Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Apr. 02, 2018 | Jun. 30, 2017 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | SORL Auto Parts Inc | ||
Entity Central Index Key | 714,284 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 53 | ||
Trading Symbol | SORL | ||
Entity Common Stock, Shares Outstanding | 19,304,921 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 4,221,940 | $ 8,057,155 |
Accounts receivable, net, including $1,297,734 and $5,025,509 from related parties at December 31, 2017 and 2016, respectively | 134,384,961 | 102,129,294 |
Bank acceptance notes from customers | 116,040,688 | 42,697,276 |
Inventories | 114,300,564 | 65,776,517 |
Prepayments, current, including $999,527 and $- to related party at December 31, 2017 and 2016, respectively | 8,826,004 | 10,797,601 |
Restricted cash | 376,236 | 5,476,621 |
Advances to related parties | 72,318,224 | 0 |
Other current assets, net | 5,555,568 | 1,124,608 |
Total Current Assets | 456,024,185 | 236,059,072 |
Property, plant and equipment, net | 79,828,006 | 53,737,706 |
Land use rights, net | 14,912,134 | 8,309,333 |
Intangible assets, net | 3,341 | 11,438 |
Deposits on loan agreements | 10,712,865 | 0 |
Prepayments, non-current | 16,594,987 | 0 |
Deferred tax assets | 4,240,424 | 3,210,575 |
Total Non-Current Assets | 126,291,757 | 65,269,052 |
Total Assets | 582,315,942 | 301,328,124 |
Current Liabilities | ||
Accounts payable and bank acceptance notes to vendors, including $15,896,804 and $1,953,707 payable to related parties at December 31, 2017 and 2016, respectively | 118,051,633 | 65,672,626 |
Deposits received from customers | 43,087,473 | 22,733,742 |
Short term bank loans | 125,380,899 | 27,416,376 |
Current portion of long term loans | 24,266,031 | 0 |
Income tax payable | 3,249,727 | 996,522 |
Accrued expenses | 25,154,658 | 20,103,392 |
Deferred income | 1,020,273 | |
Due to related party | 1,572,963 | 0 |
Other current liabilities | 2,857,130 | 2,013,943 |
Total Current Liabilities | 344,640,787 | 138,936,601 |
Non-Current Liabilities | ||
Long term loans, less current portion and net of unamortized debt issuance costs | 37,383,224 | 0 |
Total Non-Current Liabilities | 37,383,224 | 0 |
Total Liabilities | 382,024,011 | 138,936,601 |
Equity | ||
Preferred stock - no par value; 1,000,000 authorized; none issued and outstanding as of December 31, 2017 and 2016 | 0 | 0 |
Common stock - $0.002 par value; 50,000,000 authorized, 19,304,921 issued and outstanding as of December 31, 2017 and 2016 | 38,609 | 38,609 |
Additional paid-in capital | (28,582,654) | (28,582,654) |
Reserves | 17,562,357 | 15,129,935 |
Accumulated other comprehensive income | 15,903,188 | 6,117,042 |
Retained earnings | 168,244,329 | 146,352,530 |
Total SORL Auto Parts, Inc. Stockholders' Equity | 173,165,829 | 139,055,462 |
Noncontrolling Interest In Subsidiaries | 27,126,102 | 23,336,061 |
Total Equity | 200,291,931 | 162,391,523 |
Total Liabilities and Equity | $ 582,315,942 | $ 301,328,124 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts receivable, related party | $ 1,297,734 | $ 5,025,509 |
Prepayments current, related party | 999,527 | 0 |
Accounts payable, related party | $ 15,896,804 | $ 1,953,707 |
Preferred stock, par or stated value per share | $ 0 | $ 0 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.002 | $ 0.002 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 19,304,921 | 19,304,921 |
Common stock, shares outstanding | 19,304,921 | 19,304,921 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Sales | $ 390,522,569 | $ 278,743,122 |
Include: sales to related parties | 24,376,622 | 20,289,371 |
Cost of sales | 286,336,367 | 203,353,086 |
Gross profit | 104,186,202 | 75,390,036 |
Expenses: | ||
Selling and distribution expenses | 39,067,566 | 29,837,757 |
General and administrative expenses | 22,023,338 | 15,206,423 |
Research and development expenses | 11,004,560 | 7,709,533 |
Total operating expenses | 72,095,464 | 52,753,713 |
Other operating income, net | 3,039,824 | 555,946 |
Income from operations | 35,130,562 | 23,192,269 |
Interest income | 232,466 | 1,047,667 |
Government grants | 2,264,055 | 832,264 |
Other income | 101,475 | 1,244,078 |
Interest expenses | (3,100,396) | (887,097) |
Other expenses | (2,883,440) | (807,858) |
Income before income taxes provision | 31,744,722 | 24,621,323 |
Income taxes provision | 4,717,810 | 3,266,413 |
Net income | 27,026,912 | 21,354,910 |
Net income attributable to noncontrolling interest in subsidiaries | 2,702,691 | 2,135,516 |
Net income attributable to common stockholders | 24,324,221 | 19,219,394 |
Comprehensive income: | ||
Net income | 27,026,912 | 21,354,910 |
Foreign currency translation adjustments | 10,873,496 | (10,606,219) |
Comprehensive income | 37,900,408 | 10,748,691 |
Comprehensive income attributable to noncontrolling interest in subsidiaries | 3,790,041 | 1,074,894 |
Comprehensive income attributable to common stockholders | $ 34,110,367 | $ 9,673,797 |
Weighted average common share - basic | 19,304,921 | 19,304,921 |
Weighted average common share - diluted | 19,304,921 | 19,304,921 |
EPS - basic | $ 1.26 | $ 1 |
EPS - diluted | $ 1.26 | $ 1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows From Operating Activities | ||
Net income | $ 27,026,912 | $ 21,354,910 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Allowance for doubtful accounts | 1,474,872 | 395,491 |
Depreciation and amortization | 9,259,516 | 7,239,908 |
Deferred income tax | (807,058) | (502,903) |
Loss on disposal of property and equipment | 9,515 | 0 |
Changes in assets and liabilities: | ||
Account receivable | (26,640,753) | (39,422,631) |
Bank acceptance notes from customers | (3,197,464) | (21,991,160) |
Other currents assets | (4,371,425) | (291,979) |
Inventories | (43,139,593) | 3,281,901 |
Prepayments | 1,877,272 | (7,366,749) |
Prepaid capital lease interest | 0 | 90,373 |
Accounts payable and bank acceptance notes to vendors | 46,444,126 | 31,988,447 |
Income tax payable | 2,126,238 | 1,314,808 |
Deposits received from customers | 18,302,544 | 4,135,536 |
Deferred income | 989,766 | 0 |
Other current liabilities and accrued expenses | 4,466,181 | 5,201,618 |
Net Cash Flows Provided By Operating Activities | 33,820,649 | 5,427,570 |
Cash Flows From Investing Activities | ||
Change in short-term investments | 0 | 58,993,591 |
Deposits on loan agreements | (5,196,271) | 0 |
Acquisition of property, equipment, plant and land use rights | (52,259,319) | (15,889,693) |
Deposits for acquisition of land use rights | (2,982,537) | 0 |
Refund of deposits for acquisition of land use rights | 2,982,537 | 0 |
Advances to related parties | (186,885,309) | (18,247,384) |
Repayment of advances to related parties | 118,436,661 | 18,247,384 |
Change in restricted cash | 5,275,390 | (4,897,377) |
Net Cash Flows Provided By (Used In) Investing Activities | (120,628,848) | 38,206,521 |
Cash Flows From Financing Activities | ||
Proceeds from short term bank loans | 206,836,188 | 53,895,058 |
Repayment of short term bank loans | (113,440,430) | (48,153,831) |
Proceeds from related parties | 103,775,545 | 0 |
Repayments to related parties | (139,482,122) | 0 |
Proceeds from long term loans | 29,692,975 | 0 |
Repayment of long term loans | (3,008,756) | 0 |
Payment of debt issuance costs | (1,767,572) | |
Distribution to controlling shareholders in connection with plant and land use rights exchange with entity under common control | 0 | (70,781,668) |
Repayment of capital lease | 0 | (1,779,040) |
Net Cash Flows Provided By (Used In) Financing Activities | 82,605,828 | (66,819,481) |
Effects on changes in foreign exchange rate | 367,156 | 1,011,717 |
Net change in cash and cash equivalents | (3,835,215) | (22,173,673) |
Cash and cash equivalents- beginning of the year | 8,057,155 | 30,230,828 |
Cash and cash equivalents - end of the year | 4,221,940 | 8,057,155 |
Supplemental Cash Flow Disclosures: | ||
Interest paid | 2,860,931 | 807,587 |
Income taxes paid | 3,398,629 | 3,284,070 |
Non-cash Investing and Financing Transactions | ||
Transfer of plant and land use rights to entity under common control | 0 | 17,342,372 |
Liabilities assumed in connection with the plant and land use rights exchange | 0 | 5,351,196 |
Proceeds from long term loans in the form of bank acceptance notes | 29,692,975 | 0 |
Loans from related party in the form of bank acceptance notes | 35,706,576 | 0 |
Transfer of debt among related parties | 3,711,622 | 0 |
Deposits on loan agreements deducted from proceeds from long term loans | $ 5,196,271 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Reserves [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Stockholders' Equity [Member] | Non-controlling Interest [Member] |
Balance at Dec. 31, 2015 | $ 222,424,500 | $ 38,609 | $ 42,199,014 | $ 13,207,972 | $ 129,055,099 | $ 15,662,639 | $ 200,163,333 | $ 22,261,167 |
Balance, shares at Dec. 31, 2015 | 19,304,921 | |||||||
Net income | 21,354,910 | $ 0 | 0 | 0 | 19,219,394 | 0 | 19,219,394 | 2,135,516 |
Foreign currency translation adjustment | (10,606,219) | 0 | 0 | 0 | 0 | (9,545,597) | (9,545,597) | (1,060,622) |
Distribution to controlling shareholders in connection with plant and land use rights exchange with entity under common control | (70,781,668) | 0 | (70,781,668) | 0 | 0 | 0 | (70,781,668) | 0 |
Transfer to reserve | 0 | 0 | 0 | 1,921,963 | (1,921,963) | 0 | 0 | 0 |
Balance at Dec. 31, 2016 | 162,391,523 | $ 38,609 | (28,582,654) | 15,129,935 | 146,352,530 | 6,117,042 | 139,055,462 | 23,336,061 |
Balance, shares at Dec. 31, 2016 | 19,304,921 | |||||||
Net income | 27,026,912 | $ 0 | 0 | 0 | 24,324,221 | 0 | 24,324,221 | 2,702,691 |
Foreign currency translation adjustment | 10,873,496 | 0 | 0 | 0 | 0 | 9,786,146 | 9,786,146 | 1,087,350 |
Transfer to reserve | 0 | 0 | 0 | 2,432,422 | (2,432,422) | 0 | 0 | 0 |
Balance at Dec. 31, 2017 | $ 200,291,931 | $ 38,609 | $ (28,582,654) | $ 17,562,357 | $ 168,244,329 | $ 15,903,188 | $ 173,165,829 | $ 27,126,102 |
Balance, shares at Dec. 31, 2017 | 19,304,921 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2017 | |
DESCRIPTION OF BUSINESS [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 - DESCRIPTION OF BUSINESS SORL Auto Parts, Inc. (together with its subsidiaries, “we,” “us,” “our” or the “Company” or “SORL”), a Delaware corporation incorporated on March 24, 1982, is principally engaged in the manufacture and distribution of vehicle brake systems and other key safety-related components, through its 90 The Joint Venture was formed in the People’s Republic of China (“PRC” or “China”) as a Sino-Foreign joint venture on January 17, 2004, pursuant to the terms of a Joint Venture Agreement between the Ruili Group Co., Ltd. (the “Ruili Group”), a related party under common control, and Fairford Holdings Limited (“Fairford”), a wholly owned subsidiary of the Company. The Ruili Group was, incorporated in China in 1987 and specializes in the development, production and sale of various kinds of automotive parts. Fairford and the Ruili Group contributed 90 10 On November 11, 2009, the Company, through its wholly owned subsidiary, Fairford, entered into a joint venture agreement with MGR Hong Kong Limited (“MGR”), a Hong Kong-based global auto parts distribution specialist firm and an unaffiliated Taiwanese investor. The joint venture was named SORL International Holding, Ltd. (“SIH”) based in Hong Kong. SORL held a 60 30 10 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. ACCOUNTING METHOD The Company uses the accrual method of accounting for financial statement and tax return purposes. b. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of SORL Auto Parts, Inc. and its majority owned subsidiaries. All inter-company balances and transactions have been eliminated in the consolidation. The results of subsidiaries acquired or disposed of during the respective periods are included in the consolidated statements of income and comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. The portion of the income or loss applicable to non-controlling interests in subsidiary undertakings is reflected in the consolidated statements of income and comprehensive income. c. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management makes its best estimate of the outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates. d. FAIR VALUE OF FINANCIAL INSTRUMENTS For certain of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivables and payables, prepaid expenses, other current assets, short term bank loans, current portion of long term loans, deposits received from customers and other payables and accruals, the carrying amounts approximate fair values due to their short maturities. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature. e. RELATED PARTY TRANSACTIONS A related party is generally defined as (i) any person that holds 10 f. FINANCIAL RISK FACTORS AND FINANCIAL RISK MANAGEMENT The Company is exposed to the following risk factors: i) Credit risks Financial instruments that potentially subject the Company to concentrations of credit risk are cash and cash equivalents and accounts receivable arising from its normal business activities. The Company places its cash and cash equivalents in what it believes to be credit-worthy financial institutions. 10.00 ii) Liquidity risks - Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and ability to close out market positions. iii) Interest rate risk - The interest rate of short term bank borrowings obtained in 2017 ranged from 1.35 5.22 The Company also obtained long term loans from non-financial institutions for effective interest rates ranging from 4.31 8.50 g. CASH AND CASH EQUIVALENTS The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. h. SHORT TERM INVESTMENTS The Company’s short term investments include term deposits with an original maturity from three months to one year with financial institutions. Term deposits in the amount of $ 21,667,802 140,000,000 March 24, 2015 March 24, 2016 Term deposit in the amount of $ 6,190,800 40,000,000 December 17, 2015 June 17, 2016 Term deposit in the amount of $ 3,317,650 22,000,000 January 13, 2016 July 13, 2016 i. RESTRICTED CASH In 2016, the restricted cash mainly represents bank deposits used to pledge the bank acceptance notes. The Company entered into credit agreements with commercial banks in China (“endorsing banks”) which agree to provide credit within stipulated limits. Within the stipulated credit limits, the Company can issue bank acceptance notes to its suppliers as payments for the purchases. In order to issue bank acceptance notes, the Company is generally required to make initial deposits or pledge note receivables to the endorsing banks in amounts of certain percentage of the face amount of the bank acceptance notes to be issued by the Company. The cash in such accounts is restricted for use over the terms of the bank acceptance notes, which are normally three to six months. In 2017, with the change of the issuing banks, the Company is no longer required to make initial deposits for issuing bank acceptance notes. The restricted cash was mainly required as a deposit for obtaining a letter of credit from Industrial Bank Co., Ltd., which agreed to provide guarantee that the Company would pay on time to the sellers in the case of any purchases. j. INVENTORIES Inventories are stated at the lower of cost or net realizable value, with cost computed on a weighted-average basis. Cost includes all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. k. