentration Of Risks [Policy Text Block] | Concentration of risks Concentration of credit risk Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents, time deposits with original maturities over three months, restricted cash, accounts receivable, other receivables and amounts due from related parties. The maximum exposure of such assets to credit risk is their carrying amounts as of the balance sheet date. As of June 30, 2018, substantially all of the Company’s cash and cash equivalents and time deposits with original maturities exceeding three months were managed by financial institutions located in the PRC, Singapore, Malaysia and Dubai, which management believes are of high credit quality. Accounts receivable, other receivables and amounts due from related parties are typically unsecured and the risk with respect to accounts receivable is mitigated by credit evaluations the Company performs on its customers and its ongoing monitoring process of outstanding balances. The Company has no customer that individually comprised 10% or more of the outstanding balance of accounts receivable as of June 30, 2017 and 2018, respectively. Concentration of business and economic risk A majority of the Company’s net revenue and net income are derived in the PRC. The Company’s operations may be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than 20 years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC’s political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective. Concentration of currency convertibility risk A majority of the Company’s businesses are transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. Concentration of foreign currency exchange rate risk The Company’s exposure to foreign currency exchange rate risk primarily relates to monetary assets or liabilities held in foreign currencies. Since July 21, 2005, the RMB has been permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. On June 19, 2010, the People’s Bank of China announced the end of the RMB’s de facto peg to USD, a policy which was instituted in late 2008 in the face of the global financial crisis, to further reform the RMB exchange rate regime and to enhance the RMB’s exchange rate flexibility. The exchange rate floating bands will remain the same as previously announced in the inter-bank foreign exchange market. The appreciation of the US dollars against RMB was approximately 8.68% and 2.07% for the years ended June 30, 2016 and 2017, respectively. The depreciation of the US dollars against RMB was approximately 2.32% for the years ended June 30, 2018. Any significant revaluation of RMB may materially and adversely affect the Company’s cash flows, revenues, earnings and financial position, and the value of its shares in US dollars. An appreciation of US dollar against the RMB would result in foreign currency translation losses when translating the net assets of the Company from RMB into US dollar. For the years ended June 30, 2016, 2017 and 2018, the net foreign currency translation (losses) gains resulting from the translation of RMB, SGD and other functional currencies to the U.S. dollar reporting currency recorded in other comprehensive income was $(48,841), $(14,428), and $17,410, respectively. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers Subsequent to the issuance of ASU 2014-09, the FASB has issued several ASUs such as ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients The Company will adopt the new standard on July 1, 2018 using the modified retrospective approach, which requires the recognition of a cumulative-effect adjustment to retained earnings as of the date of adoption, and will apply the adoption only to contracts not completed as of July 1, 2018. As part of the implementation of ASC 606, the Company is performing an assessment, including identifying revenue streams within the scope of ASC 606, analyzing contracts and reviewing potential changes to its existing revenue recognition accounting policies. The Company has not yet completed its assessment. A significant portion of our contracts is related to the provision of integrated solution services, the revenues from which is currently recognized under the percentage of completion method using the cost-to-cost measurement. To date, our assessment of such contracts with customers under the new revenue standard continues supports the recognition of revenue over time using the current method. As such, we expect to retain the same accounting treatment used to recognize revenue under current standard. The adoption of the new revenue standard will not affect the recognition for product sales, which are currently recognized upon the transfer to control, typically upon delivery when all other revenue recognition criteria are met. The Company’s one-off service revenues are currently recognized based on the completed contract method, when the Company has completed all the respective service deliverables in the contracts. Under the new standard, the Company expects to recognize revenue primarily on an “over time” basis for such contracts by using cost inputs to measure the progress towards the completion of the performance obligation as the customer simultaneously receives and consumes the services or because of continuous transfer of control of asset to the customer as it’s created or enhanced. Therefore, the impact from adoption will primarily be associated with certain service contracts outstanding at June 30, 2018 accounted for under the completed contract method, which will be generally recognized earlier under this new guidance and result in a cumulative effect adjustment to retained earnings as of July 1, 2018. Currently, revenues are presented net of taxes collected on behalf of the government. The Company elects to retain the same accounting treatment under the new standard. In addition, the Company also expects that that adoption of the new revenue standard will significantly expand its financial statement disclosures requirement. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10) (“ASU 2016-01”). The amendments require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instruments-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. This updated guidance is effective for the annual period beginning after December 15, 2017, including interim periods within the year. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) (“ASU2016-18”). ASU 2016-18 requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. The guidance is effective for public companies for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The guidance should be applied using a retrospective transition method for each period presented. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying Definition of a Business ("ASU 2017-01") In January 2017, the FASB issued Accounting Standards Update No. 2017-04(“ASU 2017-04”), Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation: Scope of Modification Accounting |
ORGANIZATION AND BUSINESS BAC35
ORGANIZATION AND BUSINESS BACKGROUND (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities [Table Text Block] | The carrying amounts and classifications of the assets and liabilities of the VIE are as follows: June 30, 2017 2018 Current assets $ 14,331 $ 25,209 Non-current assets 239 299 Total assets 14,570 25,508 Current liabilities $ 14,178 $ 19,533 Total liabilities 14,178 19,533 Year ended June 30, 2017 2018 Revenue $ 6,914 $ 42,287 Cost of revenue 5,753 35,353 Net profit 494 5,521 Net cash provided by (used in) operating activities 8,721 (2,947 ) Net cash used in investing activities (216 ) (184 ) Net cash provided by financing activities $ - $ - |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | Depreciation expense is determined using the straight-line method over the estimated useful lives of the assets as follows: Buildings 30 -50 years Machinery 5 - 10 years Software 3 - 5 years Vehicles 5- 6 years Electronic and other equipment 3 - 10 years |
Schedule Of Acquired Finite Lived Intangible Assets By Major Class [Table Text Block] | The estimated useful lives for the intangible assets are as follows: Category Estimated useful life Customer relationship 57 - 60 months Order backlog 21 - 33 months Patents and copyrights 60 - 120 months |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Components of inventories are as follows: June 30, 2017 2018 Raw materials $ 15,781 $ 19,047 Work in progress 19,525 26,425 Finished goods 10,354 12,602 $ 45,660 $ 58,074 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | June 30, 2017 2018 Accounts receivable $ 294,641 $ 324,310 Allowance for doubtful accounts (48,089 ) (49,094 ) $ 246,552 $ 275,216 |
Allowance for Credit Losses on Financing Receivables [Table Text Block] | The movements in allowance for doubtful accounts are as follows: June 30, 2016 2017 2018 Balance at the beginning of year $ 34,259 $ 42,471 $ 48,089 Additions 12,000 7,400 3,407 Deconsolidation of a subsidiary - (160 ) - Written off (714 ) (784 ) (3,527 ) Translation adjustment (3,074 ) (838 ) 1,125 Balance at the end of year $ 42,471 $ 48,089 $ 49,094 |
COSTS AND ESTIMATED EARNINGS 39
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Costs In Excess Of Billings and Billings In Excess Of Costs Incurred [Abstract] | |
Costs In Excess Of Billings And Billings In Excess Of Costs [Table Text Block] | June 30, 2017 2018 Contracts costs incurred plus estimated earnings $ 810,327 $ 954,786 Less: Progress billings (639,571 ) (783,845 ) Cost and estimated earnings in excess of billings 170,756 170,941 Less: Allowance for doubtful accounts (8,660 ) (9,929 ) $ 162,096 $ 161,012 |
Allowance For Doubtful Accounts Of Costs And Estimated Earnings In Excess Of Billings [Table Text Block] | The movements in allowance for doubtful accounts are as follows: June 30, 2016 2017 2018 Balance at the beginning of year $ 8,850 $ 6,383 $ 8,660 Additions (1,823 ) 2,404 1,038 Translation adjustment (644 ) (127 ) 231 Balance at the end of the year $ 6,383 $ 8,660 $ 9,929 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | A summary of property, plant and equipment is as follows: June 30, 2017 2018 Buildings $ 70,029 $ 72,257 Machinery 10,892 14,070 Software 10,004 11,892 Vehicles 4,378 4,717 Electronic and other equipment 29,321 31,310 Construction in progress 4,113 1,824 $ 128,737 $ 136,070 Less: Accumulated depreciation and impairment (48,208 ) (55,860 ) $ 80,529 $ 80,210 |
Schedule of Property Subject to or Available for Operating Lease [Table Text Block] | The Company has entered into operating lease contracts related to certain buildings owned with the carrying amount as shown below: June 30, 2017 2018 Buildings leased to others - at original cost $ 13,925 $ 14,255 Less: accumulated depreciation (4,261 ) (4,714 ) Buildings leased to others - net $ 9,664 $ 9,541 |
PREPAID LAND LEASES (Tables)
PREPAID LAND LEASES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | A summary of prepaid land leases is as follows: June 30, 2017 2018 Prepaid land leases $ 12,335 $ 12,611 Less: Accumulated amortization (2,129 ) (2,439 ) $ 10,206 $ 10,172 |
Schedule of Future Amortization Expenses of Prepaid Land Lease [Table Text Block] | The annual amortization of prepaid land leases for each of the five succeeding years is as follows: Year ending June 30, 2019 $ 267 2020 267 2021 267 2022 267 2023 267 $ 1,335 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule Of Finite Lived Intangible Assets Acquired As Part Of Business Combination [Table Text Block] | June 30, 2017 2018 Gross Accumulated Net Gross Accumulated Net Customer relationships $ 3,086 (2,811 ) 275 $ 3,114 (3,114 ) - Patents and copyrights 1,695 (42 ) 1,653 3,752 (566 ) 3,186 $ 4,781 (2,853 ) 1,928 $ 6,866 (3,680 ) 3,186 |
Schedule of Expected Amortization Expense [Table Text Block] | The annual amortization expense relating to the existing intangible assets for the five succeeding years is as follow: Year ending June 30, 2019 $ 491 2020 491 2021 491 2022 491 2023 491 $ 2,455 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | The changes in the carrying amount of goodwill are as follows: June 30, 2017 2018 Balance at beginning of year $ 59,847 $ 47,326 Goodwill upon acquisition - 607 Goodwill impairment charge (11,211 ) - Translation adjustment (1,310 ) 426 Balance at the end of year $ 47,326 $ 48,359 |
INVESTMENTS IN EQUITY AND COS44
INVESTMENTS IN EQUITY AND COST INVESTEES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Equity and Cost Method Investments [Abstract] | |