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The initial cost of the asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Category Estimated Useful Life (Years) Buildings 10-20 Machinery and equipment 5-10 Electronic equipment 5 Motor vehicles 5-10 Leasehold improvements The lesser of remaining lease term or 10 Significant improvements are capitalized when it is probable that the expenditure resulted in an increase in the future economic benefits expected to be obtained from the use of the asset beyond its originally assessed standard of performance. When improvements are made to real property and those improvements are permanently affixed to the property, the title to those improvements automatically transfers to the owner of the property. The lessee’s interest in the improvements is not a direct ownership interest but rather it is an intangible right to use and benefit from the improvements during the term of the lease. Routine repairs and maintenance are expensed when incurred. Gains and losses on disposal of fixed assets are recognized in the income statement based on the net disposal proceeds less the carrying amount of the assets. l. LAND USE RIGHTS According to the law of China, the government owns all the land in China. Companies or individuals are authorized to possess and use the land only through land use rights granted by the Chinese government. Land use rights are being amortized using the straight-line method over the estimated useful life of 40 m. IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets, such as property, plant and equipment and other non-current assets, including intangible assets, are reviewed periodically for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. n. ACCOUNTS RECEIVABLES AND ALLOWANCE FOR BAD DEBTS The Company presents accounts receivables, net of allowances for doubtful accounts and returns, to ensure accounts receivable are not overstated due to being uncollectible. The allowances are calculated based on a detailed review of certain individual customer accounts, historical collectability rates, a general provision based on aging and an estimation of the overall economic conditions affecting the Company’s customer base. The Company reviews a customer’s credit history before extending credit. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company will write off the uncollectible receivables once any customers are bankrupt or there is a remote possibility that the Company will collect the outstanding balance. The write-off must be reported to the local tax authorities and the Company must receive official approval from them. To date, the Company has not written off any account receivables. o. NOTES RECEIVABLE Notes receivable, generally due within twelve months, are issued by some customers to pay certain outstanding receivable balances to the Company with specific payment terms and definitive due dates. Notes receivable do not bear interest. As of December 31, 2017 and 2016 95,914,724 and $ 32,916,198 or short term bank loans 37,177 135,329 p. REVENUE RECOGNITION Revenue from the sale of goods is recognized when the risks and rewards of ownership of the goods have transferred to the buyer including factors such as when persuasive evidence of an arrangement exits, delivery has occurred, the sales price is fixed and determinable, and collection is probable. Revenue consists of the invoice value for the sale of goods and services net of value-added tax (“VAT”), rebates and discounts and returns. The Company nets sales return in gross revenue, i.e., the revenue shown in the income statement is the net sales. q. INCOME TAXES The Company accounts for income taxes under the provision of FASB ASC 740-10, Income Taxes r. FOREIGN CURRENCY TRANSLATION The Company maintains its books and accounting records in RMB, the currency of the PRC, The Company’s functional currency is also RMB. The Company has adopted FASB ASC 830-30 in translating financial statement amounts from RMB to the Company’s reporting currency, U.S. dollars (“US$”). All assets and liabilities are translated at the current rate. The stockholders’ equity accounts are translated at appropriate historical rate. Revenue and expenses are translated at average exchange rates during the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are include in the results of operations as incurred. s. EMPLOYEES’ BENEFITS Mandatory contributions are made to government’s t. RESEARCH AND DEVELOPMENT EXPENSES Research and development costs are classified as general and administrative expenses and are expensed as incurred. Research and development expenses were $ 11,004,560 7,709,533 u. SHIPPING AND HANDLING COSTS Shipping and handling cost are classified as selling expenses and are expensed as incurred. Shipping and handling costs were $ 7,094,863 6,529,999 v. ADVERTISING COSTS Advertising costs are classified as selling expenses and are expensed as incurred. Advertising costs were $ 440,582 239,301 w. WARRANTY CLAIMS The Company provides for the estimated cost of product warranties when the products are sold. Such estimates of product warranties were based on, among other things, historical experience, product changes, material expenses, and service and transportation expenses arising from the manufactured product. Estimates will be adjusted on the basis 1,570,290 2,503,950 x. PURCHASE DISCOUNTS Purchase discounts represent discounts received from vendors for purchasing raw materials and are netted in the cost of goods sold, if applicable. y. LEASE COMMITMENTS The Company has adopted FASB Accounting Standard Codification, or ASC 840, Lease z. COST OF SALES Cost of sales consists primarily of materials costs, applicable local government levies, freight charges, purchasing and receiving costs, inspection costs, employee compensation, depreciation and related costs, which are directly attributable to production. Write-down of inventories to lower of cost or market is also recorded in cost of sales, if any. aa. GOVERNMENT GRANTS Government grants include cash subsidies as well as other subsidies received from the PRC government by the Joint Venture. Such subsidies are generally provided as incentives from the local government to encourage the expansion of local business. Government grants are recognized when received and all the conditions specified in the grant have been met. Capital grants received in advance of the acquisition of equipment are recorded initially in deferred income bb. SEGMENT REPORTING ASC Topic 280 requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. During the years ended December 31, 2017 and 2016, the Company operated in two reportable business segments: (1) commercial vehicles brake systems (2) passenger vehicles brake systems. cc. RECENTLY ISSUED FINANCIAL STANDARDS In May 2014, the FASB issued ASU 2014-09, “ ” The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company elected adopting the standard using the full retrospective method to restate prior reporting period presented. The Company has identified its revenue streams and assessed each for the impacts. The Company expects the adoption of Topic 606 will not have a material impact in the timing or amount of revenue recognized, including the presentation of revenues in the Company’s consolidated statements of income. In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. The amendments in ASU 2015-17 eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments in this ASU are effective for public business entities for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The amendments may be applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company adopted this amendment from January 1, 2017. The adoption did not have an impact on our consolidated financial statements and related disclosures other than for reclassification. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 specifies the accounting for leases. For operating leases, ASU 2016-02 requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. ASU 2016-02 is effective for publicly-traded companies for annual reporting periods, and interim periods within those years, beginning after December 15, 2018. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees may not apply a full retrospective transition approach. The Company plans to adopt the standard effective January 1, 2019. The Company anticipates this standard will not have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. These amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments do not provide a definition of restricted cash or restricted cash equivalents. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company elected In January 2017, the FASB issued ASU 2017-03, “Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)”. This pronouncement amends the SEC’s reporting requirements for public filers in regard to new accounting pronouncements or existing pronouncements that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented an accounting standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement, and provide disclosures including a description of the effect on accounting policies that the registrant expects to apply. These provisions apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that relate to corrections to several other prior FASB pronouncements. The Company has incorporated language into other recently issued accounting pronouncement notes, where relevant for the corrections in ASU 2017-03. The Company is implementing the updated SEC requirements on not yet adopted accounting pronouncements with these consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, “Income StatementReporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. These amendments provide financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of ASU 2018-02 is permitted, including adoption in any interim period for the public business entities for reporting periods for which financial statements have not yet been issued. The amendments in this ASU should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is currently evaluating the impact of the adoption of ASU No. 2018-02 on its consolidated financial statements. In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118”. The amendments in this |
RECLASSIFICATIONS
RECLASSIFICATIONS | 12 Months Ended |
Dec. 31, 2017 | |
Prior Period Adjustment [Abstract] | |
RECLASSIFICATIONS | NOTE 3 - RECLASSIFICATIONS Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 4 - RELATED PARTY TRANSACTIONS Name of Related Party Nature of Relationship Xiao Ping Zhang Principal shareholder, Chairman of the Board and Chief Executive Officer) Shu Ping Chi Shareholder, member of the Board, wife of Xiao Ping Zhang Xiao Feng Zhang Shareholder, member of the Board, brother of Xiao Ping Zhang Ruili Group Co., Ltd. ("Ruili Group") 10% shareholder of Joint Venture and is collectively controlled by Xiao Ping Zhang, Shu Ping Chi, and Xiao Feng Zhang. Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. ("Guangzhou Kormee") Controlled by Ruili Group Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. (formerly known as “Ruian Kormee Automobile Braking Co., Ltd.”, "Ruian Kormee") Wholly controlled by Guangzhou Kormee Shanghai Dachao Electric Technology Co., Ltd. ("Shanghai Dachao") Ruili Group holds 49% of the equity interests in Shanghai Dachao. Ruili MeiLian Air Management System (LangFang) Co., Ltd. ("Ruili Meilian") Controlled by Ruili Group Wenzhou Lichuang Automobile Parts Co., Ltd. ("Wenzhou Lichuang") Controlled by Ruili Group Ningbo Ruili Equipment Co., Ltd. ("Ningbo Ruili") Controlled by Ruili Group Shanghai Ruili Real Estate Development Co., Ltd. ("Shanghai Ruili") Wholly controlled by Ruili Group Kunshan Yuetu Real Estate Development Co., Ltd. ("Kunshan Yuetu") Collectively owned by Ruili Group and Shu Ping Chi Shanghai Tabouk Auto Components Co., Ltd. ("Shanghai Tabouk") Collectively owned by Xiao Feng Zhang and Xiao Ping Zhang HangZhou Ruili Property Development Co., Ltd. Collectively owned by Ruili Group and Xiao Ping Zhang The Company continues to purchase primarily packaging materials from Ruili Group. In addition, the Company purchases automotive components from five other related parties, Guangzhou Kormee, Ruian Kormee, Ruili Meilian, Shanghai Dachao and Wenzhou Lichuang. The Company also purchases molds from Ningbo Ruili used in its production. The Company sells certain automotive products to the Ruili Group. The Company also sells parts to Guangzhou Kormee, Ruian Kormee, Shanghai Tabouk and Ruili Meilian. For the Years Ended December 31, 2017 2016 PURCHASES FROM: Guangzhou Ruili Kormee Automative Eletronic Control Technology Co., Ltd. $ 4,487,457 $ 793,861 Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. 1,357,612 1,329,135 Shanghai Dachao Electric Technology Co., Ltd. 188,899 1,787,921 Ruili MeiLian Air Management System (LangFang) Co., Ltd. 4,106,986 110,446 Ruili Group Co., Ltd. 5,478,853 4,011,206 Wenzhou Lichuang Auto Parts Co., Ltd. 5,446,212 Total Purchases $ 21,066,019 $ 8,032,569 SALES TO: Guangzhou Ruili Kormee Automative Eletronic Control Technology Co., Ltd. $ 7,467,661 $ 5,781,501 Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. 135,911 37,325 Ruili MeiLian Air Management System (LangFang) Co., Ltd. 1,253,664 Ruili Group Co., Ltd. 14,108,062 13,436,421 Shanghai Tabouk Auto Components Co., Ltd. 1,411,324 1,034,124 Total Sales $ 24,376,622 $ 20,289,371 December 31, 2017 2016 ACCOUNTS RECEIVABLE Ruili Group Co., Ltd. $ $ 4,361,010 Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. 664,499 Shanghai Tabouk Auto Components Co., Ltd. 1,297,734 Total $ 1,297,734 $ 5,025,509 ACCOUNTS PREPAYMENT Ningbo Ruili Equipment Co., Ltd. $ 999,527 $ $ 999,527 $ ADVANCES TO RELATED PARTIES Ruili Group Co., Ltd. $ 5,711,605 $ Shanghai Ruili Real Estate Development Co., Ltd. 65,069,497 Kunshan Yuetu Real Estate Development Co., Ltd. 1,537,122 $ Total $ 72,318,224 $ ACCOUNTS PAYABLE TO RELATED PARTIES Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. $ $ 628,310 Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. 