Schedule Of Long Term Investments Accounted For Equity Method Or Cost Method [Table Text Block] | The following long-term investments were accounted for under either the equity method or the cost method as indicated: June 30, 2017 Interest Long-term Share of Advance Total Equity method Beijing Hollycon Medicine & Technology Co., Ltd. 30.00 % $ 22,737 1,773 - 24,510 China Techenergy Co., Ltd. 40.00 % 8,847 2,503 43 11,393 Beijing Hollysys Electric Motor Co., Ltd. 40.00 % 781 4,262 - 5,043 Beijing IPE Biotechnology Co., Ltd. 22.02 % 1,454 2,241 - 3,695 Shenzhen HollySys Intelligent Technologies Co., Ltd. 60.00 % 2,654 (159 ) - 2,495 Southcon Development Sdn Bhd. 30.00 % 210 (104 ) - 106 Beijing Hollysys Machine Automation Co., Ltd. 30.00 % 442 (442 ) - - $ 37,125 10,074 43 47,242 Cost method Shenhua Hollysys Information Technology Co., Ltd. 20.00 % $ 2,338 - - 2,338 Heilongjiang Ruixing Technology Co., Ltd. 6.00 % 1,598 - - 1,598 Zhejiang Sanxin Technology Co., Ltd. 6.00 % 88 - - 88 Zhongjijing Investment Consulting Co., Ltd. 5.00 % - - - - $ 4,024 - - 4,024 June 30, 2018 Interest Long-term Share of Advance Total Equity method Beijing Hollycon Medicine & Technology Co., Ltd. 30.00 % $ 23,276 3,091 - 26,367 China Techenergy Co., Ltd. 40.00 % 9,057 3,642 45 12,744 Beijing Hollysys Electric Motor Co., Ltd. 40.00 % 799 4,757 - 5,556 Beijing IPE Biotechnology Co., Ltd. 22.02 % 1,489 2,162 - 3,651 Beijing Hollysys Digital Technology Co.,Ltd. 25.00 % 3,729 (192 ) - 3,537 Shenzhen HollySys Intelligent Technologies Co., Ltd. 60.00 % 2,717 (1,445 ) - 1,272 Beijing AIRmaker Technology Co., Ltd. 20.00 % 151 - - 151 Southcon Development Sdn Bhd. 30.00 % 223 (112 ) - 111 Beijing Hollysys Machine Automation Co., Ltd. 30.00 % 453 (453 ) - - Beijing Jing Yi Intelligent Technologies Innovation Center Co., Ltd. 46.00 % - - - - Ningbo Hollysys Intelligent Technologies Co., Ltd. 40.00 % - - - - $ 41,894 11,450 45 53,389 Cost method Shenhua Hollysys Information Technology Co., Ltd. 20.00 % $ 2,393 - - 2,393 Heilongjiang Ruixing Technology Co., Ltd. 6.00 % 1,636 - - 1,636 Zhejiang Sanxin Technology Co., Ltd. 6.00 % 91 - - 91 Beijing Hetaitong Technologies Co., Ltd. 10.00 % 75 - - 75 Zhongjijing Investment Consulting Co., Ltd. 5.00 % - - - - Qingdao Lanjing Technology Co., Ltd. 10.00 % - - - - $ 4,195 - - 4,195 |
WARRANTY LIABILITIES (Tables)
WARRANTY LIABILITIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Product Warranty Liability [Table Text Block] | June 30, 2017 2018 Beginning balance $ 10,360 $ 7,632 Deconsolidation of a subsidiary (227 ) - Expense accrued 1,547 3,211 Expense incurred (3,836 ) (3,165 ) Translation adjustment (212 ) 180 $ 7,632 $ 7,858 Less: current portion of warranty liabilities (5,386 ) (5,622 ) Long-term warranty liabilities $ 2,246 $ 2,236 |
LONG-TERM LOANS (Tables)
LONG-TERM LOANS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule Of Debt Instruments [Table Text Block] | June 30, 2017 2018 MYR denominated loan (i) 782 1,016 SGD denominated loan (ii) 187 177 Convertible Bond (iii) 20,032 19,866 $ 21,001 $ 21,059 Less: current portion (420 ) (350 ) $ 20,581 $ 20,709 i. The MYR denominated loans are repayable in 3 to 75 installments with the last installment due in December 2041. For the year ended June 30, 2018, the effective interest rates ranged from 2.19% to 5.68% per annum. The borrowings are secured by the mortgages of buildings, vehicles in Malaysia, with an aggregate carrying value of $1,396 and $2,666 as of June 30, 2017 and 2018, respectively. ii. The SGD denominated loans are repayable in 10 to 31 installments with the last installment due on March 15, 2024. For the year ended June 30, 2018, the effective interest rates ranged from 2.68% to 5.44% per annum. The borrowing is secured by vehicles with a total carrying value of $307 and $204 as of June 30, 2017 and 2018, respectively. iii. Convertible Bond On May 30, 2014, the Company entered into a Convertible Bond agreement with International Finance Corporation ("IFC"), under which the Company borrowed $20,000 from IFC (the “Convertible Bond”) with an interest rate of 2.1% per annum and commitment fee of 0.5% per annum paid in arrears semi-annually. The Convertible Bond has a five year term and was drawn down on August 30, 2014 and is repayable in full on August 29, 2019. The loan may not be prepaid before it is due. |
Schedule of Maturities of Long-term Debt [Table Text Block] | Scheduled principal payments for all outstanding long-term loans as of June 30, 2018 are as follows: Year ending June 30, 2019 $ 826 2020 20,267 2021 239 2022 167 2023 and onwards 295 $ 21,794 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis [Table Text Block] | Assets and liabilities measured at fair value on a recurring basis as of June 30, 2017, and 2018 are stated below: June 30, 2017 Quoted prices Significant Significant (Level 1) (Level 2) (Level 3) Total Liabilities: Derivative financial liability (i) $ - $ - $ 487 $ 487 Total liabilities measured at fair value on a recurring basis $ - $ - $ 487 $ 487 June 30, 2018 Quoted prices Significant Significant (Level 1) (Level 2) (Level 3) Total Liabilities: Derivative financial liability (i) $ - $ - $ 412 $ 412 Total liabilities measured at fair value on a recurring basis $ - $ - $ 412 $ 412 (i) The derivative financial liability represents the fair value of the non-conversion compensation feature (note 13). The Company engaged an independent third-party appraiser to assist with the valuation of the feature. The Company is ultimately responsible for the fair value of the non-conversion compensation feature recorded in the consolidated financial statements. The Company adopted the binomial model to assess the fair value of such feature as of year-end. The non-conversion compensation feature is equal to the difference between the fair value of the whole Convertible Bond with the non-conversion compensation feature and the whole Convertible Bond without the non-conversion feature. The significant unobservable inputs used in the fair value measurement of the non-conversion compensation feature includes the risk-free rate of return, expected volatility, expected life of the Convertible Bond and expected ordinary dividend yield. The changes in fair value of the non-conversion compensation feature during fiscal year 2017 and 2018 are shown in the following table. Fair value measurements as of June (Level 3) Non-conversion compensation feature Balance as at June 30, 2017 $ 487 Change in fair-value (included within other expenses, net) (75 ) Balance as of June 30, 2018 $ 412 |
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block] | Assets measured at fair value on a nonrecurring basis as of June 30, 2017 are stated below: June 30, 2017 Quoted prices in Significant other Significant (Level 1) (Level 2) (Level 3) Total Assets: Retained non-controlling interest in a former subsidiary (i) $ - $ - $ 22,737 $ 22,737 Goodwill - - 11,488 11,488 Total assets measured at fair value on a non-recurring basis $ - $ - $ 34,225 $ 34,225 (i) During the year ended June 30, 2017, the investment in Hollycon was measured based on significant unobservable inputs (Level 3), using a discounted cash flow approach assuming a certain terminal growth rate and discount rate (Note 10). (ii) As of June 30, 2017, the Company’s goodwill of $11,488 was related to the acquisition of Concord Group and $35,838 was related to the acquisition of Bond Group. The Company engaged an independent third-party appraiser to assist with the valuation of the goodwill related to the Concord and Bond Groups. The Company is ultimately responsible for the fair value of the goodwill recorded in the consolidated financial statements. For the purposes of step one of the goodwill impairment test, the Company has adopted the income approach, in particular the discounted cash flow approach, to evaluate the fair value of the reporting unit. In applying the discounted cash flow approach, key assumptions include the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. For the purpose of step two of the goodwill impairment test, the Company has allocated the fair value of the reporting unit derived in step one to the assets and liabilities of the reporting unit, as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. The Company adopted the multi-period excess earnings model to evaluate the fair value of the intangible assets of the reporting unit, which was then used to compute the implied fair value of the goodwill via a residual approach. As a result, the Company recorded a goodwill impairment charge of $11,211 (Note 9). June 30, 2018 Quoted prices in Significant other Significant (Level 1) (Level 2) (Level 3) Total Assets: Intangible asset (i) $ - $ - $ 1,752 $ 1,752 Total assets measured at fair value on a non-recurring basis $ - $ - $ 1,752 $ 1,752 (i) Upon the acquisition of 100% of Hollysys Industrial Software in July 2017, the Company recognized $2,071 patents and copyrights based on significant unobservable inputs (Level 3), using a discounted cash flow approach assuming a certain terminal growth rate and discount rate. |
SHARE-BASED COMPENSATION EXPE48
SHARE-BASED COMPENSATION EXPENSES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] | A summary of the restricted share activity for the year ended June 30, 2018 is as follows: Number of restricted shares Weighted average grant-date fair value Un-vested at June 30, 2017 63,125 20.09 Vested at June 30, 2018 (22,500 ) 20.09 Un-vested at June 30, 2018 40,625 20.09 |
Performance Options 2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting Schedule For Performance Shares [Table Text Block] | The vesting schedule for such performance share options is as below: EPS Threshold Number of vested Months after the grant date 24 months 36 months 48 months Annual growth rate over 15% but below 20% 1,160,000 348,000 348,000 464,000 CAGR equals or over 20% but below 25% Additional 290,000 - - 290,000 CAGR equals 25% or above Additional 290,000 - - 290,000 Total 348,000 348,000 1,044,000 |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of the 2015 performance option activity for the year ended June 30, 2018 is as shown below: 2015 Performance Number of Weighted Weighted average Aggregate Outstanding as at June 30, 2017 396,000 22.05 2.87 - Vested and expected to vest at June 30, 2018 396,000 22.05 1.87 546 Vested and exercisable at June 30, 2018 396,000 22.05 1.87 546 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The major inputs to the binomial model are as follows: For options granted on May 14, 2015 Risk-free rate of return 1.51 % Weighted average expected volatility 53.42 % Expected life (in years) 5 years Expected ordinary dividend yield nil |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | The Company’s income before income taxes consists of: Year ended June 30, 2016 2017 2018 PRC $ 142,900 $ 105,331 $ 127,301 Non-PRC (5,158 ) (21,976 ) 2,341 $ 137,742 $ 83,355 $ 129,642 |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Income tax expense, most of which is incurred in the PRC, consists of: Year ended June 30, 2016 2017 2018 Current income tax expense (benefit) PRC 10,590 12,911 17,268 Non-PRC 4,110 (658 ) 6,462 $ 14,700 $ 12,253 $ 23,730 Deferred income tax (benefit) expense PRC (196 ) 2,616 (1,348 ) Non-PRC (266 ) (483 ) (177 ) $ (462 ) 2,133 (1,525 ) $ 14,238 $ 14,386 $ 22,205 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Reconciliation of the income tax expenses as computed by applying the PRC statutory tax rate of 25% to income before income taxes and the actual income tax expenses is as follows: Year ended June 30, 2016 2017 2018 Income before income taxes $ 137,742 $ 83,355 $ 129,642 Expected income tax expense at statutory tax rate in the PRC 34,436 20,838 32,410 Effect of different tax rates in various jurisdictions 2,109 2,627 (521 ) Effect of preferential tax treatment (12,296 ) (10,650 ) (11,678 ) Effect of non-taxable income (4,985 ) - (284 ) Effect of additional deductible research and development expenses (4,716 ) (2,385 ) (4,260 ) Effect of non-deductible expenses 5,569 4,608 3,046 Effect of change in tax rate (6,613 ) (4,835 ) (4,801 ) Change in valuation allowance 540 3,964 2,359 Tax rate differential on deferred tax items (587 ) 2,056 - Withholding tax on dividend paid by subsidiaries 1,252 (2,799 ) 4,784 Others (471 ) 962 1,150 Total $ 14,238 $ 14,386 $ 22,205 |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The breakdown of deferred tax assets/liabilities caused by the temporary difference is shown as below: June 30, 2017 Deferred tax assets, current Allowance for doubtful accounts $ 9,172 Inventory provision 179 Provision for contract loss 694 Long-term assets 13 Deferred revenue 3,220 Deferred subsidies 1,654 Warranty liabilities 829 Recognition of intangible assets (2 ) Accrued payroll 998 Net operating loss carry forward 9,801 Valuation allowance (10,160 ) Total deferred tax assets, current $ 16,398 Deferred tax liabilities, current Costs and estimated earnings in excess of billings $ (10,071 ) Recognition of intangible assets - PRC dividend withholding tax (2,949 ) Others 2 Total deferred tax liabilities, current $ (13,018 ) Net deferred tax assets, current $ 7,730 Net deferred tax liabilities, current $ (4,350 ) Deferred tax assets, non-current Long-term assets $ 112 Deferred subsidies 333 Net operating loss carryforward 1,573 Warranty liabilities 332 Others 192 Total deferred tax assets, non-current $ 2,542 Deferred tax liabilities, non-current Share of net gains of equity investees $ (2,520 ) Property, plant and equipment (38 ) Intangible assets and other non-current assets (5,552 ) Total deferred tax liabilities, non-current $ (8,110 ) Net deferred tax assets-non-current $ 1,121 Net deferred tax liabilities-non-current $ (6,689 ) June 30, 2018 Deferred tax assets Allowance for doubtful accounts $ 9,600 Costs and estimated earnings in excess of billings (8,544 ) Deferred revenue 3,562 Deferred subsidies 1,809 Warranty liabilities 882 Accrued payroll 1,029 Net operating loss carry forward 12,739 Long-term assets 296 Warranty liabilities 324 Share of net gains(loss) of equity investees (2,038 ) Inventory provision 713 Provision for contract loss 70 Recognition of intangible assets 11 Others 387 Long-term assets - Valuation allowance (12,522 ) Total deferred tax assets-non-current $ 8,318 Deferred tax liabilities Withholding tax on capital repayment $ (3,019 ) Intangible assets and other non-current assets (6,327 ) Property, plant and equipment (20 ) Total deferred tax assets, non-current $ (9,366 ) |
INCOME PER SHARE (Tables)
INCOME PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation of basic and diluted net income per share attributable to Hollysys for the years indicated: Year ended June 30, 2016 2017 2018 Numerator: Net income attributable to the Company - basic $ 118,471 $ 68,944 $ 107,161 Net income attributable to the Company - diluted (i) $ 119,121 $ 69,605 $ 107,425 Denominator: Weighted average ordinary shares outstanding used in computing basic income per share 59,170,050 60,189,004 60,434,019 Effect of dilutive securities Convertible Bond 776,800 784,400 788,800 Share options 642,184 - - Restricted shares 22,422 38,106 25,746 Weighted average ordinary shares outstanding used in computing diluted income per share 60,611,456 61,011,510 61,248,565 Income per share - basic $ 2.00 1.15 1.77 Income per share - diluted $ 1.97 1.14 1.75 (i) For the year ended June 30, 2016, 2017 and 2018, interest accretion related to the Convertible Bond of $650, $661 and $264, respectively, is added back to derive net income attributable to the Company for computing diluted income per share. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Schedule Of Amount Due From Related Parties [Table Text Block] | Due from related parties June 30, 2017 2018 China Techenergy $ 28,778 $ 29,182 Shenhua Information 3,267 3,570 Hollysys Machine 965 853 Hollycon 79 51 Shenzhen HollySys 2 22 Heilongjiang Ruixing 1,049 - Beijing IPE 2 - $ 34,142 $ 33,678 |
Schedule Of Amount Due To Related Parties [Table Text Block] | Due to related parties June 30, 2017 2018 China Techenergy $ 1,117 $ 4,141 Hollysys Machine 817 828 Shenhua Information 353 348 Electric Motor 11 34 Beijing IPE 2 2 Hollycon 1 - $ 2,301 $ 5,353 |
Schedule of Related Party Transactions [Table Text Block] | Transactions with related parties Purchases of goods and services from: Year ended June 30, 2016 2017 2018 Electric Motor $ 354 $ 29 $ 77 Hollycon - 8 16 Hollysys Machine 555 749 - $ 909 $ 786 $ 93 Sales of goods and integrated solutions to: Year ended June 30, 2016 2017 2018 China Techenergy $ 3,657 $ 10,842 $ 11,519 Hollycon - 108 225 Shenhua Information 847 765 86 Hollysys Machine 235 167 - Beijing IPE - 7 - $ 4,739 $ 11,889 $ 11,830 Operating lease income from: Year ended June 30, 2016 2017 2018 Hollycon - 602 731 Hollysys Machine 40 - - $ 40 $ 602 $ 731 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments under Non Cancelable Operating Leases [Table Text Block] | Future minimum lease payments under non-cancelable operating leases with initial terms of one year or more consist of the following: Years ending June 30, Minimum lease payments 2019 $ 2,283 2020 1,058 2021 520 2022 520 2023 and onwards 520 Total minimum lease payments $ 4,901 |
OPERATING LEASES AS LESSOR (Tab
OPERATING LEASES AS LESSOR (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Leases [Abstract] | |
Minimum Lease Payment to Be Received For Operating Leases [Table Text Block] | The minimum rental income in the next five years is shown as below: Year ending June 30, Minimum lease payments 2019 $ 1,558 2020 1,604 2021 1,653 2022 1,702 2023 1,753 Total minimum lease payments to be received in the next five years $ 8,270 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | Summarized information by segments for the years ended June 30, 2016, 2017, and 2018 is as follows: Year ended June 30, 2016 IA Rail M&E Miscellaneous Consolidated Revenues from external customers $ 182,901 240,310 95,277 25,837 544,325 Costs of revenue 113,314 131,043 82,900 11,342 338,599 Gross profit $ 69,587 109,267 12,377 14,495 205,726 Year ended June 30, 2017 IA Rail M&E Miscellaneous Consolidated Revenues from external customers $ 172,667 155,732 103,544 - 431,943 Costs of revenue 106,583 86,128 98,761 - 291,472 Gross profit $ 66,084 69,604 4,783 - 140,471 Year ended June 30, 2018 IA Rail M&E Miscellaneous Consolidated Revenues from external customers $ 224,793 190,645 125,330 - 540,768 Costs of revenue 135,633 90,574 108,681 - 334,888 Gross profit $ 89,160 100,071 16,649 - 205,880 |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] | The majority of the Company’s revenues and long-lived assets other than goodwill and intangible assets are derived from and located in the PRC. The following table sets forth the revenues by geographical area: Year ended June 30, 2016 2017 2018 Revenues: PRC $ 443,256 $ 326,713 $ 412,933 Non-PRC 101,069 105,230 127,775 $ 544,325 $ 431,943 $ 540,768 |
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block] | The following table sets forth the long-lived assets other than goodwill and intangible assets by geographical area: June 30, 2017 2018 Long-lived assets other than goodwill and acquired intangible assets PRC $ 131,625 $ 135,450 Non-PRC 12,029 12,516 $ 143,654 $ 147,966 |
CONDENSED FINANCIAL INFORMATI55
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Balance Sheet [Table Text Block] | CONDENSED BALANCE SHEETS June 30, 2017 2018 ASSETS Current assets: Cash and cash equivalents $ 13,103 $ 21,578 Amounts due from subsidiaries 59,920 53,503 Prepaid expenses 61 61 Total current assets 73,084 75,142 Investments in subsidiaries 726,837 869,706 Total assets $ 799,921 $ 944,848 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accrued payroll and related expense $ 14 $ 28 Derivative financial liability 487 412 Amounts due to subsidiaries 55,869 82,491 Total current liabilities 56,370 82,931 Long-term loan 20,032 19,865 Total liabilities 76,402 102,796 Equity: Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized; 60,342,099 shares issued and outstanding as of June 30, 2017 and 2018, respectively 60 60 Additional paid-in capital 222,189 223,396 Retained earnings 524,129 624,049 Accumulated other comprehensive loss (22,859 ) (5,453 ) Total equity 723,519 842,052 Total liabilities and equity $ 799,921 $ 944,848 |
Condensed Income Statement [Table Text Block] | CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Year Ended June 30, 2016 2017 2018 General and administrative expenses $ 4,484 $ 1,062 $ 1,751 Loss from operations (4,484 ) (1,062 ) (1,751 ) Other expense, net (93 ) (89 ) - Interest income 80 4 - Interest expenses (705 ) (1,074 ) (748 ) Foreign exchange losses (719 ) (740 ) (97 ) Equity in profit of subsidiaries $ 124,392 $ 71,905 $ 109,757 Income before income taxes 118,471 68,944 107,161 Income tax expenses - - - Net income 118,471 68,944 107,161 Other comprehensive income, net of tax of nil Translation adjustment (46,052 ) (14,392 ) 17,406 Comprehensive income $ 72,419 $ 54,552 $ 124,567 |
Condensed Cash Flow Statement [Table Text Block] | CONDENSED STATEMENTS OF CASH FLOWS Year ended June 30, 2016 2017 2018 Cash flows from operating activities: Net income $ 118,471 $ 68,944 $ 107,161 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Share of net (income) of equity investees (124,392 ) (71,905 ) (109,757 ) Share-based compensation expenses 3,860 464 1,207 Accretion of convertible bond 230 230 230 Fair value adjustments of a bifurcated derivative 93 89 (75 ) Accrued liabilities 41 1,248 14 Net cash used in operating activities $ (1,697 ) $ (930 ) $ (1,220 ) Cash flows from investing activities: Collection of loans from subsidiaries - 2,316 50,649 Loans to subsidiaries (729 ) (2,712 ) (5,000 ) Maturity of time deposits 14,713 - - Investment in subsidiaries (2,594 ) - (15,707 ) Net cash provided by (used in) investing activities $ 11,390 $ (396 ) $ 29,942 Cash flows from financing activities: Proceeds of loans from subsidiaries - 11,938 - Payment of dividends - (11,975 ) (7,241 ) Repayment of loans from subsidiaries (15,000 ) (428 ) (13,006 ) Proceeds from exercise of options 5,441 6,323 - Net cash (used in) provided by financing activities $ (9,559 ) $ 5,858 $ (20,247 ) Net increase in cash and cash equivalents $ 134 $ 4,532 $ 8,475 Cash and cash equivalents, beginning of period 8,437 8,571 13,103 Cash and cash equivalents, end of period $ 8,571 $ 13,103 $ 21,578 |
ORGANIZATION AND BUSINESS BAC56
ORGANIZATION AND BUSINESS BACKGROUND (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Equity Method Investment Summarized Financial Information [Line Items] | |||
Net cash provided by (used in) operating activities | $ 125,192 | $ 69,813 | $ 46,737 |
Net cash used in investing activities | (49,748) | (89,553) | (2,454) |
Net cash provided by financing activities | (12,197) | (7,413) | $ (6,780) |
Variable Interest Entity (VIE) or Potential VIE, Information Unavailability [Member] | |||
Equity Method Investment Summarized Financial Information [Line Items] | |||
Current assets | 25,209 | 14,331 | |
Non-current assets | 299 | 239 | |
Total assets | 25,508 | 14,570 | |
Current liabilities | 19,533 | 14,178 | |
Total liabilities | 19,533 | 14,178 | |
Revenue | 42,287 | 6,914 | |
Cost of revenue | 35,353 | 5,753 | |
Net profit | 5,521 | 494 | |
Net cash provided by (used in) operating activities | (2,947) | 8,721 | |
Net cash used in investing activities | (184) | (216) | |
Net cash provided by financing activities | $ 0 | $ 0 |
ORGANIZATION AND BUSINESS BAC57
ORGANIZATION AND BUSINESS BACKGROUND (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 31, 2017 | Jun. 30, 2017 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Business Acquisition, Equity Interest Issued or Issuable, Description | In November 2015, CECL was established in Doha, Qatar, by CCPL, a wholly-owned subsidiary of the Company incorporated under the laws of Singapore, and a Qatar citizen as a nominee shareholder, with 49% and 51% of equity interest in CECL, respectively. | ||
Percentage Of Variable ReturnsLoss attributable to CCPL | 95.00% | ||
Subsidiaries [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Due to Affiliate, Current | $ 299 | $ 127 | |
Due from Affiliate, Current | $ 5,443 | $ 1,629 | |
Bond M E Sdn Bhd [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | ||
Bond Corporation Pte Ltd [Member] | Bond M E Sdn Bhd [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Equity Method Investment, Ownership Percentage | 49.10% |
SUMMARY OF SIGNIFICANT ACCOUN58
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 12 Months Ended |
Jun. 30, 2018 | |
Buildings [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 30 years |
Buildings [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 50 years |
Machinery [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Machinery [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Computer Software, Intangible Asset [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer Software, Intangible Asset [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 6 years |
Electronic and Other Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Electronic and Other Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN59
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 12 Months Ended |
Jun. 30, 2018 | |
Customer Relationships [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 60 months |
Customer Relationships [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 57 months |
Order or Production Backlog [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 33 months |
Order or Production Backlog [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 21 months |
Patents And Copyrights [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 120 months |
Patents And Copyrights [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 60 months |
SUMMARY OF SIGNIFICANT ACCOUN60
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | Jul. 31, 2017 | |
Accounting Policies [Line Items] | ||||
Percentage Of Recognized Contractual Revenue | 100.00% | |||
Goodwill, Impairment Loss | $ 0 | $ 11,211 | $ 0 | |
Effective Value Added Tax Rate | 17.00% | |||
Percentage Of Value Added Tax Refunded | 3.00% | |||
Percentage Of After Tax Income Transferred To Statutory Reserved | 10.00% | |||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | 100.00% | ||
Retained Amount of Accounts Receivable | $ 18,203 | 12,838 | ||
Government Grants Received | $ 5,931 | 10,238 | 6,085 | |
Integrated Solutions Contracts Range Minimum | 6 months | |||
Integrated Solutions Contracts Range Maximum | 5 years | |||
Translation adjustments | $ 17,410 | $ (14,428) | $ (48,841) | |
Decreased Net Income Per Share Basic | $ 0.17 | $ 0.20 | $ 0.51 | |
Decreased Net Income Per Share diluted | $ 0.17 | $ 0.20 | $ 0.50 | |
Decreased Net Income | $ 10,466 | $ 12,062 | $ 30,270 | |
Percentage Of Currency Depreciation Or Appreciation | 2.32% | 2.07% | 8.68% | |
Statutory Reserve Balance Of Registered Capital | 50.00% | |||
Payments to Acquire Businesses, Gross | $ 2,380 | |||
Grant [Member] | ||||
Accounting Policies [Line Items] | ||||
Revenue from Grants | 4,784 | $ 12,885 | $ 2,886 | |
Malaysia [Member] | ||||
Accounting Policies [Line Items] | ||||
Deposits Assets | 1,461 | 3,935 | ||
SINGAPORE | ||||
Accounting Policies [Line Items] | ||||
Deposits Assets | $ 4,249 | 11,690 | ||
INDIA | ||||
Accounting Policies [Line Items] | ||||
Deposits Assets | $ 82 | |||
Accounts Receivable [Member] | ||||
Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | 10.00% | ||
PRC [Member] | ||||
Accounting Policies [Line Items] | ||||
Deposits Assets | $ 133,723 | $ 80,507 | ||
Minimum [Member] | ||||
Accounting Policies [Line Items] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 20.00% | |||
Contract Period | 6 months | |||
Minimum [Member] | Use Rights [Member] | ||||
Accounting Policies [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 49 years | |||