3,414,719 Shanghai Dachao Electric Technology Co., Ltd. 83,178 100,441 Ruili MeiLian Air Management System (LangFang) Co., Ltd. 1,993,787 1,224,956 Wenzhou Lichuang Auto Parts Co., Ltd. 10,405,120 Total $ 15,896,804 $ 1,953,707 DUE TO RELATED PARTY Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. $ 1,572,963 $ Total $ 1,572,963 $ During the year ended December 31, 2017, the Company advanced to its related parties in the amount of 186,885,309 including 117,296,565 to Ruili Group, 2,185,691 to Ruian Kormee, 65,918,404 to Shanghai Ruili and 1,484,649 to Kunshan Yuetu. Cash repayments received from related parties amounted to $ 118,436,661 115,467,364 2,969,297 2,109,754 3,711,622 1,572,963 5,711,605 The advances to Ruili Group and Ruian Kormee are non-interest bearing, unsecured and due on demand. Those advances are usually repaid within 3 months and are in return for their constant financing support provided to the Company. The advances to Shanghai Ruili and Kunshan Yuetu, bearing an interest rate of 5.22 181,272 18,247,384 Subsequent to December 31, 2017, the Company continued to provide loans to related parties. See Note 21 for more details. During the year ended December 31, 2017, the Company obtained loans from related parties for working capital purposes. Of the total cash borrowings of $ 103,775,545 88,197,285 15,578,260 35,706,576 139,482,122 123,903,862 15,578,260 As of December 31, 2017, the Company prepaid Ningbo Ruili in the amount of $ 999,527 The Company also entered into several lease agreements with related parties. See Note 17 for more details. The Company provided a guarantee for the credit line granted to Ruili Group by Bank of Ningbo in the amount of RMB 150,000,000 21,623,180 May 30, 2016 May 14, 2017 The Company provided a guarantee for the credit line granted to Ruili Group by the China Merchants Bank in the amount of RMB 50,000,000 7,699,889 July 29, 2015 40,000,000 5,766,181 October 24, 2016 . The credit line was renewed on October 19, 2017, and April 18, 2018 The Company provided a guarantee for the credit line granted to Ruili Group by China Guangfa Bank in the amount of RMB 200,000,000 28,830,907 May 22, 2016 May 22, 2017 The Company provided a guarantee for the credit line granted to Ruili Group by China Guangfa Bank in a maximum amount of RMB 69,000,000 10,092,000 November 16, 2016 January 16, 2018 The credit line was renewed on December 21, 2017 for a period of 12 months, and the guarantee was accordingly extended by the Company as of December 31, 2017 December 20, 2018 The Company provided a guarantee for the credit line granted to Ruili Group by Bank of Ningbo in a maximum amount of RMB 180,000,000 26,328,000 June 30, 2017 June 30, 2020 The Company has short term bank loans guaranteed or pledged by related parties. See Note 11 for more details. In May 2016, the Company, through its principal subsidiary, entered into a purchase agreement with Ruili Group, pursuant to which the Company agreed to exchange the land use rights and factory facilities located at No. 1169 Yumeng Road, Rui’an Economic Development Zone, Rui’an City, Zhejiang Province, China, purchased from Ruili Group in 2007. See Note 7 for more details. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 5 - ACCOUNTS RECEIVABLE, NET December 31, 2017 December 31, 2016 Accounts receivable $ 148,312,117 $ 113,815,711 Less: allowance for doubtful accounts (13,927,156) (11,686,417) Account receivable balance, net $ 134,384,961 $ 102,129,294 No customer individually accounted for more than 10% of our revenues or accounts receivable for the years ended December 31, 2017 and 2016. The changes in the allowance for doubtful accounts at December 31, 2017 and December 31, 2016 were summarized as follows: December 31, 2017 December 31, 2016 Beginning balance $ 11,686,417 $ 12,075,402 Add: Increase to allowance 1,474,872 395,491 Less: Accounts written off Effects on changes in foreign exchange rate 765,867 (784,476) Ending balance $ 13,927,156 $ 11,686,417 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2017 | |
INVENTORIES [Abstract] | |
INVENTORIES | NOTE 6 INVENTORIES December 31, 2017 December 31, 2016 Raw materials $ 27,657,266 $ 20,121,513 Work-in-process 40,805,434 14,843,653 Finished goods 45,837,864 30,811,351 Less: Write-down of inventories Total inventories $ 114,300,564 $ 65,776,517 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 7 - PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, consisted of the following, on December 31, 2017 and December 31, 2016: December 31, 2017 December 31, 2016 Machinery $ 119,296,564 $ 87,694,677 Molds 1,338,912 1,257,841 Office equipment 2,998,443 2,021,982 Vehicles 3,681,194 2,246,203 Buildings 20,127,148 15,826,738 Leasehold improvements 486,834 458,566 Sub-total 147,929,095 109,506,007 Less: Accumulated depreciation (68,101,089) (55,768,301) Property, plant and equipment, net $ 79,828,006 $ 53,737,706 Depreciation expense charged to operations was $ 8,871,856 6,943,941 In May 2016, the Company, through its principal operating subsidiary, entered into a Purchase Agreement (the “Purchase Agreement”) with Ruili Group, pursuant to which the Company agreed to exchange the land use rights and factory facilities located at No. 1169 Yumeng Road, Rui'an Economic Development Zone, Rui'an City, Zhejiang Province, China (the “Dongshan Facility”), purchased in 2007 from Ruili Group, plus RMB 501.00 76.50 4.56 0.75 15.00 2.30 3 In July 2017, Ruian, a subsidiary of the Company, purchased plants and the associated land use rights from Yunding Holding Group Co., Ltd. in cash at the purchase price of RMB 60.06 8.87 58.95 8.88 42.35 6.38 16.60 2.50 33,141 25,016 |
LAND USE RIGHTS, NET
LAND USE RIGHTS, NET | 12 Months Ended |
Dec. 31, 2017 | |
Land Use Rights [Abstract] | |
LAND USE RIGHTS, NET | NOTE 8 LAND USE RIGHTS, NET December 31, 2017 December 31, 2016 Cost $ 15,477,081 $ 8,473,362 Less: Accumulated amortization (564,947) (164,029) Land use rights, net $ 14,912,134 $ 8,309,333 According to the law of China, the government owns all the land in China. Companies and individuals are authorized to possess and use the land only through land use rights granted by the Chinese government. In connection with the execution of the Purchase Agreement in May 2016, the Company exchanged the Dongshan Facility plus RMB 501.00 76.50 8.50 In July 2017, Ruian, a subsidiary of the Company, purchased plants and the associated land use rights from Yunding Holding Group Co., Ltd. in cash at the purchase price of RMB 60.06 8.87 42.35 6.38 During the year ended December 31, 2017, the Company prepaid the amount of RMB 51.81 7.93 20.00 3.01 During the year ended December 31, 2017, the Company prepaid the amount of RMB 14.40 2.14 72.02 11.02 Amortization expenses were $ 379,121 284,717 |
PREPAYMENTS
PREPAYMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Other Assets [Abstract] | |
PREPAYMENTS | NOTE 9 - PREPAYMENTS December 31, 2017 December 31, 2016 Raw material suppliers $ 8,826,004 $ 10,797,601 Equipment and land use rights purchases 16,594,987 - Total prepayments $ 25,420,991 $ 10,797,601 As of December 31, 2017, prepayments to raw material suppliers totaled $8,826,004, including prepayments to Ningbo Ruili, a related party under common control, in the amount of $999,527. Also see Note 4 for details. During the year ended December 31, 2017, the Company prepaid the amount of RMB 51.81 7.93 14.40 2.14 |
DEFERRED TAX ASSETS AND DEFERRE
DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES [Abstract] | |
DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES | NOTE 10- DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES December 31, 2017 December 31, 2016 Deferred tax assets - noncurrent Allowance for doubtful accounts $ 2,137,837 $ 1,798,894 Revenue (net of cost) 160,766 76,719 Unpaid accrued expenses 955,287 357,352 Warranty 986,534 977,610 Deferred tax assets 4,240,424 3,210,575 Valuation allowance Net deferred tax assets - noncurrent $ 4,240,424 $ 3,210,575 Deferred taxation is calculated under the liability method in respect of taxation effect arising from all timing differences, which are expected with reasonable probability to realize in the foreseeable future. The Company and its subsidiaries do not have income tax liabilities in U.S. as the Company had no U.S. taxable income for the reporting period. The Company’s subsidiary registered in the PRC is subject to income taxes within the PRC at the applicable tax rate. |
SHORT TERM BANK LOANS
SHORT TERM BANK LOANS | 12 Months Ended |
Dec. 31, 2017 | |
SHORT-TERM BANK LOANS [Abstract] | |
SHORT-TERM BANK LOANS | NOTE 11 SHORT TERM BANK LOANS December 31, 2017 December 31, 2016 Secured $ 125,380,899 $ 27,416,376 The Company obtained those short term loans from Bank of China, Bank of Ningbo, Agricultural Bank of China, China Zheshang Bank, China Minsheng Bank, Industrial Bank Co., Ltd., Oversea-Chinese Banking Corporation Limited and China Construction Bank, respectively, to finance general working capital and acquire long-lived assets. Interest rate for the loans outstanding as of December 31, 2017 ranged from 0.9 5.22 5,472,169 4,484,755 2,752,579 887,097 56,564,323 Pledged with the Company’s bank acceptance notes. 16,594,227 Guaranteed by Ruili Group., a related party, Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company’s principal stockholders. 11,478,069 Pledged by Shanghai Ruili, a related party, with its property. Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company’s principal stockholders. 5,850,950 Guaranteed by Ruili Group. 7,345,964 Pledged by the Company with its land use rights and property. Guaranteed by Ruili Group, a related party and Ms. Xiao Ping Zhang, the Company’s principal stockholders. 27,547,366 Pledged by HangZhou Ruili Property Development Co., Ltd., a related party, with its property. Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company’s principal stockholders. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCRUED EXPENSES | NOTE 12 - ACCRUED EXPENSES December 31, 2017 December 31, 2016 Accrued payroll $ 11,063,726 $ 6,267,794 Accrued warranty expenses 6,576,895 6,517,402 Other accrued expenses 7,514,037 7,318,196 Total accrued expenses $ 25,154,658 $ 20,103,392 |
LONG-TERM LOANS
LONG-TERM LOANS | 12 Months Ended |
Dec. 31, 2017 | |
SHORT-TERM BANK LOANS [Abstract] | |
Long-term Debt [Text Block] | NOTE 13 LONG TERM LOANS December 31, 2017 December 31, 2016 Aggregate outstanding principal balance $ 63,471,308 $ Less: unamortized debt issuance costs (1,822,053) Less: current portion (24,266,031) Non-current portion $ 37,383,224 $ On November 16, 2017, the Company entered into two identical but independent loan agreements with Far Eastern Horizon Co., Ltd. (“Far Eastern”), each for a term of 36 8.38 200,000,000 30,608,185 205,690,574 31,479,075 35,000,000 5,196,271 7 42 14,846,488 14,846,487 1,599,930 742,324 In November 2017, the Company entered into four independent loan agreements with COSCO Shipping Leasing Co., Ltd. (“COSCO”) for a term of 36 8.50 4.31 235,000,000 35,964,617 238,333,639 36,474,800 5,196,271 29,692,975 14,846,487 14,846,488 1,408,826 1,025,248 The interest expense for long-term loans was in the amount of $ 347,817 Amount For the years ending December 31, 2018 $ 24,266,031 2019 21,638,468 2020 15,744,756 Thereafter Total $ 61,649,255 |
RESERVE
RESERVE | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
RESERVE | NOTE 14 RESERVE December 31, 2017 December 31, 2016 Statutory surplus reserve fund $ 17,562,357 $ 15,129,935 Total $ 17,562,357 $ 15,129,935 Pursuant to the relevant laws and regulations of Sino-Foreign joint venture enterprises, the profits of the Company's subsidiary, which are based on their PRC statutory financial statements, are available for distribution in the form of cash dividends after they have satisfied all the PRC tax liabilities, provided for losses in previous years, and made appropriations to reserve funds, as determined at the discretion of the board of directors in accordance with PRC accounting standards and regulations. As stipulated by the relevant laws and regulations for enterprises operating in the PRC, Ruian is required to make annual appropriations to the statutory surplus funds. In accordance with the relevant PRC regulations and the articles of association of the respective companies, Ruian is required to allocate a certain percentage of its profits after taxation, as determined in accordance with PRC accounting standards applicable to the Company, to the statutory surplus reserve until such reserve reaches 50% of the registered capital of the Company. Net income as reported in the U.S. GAAP financial statements differs from that as reported in the PRC statutory financial statements. In accordance with the relevant laws and regulations in the PRC, the profits available for distribution are based on the statutory financial statements. If Ruian has foreign currency available after meeting its operational needs, Ruian may make its profit distributions in foreign currency to the extent foreign currency is available. Otherwise, it is necessary to obtain approval and convert such distributions at an authorized bank. The reserve fund consists of retained earnings which have been allocated to the statutory reserve fund. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 15 - INCOME TAXES The Joint Venture is registered in the PRC, and is therefore subject to state and local income taxes within the PRC at the applicable tax rate on the taxable income as reported in the PRC statutory financial statements in accordance with relevant income tax laws. In 2009, the Joint Venture was awarded the Chinese government's "High-Tech Enterprise" designation. The High-Tech Enterprise certificate is valid for three years and provided for a reduced tax rate of 15% for years 2009 through 2011. The Company used a tax rate of 25 15 Years Ended December 31, 2017 2016 US statutory income tax rate 35.00 % 35.00 % Valuation allowance recognized with respect to the loss in the US company -35.00 % -35.00 % China statutory income tax rate 25.00 % 25.00 % Effects of income tax exemptions and reliefs -10.00 % -10.00 % Effects of additional deduction allowed for R&;D expenses -2.34 % -2.88 % Effects of expenses not deductible for tax purposes 0.79 % 0.61 % Other items 1.41 % 0.54 % Effective tax rate 14.86 % 13.27 % Income taxes are calculated on a separate entity basis. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. There currently is no tax benefit or burden recorded for the entity located in U.S. The tax authority may examine the tax returns of the Company three years after the year ended. The provisions for income taxes for the years ended December 31, 2017 and 2016, respectively, are summarized as follows: December 31, 2017 December 31, 2016 Current $ 5,524,868 $ 3,769,316 Deferred (807,058) (502,903) Total $ 4,717,810 $ 3,266,413 ASC 740-10 requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. The management evaluated the Company’s tax positions and considered that no provision for uncertainty in income taxes was necessary as of December 31, 2017 and 2016. |