Maximum [Member] | ||||
Accounting Policies [Line Items] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 50.00% | |||
Contract Period | 3 years | |||
Maximum [Member] | Use Rights [Member] | ||||
Accounting Policies [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 88 years |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Inventory [Line Items] | ||
Raw materials | $ 19,047 | $ 15,781 |
Work in progress | 26,425 | 19,525 |
Finished goods | 12,602 | 10,354 |
Inventories | $ 58,074 | $ 45,660 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 324,310 | $ 294,641 |
Allowance for doubtful accounts | (49,094) | (48,089) |
Accounts receivable, net | $ 275,216 | $ 246,552 |
ACCOUNTS RECEIVABLE (Details 1)
ACCOUNTS RECEIVABLE (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Balance at the beginning of year | $ 48,089 | $ 42,471 | $ 34,259 |
Additions | 3,407 | 7,400 | 12,000 |
Deconsolidation of a subsidiary | 0 | (160) | 0 |
Written off | (3,527) | (784) | (714) |
Translation adjustment | 1,125 | (838) | (3,074) |
Balance at the end of year | $ 49,094 | $ 48,089 | $ 42,471 |
COSTS AND ESTIMATED EARNINGS 64
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 |
Costs In Excess Of Billings And Billings In Excess Of Costs Incurred [Line Items] | ||||
Contracts costs incurred plus estimated earnings | $ 954,786 | $ 810,327 | ||
Less: Progress billings | (783,845) | (639,571) | ||
Cost and estimated earnings in excess of billings | 170,941 | 170,756 | ||
Less: Allowance for doubtful accounts | (9,929) | (8,660) | $ (6,383) | $ (8,850) |
Cost and estimated earnings in excess of billings, Total | $ 161,012 | $ 162,096 |
COSTS AND ESTIMATED EARNINGS 65
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Costs In Excess Of Billings And Billings In Excess Of Costs Incurred [Line Items] | |||
Balance at the beginning of year | $ 8,660 | $ 6,383 | $ 8,850 |
Additions | 1,038 | 2,404 | (1,823) |
Translation adjustment | 231 | (127) | (644) |
Balance at the end of the year | $ 9,929 | $ 8,660 | $ 6,383 |
PROPERTY, PLANT AND EQUIPMENT66
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 136,070 | $ 128,737 |
Less: Accumulated depreciation and impairment | (55,860) | (48,208) |
Property, plant and equipment, net | 80,210 | 80,529 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 72,257 | 70,029 |
Machinery [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 14,070 | 10,892 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 11,892 | 10,004 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 4,717 | 4,378 |
Electronic and other equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 31,310 | 29,321 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 1,824 | $ 4,113 |
PROPERTY, PLANT AND EQUIPMENT67
PROPERTY, PLANT AND EQUIPMENT (Details 1) - Assets Leased to Others [Member] - Building [Member] - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Property Subject to or Available for Operating Lease [Line Items] | ||
Buildings leased to others - at original cost | $ 14,255 | $ 13,925 |
Less: accumulated depreciation | (4,714) | (4,261) |
Buildings leased to others - net | $ 9,541 | $ 9,664 |
PROPERTY, PLANT AND EQUIPMENT68
PROPERTY, PLANT AND EQUIPMENT (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation, Depletion and Amortization | $ 8,217 | $ 8,752 | $ 6,266 |
Property Plant And Equipment Pledged For Short Term Loans | 0 | 991 | |
Property Plant And Equipment Pledged For Long Term Loans | 2,870 | 1,703 | |
Property Plant And Equipment Pledged For Line Of Credit | $ 3,121 | $ 3,209 |
PREPAID LAND LEASES (Details)
PREPAID LAND LEASES (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Prepaid Land and Leases [Line Items] | ||
Prepaid land leases | $ 12,611 | $ 12,335 |
Less: Accumulated amortization | (2,439) | (2,129) |
Deferred Costs, Leasing, Net | $ 10,172 | $ 10,206 |
PREPAID LAND LEASES (Details 1)
PREPAID LAND LEASES (Details 1) $ in Thousands | Jun. 30, 2018USD ($) |
Prepaid Land and Leases [Line Items] | |
2,019 | $ 267 |
2,020 | 267 |
2,021 | 267 |
2,022 | 267 |
2,023 | 267 |
Prepaid Land Lease Amortization Expense Net Total | $ 1,335 |
PREPAID LAND LEASES (Details Te
PREPAID LAND LEASES (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Prepaid Land and Leases [Line Items] | |||
Amortization of Deferred Leasing Fees | $ 270 | $ 261 | $ 281 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 6,866 | $ 4,781 |
Accumulated amortization | (3,680) | (2,853) |
Net carrying value | 3,186 | 1,928 |
Customer Relationships [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 3,114 | 3,086 |
Accumulated amortization | (3,114) | (2,811) |
Net carrying value | 0 | 275 |
Patents and copyrights [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 3,752 | 1,695 |
Accumulated amortization | (566) | (42) |
Net carrying value | $ 3,186 | $ 1,653 |
INTANGIBLE ASSETS, NET (Detai73
INTANGIBLE ASSETS, NET (Details 1) $ in Thousands | Jun. 30, 2018USD ($) |
Schedule of Finite Lived Intangible Assets Future Amortization Expense [Line Items] | |
2,019 | $ 491 |
2,020 | 491 |
2,021 | 491 |
2,022 | 491 |
2,023 | 491 |
Intangible assets, Total | $ 2,455 |
INTANGIBLE ASSETS, NET (Detai74
INTANGIBLE ASSETS, NET (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | Jul. 31, 2017 | |
Intangible Assets Net Excluding Goodwill [Line Items] | ||||
Accumulated amortization | $ 801 | $ 623 | $ 818 | |
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | 100.00% | ||
Amortization of Intangible Assets | $ 801 | 623 | 818 | |
Customer Relationships [Member] | ||||
Intangible Assets Net Excluding Goodwill [Line Items] | ||||
Accumulated amortization | 279 | 623 | 818 | |
Amortization of Intangible Assets | 279 | $ 623 | $ 818 | |
Patents And Copyrights [Member] | ||||
Intangible Assets Net Excluding Goodwill [Line Items] | ||||
Accumulated amortization | 319 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 2,071 | |||
Amortization of Intangible Assets | $ 319 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill [Line Items] | |||
Balance at beginning of year | $ 47,326 | $ 59,847 | |
Goodwill upon acquisition | 607 | 0 | |
Goodwill impairment charge | 0 | 11,211 | $ 0 |
Translation adjustment | 426 | (1,310) | |
Balance at the end of year | $ 48,359 | $ 47,326 | $ 59,847 |
GOODWILL (Details Textual)
GOODWILL (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill [Line Items] | |||
Goodwill | $ 48,359 | $ 47,326 | $ 59,847 |
Goodwill, Impairment Loss | 0 | 11,211 | $ 0 |
Concord Corporation Pte Ltd [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 24,817 | 24,595 | |
Concord [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 11,592 | $ 11,488 | |
Goodwill, Impairment Loss | $ 11,211 | ||
Fair Value Inputs, Terminal Value Growth Rate | 2.00% | 2.00% | |
Maximum [Member] | Concord [Member] | Measurement Input, Discount Rate [Member] | |||
Goodwill [Line Items] | |||
Fair Value Inputs Rate | 16.00% | 16.90% | |
Minimum [Member] | Concord [Member] | Measurement Input, Discount Rate [Member] | |||
Goodwill [Line Items] | |||
Fair Value Inputs Rate | 12.70% | 12.70% | |
Discount Rate [Member] | Concord [Member] | |||
Goodwill [Line Items] | |||
Percentage Of Goodwill Increase | 1.00% | ||
Percentage Of Goodwill Decrease | 1.00% | ||
Discount Rate [Member] | Maximum [Member] | Concord [Member] | |||
Goodwill [Line Items] | |||
Goodwill, Period Increase (Decrease) | $ 1,980 | ||
Discount Rate [Member] | Minimum [Member] | Concord [Member] | |||
Goodwill [Line Items] | |||
Goodwill, Period Increase (Decrease) | 1,672 | ||
Terminal Value Growth Rate [Member] | Maximum [Member] | Concord [Member] | |||
Goodwill [Line Items] | |||
Goodwill, Period Increase (Decrease) | 808 | ||
Terminal Value Growth Rate [Member] | Minimum [Member] | Concord [Member] | |||
Goodwill [Line Items] | |||
Goodwill, Period Increase (Decrease) | $ 697 |
INVESTMENTS IN EQUITY AND COS77
INVESTMENTS IN EQUITY AND COST INVESTEES (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||||||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | May 31, 2018USD ($) | May 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Oct. 31, 2017 | Aug. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016USD ($) | |
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Total | $ 53,389 | $ 47,242 | ||||||||
Beijing Hollycon Medicine Technology Co Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Long-term investment, at cost, less impairment | $ 22,737 | |||||||||
Shenzhen HollySys Intelligent Technologies Co., Ltd. [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 60.00% | |||||||||
Beijing AIRmaker Technology Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 20.00% | 20.00% | ||||||||
Long-term investment, at cost, less impairment | $ 151 | ¥ 1,000 | ||||||||
Beijing Hetaitong Technologies Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 10.00% | 10.00% | ||||||||
Long-term investment, at cost, less impairment | $ 75 | ¥ 500 | ||||||||
Beijing Jing Yi Intelligent Technologies Innovation Center Co Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 46.00% | 46.00% | ||||||||
Ningbo Hollysys Intelligent Technologies Co Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 40.00% | |||||||||
Qingdao Lanjing Technology Co Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 10.00% | 10.00% | 10.00% | |||||||
Equity Method Investments [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 25.00% | |||||||||
Long-term investment, at cost, less impairment | $ 41,894 | 37,125 | ||||||||
Share of undistributed profits | 11,450 | 10,074 | ||||||||
Advance to investee company | 45 | 43 | ||||||||
Total | $ 53,389 | $ 47,242 | ||||||||
Equity Method Investments [Member] | China Techenergy Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 40.00% | 40.00% | ||||||||
Long-term investment, at cost, less impairment | $ 9,057 | $ 8,847 | ||||||||
Share of undistributed profits | 3,642 | 2,503 | ||||||||
Advance to investee company | 45 | 43 | ||||||||
Total | $ 12,744 | $ 11,393 | ||||||||
Equity Method Investments [Member] | Beijing Hollysys Electric Motor Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 40.00% | 40.00% | ||||||||
Long-term investment, at cost, less impairment | $ 799 | $ 781 | ||||||||
Share of undistributed profits | 4,757 | 4,262 | ||||||||
Advance to investee company | 0 | 0 | ||||||||
Total | $ 5,556 | $ 5,043 | ||||||||
Equity Method Investments [Member] | Beijing IPE Biotechnology Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 22.02% | 22.02% | ||||||||
Long-term investment, at cost, less impairment | $ 1,489 | $ 1,454 | ||||||||
Share of undistributed profits | 2,162 | 2,241 | ||||||||
Advance to investee company | 0 | 0 | ||||||||
Total | $ 3,651 | $ 3,695 | ||||||||
Equity Method Investments [Member] | Beijing Hollysys Machine Automation Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 30.00% | 30.00% | ||||||||
Long-term investment, at cost, less impairment | $ 453 | $ 442 | ||||||||
Share of undistributed profits | (453) | (442) | ||||||||
Advance to investee company | 0 | 0 | ||||||||
Total | $ 0 | $ 0 | ||||||||
Equity Method Investments [Member] | Southcon Development Sdn Bhd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 30.00% | 30.00% | ||||||||
Long-term investment, at cost, less impairment | $ 223 | $ 210 | ||||||||
Share of undistributed profits | (112) | (104) | ||||||||
Advance to investee company | 0 | 0 | ||||||||
Total | $ 111 | $ 106 | ||||||||
Equity Method Investments [Member] | Beijing Hollycon Medicine Technology Co Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 30.00% | 30.00% | ||||||||
Long-term investment, at cost, less impairment | $ 23,276 | $ 22,737 | ||||||||
Share of undistributed profits | 3,091 | 1,773 | ||||||||
Advance to investee company | 0 | 0 | ||||||||
Total | $ 26,367 | $ 24,510 | ||||||||
Equity Method Investments [Member] | Shenzhen HollySys Intelligent Technologies Co., Ltd. [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 60.00% | 60.00% | ||||||||
Long-term investment, at cost, less impairment | $ 2,717 | $ 2,654 | ||||||||
Share of undistributed profits | (1,445) | (159) | ||||||||
Advance to investee company | 0 | 0 | ||||||||
Total | $ 1,272 | 2,495 | ||||||||
Equity Method Investments [Member] | Beijing AIRmaker Technology Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 20.00% | |||||||||
Long-term investment, at cost, less impairment | $ 151 | |||||||||
Share of undistributed profits | 0 | |||||||||
Advance to investee company | 0 | |||||||||
Total | $ 151 | |||||||||
Equity Method Investments [Member] | Beijing Hollysys Digital Technology Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 25.00% | |||||||||
Long-term investment, at cost, less impairment | $ 3,729 | |||||||||
Share of undistributed profits | (192) | |||||||||
Advance to investee company | 0 | |||||||||
Total | 3,537 | |||||||||
Cost-method Investments [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Long-term investment, at cost, less impairment | 4,195 | 4,024 | ||||||||
Share of undistributed profits | 0 | 0 | ||||||||
Advance to investee company | 0 | 0 | ||||||||
Total | $ 4,195 | $ 4,024 | ||||||||
Cost-method Investments [Member] | Shenhua Hollysys Information Technology Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 20.00% | 20.00% | ||||||||
Long-term investment, at cost, less impairment | $ 2,393 | $ 2,338 | ||||||||
Share of undistributed profits | 0 | 0 | ||||||||
Advance to investee company | 0 | 0 | ||||||||
Total | $ 2,393 | $ 2,338 | ||||||||
Cost-method Investments [Member] | Heilongjiang Ruixing Technology Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 6.00% | 6.00% | ||||||||
Long-term investment, at cost, less impairment | $ 1,636 | $ 1,598 | ||||||||
Share of undistributed profits | 0 | 0 | ||||||||
Advance to investee company | 0 | 0 | ||||||||
Total | $ 1,636 | $ 1,598 | ||||||||
Cost-method Investments [Member] | Zhongjijing Investment Consulting Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 5.00% | 5.00% | ||||||||
Long-term investment, at cost, less impairment | $ 0 | $ 0 | ||||||||
Share of undistributed profits | 0 | 0 | ||||||||
Advance to investee company | 0 | 0 | ||||||||
Total | $ 0 | $ 0 | ||||||||
Cost-method Investments [Member] | Zhejiang Sanxin Technology Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 6.00% | 6.00% | ||||||||
Long-term investment, at cost, less impairment | $ 91 | $ 88 | ||||||||
Share of undistributed profits | 0 | 0 | ||||||||
Advance to investee company | 0 | 0 | ||||||||
Total | $ 91 | $ 88 | ||||||||
Cost-method Investments [Member] | Beijing Hetaitong Technologies Co., Ltd [Member] | ||||||||||
Schedule Of Equity And Cost Method Investments [Line Items] | ||||||||||
Interest held (in percentage) | 10.00% | |||||||||
Long-term investment, at cost, less impairment | $ 75 | |||||||||
Share of undistributed profits | 0 | |||||||||
Advance to investee company | 0 | |||||||||
Total | $ 75 |
INVESTMENTS IN EQUITY AND COS78
INVESTMENTS IN EQUITY AND COST INVESTEES (Details Textual) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||||
Jul. 31, 2016USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2014 | Jun. 30, 2018CNY (¥) | May 31, 2018USD ($) | May 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Oct. 31, 2017USD ($) | Oct. 31, 2017CNY (¥) | Aug. 31, 2017 | Oct. 31, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity method investment remaining percentage | 80.00% | |||||||||||||
Proceeds from Divestiture of Interest in Consolidated Subsidiaries | $ 0 | $ 0 | $ 464 | |||||||||||
Deconsolidation, Gain (Loss), Amount | $ 0 | 14,514 | 0 | |||||||||||
Asset Impairment Charges | 11,211 | |||||||||||||
Third Party [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 60.00% | 60.00% | ||||||||||||
Equity Method Investments [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 25.00% | |||||||||||||
Equity Method Investment Less Impairment ,At Cost | $ 41,894 | 37,125 | ||||||||||||
Cost-method Investments [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment Less Impairment ,At Cost | $ 4,195 | $ 4,024 | ||||||||||||
Shenhua Hollysys Information Technology Co., Ltd [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Cost Method Investment Ownership Percentage | 20.00% | |||||||||||||
Shenhua Hollysys Information Technology Co., Ltd [Member] | Cost-method Investments [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 20.00% | 20.00% | 20.00% | |||||||||||
Equity Method Investment Less Impairment ,At Cost | $ 2,393 | $ 2,338 | ||||||||||||
Beijing Hollycon Medicine Technology Co., Ltd [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment Less Impairment ,At Cost | $ 22,737 | |||||||||||||
Sale of Stock, Consideration Received on Transaction | $ 30,943 | |||||||||||||
Equity Method Investment, Percentage Sold | 0.60% | |||||||||||||
Proceeds from Divestiture of Interest in Consolidated Subsidiaries | $ 464 | |||||||||||||
Sale of Stock, Percentage of Ownership before Transaction | 51.00% | |||||||||||||
Sale of Stock, Percentage of Ownership after Transaction | 30.00% | |||||||||||||
Deconsolidation, Gain (Loss), Amount | $ 14,514 | |||||||||||||
Beijing Hollycon Medicine Technology Co., Ltd [Member] | Equity Method Investments [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 30.00% | 30.00% | 30.00% | |||||||||||
Equity Method Investment Less Impairment ,At Cost | $ 23,276 | $ 22,737 | ||||||||||||
Shenzhen HollySys Intelligent Technologies Co., Ltd. [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 60.00% | |||||||||||||
Shenzhen HollySys Intelligent Technologies Co., Ltd. [Member] | Equity Method Investments [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 60.00% | 60.00% | 60.00% | |||||||||||
Equity Method Investment Less Impairment ,At Cost | $ 2,717 | $ 2,654 | ||||||||||||
Beijing Hetaitong Technologies Co., Ltd [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 10.00% | 10.00% | ||||||||||||
Equity Method Investment Less Impairment ,At Cost | $ 75 | ¥ 500 | ||||||||||||
Registered Capital | 755 | 5,000 | ||||||||||||
Beijing Hetaitong Technologies Co., Ltd [Member] | Cost-method Investments [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 10.00% | 10.00% | ||||||||||||
Equity Method Investment Less Impairment ,At Cost | $ 75 | |||||||||||||
Cost Method Investment Less Impairment At Cost | $ 75 | ¥ 500 | ||||||||||||
Beijing AIRmaker Technology Co., Ltd [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 20.00% | 20.00% | ||||||||||||
Equity Method Investment Less Impairment ,At Cost | $ 151 | ¥ 1,000 | ||||||||||||
Registered Capital | $ 755 | ¥ 5,000 | ||||||||||||
Beijing AIRmaker Technology Co., Ltd [Member] | Equity Method Investments [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 20.00% | 20.00% | ||||||||||||
Equity Method Investment Less Impairment ,At Cost | $ 151 | |||||||||||||
Beijing Jing Yi Intelligent Technologies Innovation Center Co Ltd [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 46.00% | 46.00% | 46.00% | 46.00% | ||||||||||
Registered Capital | $ 7,612 | ¥ 50,000 | ||||||||||||
Ningbo Hollysys Intelligent Technology Company Limited [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | ||||||||||||
Registered Capital | $ 38,060 | ¥ 250,000 | ||||||||||||
Qingdao Lanjing Technology Co Ltd [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 10.00% | 10.00% | 10.00% | 10.00% | ||||||||||
Registered Capital | $ 755 | ¥ 5,000 | ||||||||||||
Zhongjijing Investment Consulting Co Ltd [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Asset Impairment Charges | $ 0 | $ 0 | $ 0 | |||||||||||
Zhongjijing Investment Consulting Co Ltd [Member] | Cost-method Investments [Member] | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 5.00% | 5.00% | 5.00% | |||||||||||
Equity Method Investment Less Impairment ,At Cost | $ 0 | $ 0 |
WARRANTY LIABILITIES (Details)
WARRANTY LIABILITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Class of Warrant or Right [Line Items] | ||
Beginning balance | $ 7,632 | $ 10,360 |
Deconsolidation of a subsidiary | 0 | (227) |
Expense accrued | 3,211 | 1,547 |
Expense incurred | (3,165) | (3,836) |
Translation adjustment | 180 | (212) |
Closing balance | 7,858 | 7,632 |
Less: current portion of warranty liabilities | (5,622) | (5,386) |
Long-term warranty liabilities | $ 2,236 | $ 2,246 |
SHORT-TERM BANK LOANS (Details
SHORT-TERM BANK LOANS (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Short-term Debt [Line Items] | |||
Short-term bank loans | $ 2,865 | $ 8,121 | |
Property Plant And Equipment Pledged For Short Term Loans | 0 | 991 | |
Interest Expense | 376 | 178 | $ 211 |
Long-term Line of Credit | 340,006 | 257,670 | |
Line Of Credit Facility Amount Utilized | 151,254 | 78,910 | |
Line Of Credit Facility Amount Available For Use | 188,752 | 178,760 | |
Line Of Credit Facility Secured By Restricted Cash | 2,279 | 4,954 | |
Line Of Credit Facility Secured By Restricted Buildings | 3,121 | 3,209 | |
Building [Member] | |||
Short-term Debt [Line Items] | |||
Property Plant And Equipment Pledged For Short Term Loans | 991 | ||
Restricted Stock [Member] | |||
Short-term Debt [Line Items] | |||
Restricted Cash Pledged For Short Term Loans | $ 1,007 | $ 16,410 | |
Minimum [Member] | |||
Short-term Debt [Line Items] | |||
Debt Instrument, Interest Rate, Effective Percentage | 4.60% | 3.09% | |
Maximum [Member] | |||
Short-term Debt [Line Items] | |||
Debt Instrument, Interest Rate, Effective Percentage | 5.66% | 4.85% | |
Weighted Average [Member] | |||
Short-term Debt [Line Items] | |||
Debt Instrument, Interest Rate, Effective Percentage | 4.71% | 3.53% |
LONG-TERM LOANS (Details)
LONG-TERM LOANS (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 | |
Debt Instrument [Line Items] | |||
Loans Payable to Bank | $ 21,059 | $ 21,001 | |
Less: current portion | (350) | (420) | |
Long-term bank loans | 20,709 | 20,581 | |
MYR-denominated loan [Member] | |||
Debt Instrument [Line Items] | |||
Loans Payable to Bank | [1] | 1,016 | 782 |
SGD-denominated loan [Member] | |||
Debt Instrument [Line Items] | |||
Loans Payable to Bank | [2] | 177 | 187 |
Convertible Bond [Member] | |||
Debt Instrument [Line Items] | |||
Loans Payable to Bank | [3] | $ 19,866 | $ 20,032 |
[1] | The MYR denominated loans are repayable in 3 to 75 installments with the last installment due in December 2041. For the year ended June 30, 2018, the effective interest rates ranged from 2.19% to 5.68% per annum. The borrowings are secured by the mortgages of buildings, vehicles in Malaysia, with an aggregate carrying value of $1,396 and $2,666 as of June 30, 2017 and 2018, respectively. | ||
[2] | The SGD denominated loans are repayable in 10 to 31 installments with the last installment due on March 15, 2024. For the year ended June 30, 2018, the effective interest rates ranged from 2.68% to 5.44% per annum. The borrowing is secured by vehicles with a total carrying value of $307 and $204 as of June 30, 2017 and 2018, respectively. | ||
[3] | On May 30, 2014, the Company entered into a Convertible Bond agreement with International Finance Corporation ("IFC"), under which the Company borrowed $20,000 from IFC (the “Convertible Bond”) with an interest rate of 2.1% per annum and commitment fee of 0.5% per annum paid in arrears semi-annually. The Convertible Bond has a five year term and was drawn down on August 30, 2014 and is repayable in full on August 29, 2019. The loan may not be prepaid before it is due. |
LONG-TERM LOANS (Details 1)
LONG-TERM LOANS (Details 1) $ in Thousands | Jun. 30, 2018USD ($) |
Debt Instrument [Line Items] | |
2,019 | $ 826 |
2,020 | 20,267 |
2,021 | 239 |
2,022 | 167 |
2023 and onwards | 295 |
Loans Payable to Bank | $ 21,794 |
LONG-TERM LOANS (Details Textua
LONG-TERM LOANS (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 30, 2014 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Debt Instrument [Line Items] | ||||
Interest Payable | $ 316 | $ 760 | $ 1,193 | |
Penalty Percentage | 0.50% | |||
Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Penalty Percentage | 5.00% | |||
SGD-denominated loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Prepaid Land Leases Total | $ 204 | 307 | ||
SGD-denominated loan [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate During Period | 5.44% | |||
SGD-denominated loan [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate During Period | 2.68% | |||
MYR-denominated loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Prepaid Land Leases Total | $ 2,666 | 1,396 | ||
MYR-denominated loan [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate During Period | 5.68% | |||
MYR-denominated loan [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate During Period | 2.19% | |||
IFC Convertible Bond [Member] | International Finance Corporation [Member] | ||||
Debt Instrument [Line Items] | ||||
Proceeds from Convertible Debt | $ 20,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 2.10% | |||
Line of Credit Facility, Commitment Fee Percentage | 0.50% | |||
Debt Instrument, Convertible, Beneficial Conversion Feature | $ 1,000 | |||
Debt Instrument, Fee Amount | $ 349 | |||
Debt Instrument, Unamortized Discount | $ 230 | $ 230 | $ 230 | |
Debt Instrument, Convertible, Terms of Conversion Feature | According to the Convertible Bond agreement, 50% of the principal amount of the Convertible Bond then outstanding will be mandatorily converted into ordinary shares of the Company at the conversion rate and conversion price then in effect if at any time, with respect to the period of 30 consecutive trading days ending at such time, the volume weighted average prices for 20 trading days or more in such 30 consecutive trading day period is equal to or more than 150% of the conversion price in effect at such time. In addition, 100% of the principal amount of the Convertible Bond then outstanding will be mandatorily converted into ordinary shares at the conversion rate and conversion price then in effect if at any time, with respect to the period of 30 consecutive trading days ending at such time, the volume weighted average prices for 20 trading days or more in such 30 consecutive trading day period is equal to or more than 200% of the conversion price in effect at such time. | |||
IFC Conversion Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Convertible, Terms of Conversion Feature | The initial conversion rate at the time of the agreement is 38 ordinary shares per $1, and the initial conversion price is $26.35 per share. | Since the Company paid out a cash dividend of $0.40 per share in March 2015, $0.20 per share in November 2016, and $0.12 per share in Novermber 2017, the conversion rate and conversion price was adjusted to 39.44 ordinary shares per $1 and $25.35 per share, respectively. |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 | |
Liabilities: | |||
Total liabilities measured at fair value on a recurring basis | $ 412 | $ 487 | |
Fair Value, Measurements, Recurring [Member] | |||