NON-CONTROLLING INTEREST IN SUB
NON-CONTROLLING INTEREST IN SUBSIDIARIES | 12 Months Ended |
Dec. 31, 2017 | |
NON-CONTROLLING INTEREST IN SUBSIDIARIES [Abstract] | |
NON-CONTROLLING INTEREST IN SUBSIDIARIES | NOTE 16 NON-CONTROLLING INTEREST IN SUBSIDIARIES Non-controlling interest in subsidiaries represents a 10 2,702,691 2,135,516 2017 2016 10% non-controlling interest in Ruian $ 2,702,691 $ 2,135,516 Total $ 2,702,691 $ 2,135,516 |
OPERATING LEASES WITH RELATED P
OPERATING LEASES WITH RELATED PARTIES | 12 Months Ended |
Dec. 31, 2017 | |
OPERATING LEASES WITH RELATED PARTIES [Abstract] | |
OPERATING LEASES WITH RELATED PARTIES | NOTE 17 OPERATING LEASES WITH RELATED PARTIES In December 2006, Ruian entered into a lease agreement with Ruili Group Co., Ltd. for the lease of two apartment buildings. These two apartment buildings are for Ruian’s management personnel and staff, respectively. The initial lease term was from January 2013 to December 2016. This lease was amended in 2013, with a new lease term from January 1, 2013 to December 31, 2022. The annual lease expense is RMB 2,100,000 311,776 In May 2009, Ruian entered into a lease agreement with Ruili Group for the lease of a manufacturing plant. The lease was from September 2009 to May 2017. In August 2010, a new lease agreement was signed between Ruian and Ruili Group, under which Ruian leased 89,229 8,137,680 1,293,070 The lease expenses were $ 311,776 716,656 2018 2019 2020 2021 2022 Thereafter Operating Lease Commitments $ 321,386 $ 321,386 $ 321,386 $ 321,386 $ 321,386 $ |
WARRANTY CLAIMS
WARRANTY CLAIMS | 12 Months Ended |
Dec. 31, 2017 | |
WARRANTY CLAIMS [Abstract] | |
WARRANTY CLAIMS | NOTE 18 WARRANTY CLAIMS Warranty claims were $ 1,570,290 2,503,950 Beginning balance at January 1, 2017 $ 6,517,402 Aggregate increase for new warranties issued during current period 1,570,290 Aggregate reduction for payments made and effect of exchange rate fluctuation (1,510,797) Ending balance at December 31, 2017 $ 6,576,895 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENT INFORMATION [Abstract] | |
SEGMENT INFORMATION | NOTE 19 SEGMENT INFORMATION The Company produces brake systems and other related components for different types of commercial vehicles (“Commercial Vehicle Brake Systems”). On August 31, 2010, the Company through Ruian, executed an Asset Purchase Agreement to acquire, and purchased, a segment of the passenger vehicle auto parts business (“Passenger Vehicle Brake Systems”) of Ruili Group. As a result of this acquisition, the Company's product offerings were expanded to both commercial and passenger vehicles' brake systems and other key safety-related auto parts. The Company has two operating segments: Commercial Vehicle Brake Systems and Passenger Vehicle Brake Systems. 2017 2016 NET SALES TO EXTERNAL CUSTOMERS Commercial vehicles brake systems $ 330,201,227 $ 224,213,063 Passenger vehicles brake systems 60,321,342 54,530,059 Net sales $ 390,522,569 $ 278,743,122 INTERSEGMENT SALES Commercial vehicles brake systems $ $ Passenger vehicles brake systems Intersegment sales $ $ GROSS PROFIT Commercial vehicles brake systems $ 89,355,410 $ 63,051,542 Passenger vehicles brake systems 14,830,792 12,338,494 Gross profit $ 104,186,202 $ 75,390,036 Selling and distribution expenses 39,067,566 29,837,757 General and administrative expenses 22,023,338 15,206,423 Research and development expenses 11,004,560 7,709,533 Other operating income, net 3,039,824 555,946 Income from operations 35,130,562 23,192,269 Interest income 232,466 1,047,667 Government grants 2,264,055 832,264 Other income 101,475 1,244,078 Interest expenses (3,100,396) (887,097) Other expenses (2,883,440) (807,858) Income before income tax expense $ 31,744,722 $ 24,621,323 CAPITAL EXPENDITURE Commercial vehicles brake systems $ 44,185,254 $ 13,078,806 Passenger vehicles brake systems 8,074,065 2,810,887 Total $ 52,259,319 $ 15,889,693 DEPRECIATION AND AMORTIZATION Commercial vehicles brake systems $ 7,828,921 $ 5,959,168 Passenger vehicles brake systems 1,430,595 1,280,740 Total $ 9,259,516 $ 7,239,908 December 31, 2017 December 31, 2016 TOTAL ASSETS Commercial vehicles brake systems $ 492,348,129 $ 248,023,179 Passenger vehicles brake systems 89,967,813 53,304,945 Total $ 582,315,942 $ 301,328,124 December 31, 2017 December 31, 2016 LONG LIVED ASSETS Commercial vehicles brake systems $ 106,779,681 $ 53,520,623 Passenger vehicles brake systems 19,512,076 11,748,429 Total $ 126,291,757 $ 65,269,052 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 20 COMMITMENTS AND CONTINGENCIES (1) As described in Note 7, the Company purchased the Dongshan Facility from Ruili Group in 2007 and subsequently transferred the plants and land use right to Ruili Group. The Company has never obtained the land use rights certificate nor the property ownership certificate of the building for the Dongshan Facility. The Company reserved the relevant tax amount of RMB 4,560,000 745,220 3 (2) As described in Note 7, the Company purchased the Development Zone Facility from Ruili Group on May 5, 2016. As of the filing date, the Company hasn’t obtained the land use rights certificate or the property ownership certificate for the building of the Development Zone Facility. The Company reserved the relevant tax amount of RMB 15,030,000 (approximately $2,300,205). This amount was determined based on a 3% tax rate on the consideration paid for the Development Zone Facility, which the Company considered as the most probable amount of tax liability. (3) The information of lease commitments is provided in Note 17. (4) The information of guarantees and assets pledged is provided in Note 4. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 21 SUBSEQUENT EVENTS During the subsequent period, the Company obtained short term loans in the total amount of approximately $ 126,041,000 3.00 5.72 3,731,000 Agricultural Bank of China. In the same period, the Company repaid loan principals and interest expenses in the total amount of approximately $68,525,000 to Bank of China, China Construction Bank, China Zheshang Bank, and Agricultural Bank of China. During the subsequent period, the Company continued to provide loans to Shanghai Ruili and Kunshan Yuetu, two related parties under common control, in the amounts of RMB 332,000,000 50,810,000 97,000,000 14,845,000 5.22 |
ADDITIONAL INFORMATION-FINANCIA
ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Additional Information-Financial Statement Schedule I | ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I This financial statements schedule has been prepared in conformity with U.S. GAAP. SORL AUTO PARTS, INC. This financial statements schedule has been prepared in conformity with U.S. GAAP. The parent company financial statements have been prepared using the same accounting principles and policies described in the notes to the consolidated financial statements, with the only exception being that the Company accounts for its subsidiaries using the equity method. Please refer to the notes to the consolidated financial statements presented above for additional information and disclosures with respect to these financial statements. Financial Information of Parent Company BALANCE SHEETS December 31, 2017 and 2016 December 31, 2017 December 31, 2016 ASSETS Current Assets: Other current assets $ 86,828 $ 86,828 Total Current Assets - 86,828 Investments in subsidiaries 160,185,796 135,861,575 TOTAL ASSETS $ 160,272,624 $ 135,948,403 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Other current liabilities $ 2,921,411 $ 2,921,411 Total Current Liabilities 2,921,411 2,921,411 Total Liabilities 2,921,411 2,921,411 Stockholders' Equity: Preferred stock - no par value; 1,000,000 authorized; none issued and outstanding as of December 31, 2017 and 2016 - - Common stock - $0.002 par value; 50,000,000 authorized, 19,304,921 issued and outstanding as of December 31, 2017 and 2016 38,609 38,609 Additional paid-in capital (28,582,654) (28,582,654) Retained earnings 185,895,258 161,571,037 Total Stockholders' Equity 157,351,213 133,026,992 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 160,272,624 $ 135,948,403 Financial Information of Parent Company STATEMENTS OF INCOME For the Years Ended December 31, 2017 and 2016 For Years Ended December 31, 2017 2016 Investment income $ 24,324,221 $ 19,219,637 Financial expenses - 243 Net income attributable to stockholders $ 24,324,221 $ 19,219,394 Weighted average common share - Basic 19,304,921 19,304,921 Weighted average common share - Diluted 19,304,921 19,304,921 EPS - Basic $ 1.26 $ 1.00 EPS - Diluted $ 1.26 $ 1.00 Financial Information of Parent Company STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2017 and 2016 For Years Ended December 31, 2017 2016 Cash flow from operating activities: Net income $ 24,324,221 $ 19,219,394 Adjustments to reconcile net income to net cash used in operating activities : Investment in subsidiaries (24,324,221) (19,219,394) Other current liabilities - (80,667) Net cash used in operating activities - (80,910) Net change in cash and cash equivalents - (80,910) Cash and cash equivalents, beginning of the year - 80,910 Cash and cash equivalents, end of the year $ - $ - Financial Information of Parent Company STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY For the Years Ended December 31, 2017 and 2016 Number Common Additional Retained Shareholders' Balance - December 31, 2015 19,304,921 $ 38,609 $ 42,199,014 $ 142,351,643 $ 184,589,266 Net income - - - 19,219,394 19,219,394 Distribution to controlling shareholders in connection with plant and land use rights exchange with entity under common control - - (70,781,668) - (70,781,668) Balance - December 31, 2016 19,304,921 $ 38,609 $ (28,582,654) $ 161,571,037 $ 133,026,992 Net income - - - 24,324,221 24,324,221 Balance December 31, 2017 19,304,921 $ 38,609 $ (28,582,654) $ 185,895,258 $ 157,351,213 |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
ACCOUNTING METHOD | a. ACCOUNTING METHOD The Company uses the accrual method of accounting for financial statement and tax return purposes. |
PRINCIPLES OF CONSOLIDATION | b. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of SORL Auto Parts, Inc. and its majority owned subsidiaries. All inter-company balances and transactions have been eliminated in the consolidation. The results of subsidiaries acquired or disposed of during the respective periods are included in the consolidated statements of income and comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. The portion of the income or loss applicable to non-controlling interests in subsidiary undertakings is reflected in the consolidated statements of income and comprehensive income. |
USE OF ESTIMATES | c. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management makes its best estimate of the outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | d. FAIR VALUE OF FINANCIAL INSTRUMENTS For certain of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivables and payables, prepaid expenses, other current assets, short term bank loans, current portion of long term loans, deposits received from customers and other payables and accruals, the carrying amounts approximate fair values due to their short maturities. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature. |
RELATED PARTY TRANSACTIONS | e. RELATED PARTY TRANSACTIONS A related party is generally defined as (i) any person that holds 10 |
FINANCIAL RISK FACTORS AND FINANCIAL RISK MANAGEMENT | f. FINANCIAL RISK FACTORS AND FINANCIAL RISK MANAGEMENT The Company is exposed to the following risk factors: i) Credit risks Financial instruments that potentially subject the Company to concentrations of credit risk are cash and cash equivalents and accounts receivable arising from its normal business activities. The Company places its cash and cash equivalents in what it believes to be credit-worthy financial institutions. 10.00 ii) Liquidity risks - Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and ability to close out market positions. iii) Interest rate risk - The interest rate of short term bank borrowings obtained in 2017 ranged from 1.35 5.22 The Company also obtained long term loans from non-financial institutions for effective interest rates ranging from 4.31 8.50 |
CASH AND CASH EQUIVALENTS | g. CASH AND CASH EQUIVALENTS The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. |
SHORT TERM INVESTMENTS | h. SHORT TERM INVESTMENTS The Company’s short term investments include term deposits with an original maturity from three months to one year with financial institutions. Term deposits in the amount of $ 21,667,802 140,000,000 March 24, 2015 March 24, 2016 Term deposit in the amount of $ 6,190,800 40,000,000 December 17, 2015 June 17, 2016 Term deposit in the amount of $ 3,317,650 22,000,000 January 13, 2016 July 13, 2016 |
RESTRICTED CASH | i. RESTRICTED CASH In 2016, the restricted cash mainly represents bank deposits used to pledge the bank acceptance notes. The Company entered into credit agreements with commercial banks in China (“endorsing banks”) which agree to provide credit within stipulated limits. Within the stipulated credit limits, the Company can issue bank acceptance notes to its suppliers as payments for the purchases. In order to issue bank acceptance notes, the Company is generally required to make initial deposits or pledge note receivables to the endorsing banks in amounts of certain percentage of the face amount of the bank acceptance notes to be issued by the Company. The cash in such accounts is restricted for use over the terms of the bank acceptance notes, which are normally three to six months. In 2017, with the change of the issuing banks, the Company is no longer required to make initial deposits for issuing bank acceptance notes. The restricted cash was mainly required as a deposit for obtaining a letter of credit from Industrial Bank Co., Ltd., which agreed to provide guarantee that the Company would pay on time to the sellers in the case of any purchases. |
INVENTORIES | j. INVENTORIES Inventories are stated at the lower of cost or net realizable value, with cost computed on a weighted-average basis. Cost includes all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. |