Liabilities: | |||
Derivative financial liability | [1] | 412 | 487 |
Total liabilities measured at fair value on a recurring basis | 412 | 487 | |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Liabilities: | |||
Derivative financial liability | [1] | 0 | 0 |
Total liabilities measured at fair value on a recurring basis | 0 | 0 | |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Liabilities: | |||
Derivative financial liability | [1] | 0 | 0 |
Total liabilities measured at fair value on a recurring basis | 0 | 0 | |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Liabilities: | |||
Derivative financial liability | [1] | 412 | 487 |
Total liabilities measured at fair value on a recurring basis | $ 412 | $ 487 | |
[1] | The derivative financial liability represents the fair value of the non-conversion compensation feature (note 13). The Company engaged an independent third-party appraiser to assist with the valuation of the feature. The Company is ultimately responsible for the fair value of the non-conversion compensation feature recorded in the consolidated financial statements. The Company adopted the binomial model to assess the fair value of such feature as of year-end. The non-conversion compensation feature is equal to the difference between the fair value of the whole Convertible Bond with the non-conversion compensation feature and the whole Convertible Bond without the non-conversion feature. The significant unobservable inputs used in the fair value measurement of the non-conversion compensation feature includes the risk-free rate of return, expected volatility, expected life of the Convertible Bond and expected ordinary dividend yield. The changes in fair value of the non-conversion compensation feature during fiscal year 2017 and 2018 are shown in the following table. |
FAIR VALUE MEASUREMENT (Detai85
FAIR VALUE MEASUREMENT (Details 1) $ in Thousands | 12 Months Ended |
Jun. 30, 2018USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance as at June 30, 2017 | $ 487 |
Change in fair-value (included within other expenses, net) | (75) |
Balance as of June 30, 2018 | $ 412 |
FAIR VALUE MEASUREMENT (Detai86
FAIR VALUE MEASUREMENT (Details 2) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 | |
Assets: | |||
Retained non-controlling interest in a former subsidiary | [1] | $ 22,737 | |
Goodwill | [2] | 11,488 | |
Intangible asset | [3] | $ 1,752 | |
Total assets measured at fair value on a non-recurring basis | 1,752 | 34,225 | |
Fair Value, Inputs, Level 1 [Member] | |||
Assets: | |||
Retained non-controlling interest in a former subsidiary | [1] | 0 | |
Goodwill | [2] | 0 | |
Intangible asset | [3] | 0 | |
Total assets measured at fair value on a non-recurring basis | 0 | 0 | |
Fair Value, Inputs, Level 2 [Member] | |||
Assets: | |||
Retained non-controlling interest in a former subsidiary | [1] | 0 | |
Goodwill | [2] | 0 | |
Intangible asset | [3] | 0 | |
Total assets measured at fair value on a non-recurring basis | 0 | 0 | |
Fair Value, Inputs, Level 3 [Member] | |||
Assets: | |||
Retained non-controlling interest in a former subsidiary | [1] | 22,737 | |
Goodwill | [2] | 11,488 | |
Intangible asset | [3] | 1,752 | |
Total assets measured at fair value on a non-recurring basis | $ 1,752 | $ 34,225 | |
[1] | During the year ended June 30, 2017, the investment in Hollycon was measured based on significant unobservable inputs (Level 3), using a discounted cash flow approach assuming a certain terminal growth rate and discount rate (Note 10). | ||
[2] | As of June 30, 2017, the Company’s goodwill of $11,488 was related to the acquisition of Concord Group and $35,838 was related to the acquisition of Bond Group. The Company engaged an independent third-party appraiser to assist with the valuation of the goodwill related to the Concord and Bond Groups. The Company is ultimately responsible for the fair value of the goodwill recorded in the consolidated financial statements. For the purposes of step one of the goodwill impairment test, the Company has adopted the income approach, in particular the discounted cash flow approach, to evaluate the fair value of the reporting unit. In applying the discounted cash flow approach, key assumptions include the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. For the purpose of step two of the goodwill impairment test, the Company has allocated the fair value of the reporting unit derived in step one to the assets and liabilities of the reporting unit, as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. The Company adopted the multi-period excess earnings model to evaluate the fair value of the intangible assets of the reporting unit, which was then used to compute the implied fair value of the goodwill via a residual approach. As a result, the Company recorded a goodwill impairment charge of $11,211 (Note 9). | ||
[3] | Upon the acquisition of 100% of Hollysys Industrial Software in July 2017, the Company recognized $2,071 patents and copyrights based on significant unobservable inputs (Level 3), using a discounted cash flow approach assuming a certain terminal growth rate and discount rate. |
FAIR VALUE MEASUREMENT (Detai87
FAIR VALUE MEASUREMENT (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jul. 31, 2017 | Jun. 30, 2016 | |
Fair Value Input Liabilities Quantitative Information [Line Items] | ||||
Payments to Acquire Businesses, Gross | $ 2,380 | |||
Goodwill | $ 48,359 | $ 47,326 | $ 59,847 | |
Asset Impairment Charges | 11,211 | |||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | 100.00% | ||
Patents And Copyrights [Member] | ||||
Fair Value Input Liabilities Quantitative Information [Line Items] | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 2,071 | |||
Bond [Member] | ||||
Fair Value Input Liabilities Quantitative Information [Line Items] | ||||
Convertible Debt | $ 19,866 | 20,032 | ||
Convertible Debt, Fair Value Disclosures | $ 17,119 | 15,359 | ||
Bond Group [Member] | ||||
Fair Value Input Liabilities Quantitative Information [Line Items] | ||||
Payments to Acquire Businesses, Gross | 35,838 | |||
Concord Group [Member] | ||||
Fair Value Input Liabilities Quantitative Information [Line Items] | ||||
Goodwill | $ 11,488 | |||
Hollysys Industrial Software [Member] | ||||
Fair Value Input Liabilities Quantitative Information [Line Items] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||
Hollysys Industrial Software [Member] | Patents And Copyrights [Member] | ||||
Fair Value Input Liabilities Quantitative Information [Line Items] | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 2,071 |
STOCKHOLDERS' EQUITY (Details T
STOCKHOLDERS' EQUITY (Details Textual) - $ / shares | 1 Months Ended | 12 Months Ended | |||
Sep. 26, 2017 | Sep. 26, 2016 | Jun. 30, 2018 | Jul. 31, 2017 | Aug. 31, 2010 | |
Stockholders Equity Note [Line Items] | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | 100.00% | |||
Dividends Payable, Amount Per Share | $ 0.12 | $ 0.20 | |||
Dividends Payable, Date Declared | Sep. 26, 2017 | Sep. 26, 2016 | |||
Dividends Payable, Date of Record | Oct. 16, 2017 | Oct. 26, 2016 | |||
Dividends Payable, Date to be Paid | Nov. 6, 2017 | Nov. 11, 2016 | |||
Preferred Class [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Business Acquisition, Share Price (in dollars per share) | $ 160 | ||||
2010 Rights Plan [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 20.00% | ||||
Percentage Of Tender Offer For Ordinary Shares | 20.00% | ||||
Percentage Of Ordinary Shares Acquiring Discount | 50.00% |
SHARE-BASED COMPENSATION EXPE89
SHARE-BASED COMPENSATION EXPENSES (Details) - Performance Options 2015 [Member] | 12 Months Ended |
Jun. 30, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 396,000 |
Grant Date After Two Years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 348,000 |
Grant Date After Three Years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 348,000 |
Grant Date After Four Years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 1,044,000 |
Performance Shares Eps Threshold Limit Over Fifteen Percentage But Below Twenty Percentage [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance share options vested | 1,160,000 |
Performance Shares Eps Threshold Limit Over Fifteen Percentage But Below Twenty Percentage [Member] | Grant Date After Two Years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 348,000 |
Performance Shares Eps Threshold Limit Over Fifteen Percentage But Below Twenty Percentage [Member] | Grant Date After Three Years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 348,000 |
Performance Shares Eps Threshold Limit Over Fifteen Percentage But Below Twenty Percentage [Member] | Grant Date After Four Years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 464,000 |
Performance Shares Eps Threshold Limit Equal Or Over Twenty Percentage But Below Twenty Five Percentage [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance share options vested | 290,000 |
Performance Shares Eps Threshold Limit Equal Or Over Twenty Percentage But Below Twenty Five Percentage [Member] | Grant Date After Two Years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 0 |
Performance Shares Eps Threshold Limit Equal Or Over Twenty Percentage But Below Twenty Five Percentage [Member] | Grant Date After Three Years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 0 |
Performance Shares Eps Threshold Limit Equal Or Over Twenty Percentage But Below Twenty Five Percentage [Member] | Grant Date After Four Years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 290,000 |
Performance Shares Eps Threshold Limit Twenty Five Percentage Or Above [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance share options vested | 290,000 |
Performance Shares Eps Threshold Limit Twenty Five Percentage Or Above [Member] | Grant Date After Two Years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 0 |
Performance Shares Eps Threshold Limit Twenty Five Percentage Or Above [Member] | Grant Date After Three Years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 0 |
Performance Shares Eps Threshold Limit Twenty Five Percentage Or Above [Member] | Grant Date After Four Years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Outstanding Number | 290,000 |
SHARE-BASED COMPENSATION EXPE90
SHARE-BASED COMPENSATION EXPENSES (Details 1) - Performance Options 2015 [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares, Outstanding as at June 30, 2017 | shares | 396,000 |
Number of shares, Vested and expected to vest at June 30, 2018 | shares | 396,000 |
Number of shares,Vested and exercisable at June 30, 2018 | shares | 396,000 |
Weighted average exercise price, Outstanding as at June 30, 2017 (in dollars per share) | $ / shares | $ 22.05 |
Weighted average exercise price, Vested and expected to vest at June 30, 2018 (in dollars per share) | $ / shares | 22.05 |
Weighted average exercise price,Vested and exercisable at June 30, 2018 (in dollars per share) | $ / shares | $ 22.05 |
Weighted average remaining contractual life (years), Outstanding as at June 30, 2017 | 2 years 10 months 13 days |
Weighted average remaining contractual life (years), Vested and expected to vest at June 30, 2018 | 1 year 10 months 13 days |
Weighted average remaining contractual life (years), Vested and exercisable at June 30, 2018 | 1 year 10 months 13 days |
Aggregate intrinsic value, Outstanding as at June 30, 2017 (in dollars) | $ | $ 0 |
Aggregate intrinsic value, Vested and expected to vest at June 30, 2018 (in dollars) | $ | 546 |
Aggregate intrinsic value, Vested and exercisable at June 30, 2018 (in dollars) | $ | $ 546 |
SHARE-BASED COMPENSATION EXPE91
SHARE-BASED COMPENSATION EXPENSES (Details 2) - Performance Options 2015 [Member] | 1 Months Ended | 12 Months Ended |
May 14, 2015 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free rate of return | 1.51% | |
Weighted average expected volatility | 53.42% | |
Expected life (in years) | 5 years | |
Expected ordinary dividend yield | 0.00% |
SHARE-BASED COMPENSATION EXPE92
SHARE-BASED COMPENSATION EXPENSES (Details 3) - Restricted Stock [Member] | 12 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of restricted shares, Un-vested | shares | 63,125 |
Number of restricted shares, Vested | shares | (22,500) |
Number of restricted shares, Un-vested | shares | 40,625 |
Weighted average grant-date fair value, Un-vested (in dollars per share) | $ / shares | $ 20.09 |
Weighted average grant-date fair value, Vested (in dollars per share) | $ / shares | 20.09 |
Weighted average grant-date fair value, Un-vested (in dollars per share) | $ / shares | $ 20.09 |
SHARE-BASED COMPENSATION EXPE93
SHARE-BASED COMPENSATION EXPENSES (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
May 14, 2015 | Feb. 20, 2012 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Sep. 20, 2007 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average exercise price, Granted (in dollars per share) | $ 22.25 | |||||||||
Share-Based Compensation | $ 1,207 | $ 464 | $ 3,860 | |||||||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross (is shares) | 1,740,000 | |||||||||
Service and Performance Conditions 2 [Member] | EPS Threshold One [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Average Growth Rate Of Non GAAP Diluted Earnings Per Share Threshold Minimum | 15.00% | |||||||||
Average Growth Rate Of Non GAAP Diluted Earnings Per Share Threshold Maximum | 20.00% | |||||||||