PROPERTY, PLANT AND EQUIPMENT | k. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The initial cost of the asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Category Estimated Useful Life (Years) Buildings 10-20 Machinery and equipment 5-10 Electronic equipment 5 Motor vehicles 5-10 Leasehold improvements The lesser of remaining lease term or 10 Significant improvements are capitalized when it is probable that the expenditure resulted in an increase in the future economic benefits expected to be obtained from the use of the asset beyond its originally assessed standard of performance. When improvements are made to real property and those improvements are permanently affixed to the property, the title to those improvements automatically transfers to the owner of the property. The lessee’s interest in the improvements is not a direct ownership interest but rather it is an intangible right to use and benefit from the improvements during the term of the lease. Routine repairs and maintenance are expensed when incurred. Gains and losses on disposal of fixed assets are recognized in the income statement based on the net disposal proceeds less the carrying amount of the assets. |
LAND USE RIGHTS | l. LAND USE RIGHTS According to the law of China, the government owns all the land in China. Companies or individuals are authorized to possess and use the land only through land use rights granted by the Chinese government. Land use rights are being amortized using the straight-line method over the estimated useful life of 40 |
IMPAIRMENT OF LONG-LIVED ASSETS | m. IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets, such as property, plant and equipment and other non-current assets, including intangible assets, are reviewed periodically for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. |
ACCOUNTS RECEIVABLES AND ALLOWANCE FOR BAD DEBTS | n. ACCOUNTS RECEIVABLES AND ALLOWANCE FOR BAD DEBTS The Company presents accounts receivables, net of allowances for doubtful accounts and returns, to ensure accounts receivable are not overstated due to being uncollectible. The allowances are calculated based on a detailed review of certain individual customer accounts, historical collectability rates, a general provision based on aging and an estimation of the overall economic conditions affecting the Company’s customer base. The Company reviews a customer’s credit history before extending credit. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company will write off the uncollectible receivables once any customers are bankrupt or there is a remote possibility that the Company will collect the outstanding balance. The write-off must be reported to the local tax authorities and the Company must receive official approval from them. To date, the Company has not written off any account receivables. |
NOTES RECEIVABLE | o. NOTES RECEIVABLE Notes receivable, generally due within twelve months, are issued by some customers to pay certain outstanding receivable balances to the Company with specific payment terms and definitive due dates. Notes receivable do not bear interest. As of December 31, 2017 and 2016 95,914,724 and $ 32,916,198 or short term bank loans 37,177 135,329 |
REVENUE RECOGNITION | p. REVENUE RECOGNITION Revenue from the sale of goods is recognized when the risks and rewards of ownership of the goods have transferred to the buyer including factors such as when persuasive evidence of an arrangement exits, delivery has occurred, the sales price is fixed and determinable, and collection is probable. Revenue consists of the invoice value for the sale of goods and services net of value-added tax (“VAT”), rebates and discounts and returns. The Company nets sales return in gross revenue, i.e., the revenue shown in the income statement is the net sales. |
INCOME TAXES | q. INCOME TAXES The Company accounts for income taxes under the provision of FASB ASC 740-10, Income Taxes |
FOREIGN CURRENCY TRANSLATION | r. FOREIGN CURRENCY TRANSLATION The Company maintains its books and accounting records in RMB, the currency of the PRC, The Company’s functional currency is also RMB. The Company has adopted FASB ASC 830-30 in translating financial statement amounts from RMB to the Company’s reporting currency, U.S. dollars (“US$”). All assets and liabilities are translated at the current rate. The stockholders’ equity accounts are translated at appropriate historical rate. Revenue and expenses are translated at average exchange rates during the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are include in the results of operations as incurred. |
EMPLOYEES’ BENEFITS | s. EMPLOYEES’ BENEFITS Mandatory contributions are made to government’s |
RESEARCH AND DEVELOPMENT EXPENSES | t. RESEARCH AND DEVELOPMENT EXPENSES Research and development costs are classified as general and administrative expenses and are expensed as incurred. Research and development expenses were $ 11,004,560 7,709,533 |
SHIPPING AND HANDLING COSTS | u. SHIPPING AND HANDLING COSTS Shipping and handling cost are classified as selling expenses and are expensed as incurred. Shipping and handling costs were $ 7,094,863 6,529,999 |
ADVERTISING COSTS | v. ADVERTISING COSTS Advertising costs are classified as selling expenses and are expensed as incurred. Advertising costs were $ 440,582 239,301 |
WARRANTY CLAIMS | w. WARRANTY CLAIMS The Company provides for the estimated cost of product warranties when the products are sold. Such estimates of product warranties were based on, among other things, historical experience, product changes, material expenses, and service and transportation expenses arising from the manufactured product. Estimates will be adjusted on the basis 1,570,290 2,503,950 |
PURCHASE DISCOUNTS | x. PURCHASE DISCOUNTS Purchase discounts represent discounts received from vendors for purchasing raw materials and are netted in the cost of goods sold, if applicable. |
LEASE COMMITMENTS | y. LEASE COMMITMENTS The Company has adopted FASB Accounting Standard Codification, or ASC 840, Lease |
COST OF SALES | z. COST OF SALES Cost of sales consists primarily of materials costs, applicable local government levies, freight charges, purchasing and receiving costs, inspection costs, employee compensation, depreciation and related costs, which are directly attributable to production. Write-down of inventories to lower of cost or market is also recorded in cost of sales, if any. |
GOVERNMENT GRANTS | aa. GOVERNMENT GRANTS Government grants include cash subsidies as well as other subsidies received from the PRC government by the Joint Venture. Such subsidies are generally provided as incentives from the local government to encourage the expansion of local business. Government grants are recognized when received and all the conditions specified in the grant have been met. Capital grants received in advance of the acquisition of equipment are recorded initially in deferred income |
SEGMENT REPORTING | bb. SEGMENT REPORTING ASC Topic 280 requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. During the years ended December 31, 2017 and 2016, the Company operated in two reportable business segments: (1) commercial vehicles brake systems (2) passenger vehicles brake systems. |
RECENTLY ISSUED FINANCIAL STANDARDS | cc. RECENTLY ISSUED FINANCIAL STANDARDS In May 2014, the FASB issued ASU 2014-09, “ ” The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company elected adopting the standard using the full retrospective method to restate prior reporting period presented. The Company has identified its revenue streams and assessed each for the impacts. The Company expects the adoption of Topic 606 will not have a material impact in the timing or amount of revenue recognized, including the presentation of revenues in the Company’s consolidated statements of income. In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. The amendments in ASU 2015-17 eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments in this ASU are effective for public business entities for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The amendments may be applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company adopted this amendment from January 1, 2017. The adoption did not have an impact on our consolidated financial statements and related disclosures other than for reclassification. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 specifies the accounting for leases. For operating leases, ASU 2016-02 requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. ASU 2016-02 is effective for publicly-traded companies for annual reporting periods, and interim periods within those years, beginning after December 15, 2018. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees may not apply a full retrospective transition approach. The Company plans to adopt the standard effective January 1, 2019. The Company anticipates this standard will not have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. These amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments do not provide a definition of restricted cash or restricted cash equivalents. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company elected In January 2017, the FASB issued ASU 2017-03, “Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)”. This pronouncement amends the SEC’s reporting requirements for public filers in regard to new accounting pronouncements or existing pronouncements that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented an accounting standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement, and provide disclosures including a description of the effect on accounting policies that the registrant expects to apply. These provisions apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that relate to corrections to several other prior FASB pronouncements. The Company has incorporated language into other recently issued accounting pronouncement notes, where relevant for the corrections in ASU 2017-03. The Company is implementing the updated SEC requirements on not yet adopted accounting pronouncements with these consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, “Income StatementReporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. These amendments provide financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of ASU 2018-02 is permitted, including adoption in any interim period for the public business entities for reporting periods for which financial statements have not yet been issued. The amendments in this ASU should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is currently evaluating the impact of the adoption of ASU No. 2018-02 on its consolidated financial statements. In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118”. The amendments in this |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Property, Plant and Equipment by Estimated Useful Life | Depreciation is calculated using the straight-line method over the estimated useful life of the respective assets as follows: Category Estimated Useful Life (Years) Buildings 10-20 Machinery and equipment 5-10 Electronic equipment 5 Motor vehicles 5-10 Leasehold improvements The lesser of remaining lease term or 10 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
Schedule of Nature of Relationship under Related Party Transactions | Related parties with whom the Company conducted business consist of the following: Name of Related Party Nature of Relationship Xiao Ping Zhang Principal shareholder, Chairman of the Board and Chief Executive Officer) Shu Ping Chi Shareholder, member of the Board, wife of Xiao Ping Zhang Xiao Feng Zhang Shareholder, member of the Board, brother of Xiao Ping Zhang Ruili Group Co., Ltd. ("Ruili Group") 10% shareholder of Joint Venture and is collectively controlled by Xiao Ping Zhang, Shu Ping Chi, and Xiao Feng Zhang. Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. ("Guangzhou Kormee") Controlled by Ruili Group Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. (formerly known as “Ruian Kormee Automobile Braking Co., Ltd.”, "Ruian Kormee") Wholly controlled by Guangzhou Kormee Shanghai Dachao Electric Technology Co., Ltd. ("Shanghai Dachao") Ruili Group holds 49% of the equity interests in Shanghai Dachao. Ruili MeiLian Air Management System (LangFang) Co., Ltd. ("Ruili Meilian") Controlled by Ruili Group Wenzhou Lichuang Automobile Parts Co., Ltd. ("Wenzhou Lichuang") Controlled by Ruili Group Ningbo Ruili Equipment Co., Ltd. ("Ningbo Ruili") Controlled by Ruili Group Shanghai Ruili Real Estate Development Co., Ltd. ("Shanghai Ruili") Wholly controlled by Ruili Group Kunshan Yuetu Real Estate Development Co., Ltd. ("Kunshan Yuetu") Collectively owned by Ruili Group and Shu Ping Chi Shanghai Tabouk Auto Components Co., Ltd. ("Shanghai Tabouk") Collectively owned by Xiao Feng Zhang and Xiao Ping Zhang HangZhou Ruili Property Development Co., Ltd. Collectively owned by Ruili Group and Xiao Ping Zhang |
Schedule of Related Party Transactions | The following related party transactions occurred for the years ended December 31, 2017 and 2016: For the Years Ended December 31, 2017 2016 PURCHASES FROM: Guangzhou Ruili Kormee Automative Eletronic Control Technology Co., Ltd. $ 4,487,457 $ 793,861 Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. 1,357,612 1,329,135 Shanghai Dachao Electric Technology Co., Ltd. 188,899 1,787,921 Ruili MeiLian Air Management System (LangFang) Co., Ltd. 4,106,986 110,446 Ruili Group Co., Ltd. 5,478,853 4,011,206 Wenzhou Lichuang Auto Parts Co., Ltd. 5,446,212 Total Purchases $ 21,066,019 $ 8,032,569 SALES TO: Guangzhou Ruili Kormee Automative Eletronic Control Technology Co., Ltd. $ 7,467,661 $ 5,781,501 Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. 135,911 37,325 Ruili MeiLian Air Management System (LangFang) Co., Ltd. 1,253,664 Ruili Group Co., Ltd. 14,108,062 13,436,421 Shanghai Tabouk Auto Components Co., Ltd. 1,411,324 1,034,124 Total Sales $ 24,376,622 $ 20,289,371 December 31, 2017 2016 ACCOUNTS RECEIVABLE Ruili Group Co., Ltd. $ $ 4,361,010 Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. 664,499 Shanghai Tabouk Auto Components Co., Ltd. 1,297,734 Total $ 1,297,734 $ 5,025,509 ACCOUNTS PREPAYMENT Ningbo Ruili Equipment Co., Ltd. $ 999,527 $ $ 999,527 $ ADVANCES TO RELATED PARTIES Ruili Group Co., Ltd. $ 5,711,605 $ Shanghai Ruili Real Estate Development Co., Ltd. 65,069,497 Kunshan Yuetu Real Estate Development Co., Ltd. 1,537,122 $ Total $ 72,318,224 $ ACCOUNTS PAYABLE TO RELATED PARTIES Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. $ $ 628,310 Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. 3,414,719 Shanghai Dachao Electric Technology Co., Ltd. 83,178 100,441 Ruili MeiLian Air Management System (LangFang) Co., Ltd. 1,993,787 1,224,956 Wenzhou Lichuang Auto Parts Co., Ltd. 10,405,120 Total $ 15,896,804 $ 1,953,707 DUE TO RELATED PARTY Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. $ 1,572,963 $ Total $ 1,572,963 $ |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ACCOUNTS RECEIVABLE [Abstract] | |