Service and Performance Conditions 2 [Member] | Options Vest Three [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 48 months | |||||||||
Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 1 year 7 months 17 days | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 452 | $ 432 | 419 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 67,500 | 52,500 | ||||||||
Restricted Stock [Member] | General and Administrative Expense [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-Based Compensation | 619 | $ 727 | $ 419 | |||||||
Performance Shares [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross (is shares) | 1,476,000 | |||||||||
Performance Shares [Member] | General and Administrative Expense [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-Based Compensation | 588 | 263 | 3,190 | |||||||
Equity Plan 2015 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares) | 5,000,000 | |||||||||
Performance Options 2015 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options | $ 285 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 10.07 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 396,000 | 1,740,000 | ||||||||
Two Thousand Fifteen Performance Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 396,000 | |||||||||
Two Thousand Fifteen Performance Options [Member] | Vesting Period One [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares (in shares) | 1,160,000 | |||||||||
Two Thousand Fifteen Performance Options [Member] | Vesting Period Two [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares) | 580,000 | |||||||||
Two Thousand Fifteen Performance Options [Member] | Vesting Period Three [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares (in shares) | 580,000 | |||||||||
2012 Performance Share Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-Based Compensation | $ 0 | $ 0 | $ 251 | |||||||
Stock Plan 2006 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares) | 3,000,000,000 | |||||||||
Package A [Member] | Performance Options 2015 [Member] | Fiscal Year 2015 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Options Vested Grant Date Fair Value Percentage | 30.00% | |||||||||
Package A [Member] | Performance Options 2015 [Member] | Fiscal Year 2016 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Options Vested Grant Date Fair Value Percentage | 30.00% | |||||||||
Package A [Member] | Performance Options 2015 [Member] | Fiscal Year 2017 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Options Vested Grant Date Fair Value Percentage | 40.00% | |||||||||
Package B [Member] | Performance Options 2015 [Member] | Vesting Period One [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Options Vested Grant Date Fair Value Percentage | 50.00% | |||||||||
Package B [Member] | Performance Options 2015 [Member] | Vesting Period Two [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Options Vested Grant Date Fair Value Percentage | 50.00% |
EMPLOYEE BENEFITS (Details Text
EMPLOYEE BENEFITS (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Cost | $ 18,994 | $ 17,568 | $ 18,235 |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Schedule Of Income Tax Disclosure [Line Items] | |||
PRC | $ 127,301 | $ 105,331 | $ 142,900 |
Non-PRC | 2,341 | (21,976) | (5,158) |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest, Total | $ 129,642 | $ 83,355 | $ 137,742 |
INCOME TAX (Details 1)
INCOME TAX (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Expense Incurred In PRC [Line Items] | |||
Current income tax expense (benefit) | $ 23,730 | $ 12,253 | $ 14,700 |
Deferred income tax (benefit) expense | (1,525) | 2,133 | (462) |
Effective income tax expense | 22,205 | 14,386 | 14,238 |
PRC [Member] | |||
Income Tax Expense Incurred In PRC [Line Items] | |||
Current income tax expense (benefit) | 17,268 | 12,911 | 10,590 |
Deferred income tax (benefit) expense | (1,348) | 2,616 | (196) |
Non Prc [Member] | |||
Income Tax Expense Incurred In PRC [Line Items] | |||
Current income tax expense (benefit) | 6,462 | (658) | 4,110 |
Deferred income tax (benefit) expense | $ (177) | $ (483) | $ (266) |
INCOME TAX (Details 2)
INCOME TAX (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Statutory Tax Rate PRC [Line Items] | |||
Income before income taxes | $ 129,642 | $ 83,355 | $ 137,742 |
Withholding tax on dividend paid by subsidiaries | 3,019 | ||
Total | 22,205 | 14,386 | 14,238 |
People Republic Of China Subsidiaries [Member] | |||
Income Tax Statutory Tax Rate PRC [Line Items] | |||
Expected income tax expense at statutory tax rate in the PRC | 32,410 | 20,838 | 34,436 |
Effect of different tax rates in various jurisdictions | (521) | 2,627 | 2,109 |
Effect of preferential tax treatment | (11,678) | (10,650) | (12,296) |
Effect of non-taxable income | (284) | 0 | (4,985) |
Effect of additional deductible research and development expenses | (4,260) | (2,385) | (4,716) |
Effect of non-deductible expenses | 3,046 | 4,608 | 5,569 |
Effect of change in tax rate | (4,801) | (4,835) | (6,613) |
Change in valuation allowance | 2,359 | 3,964 | 540 |
Tax rate differential on deferred tax items | 0 | 2,056 | (587) |
Withholding tax on dividend paid by subsidiaries | 4,784 | (2,799) | 1,252 |
Others | $ 1,150 | $ 962 | $ (471) |
INCOME TAX (Details 3)
INCOME TAX (Details 3) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Deferred tax assets, current | ||
Allowance for doubtful accounts | $ 9,172 | |
Inventory provision | 179 | |
Provision for contract loss | 694 | |
Long-term assets | 13 | |
Deferred revenue | 3,220 | |
Deferred subsidies | 1,654 | |
Warranty liabilities | 829 | |
Recognition of intangible assets | (2) | |
Accrued payroll | 998 | |
Net operating loss carry forward | 9,801 | |
Valuation allowance | (10,160) | |
Total deferred tax assets, current | 16,398 | |
Deferred tax liabilities, current | ||
Costs and estimated earnings in excess of billings | (10,071) | |
Recognition of intangible assets | 0 | |
PRC dividend withholding tax | (2,949) | |
Others | 2 | |
Total deferred tax liabilities, current | (13,018) | |
Net deferred tax assets, current | $ 0 | 7,730 |
Net deferred tax liabilities, current | 0 | (4,350) |
Deferred tax assets, non-current | ||
Long-term assets | 112 | |
Deferred subsidies | 333 | |
Net operating loss carryforward | 1,573 | |
Warranty liabilities | 332 | |
Others | 192 | |
Total deferred tax assets, non-current | 2,542 | |
Deferred tax liabilities, non-current | ||
Share of net gains of equity investees | (2,520) | |
Property, plant and equipment | (38) | |
Intangible assets and other non-current assets | (5,552) | |
Total deferred tax liabilities, non-current | (8,110) | |
Net deferred tax assets-non-current | 8,318 | 1,121 |
Net deferred tax liabilities-non-current | (9,366) | $ (6,689) |
Deferred tax assets | ||
Allowance for doubtful accounts | 9,600 | |
Costs and estimated earnings in excess of billings | (8,544) | |
Deferred revenue | 3,562 | |
Deferred subsidies | 1,809 | |
Warranty liabilities | 882 | |
Accrued payroll | 1,029 | |
Net operating loss carry forward | 12,739 | |
Long-term assets | 296 | |
Warranty liabilities | 324 | |
Share of net gains(loss) of equity investees | (2,038) | |
Inventory provision | 713 | |
Provision for contract loss | 70 | |
Recognition of intangible assets | 11 | |
Others | 387 | |
Long-term assets | 0 | |
Valuation allowance | (12,522) | |
Total deferred tax assets-non-current | 8,318 | |
Deferred tax liabilities | ||
Withholding tax on capital repayment | (3,019) | |
Intangible assets and other non-current assets | (6,327) | |
Property, plant and equipment | (20) | |
Total deferred tax assets, non-current | $ (9,366) |
INCOME TAX (Details Textual)
INCOME TAX (Details Textual) ¥ in Thousands, $ in Thousands | 12 Months Ended | 24 Months Ended | ||||||
Jun. 30, 2018USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2008 | Jun. 30, 2018USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2017CNY (¥) | |
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential | 15.00% | 15.00% | ||||||
Undistributed Earnings of Foreign Subsidiaries (in dollars) | $ 623,213 | $ 557,093 | $ 623,213 | ¥ 4,089,013 | ¥ 3,654,625 | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 10.00% | |||||||
Operating Loss Carry Forwards Expiration | 264 | 264 | ||||||
Withholding tax rate profits of subsidiaries earned | 10.00% | |||||||
Withholding Tax On Capital Gain | 3,019 | |||||||
Distributed Earnings | 30,190 | ¥ 200,000 | ||||||
Undistributed, Retained Earnings Of Foreign Subsidiaries With No Withholding Tax | $ 63,716 | $ 63,716 | 63,716 | |||||
Singapore [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 17.00% | 17.00% | ||||||
Operating Loss Carryforwards (in dollars) | $ 34,634 | 34,634 | ||||||
Malaysia [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 24.00% | 24.00% | ||||||
Hong kong [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 16.50% | 16.50% | ||||||
Macau [Member] | Minimum [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 12.00% | 12.00% | ||||||
India [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 30.00% | 30.00% | ||||||
QATAR | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 10.00% | 10.00% | ||||||
ID [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 25.00% | ||||||
Operating Loss Carryforwards (in dollars) | $ 800 | 800 | ||||||
People Republic Of China Subsidiaries [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 25.00% | ||||||
Operating Loss Carryforwards (in dollars) | $ 7,994 | 7,994 | ||||||
Withholding Tax On Capital Gain | 4,784 | (2,799) | $ 1,252 | |||||
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | 48,922 | 42,060 | 48,922 | |||||
Undistributed Earnings Of Foreign Subsidiaries With No Withholding Tax | $ 552,937 | $ 484,314 | $ 552,937 | |||||
Hangzhou Hollysys Automation Company Ltd [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 10.00% | |||||||
Beijing Hollysys Company Ltd [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 15.00% | 15.00% | ||||||
Beijing Hollysys Industrial Software Company Ltd [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential | 15.00% |
INCOME PER SHARE (Details)
INCOME PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Numerator: | ||||
Net income attributable to the Company - basic (in dollars) | $ 107,161 | $ 68,944 | $ 118,471 | |
Net income attributable to the Company - diluted (in dollars) | [1] | $ 107,425 | $ 69,605 | $ 119,121 |
Denominator: | ||||
Weighted average ordinary shares outstanding used in computing basic income per share | 60,434,019 | 60,189,004 | 59,170,050 | |
Effect of dilutive securities | ||||
Convertible Bond | 788,800 | 784,400 | 776,800 | |
Share options | 0 | 0 | 642,184 | |
Restricted shares | 25,746 | 38,106 | 22,422 | |
Weighted average ordinary shares outstanding used in computing diluted income per share | 61,248,565 | 61,011,510 | 60,611,456 | |
Income per share - basic (in dollars per share) | $ 1.77 | $ 1.15 | $ 2 | |
Income per share - diluted (in dollars per share) | $ 1.75 | $ 1.14 | $ 1.97 | |
[1] | For the year ended June 30, 2016, 2017 and 2018, interest accretion related to the Convertible Bond of $650, $661 and $264, respectively, is added back to derive net income attributable to the Company for computing diluted income per share. |
INCOME PER SHARE (Details Textu
INCOME PER SHARE (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Line Items] | |||
Interest on Convertible Debt, Net of Tax | $ 264 | $ 661 | $ 650 |
Vested and Unissued Restricted Shares [Member] | |||
Earnings Per Share [Line Items] | |||
Weighted Average Number Diluted Shares Outstanding Vested And Unissued Restricted Shares | 91,920 | 72,263 | 75,066 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Related Party Transaction [Line Items] | ||
Due from Related Parties | $ 33,678 | $ 34,142 |
China Techenergy [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties | 29,182 | 28,778 |
Shenhua Information [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties | 3,570 | 3,267 |
Hollysys Machine [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties | 853 | 965 |
Heilongjiang Ruixing [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties | 0 | 1,049 |
Beijing IPE [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties | 0 | 2 |
Hollycon [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties | 51 | 79 |
Shenzhen HollySys [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties | $ 22 | $ 2 |
RELATED PARTY TRANSACTIONS (103
RELATED PARTY TRANSACTIONS (Details 1) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Related Party Transaction [Line Items] | ||
Due to Related Parties | $ 5,353 | $ 2,301 |
China Techenergy [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | 4,141 | 1,117 |
Shenhua Information [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | 348 | 353 |
Electric Motor [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | 34 | 11 |
Hollysys Machine [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | 828 | 817 |
Beijing IPE [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | 2 | 2 |
Hollycon [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | $ 0 | $ 1 |
RELATED PARTY TRANSACTIONS (104
RELATED PARTY TRANSACTIONS (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Related Party Transaction [Line Items] | |||
Related Party Transaction Purchases From Related Party | $ 88 | $ 762 | $ 22 |
Goods And Services [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction Purchases From Related Party | 93 | 786 | 909 |