Schedule of Allowance for Doubtful Accounts | Accounts receivable, net consisted of the following: December 31, 2017 December 31, 2016 Accounts receivable $ 148,312,117 $ 113,815,711 Less: allowance for doubtful accounts (13,927,156) (11,686,417) Account receivable balance, net $ 134,384,961 $ 102,129,294 No customer individually accounted for more than 10% of our revenues or accounts receivable for the years ended December 31, 2017 and 2016. The changes in the allowance for doubtful accounts at December 31, 2017 and December 31, 2016 were summarized as follows: December 31, 2017 December 31, 2016 Beginning balance $ 11,686,417 $ 12,075,402 Add: Increase to allowance 1,474,872 395,491 Less: Accounts written off Effects on changes in foreign exchange rate 765,867 (784,476) Ending balance $ 13,927,156 $ 11,686,417 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INVENTORIES [Abstract] | |
Schedule of Inventories | On December 31, 2017 and December 31, 2016, inventories consisted of the following: December 31, 2017 December 31, 2016 Raw materials $ 27,657,266 $ 20,121,513 Work-in-process 40,805,434 14,843,653 Finished goods 45,837,864 30,811,351 Less: Write-down of inventories Total inventories $ 114,300,564 $ 65,776,517 |
PROPERTY, PLANT AND EQUIPMENT34
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment, net, consisted of the following, on December 31, 2017 and December 31, 2016: December 31, 2017 December 31, 2016 Machinery $ 119,296,564 $ 87,694,677 Molds 1,338,912 1,257,841 Office equipment 2,998,443 2,021,982 Vehicles 3,681,194 2,246,203 Buildings 20,127,148 15,826,738 Leasehold improvements 486,834 458,566 Sub-total 147,929,095 109,506,007 Less: Accumulated depreciation (68,101,089) (55,768,301) Property, plant and equipment, net $ 79,828,006 $ 53,737,706 |
LAND USE RIGHTS, NET (Tables)
LAND USE RIGHTS, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Land Use Rights [Abstract] | |
Schedule Of Land Rights | December 31, 2017 December 31, 2016 Cost $ 15,477,081 $ 8,473,362 Less: Accumulated amortization (564,947) (164,029) Land use rights, net $ 14,912,134 $ 8,309,333 |
PREPAYMENTS (Tables)
PREPAYMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Assets [Abstract] | |
Schedule of Prepayments | Prepayments consisted of the following as of December 31, 2017 and December 31, 2016: December 31, 2017 December 31, 2016 Raw material suppliers $ 8,826,004 $ 10,797,601 Equipment and land use rights purchases 16,594,987 - Total prepayments $ 25,420,991 $ 10,797,601 |
DEFERRED TAX ASSETS AND DEFER37
DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets as of December 31, 2017 and December 31, 2016 comprise of the following: December 31, 2017 December 31, 2016 Deferred tax assets - noncurrent Allowance for doubtful accounts $ 2,137,837 $ 1,798,894 Revenue (net of cost) 160,766 76,719 Unpaid accrued expenses 955,287 357,352 Warranty 986,534 977,610 Deferred tax assets 4,240,424 3,210,575 Valuation allowance Net deferred tax assets - noncurrent $ 4,240,424 $ 3,210,575 |
SHORT TERM BANK LOANS (Tables)
SHORT TERM BANK LOANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SHORT-TERM BANK LOANS [Abstract] | |
Schedule of Bank Loans | Bank loans represented the following as of December 31, 2017 and December 31, 2016: December 31, 2017 December 31, 2016 Secured $ 125,380,899 $ 27,416,376 |
Schedule of Personal or Corporate Guarantees | As of December 31, 2017, corporate or personal guarantees provided for those bank loans were as follows: 56,564,323 Pledged with the Company’s bank acceptance notes. 16,594,227 Guaranteed by Ruili Group., a related party, Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company’s principal stockholders. 11,478,069 Pledged by Shanghai Ruili, a related party, with its property. Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company’s principal stockholders. 5,850,950 Guaranteed by Ruili Group. 7,345,964 Pledged by the Company with its land use rights and property. Guaranteed by Ruili Group, a related party and Ms. Xiao Ping Zhang, the Company’s principal stockholders. 27,547,366 Pledged by HangZhou Ruili Property Development Co., Ltd., a related party, with its property. Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company’s principal stockholders. |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following as of December 31, 2017 and December 31, 2016: December 31, 2017 December 31, 2016 Accrued payroll $ 11,063,726 $ 6,267,794 Accrued warranty expenses 6,576,895 6,517,402 Other accrued expenses 7,514,037 7,318,196 Total accrued expenses $ 25,154,658 $ 20,103,392 |
LONG-TERM LOANS (Tables)
LONG-TERM LOANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SHORT-TERM BANK LOANS [Abstract] | |
Schedule of Long-term Loans [Table Text Block] | NOTE 14 LONG-TERM LOANS December 31, 2017 December 31, 2016 Total long-term loans $ 61,649,255 $ Less: current portion (24,266,031) Non - current portion $ 37,383,224 $ |
Schedule of Maturities of Long-term Debt [Table Text Block] | The following table summarizes the aggregate required repayments of principal amounts of the Company’s long term loans in the succeeding five years and thereafter: Amount For the years ending December 31, 2018 $ 24,266,031 2019 21,638,468 2020 15,744,756 Thereafter Total $ 61,649,255 |
RESERVE (Tables)
RESERVE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Reserve | The reserve funds were comprised of the following: December 31, 2017 December 31, 2016 Statutory surplus reserve fund $ 17,562,357 $ 15,129,935 Total $ 17,562,357 $ 15,129,935 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the effective income tax rate of the Joint Venture to the statutory income tax rate in the PRC for the years ended December 31, 2017 and 2016 is as follows: Years Ended December 31, 2017 2016 US statutory income tax rate 35.00 % 35.00 % Valuation allowance recognized with respect to the loss in the US company -35.00 % -35.00 % China statutory income tax rate 25.00 % 25.00 % Effects of income tax exemptions and reliefs -10.00 % -10.00 % Effects of additional deduction allowed for R&;D expenses -2.34 % -2.88 % Effects of expenses not deductible for tax purposes 0.79 % 0.61 % Other items 1.41 % 0.54 % Effective tax rate 14.86 % 13.27 % |
Schedule of Income Tax Provision | The provisions for income taxes for the years ended December 31, 2017 and 2016, respectively, are summarized as follows: December 31, 2017 December 31, 2016 Current $ 5,524,868 $ 3,769,316 Deferred (807,058) (502,903) Total $ 4,717,810 $ 3,266,413 |
NON-CONTROLLING INTEREST IN S43
NON-CONTROLLING INTEREST IN SUBSIDIARIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
NON-CONTROLLING INTEREST IN SUBSIDIARIES [Abstract] | |
Schedule of Non-controlling Interest | Net income attributable to non-controlling interest in subsidiaries amounted to $ 2,702,691 2,135,516 2017 2016 10% non-controlling interest in Ruian $ 2,702,691 $ 2,135,516 Total $ 2,702,691 $ 2,135,516 |
OPERATING LEASES WITH RELATED44
OPERATING LEASES WITH RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Assets, Current [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | future minimum rental payments are as follows: 2018 2019 2020 2021 2022 Thereafter Operating Lease Commitments $ 321,386 $ 321,386 $ 321,386 $ 321,386 $ 321,386 $ |
WARRANTY CLAIMS (Tables)
WARRANTY CLAIMS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
WARRANTY CLAIMS [Abstract] | |
Schedule of Accrued Warranty Expenses | The movement of accrued warranty expenses for the year ended December 31, 2017 is as follows: Beginning balance at January 1, 2017 $ 6,517,402 Aggregate increase for new warranties issued during current period 1,570,290 Aggregate reduction for payments made and effect of exchange rate fluctuation (1,510,797) Ending balance at December 31, 2017 $ 6,576,895 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENT INFORMATION [Abstract] | |
Schedule of Segment Information, by Segment | 2017 2016 NET SALES TO EXTERNAL CUSTOMERS Commercial vehicles brake systems $ 330,201,227 $ 224,213,063 Passenger vehicles brake systems 60,321,342 54,530,059 Net sales $ 390,522,569 $ 278,743,122 INTERSEGMENT SALES Commercial vehicles brake systems $ $ Passenger vehicles brake systems Intersegment sales $ $ GROSS PROFIT Commercial vehicles brake systems $ 89,355,410 $ 63,051,542 Passenger vehicles brake systems 14,830,792 12,338,494 Gross profit $ 104,186,202 $ 75,390,036 Selling and distribution expenses 39,067,566 29,837,757 General and administrative expenses 22,023,338 15,206,423 Research and development expenses 11,004,560 7,709,533 Other operating income, net 3,039,824 555,946 Income from operations 35,130,562 23,192,269 Interest income 232,466 1,047,667 Government grants 2,264,055 832,264 Other income 101,475 1,244,078 Interest expenses (3,100,396) (887,097) Other expenses (2,883,440) (807,858) Income before income tax expense $ 31,744,722 $ 24,621,323 CAPITAL EXPENDITURE Commercial vehicles brake systems $ 44,185,254 $ 13,078,806 Passenger vehicles brake systems 8,074,065 2,810,887 Total $ 52,259,319 $ 15,889,693 DEPRECIATION AND AMORTIZATION Commercial vehicles brake systems $ 7,828,921 $ 5,959,168 Passenger vehicles brake systems 1,430,595 1,280,740 Total $ 9,259,516 $ 7,239,908 December 31, 2017 December 31, 2016 TOTAL ASSETS Commercial vehicles brake systems $ 492,348,129 $ 248,023,179 Passenger vehicles brake systems 89,967,813 53,304,945 Total $ 582,315,942 $ 301,328,124 December 31, 2017 December 31, 2016 LONG LIVED ASSETS Commercial vehicles brake systems $ 106,779,681 $ 53,520,623 Passenger vehicles brake systems 19,512,076 11,748,429 Total $ 126,291,757 $ 65,269,052 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Textual) | Dec. 31, 2017 | Nov. 11, 2009 | Jan. 17, 2004 |
Ruian [Member] | |||
Description Of Business [Line Items] | |||
Ownership percentage | 90.00% | ||
Ruili Group, Co., Ltd. [Member] | |||
Description Of Business [Line Items] | |||
Ownership percentage | 10.00% | ||
SORL International Holding, Ltd. [Member] | |||
Description Of Business [Line Items] | |||
Ownership percentage | 60.00% | ||
MGR Hong Kong Limited [Member] | SIH [Member] | |||
Description Of Business [Line Items] | |||
Ownership percentage | 30.00% | ||
Taiwanese Investor [Member] | |||
Description Of Business [Line Items] | |||
Ownership percentage | 10.00% | ||
Fairford [Member] | |||
Description Of Business [Line Items] | |||
Ownership percentage | 90.00% |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Buildings [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Buildings [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 20 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Electronic Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Motor vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Motor vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | The lesser of remaining lease term or 10 |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) | 1 Months Ended | 12 Months Ended | ||||||||
Jul. 13, 2016USD ($) | Jun. 17, 2016USD ($) | Mar. 24, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Nov. 14, 2017 | Jul. 13, 2016CNY (¥) | Jun. 17, 2016CNY (¥) | Mar. 24, 2016CNY (¥) | Jan. 17, 2004 | |
Summary of Significant Accounting Policy [Line Items] | ||||||||||
Research and Development Expense | $ 11,004,560 | $ 7,709,533 | ||||||||
Shipping, Handling and Transportation Costs | 7,094,863 | 6,529,999 | ||||||||
Advertising Expense | 440,582 | 239,301 | ||||||||
Product Warranty Accrual, Warranties Issued | $ 1,570,290 | 2,503,950 | ||||||||
Lease Terms | the lease term is equal to 75% of the estimated economic life of the leased property or more | |||||||||
Line of Credit Facility, Collateral Fees, Amount | $ 37,177 | 135,329 | ||||||||
Notes Receivable [Member] | ||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||
Pledged assets amount | $ 95,914,724 | $ 32,916,198 | ||||||||
Ruili Group Co Ltd [Member] | ||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||
Ownership percentage | 10.00% | |||||||||
Ruili Group Co Ltd [Member] | Time Deposits [Member] | ||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||
Pledged assets amount | $ 3,317,650 | $ 21,667,802 | ¥ 22,000,000 | ¥ 140,000,000 | ||||||
Maturity date, Start | Jan. 13, 2016 | Mar. 24, 2015 | ||||||||
Maturity date, End | Jul. 13, 2016 | Mar. 24, 2016 | ||||||||
Hangzhou Xiangwei Wuzi Co [Member] | Time Deposits [Member] | ||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||
Pledged assets amount | $ 6,190,800 | ¥ 40,000,000 | ||||||||
Maturity date, Start | Dec. 17, 2015 | |||||||||
Maturity date, End | Jun. 17, 2016 | |||||||||
Minimum [Member] | ||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||
Ownership percentage | 10.00% | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.35% | 3.00% | ||||||||
Minimum [Member] | Long-term Borrowings [Member] | ||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.31% | |||||||||
Maximum [Member] | ||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.22% | 5.72% | ||||||||
Maximum [Member] | Sales Revenue, Net [Member] | ||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||
Concentration Risk, Percentage | 10.00% | |||||||||
Maximum [Member] | Long-term Borrowings [Member] | ||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.50% | |||||||||
Use Rights [Member] | ||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 40 years |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Xiao Ping Zhang [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Principal shareholder, Chairman of the Board and Chief Executive Officer) |
Shu Ping Chi [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Shareholder, member of the Board, wife of Xiao Ping Zhang |
Xiao Feng Zhang [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Shareholder, member of the Board, brother of Xiao Ping Zhang |
Ruili Group [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | 10% shareholder of Joint Venture and is collectively controlled by Xiao Ping Zhang, Shu Ping Chi, and Xiao Feng Zhang. |
Guangzhou Kormee [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Controlled by Ruili Group |
Ruian Kormee [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Wholly controlled by Guangzhou Kormee |
Shanghai Dachao [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Ruili Group holds 49% of the equity interests in Shanghai Dachao. |
Ruili Meilian [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Controlled by Ruili Group |
Wenzhou Lichuang [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Controlled by Ruili Group |
Ningbo Ruili [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Controlled by Ruili Group |
Shanghai Ruili [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Wholly controlled by Ruili Group |
Kunshan Yuetu [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Collectively owned by Ruili Group and Shu Ping Chi |
Shanghai Tabouk [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Collectively owned by Xiao Feng Zhang and Xiao Ping Zhang |
HangZhou Ruili [Member] | |
Related Party Transaction [Line Items] | |
Name of Related Party | Collectively owned by Ruili Group and Xiao Ping Zhang |
RELATED PARTY TRANSACTIONS (D51
RELATED PARTY TRANSACTIONS (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | ||
PURCHASES FROM: | $ 21,066,019 | $ 8,032,569 |
SALES TO: | 24,376,622 | 20,289,371 |
Guangzhou Ruili Kormee Automative Eletronic Control Technology Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM: | 4,487,457 | 793,861 |
SALES TO: | 7,467,661 | 5,781,501 |
Wenzhou Ruili Kormee Automative Electronics Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM: | 1,357,612 | 1,329,135 |
SALES TO: | 135,911 | 37,325 |
Shanghai Dachao Electric Technology Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM: | 188,899 | 1,787,921 |
Ruili MeiLian Air Management System (LangFang) Co., Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM: | 4,106,986 | 110,446 |
SALES TO: | 1,253,664 | 0 |
Ruili Group, Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM: | 5,478,853 | 4,011,206 |
SALES TO: | 14,108,062 | 13,436,421 |
Wenzhou Lichuang Auto Parts Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM: | 5,446,212 | 0 |
Shanghai Tabouk Auto Components Co., Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
SALES TO: | $ 1,411,324 | $ 1,034,124 |
RELATED PARTY TRANSACTIONS (D52
RELATED PARTY TRANSACTIONS (Details 2) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
ACCOUNTS RECEIVABLE | $ 1,297,734 | $ 5,025,509 |
ACCOUNTS PREPAYMENT | 999,527 | 0 |
Ruili Group Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
ACCOUNTS RECEIVABLE | 0 | 4,361,010 |
Guangzhou Ruili Kormee Automative Eletronic Control Technology Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
ACCOUNTS RECEIVABLE | 0 | 664,499 |
Shanghai Tabouk Auto Components Co., Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
ACCOUNTS RECEIVABLE | 1,297,734 | 0 |
Ningbo Ruili Equipment Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
ACCOUNTS PREPAYMENT | $ 999,527 | $ 0 |
RELATED PARTY TRANSACTIONS (D53
RELATED PARTY TRANSACTIONS (Details 3) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Due from Affiliate, Current | $ 72,318,224 | $ 0 |
Due from Related Parties, Noncurrent | 15,896,804 | 1,953,707 |
Due to Related Parties, Current | 1,572,963 | 0 |
Ruili Group Co Ltd [Member] | ||
Due from Affiliate, Current | 5,711,605 | 0 |
ShangHai Ruili Real Estate Development Co Ltd [Member] | ||
Due from Affiliate, Current | 65,069,497 | 0 |
KunShan Yuetu Real Estate Development Co Ltd [Member] | ||
Due from Affiliate, Current | 1,537,122 | 0 |
Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. [Member] | ||
Due from Related Parties, Noncurrent | 0 | 628,310 |
Due to Related Parties, Current | 1,572,963 | 0 |
Guangzhou Ruili Kormee Automative Eletronic Control Technology Co., Ltd. [Member] | ||
Due from Related Parties, Noncurrent | 3,414,719 | 0 |
Shanghai Dachao Electric Technology Co., Ltd. [Member] | ||
Due from Related Parties, Noncurrent | 83,178 | 100,441 |
Ruili MeiLian Air Management System LangFang Co., Ltd [Member] | ||
Due from Related Parties, Noncurrent | 1,993,787 | 1,224,956 |
Wenzhou Lichuang Auto Parts Co., Ltd. [Member] | ||
Due from Related Parties, Noncurrent | $ 10,405,120 | $ 0 |
RELATED PARTY TRANSACTIONS (D54
RELATED PARTY TRANSACTIONS (Details Textual) | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2017CNY (¥) | |
Related Party Transaction [Line Items] | |||
Repayments of Related Party Debt | $ 139,482,122 | $ 0 | |
Payments to Fund Long-term Loans to Related Parties | 186,885,309 | 18,247,384 | |
Effect of Exchange Rate on Cash and Cash Equivalents | $ 367,156 | 1,011,717 | |
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 5.22% | ||
Proceeds from Related Party Debt | $ 103,775,545 | 0 | |
Proceeds from Bank Debt | 35,706,576 | ||
Prepaid Expense Related Party Current | 999,527 | 0 | |
Proceeds From Advances, Related Parties | 118,436,661 | 18,247,384 | |
Related Party Tranasctions, Agreed Transfer Amount | 3,711,622 | 0 | |
Due to Related Parties, Current | 1,572,963 | 0 | |
Other Prepaid Expense, Current | 72,318,224 | 0 | |
Interest Income from Advances to Related Parties | $ 181,272 | ||
Credit Line by China Guangfa Bank [Member] | |||
Related Party Transaction [Line Items] | |||
Guarantee start date | Dec. 31, 2017 | ||
Guarantee end date | Dec. 20, 2018 | ||
Ruili Group Co Ltd [Member] | |||
Related Party Transaction [Line Items] | |||
Repayments of Related Party Debt | $ 123,903,862 | ||
Payments to Fund Long-term Loans to Related Parties | 117,296,565 | 18,247,384 | |
Effect of Exchange Rate on Cash and Cash Equivalents | 2,109,754 | ||
Proceeds from Related Party Debt | 88,197,285 | ||
Proceeds From Advances, Related Parties | 115,467,364 | ||
Related Party Tranasctions, Agreed Transfer Amount | 3,711,622 | ||
Other Prepaid Expense, Current | 5,711,605 | ||
Ruili Group Co Ltd [Member] | Credit Line by Bank of Ningbo [Member] | |||
Related Party Transaction [Line Items] | |||
Guarantee amount | $ 21,623,180 | ¥ 150,000,000 | |
Guarantee start date | May 30, 2016 | ||
Guarantee end date | May 14, 2017 | ||
Ruili Group Co Ltd [Member] | Credit Line by China Guangfa Bank [Member] | |||
Related Party Transaction [Line Items] | |||
Guarantee amount | $ 28,830,907 | 200,000,000 | |
Guarantee start date | May 22, 2016 | ||
Guarantee end date | May 22, 2017 | ||
Ruili Group Co Ltd [Member] | Credit Line by China Merchants Bank [Member] | |||
Related Party Transaction [Line Items] | |||
Guarantee amount | $ 7,699,889 | 50,000,000 | |
Guarantee start date | Jul. 29, 2015 | ||
Ruili Group Co Ltd One [Member] | Credit Line by Bank of Ningbo [Member] | |||
Related Party Transaction [Line Items] | |||
Guarantee amount | $ 26,328,000 | 180,000,000 | |
Guarantee start date | Jun. 30, 2017 | ||
Guarantee end date | Jun. 30, 2020 | ||
Ruili Group Co Ltd One [Member] | Credit Line by China Guangfa Bank [Member] | |||
Related Party Transaction [Line Items] | |||
Guarantee amount | $ 10,092,000 | 69,000,000 | |
Guarantee start date | Nov. 16, 2016 | ||
Guarantee end date | Jan. 16, 2018 | ||
Ruili Group Co Ltd One [Member] | Credit Line by China Merchants Bank [Member] | |||
Related Party Transaction [Line Items] | |||
Guarantee amount | $ 5,766,181 | ¥ 40,000,000 | |
Guarantee start date | Oct. 24, 2016 | ||
Guarantee end date | Apr. 18, 2018 | ||
Shanghai Ruili [Member] | |||
Related Party Transaction [Line Items] | |||
Payments to Fund Long-term Loans to Related Parties | $ 65,918,404 | ||
Proceeds From Advances, Related Parties | 2,969,297 | ||
Ruian Kormee [Member] | |||
Related Party Transaction [Line Items] | |||
Repayments of Related Party Debt | 15,578,260 | ||
Payments to Fund Long-term Loans to Related Parties | 2,185,691 | ||
Proceeds from Related Party Debt | 15,578,260 | ||
Due to Related Parties, Current | 1,572,963 | ||
Ningbo Ruili Equipment Co Ltd [Member] | |||
Related Party Transaction [Line Items] | |||
Prepaid Expense Related Party Current | 999,527 | $ 0 | |
Kunshan Yuetu [Member] | |||
Related Party Transaction [Line Items] | |||
Payments to Fund Long-term Loans to Related Parties | $ 1,484,649 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Concentration Risk [Line Items] | ||
Accounts receivable | $ 148,312,117 | $ 113,815,711 |
Less: allowance for doubtful accounts | (13,927,156) | (11,686,417) |
Account receivable balance, net | $ 134,384,961 | $ 102,129,294 |
ACCOUNTS RECEIVABLE, NET (Det56
ACCOUNTS RECEIVABLE, NET (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | ||
Beginning balance | $ 11,686,417 | $ 12,075,402 |
Add: Increase to allowance | 1,474,872 | 395,491 |
Less: Accounts written off | 0 | 0 |
Effects on changes in foreign exchange rate | 765,867 | (784,476) |
Ending balance | $ 13,927,156 | $ 11,686,417 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Raw Materials | $ 27,657,266 | $ 20,121,513 |
Work-in-process | 40,805,434 | 14,843,653 |
Finished Goods | 45,837,864 | 30,811,351 |
Less: Write-down of inventories | 0 | 0 |
Total Inventory | $ 114,300,564 | $ 65,776,517 |
PROPERTY, PLANT AND EQUIPMENT58
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Sub-total | $ 147,929,095 | $ 109,506,007 |
Less: accumulated depreciation | (68,101,089) | (55,768,301) |
Property, plant and equipment, net | 79,828,006 | 53,737,706 |
Machinery [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Sub-total | 119,296,564 | 87,694,677 |
Molds [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Sub-total | 1,338,912 | 1,257,841 |
Office equipments [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Sub-total | 2,998,443 | 2,021,982 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Sub-total | 3,681,194 | 2,246,203 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Sub-total | 20,127,148 | 15,826,738 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Sub-total | $ 486,834 | $ 458,566 |
PROPERTY, PLANT AND EQUIPMENT59
PROPERTY, PLANT AND EQUIPMENT, NET (Details Textual) | 1 Months Ended | 12 Months Ended | |||||||
Jul. 31, 2017USD ($)m² | Jul. 31, 2017CNY (¥) | May 31, 2016USD ($) | May 31, 2016CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2017CNY (¥) | Jul. 31, 2017CNY (¥)m² | May 31, 2016CNY (¥) | |
Property, Plant and Equipment [Line Items] | |||||||||
Depreciation | $ | $ 8,871,856 | $ 6,943,941 | |||||||
Tax Amount Reserved for Land Use Rights | $ 745,220 | ¥ 4,560,000 | |||||||
Tax Rate Land Use Rights | 3.00% | 3.00% | |||||||
Ruili Group [Member] | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Machinery and Equipment, Gross | $ 2,500,000 | ¥ 16,600,000 | |||||||
Area Of Building | 33,141 | 33,141 | |||||||
Area of Land | 25,016 | 25,016 | |||||||
Ruili Group [Member] | Use Rights [Member] | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Land | $ 6,380,000 | ¥ 42,350,000 | |||||||
Ruili Group [Member] | Maximum [Member] | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Payments to Acquire Property, Plant, and Equipment | 8,870,000 | ¥ 60,060,000 | |||||||
Ruili Group [Member] | Minimum [Member] | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Payments to Acquire Property, Plant, and Equipment | $ 8,880,000 | ¥ 58,950,000 | |||||||
Dongshan Facility [Member] | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Capital Expenditures Incurred but Not yet Paid | $ 76,500,000 | ¥ 501,000,000 | |||||||
Tax Amount Reserved for Land Use Rights | 750,000 | ¥ 4,560,000 | |||||||
Development Zone Facility [Member] | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Tax Amount Reserved for Land Use Rights | $ 2,300,000 | $ 2,300,205 | ¥ 15,030,000 | ¥ 15,000,000 | |||||
Tax Rate Land Use Rights | 0.00% | 3.00% | 3.00% | 0.00% |
LAND USE RIGHTS, NET (Details)
LAND USE RIGHTS, NET (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Cost | $ 15,477,081 | $ 8,473,362 |
Less: Accumulated amortization | (564,947) | (164,029) |
Land use rights, net | $ 14,912,134 | $ 8,309,333 |
LAND USE RIGHTS, NET (Details T
LAND USE RIGHTS, NET (Details Textual) ¥ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Jul. 31, 2017USD ($) | Jul. 31, 2017CNY (¥) | May 31, 2016USD ($) | May 31, 2016CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2017CNY (¥) | Jul. 31, 2017CNY (¥) | |
Land Use Rights [Line Items] | |||||||||
Amortization expense, land use rights | $ 379,121 | $ 284,717 | |||||||
Yunding Holding Group Co [Member] | |||||||||
Land Use Rights [Line Items] | |||||||||
Payments to Acquire Property, Plant, and Equipment | $ 8,870,000 | ¥ 60,060 | |||||||
Use Rights [Member] | |||||||||
Land Use Rights [Line Items] | |||||||||
Payments to Acquire Intangible Assets | 11,020,000 | ¥ 72,020 | |||||||
Ruili Group Co Ltd [Member] | Land Use Rights [Member] | |||||||||
Land Use Rights [Line Items] | |||||||||
Land | $ 6,380,000 | ¥ 42,350 | |||||||
Dongshan Facility [Member] | |||||||||
Land Use Rights [Line Items] | |||||||||
Capital Expenditures Incurred but Not yet Paid | $ 76,500,000 | ¥ 501,000 | |||||||
Dongshan Facility [Member] | Land Use Rights [Member] | |||||||||
Land Use Rights [Line Items] | |||||||||
Payments to Acquire Intangible Assets | $ 8,500,000 | 7,930,000 | 51,810 | ||||||
Deposit Assets | 3,010,000 | ¥ 20,000 | |||||||
Dongshan Facility One [Member] | Use Rights [Member] | |||||||||
Land Use Rights [Line Items] | |||||||||
Payments to Acquire Intangible Assets | $ 2,140,000 | ¥ 14,400 |
PREPAYMENTS (Details)
PREPAYMENTS (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Raw material suppliers | $ 8,826,004 | $ 10,797,601 |
Equipment and land use rights purchases | 16,594,987 | 0 |
Total prepayments | $ 25,420,991 | $ 10,797,601 |
PREPAYMENTS (Details Texual)
PREPAYMENTS (Details Texual) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016USD ($) | |
Prepaid Supplies | $ 8,826,004 | $ 10,797,601 | |
Prepaid Expense Related Party Current | 999,527 | $ 0 | |
Dongshan Facility [Member] | Land Use Right Facility [Member] | |||
Payments to Acquire Intangible Assets | 7,930,000 | ¥ 51,810 | |
Dongshan Facility One [Member] | Land Use Right Facility [Member] | |||
Payments to Acquire Intangible Assets | $ 2,140,000 | ¥ 14,400 |
DEFERRED TAX ASSETS AND DEFER64
DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets - noncurrent | ||
Allowance for doubtful accounts | $ 2,137,837 | $ 1,798,894 |
Revenue (net of cost) | 160,766 | 76,719 |
Unpaid accrued expenses | 955,287 | 357,352 |
Warranty | 986,534 | 977,610 |
Deferred tax assets | 4,240,424 | 3,210,575 |
Valuation allowance | 0 | 0 |
Net deferred tax assets - noncurrent | $ 4,240,424 | $ 3,210,575 |
SHORT TERM BANK LOANS (Details)
SHORT TERM BANK LOANS (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Secured | $ 125,380,899 | $ 27,416,376 |
SHORT TERM BANK LOANS (Details
SHORT TERM BANK LOANS (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Nov. 14, 2017 | |
Short-term Debt [Line Items] | |||
Interest expenses | $ 347,817 | ||
Bank Acceptance Notes [Member] | |||
Short-term Debt [Line Items] | |||
Corporate or personal guarantees | $ 56,564,323 | ||
Minimum [Member] | |||
Short-term Debt [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 1.35% | 3.00% | |
Maximum [Member] | |||
Short-term Debt [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.22% | 5.72% | |
Ruili Group, Co., Ltd. [Member] | |||
Short-term Debt [Line Items] | |||
Corporate or personal guarantees | $ 5,850,950 | ||
Ruili Group Co Ltd And Related Parties And Shareholders One [Member] | |||
Short-term Debt [Line Items] | |||
Corporate or personal guarantees | 16,594,227 | ||
Ruili Group Co Ltd And Related Parties And Shareholders Two [Member] | |||
Short-term Debt [Line Items] | |||
Corporate or personal guarantees | 11,478,069 | ||
HangZhou RuiLi Property Development Ltd And Related Parties And Shareholders One [Member] | |||
Short-term Debt [Line Items] | |||
Corporate or personal guarantees | 7,345,964 | ||
HangZhou RuiLi Property Development Ltd And Related Parties And Shareholders Two [Member] | |||