Hollysys Machine [Member] | Goods And Services [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction Purchases From Related Party | 0 | 749 | 555 |
Electric Motor [Member] | Goods And Services [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction Purchases From Related Party | 77 | 29 | 354 |
Hollycon [Member] | Goods And Services [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction Purchases From Related Party | $ 16 | $ 8 | $ 0 |
RELATED PARTY TRANSACTIONS (105
RELATED PARTY TRANSACTIONS (Details 3) - Goods And Services [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Related Party Transaction [Line Items] | |||
Sales Of Goods and Services To Related Parties Amount | $ 11,830 | $ 11,889 | $ 4,739 |
China Techenergy [Member] | |||
Related Party Transaction [Line Items] | |||
Sales Of Goods and Services To Related Parties Amount | 11,519 | 10,842 | 3,657 |
Shenhua Information [Member] | |||
Related Party Transaction [Line Items] | |||
Sales Of Goods and Services To Related Parties Amount | 86 | 765 | 847 |
Hollysys Machine [Member] | |||
Related Party Transaction [Line Items] | |||
Sales Of Goods and Services To Related Parties Amount | 0 | 167 | 235 |
Hollycon [Member] | |||
Related Party Transaction [Line Items] | |||
Sales Of Goods and Services To Related Parties Amount | 225 | 108 | 0 |
Beijing IPE [Member] | |||
Related Party Transaction [Line Items] | |||
Sales Of Goods and Services To Related Parties Amount | $ 0 | $ 7 | $ 0 |
RELATED PARTY TRANSACTIONS (106
RELATED PARTY TRANSACTIONS (Details 4) - Goods And Services [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Related Party Transaction [Line Items] | |||
Sales Of Goods and Services To Related Parties Amount | $ 731 | $ 602 | $ 40 |
Hollysys Machine [Member] | |||
Related Party Transaction [Line Items] | |||
Sales Of Goods and Services To Related Parties Amount | 0 | 0 | 40 |
Hollycon [Member] | |||
Related Party Transaction [Line Items] | |||
Sales Of Goods and Services To Related Parties Amount | $ 731 | $ 602 | $ 0 |
RELATED PARTY TRANSACTIONS (107
RELATED PARTY TRANSACTIONS (Details Textual) | 12 Months Ended |
Jun. 30, 2018 | |
Related Party Transaction [Line Items] | |
Lessor Operating Lease Term Of Contracts | 10 years |
Hollycon [Member] | |
Related Party Transaction [Line Items] | |
Lessor Operating Lease Term Of Contracts | 1 year |
COMMITMENTS AND CONTINGENCIE108
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Operating Leases Future Minimum Payments Due [Line Items] | |
2,019 | $ 2,283 |
2,020 | 1,058 |
2,021 | 520 |
2,022 | 520 |
2023 and onwards | 520 |
Total minimum lease payments | $ 4,901 |
COMMITMENTS AND CONTINGENCIE109
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Commitments And Contingencies Disclosure [Line Items] | |||
Operating Leases, Rent Expense | $ 2,295 | $ 2,718 | $ 1,811 |
Commitments and contingencies | |||
Outstanding Guarantees | 51,744 | ||
Line of Credit Facility, Amount Outstanding | 340,006 | $ 257,670 | |
Purchase Obligation, Due in Next Twelve Months | 188,558 | ||
Capital Commitments [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Commitments and contingencies | 243 | ||
Standby Letters of Credit [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Line of Credit Facility, Amount Outstanding | 25,782 | ||
Performance Guarantee [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Restricted Cash and Cash Equivalents | $ 6,404 |
OPERATING LEASES AS LESSOR (Det
OPERATING LEASES AS LESSOR (Details) - Beijing Hollysys [Member] $ in Thousands | Jun. 30, 2018USD ($) |
Operating Leases Future Minimum Payments Receivable [Line Items] | |
2,019 | $ 1,558 |
2,020 | 1,604 |
2,021 | 1,653 |
2,022 | 1,702 |
2,023 | 1,753 |
Total minimum lease payments to be received in the next five years | $ 8,270 |
OPERATING LEASES AS LESSOR (111
OPERATING LEASES AS LESSOR (Details Textual) $ in Thousands | 12 Months Ended |
Jun. 30, 2018USD ($) | |
Leases Operating [Line Items] | |
Operating Leases, Future Minimum Payments Receivable | $ 297 |
Lessor Operating Lease Term Of Contracts | 10 years |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | |||
Revenues from external customers | $ 540,768 | $ 431,943 | $ 544,325 |
Costs of revenue | 334,888 | 291,472 | 338,599 |
Gross profit | 205,880 | 140,471 | 205,726 |
IA [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 224,793 | 172,667 | 182,901 |
Costs of revenue | 135,633 | 106,583 | 113,314 |
Gross profit | 89,160 | 66,084 | 69,587 |
Rail [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 190,645 | 155,732 | 240,310 |
Costs of revenue | 90,574 | 86,128 | 131,043 |
Gross profit | 100,071 | 69,604 | 109,267 |
M&E [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 125,330 | 103,544 | 95,277 |
Costs of revenue | 108,681 | 98,761 | 82,900 |
Gross profit | 16,649 | 4,783 | 12,377 |
Miscellaneous [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 0 | 0 | 25,837 |
Costs of revenue | 0 | 0 | 11,342 |
Gross profit | $ 0 | $ 0 | $ 14,495 |
SEGMENT REPORTING (Details 1)
SEGMENT REPORTING (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 540,768 | $ 431,943 | $ 544,325 |
PRC [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 412,933 | 326,713 | 443,256 |
Non-PRC [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 127,775 | $ 105,230 | $ 101,069 |
SEGMENT REPORTING (Details 2)
SEGMENT REPORTING (Details 2) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets other than goodwill and acquired intangible assets | $ 147,966 | $ 143,654 |
PRC [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets other than goodwill and acquired intangible assets | 135,450 | 131,625 |
Non-PRC [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets other than goodwill and acquired intangible assets | $ 12,516 | $ 12,029 |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) | Aug. 31, 2018 | Jun. 30, 2018 |
Ningbo Hollysys Intelligent Technology Company Limited [Member] | ||
Subsequent Event [Line Items] | ||
Equity Method Investment, Ownership Percentage | 40.00% | |
Subsequent Event [Member] | Beijing Hollysys Intelligent Technology Company Limited [Member] | ||
Subsequent Event [Line Items] | ||
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | |
Subsequent Event [Member] | Ningbo Hollysys Intelligent Technology Company Limited [Member] | ||
Subsequent Event [Line Items] | ||
Equity Method Investment, Ownership Percentage | 40.00% |
ENDORSEMENT OF NOTE RECEIVAB116
ENDORSEMENT OF NOTE RECEIVABLES (Details Textual) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
ENDORSEMENT OF NOTE RECEIVABLES [Line Items] | ||
Endorsed Bank Acceptance Bill | $ 42,559 | $ 25,462 |
CONDENSED FINANCIAL INFORMAT117
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 |
ASSETS | ||||
Cash and cash equivalents | $ 265,675 | $ 197,640 | $ 229,095 | $ 207,834 |
Prepaid expenses | 713 | 619 | ||
Total current assets | 1,000,898 | 865,356 | ||
Total assets | 1,210,128 | 1,058,254 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Accrued payroll and related expense | 14,299 | 13,600 | ||
Derivative financial liability | 412 | 487 | ||
Total current liabilities | 333,054 | 302,978 | ||
Long-term loan | 20,709 | 20,581 | ||
Total liabilities | 367,775 | 334,714 | ||
Equity: | ||||
Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized; 60,342,099 shares issued and outstanding as of June 30, 2017 and 2018, respectively | 60 | 60 | ||
Additional paid-in capital | 223,396 | 222,189 | ||
Accumulated other comprehensive loss | (5,453) | (22,859) | ||
Total equity | 842,353 | 723,540 | 682,685 | 585,385 |
Total liabilities and equity | 1,210,128 | 1,058,254 | ||
Parent Company [Member] | ||||
ASSETS | ||||
Cash and cash equivalents | 21,578 | 13,103 | $ 8,571 | $ 8,437 |
Amounts due from subsidiaries | 53,503 | 59,920 | ||
Prepaid expenses | 61 | 61 | ||
Total current assets | 75,142 | 73,084 | ||
Investments in subsidiaries | 869,706 | 726,837 | ||
Total assets | 944,848 | 799,921 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Accrued payroll and related expense | 28 | 14 | ||
Derivative financial liability | 412 | 487 | ||
Amounts due to subsidiaries | 82,491 | 55,869 | ||
Total current liabilities | 82,931 | 56,370 | ||
Long-term loan | 19,865 | 20,032 | ||
Total liabilities | 102,796 | 76,402 | ||
Equity: | ||||
Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized; 60,342,099 shares issued and outstanding as of June 30, 2017 and 2018, respectively | 60 | 60 | ||
Additional paid-in capital | 223,396 | 222,189 | ||
Retained earnings | 624,049 | 524,129 | ||
Accumulated other comprehensive loss | (5,453) | (22,859) | ||
Total equity | 842,052 | 723,519 | ||
Total liabilities and equity | $ 944,848 | $ 799,921 |
CONDENSED FINANCIAL INFORMAT118
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Condensed Income Statements, Captions [Line Items] | |||
General and administrative expenses | $ 46,323 | $ 44,297 | $ 45,832 |
Loss from operations | 120,244 | 60,270 | 120,583 |
Interest income | 7,318 | 3,687 | 5,858 |
Interest expenses | (692) | (938) | (1,404) |
Income before income taxes | 129,642 | 83,355 | 137,742 |
Income tax expenses | 22,205 | 14,386 | 14,238 |
Net income | 107,161 | 68,944 | 118,471 |
Other comprehensive income, net of tax of nil | |||
Translation adjustment | 17,410 | (14,428) | (48,841) |
Comprehensive income | 124,847 | 54,541 | 74,663 |
Parent Company [Member] | |||
Condensed Income Statements, Captions [Line Items] | |||
General and administrative expenses | 1,751 | 1,062 | 4,484 |
Loss from operations | (1,751) | (1,062) | (4,484) |
Other expense, net | 0 | (89) | (93) |
Interest income | 0 | 4 | 80 |
Interest expenses | (748) | (1,074) | (705) |
Foreign exchange losses | (97) | (740) | (719) |
Equity in profit of subsidiaries | 109,757 | 71,905 | 124,392 |
Income before income taxes | 107,161 | 68,944 | 118,471 |
Income tax expenses | 0 | 0 | 0 |
Net income | 107,161 | 68,944 | 118,471 |
Other comprehensive income, net of tax of nil | |||
Translation adjustment | 17,406 | (14,392) | (46,052) |
Comprehensive income | $ 124,567 | $ 54,552 | $ 72,419 |
CONDENSED FINANCIAL INFORMAT119
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 107,437 | $ 68,969 | $ 123,504 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Share of net (income) of equity investees | (1,571) | 3,607 | 7,834 |
Share-based compensation expenses | 1,207 | 464 | 3,860 |
Fair value adjustments of a bifurcated derivative | 75 | (89) | (93) |
Net cash used in operating activities | 125,192 | 69,813 | 46,737 |
Cash flows from investing activities: | |||
Maturity of time deposits | 137,839 | 89,262 | 112,013 |
Net cash provided by (used in) investing activities | (49,748) | (89,553) | (2,454) |
Cash flows from financing activities: | |||
Payment of dividends | 7,241 | 11,975 | 0 |
Proceeds from exercise of options | 0 | 6,322 | 5,441 |
Net cash (used in) provided by financing activities | (12,197) | (7,413) | (6,780) |
Net increase in cash and cash equivalents | 68,035 | (31,455) | 21,261 |
Cash and cash equivalents, beginning of year | 197,640 | 229,095 | 207,834 |
Cash and cash equivalents, end of year | 265,675 | 197,640 | 229,095 |
Parent Company [Member] | |||
Cash flows from operating activities: | |||
Net income | 107,161 | 68,944 | 118,471 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Share of net (income) of equity investees | (109,757) | (71,905) | (124,392) |
Share-based compensation expenses | 1,207 | 464 | 3,860 |
Accretion of convertible bond | 230 | 230 | 230 |
Fair value adjustments of a bifurcated derivative | (75) | 89 | 93 |
Accrued liabilities | 14 | 1,248 | 41 |
Net cash used in operating activities | (1,220) | (930) | (1,697) |
Cash flows from investing activities: | |||
Collection of loans from subsidiaries | 50,649 | 2,316 | 0 |
Loans to subsidiaries | (5,000) | (2,712) | (729) |
Maturity of time deposits | 0 | 0 | 14,713 |
Investment in subsidiaries | (15,707) | 0 | (2,594) |
Net cash provided by (used in) investing activities | 29,942 | (396) | 11,390 |
Cash flows from financing activities: | |||
Proceeds of loans from subsidiaries | 0 | 11,938 | 0 |
Payment of dividends | (7,241) | (11,975) | 0 |
Repayment of loans from subsidiaries | (13,006) | (428) | (15,000) |
Proceeds from exercise of options | 0 | 6,323 | 5,441 |
Net cash (used in) provided by financing activities | (20,247) | 5,858 | (9,559) |
Net increase in cash and cash equivalents | 8,475 | 4,532 | 134 |
Cash and cash equivalents, beginning of year | 13,103 | 8,571 | 8,437 |
Cash and cash equivalents, end of year | $ 21,578 | $ 13,103 | $ 8,571 |
CONDENSED FINANCIAL INFORMAT120
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details Textual) $ / shares in Units, ¥ in Thousands, $ in Thousands | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2018CNY (¥)shares | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2017CNY (¥)shares |
Condensed Financial Information of Parent Company [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 60,342,099 | 60,342,099 | 60,342,099 | 60,342,099 |
Common stock, shares outstanding (in shares) | 60,342,099 | 60,342,099 | 60,342,099 | 60,342,099 |
Parent Company [Member] | ||||
Condensed Financial Information of Parent Company [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 60,342,099 | 60,342,099 | 60,342,099 | 60,342,099 |
Common stock, shares outstanding (in shares) | 60,342,099 | 60,342,099 | 60,342,099 | 60,342,099 |
Amount Restricted To Transfer From Subsidiary To Parent | $ 88,930 | ¥ 601,064 | $ 84,091 | ¥ 569,279 |