Short-term Debt [Line Items] | |||
Corporate or personal guarantees | 27,547,366 | ||
Short Term Bank Loans [Member] | |||
Short-term Debt [Line Items] | |||
Interest expenses | 2,752,579 | $ 887,097 | |
Accounts receivable pledged as collateral | $ 5,472,169 | $ 4,484,755 | |
Short Term Bank Loans [Member] | Minimum [Member] | |||
Short-term Debt [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 0.90% | ||
Short Term Bank Loans [Member] | Maximum [Member] | |||
Short-term Debt [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.22% |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued payroll | $ 11,063,726 | $ 6,267,794 |
Accrued warranty expenses | 6,576,895 | 6,517,402 |
Other accrued expenses | 7,514,037 | 7,318,196 |
Total accrued expenses | $ 25,154,658 | $ 20,103,392 |
LONG-TERM LOANS (Details)
LONG-TERM LOANS (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Aggregate outstanding principal balance | $ 63,471,308 | $ 0 |
Less: unamortized debt issuance costs | (1,822,053) | 0 |
Less: current portion | (24,266,031) | 0 |
Non-current portion | $ 37,383,224 | $ 0 |
LONG-TERM LOANS (Details 1)
LONG-TERM LOANS (Details 1) | Dec. 31, 2017USD ($) |
2,018 | $ 24,266,031 |
2,019 | 21,638,468 |
2,020 | 15,744,756 |
Thereafter | 0 |
Total | $ 61,649,255 |
LONG-TERM LOANS (Details Textua
LONG-TERM LOANS (Details Textual) | 1 Months Ended | 12 Months Ended | |||||||
Nov. 30, 2017USD ($) | Nov. 16, 2017USD ($) | Nov. 16, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016USD ($) | Nov. 30, 2017CNY (¥) | Nov. 16, 2017CNY (¥) | Nov. 15, 2017 | |
Debt Instrument [Line Items] | |||||||||
Long-term Debt, Gross | $ 63,471,308 | $ 0 | |||||||
Proceeds from Issuance of Long-term Debt | 29,692,975 | 0 | |||||||
Notes Assumed | 29,692,975 | 0 | |||||||
Repayments of Long-term Debt | 3,008,756 | 0 | |||||||
Interest Expense, Debt | 347,817 | ||||||||
Payments of Debt Issuance Costs | 1,767,572 | ||||||||
Deposits on Loan Agreements Deducted from Proceeds from Long Term Loans | 5,196,271 | $ 0 | |||||||
Far Eastern Horizon Co Ltd [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 7.00% | 7.00% | |||||||
Debt Instrument, Term | 42 months | 42 months | |||||||
Payments for Deposits | $ 5,196,271 | ¥ 35,000,000 | |||||||
Long-term Loans [Member] | Far Eastern Horizon Co Ltd [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Lease collateral amount | $ 31,479,075 | ¥ 205,690,574 | |||||||
Interest rate | 8.38% | 8.38% | |||||||
Debt Instrument, Term | 36 months | 36 months | |||||||
Long-term Debt, Gross | $ 30,608,185 | ¥ 200,000,000 | |||||||
Proceeds from Issuance of Long-term Debt | 14,846,488 | ¥ 100,000,000 | |||||||
Notes Assumed | 14,846,487 | 100,000,000 | |||||||
Repayments of Long-term Debt | 1,599,930 | ||||||||
Payments of Debt Issuance Costs | 742,324 | ||||||||
Long-term Loans [Member] | COSCO Shipping Leasing Co Ltd [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Lease collateral amount | $ 36,474,800 | ¥ 238,333,639 | |||||||
Interest rate | 8.50% | 8.50% | 4.31% | ||||||
Debt Instrument, Term | 36 months | ||||||||
Long-term Debt, Gross | $ 35,964,617 | ¥ 235,000,000 | |||||||
Proceeds from Issuance of Long-term Debt | 14,846,487 | 100,000,000 | |||||||
Notes Assumed | 14,846,488 | ¥ 100,000,000 | |||||||
Repayments of Long-term Debt | 1,408,826 | ||||||||
Payments of Debt Issuance Costs | $ 1,025,248 |
RESERVE (Details)
RESERVE (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Statutory Accounting Practices [Line Items] | ||
Statutory surplus reserve fund | $ 17,562,357 | $ 15,129,935 |
Total | $ 17,562,357 | $ 15,129,935 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax [Line Items] | ||
China statutory income tax rate | 25.00% | 25.00% |
Effect of income tax exemptions and reliefs | (10.00%) | (10.00%) |
Effects of additional deduction allowed for R&D expenses | (2.34%) | (2.88%) |
Effects of expenses not deductible for tax purposes | 0.79% | 0.61% |
Other items | 1.41% | 0.54% |
Effective tax rate | 14.86% | 13.27% |
UNITED STATES | ||
Income Tax [Line Items] | ||
Foreign statutory income tax rate | 35.00% | 35.00% |
Valuation allowance recognized with respect to the loss in the company | (35.00%) | (35.00%) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
INCOME TAXES [Abstract] | ||
Current | $ 5,524,868 | $ 3,769,316 |
Deferred | (807,058) | (502,903) |
Total | $ 4,717,810 | $ 3,266,413 |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Line Items] | |||
"High-Tech Enterprise" income tax rate | 15.00% | 15.00% | 15.00% |
US Statutory income tax rate | 25.00% | 25.00% |
NON-CONTROLLING INTEREST IN S75
NON-CONTROLLING INTEREST IN SUBSIDIARIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net income attributable to noncontrolling interest in subsidiaries | $ 2,702,691 | $ 2,135,516 |
Ruili Group [Member] | ||
Net income attributable to noncontrolling interest in subsidiaries | $ 2,702,691 | $ 2,135,516 |
NON-CONTROLLING INTEREST IN S76
NON-CONTROLLING INTEREST IN SUBSIDIARIES (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Noncontrolling Interest [Line Items] | ||
Net income attributable to noncontrolling interest in subsidiaries | $ 2,702,691 | $ 2,135,516 |
Ruili Group Co Ltd [Member] | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest in subsidiary | 10.00% | |
Net income attributable to noncontrolling interest in subsidiaries | $ 2,702,691 | $ 2,135,516 |
OPERATING LEASES WITH RELATED77
OPERATING LEASES WITH RELATED PARTIES (Details) | Dec. 31, 2017USD ($) |
OPERATING LEASES WITH RELATED PARTIES [Abstract] | |
2,018 | $ 321,386 |
2,019 | 321,386 |
2,020 | 321,386 |
2,021 | 321,386 |
2,022 | 321,386 |
Thereafter | $ 0 |
OPERATING LEASES WITH RELATED78
OPERATING LEASES WITH RELATED PARTIES (Details Textual) | 12 Months Ended | ||
Dec. 31, 2017USD ($)m² | Dec. 31, 2017CNY (¥)m² | Dec. 31, 2016USD ($) | |
Operating Leased Assets [Line Items] | |||
Lease expenses | $ | $ 311,776 | $ 716,656 | |
Apartment Buildings [Member] | Ruili Group [Member] | |||
Operating Leased Assets [Line Items] | |||
Annual lease expense | $ 311,776 | ¥ 2,100,000 | |
Manufacturing Plant [Member] | Ruili Group [Member] | |||
Operating Leased Assets [Line Items] | |||
Area of manufacturing plant | m² | 89,229 | 89,229 | |
Annual lease expense | $ 1,293,070 | ¥ 8,137,680 |
WARRANTY CLAIMS (Details)
WARRANTY CLAIMS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Beginning balance at January 1, 2017 | $ 6,517,402 | |
Aggregate increase for new warranties issued during current period | 1,570,290 | $ 2,503,950 |
Aggregate reduction for payments made and effect of exchange rate fluctuation | (1,510,797) | |
Ending balance at December 31, 2017 | $ 6,576,895 | $ 6,517,402 |
WARRANTY CLAIMS (Details Textua
WARRANTY CLAIMS (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Product Warranty Accrual, Warranties Issued | $ 1,570,290 | $ 2,503,950 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
sales | $ 390,522,569 | $ 278,743,122 |
Gross profit | 104,186,202 | 75,390,036 |
OPERATING EXPENSES | ||
Selling and distribution expenses | 39,067,566 | 29,837,757 |
General and administrative expenses | 22,023,338 | 15,206,423 |
Research and development expenses | 11,004,560 | 7,709,533 |
Other operating income, net | 3,039,824 | 555,946 |
Income from operations | 35,130,562 | 23,192,269 |
Interest income | 232,466 | 1,047,667 |
Government grants | 2,264,055 | 832,264 |
Other income | 101,475 | 1,244,078 |
Interest expenses | (3,100,396) | (887,097) |
Other expenses | (2,883,440) | (807,858) |
Income before income tax expense | 31,744,722 | 24,621,323 |
CAPITAL EXPENDITURE | 52,259,319 | 15,889,693 |
DEPRECIATION AND AMORTIZATION | 9,259,516 | 7,239,908 |
TOTAL ASSETS | 582,315,942 | 301,328,124 |
LONG LIVED ASSETS | 126,291,757 | 65,269,052 |
INTERSEGMENT SALES [Member] | ||
Segment Reporting Information [Line Items] | ||
sales | 0 | 0 |
Commercial Vehicles Brake Systems [Member] | ||
Segment Reporting Information [Line Items] | ||
sales | 330,201,227 | 224,213,063 |
Gross profit | 89,355,410 | 63,051,542 |
OPERATING EXPENSES | ||
CAPITAL EXPENDITURE | 44,185,254 | 13,078,806 |
DEPRECIATION AND AMORTIZATION | 7,828,921 | 5,959,168 |
TOTAL ASSETS | 492,348,129 | 248,023,179 |
LONG LIVED ASSETS | 106,779,681 | 53,520,623 |
Commercial Vehicles Brake Systems [Member] | INTERSEGMENT SALES [Member] | ||
Segment Reporting Information [Line Items] | ||
sales | 0 | 0 |
Passenger Vehicles Brake Systems [Member] | ||
Segment Reporting Information [Line Items] | ||
sales | 60,321,342 | 54,530,059 |
Gross profit | 14,830,792 | 12,338,494 |
OPERATING EXPENSES | ||
CAPITAL EXPENDITURE | 8,074,065 | 2,810,887 |
DEPRECIATION AND AMORTIZATION | 1,430,595 | 1,280,740 |
TOTAL ASSETS | 89,967,813 | 53,304,945 |
LONG LIVED ASSETS | 19,512,076 | 11,748,429 |
Passenger Vehicles Brake Systems [Member] | INTERSEGMENT SALES [Member] | ||
Segment Reporting Information [Line Items] | ||
sales | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | May 31, 2016USD ($) | May 31, 2016CNY (¥) |
Contingencies [Line Items] | ||||
Relevant tax amount reserved | $ 745,220 | ¥ 4,560,000 | ||
Tax rate, land use right | 3.00% | 3.00% | ||
Development Zone Facility [Member] | ||||
Contingencies [Line Items] | ||||
Relevant tax amount reserved | $ 2,300,205 | ¥ 15,030,000 | $ 2,300,000 | ¥ 15,000,000 |
Tax rate, land use right | 3.00% | 3.00% | 0.00% | 0.00% |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) | Apr. 01, 2018USD ($) | Apr. 01, 2018CNY (¥) | Nov. 14, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Apr. 02, 2018USD ($) |
Subsequent Event [Line Items] | ||||||
Short-term Debt | $ 126,041,000 | |||||
Repayments of Debt | $ 68,525,000 | |||||
Payments to Fund Long-term Loans to Related Parties | $ 186,885,309 | $ 18,247,384 | ||||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 5.22% | |||||
Scenario, Forecast [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 5.22% | 5.22% | ||||
Shanghai Ruili [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Payments to Fund Long-term Loans to Related Parties | $ 65,918,404 | |||||
Shanghai Ruili [Member] | Scenario, Forecast [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Payments to Fund Long-term Loans to Related Parties | $ 50,810,000 | ¥ 332,000,000 | ||||
Kunshan Yuetu [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Payments to Fund Long-term Loans to Related Parties | $ 1,484,649 | |||||
Kunshan Yuetu [Member] | Scenario, Forecast [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Payments to Fund Long-term Loans to Related Parties | $ 14,845,000 | ¥ 97,000,000 | ||||
Maximum [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.72% | 5.22% | ||||
Minimum [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | 1.35% | ||||
Subsequent Event [Member] | Pledged Accounts Receivable [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Pledged Assets Separately Reported, Finance Receivables Pledged as Collateral, at Fair Value | $ 3,731,000 |
ADDITIONAL INFORMATION-FINANC84
ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | |||
Other current assets | $ 5,555,568 | $ 1,124,608 | |
Total Current Assets | 456,024,185 | 236,059,072 | |
TOTAL ASSETS | 582,315,942 | 301,328,124 | |
Current Liabilities: | |||
Other current liabilities | 2,857,130 | 2,013,943 | |
Total Current Liabilities | 344,640,787 | 138,936,601 | |
Total Liabilities | 382,024,011 | 138,936,601 | |
Stockholders' Equity: | |||
Preferred stock - no par value; 1,000,000 authorized; none issued and outstanding as of December 31, 2017 and 2016 | 0 | 0 | |
Common stock - $0.002 par value; 50,000,000 authorized, 19,304,921 issued and outstanding as of December 31, 2017 and 2016 | 38,609 | 38,609 | |
Additional paid-in capital | (28,582,654) | (28,582,654) | |
Total Stockholders' Equity | 173,165,829 | 139,055,462 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 582,315,942 | 301,328,124 | |
Parent Company [Member] | |||
Current Assets: | |||
Other current assets | 86,828 | ||
Total Current Assets | 86,828 | ||
Investments in subsidiaries | 135,861,575 | ||
TOTAL ASSETS | 135,948,403 | ||
Current Liabilities: | |||
Other current liabilities | 2,921,411 | 2,921,411 | |
Total Current Liabilities | 2,921,411 | 2,921,411 | |
Total Liabilities | 2,921,411 | 2,921,411 | |
Stockholders' Equity: | |||
Preferred stock - no par value; 1,000,000 authorized; none issued and outstanding as of December 31, 2017 and 2016 | 0 | 0 | |
Common stock - $0.002 par value; 50,000,000 authorized, 19,304,921 issued and outstanding as of December 31, 2017 and 2016 | 38,609 | 38,609 | |
Additional paid-in capital | (28,582,654) | ||
Retained earnings | 161,571,037 | ||
Total Stockholders' Equity | 133,026,992 | $ 184,589,266 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 135,948,403 |
ADDITIONAL INFORMATION-FINANC85
ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||
Net income attributable to stockholders | $ 24,324,221 | $ 19,219,394 |
Weighted average common share - Basic | 19,304,921 | 19,304,921 |
Weighted average common share - Diluted | 19,304,921 | 19,304,921 |
EPS - Basic | $ 1.26 | $ 1 |
EPS - Diluted | $ 1.26 | $ 1 |
Parent Company [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Investment income | $ 19,219,637 | |
Financial expenses | 243 | |
Net income attributable to stockholders | $ 19,219,394 | |
Weighted average common share - Basic | 19,304,921 | |
Weighted average common share - Diluted | 19,304,921 |
ADDITIONAL INFORMATION-FINANC86
ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flow from operating activities: | ||
Net income | $ 24,324,221 | $ 19,219,394 |
Adjustments to reconcile net income to net cash used in operating activities : | ||
Net cash used in operating activities | 33,820,649 | 5,427,570 |
Net change in cash and cash equivalents | (3,835,215) | (22,173,673) |
Cash and cash equivalents- beginning of the year | 8,057,155 | 30,230,828 |
Cash and cash equivalents - end of the year | 4,221,940 | 8,057,155 |
Parent Company [Member] | ||
Cash flow from operating activities: | ||
Net income | 19,219,394 | |
Adjustments to reconcile net income to net cash used in operating activities : | ||
Investment in subsidiaries | (19,219,394) | |
Other current liabilities | (80,667) | |
Net cash used in operating activities | (80,910) | |
Net change in cash and cash equivalents | (80,910) | |
Cash and cash equivalents- beginning of the year | 0 | 80,910 |
Cash and cash equivalents - end of the year | $ 0 |
ADDITIONAL INFORMATION-FINANC87
ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Balance | $ 139,055,462 | |
Balance, shares | 19,304,921 | |
Net income | $ 24,324,221 | $ 19,219,394 |
Distribution to controlling shareholders in connection with plant and land use rights exchange with entity under common control | (70,781,668) | |
Balance | $ 173,165,829 | $ 139,055,462 |
Balance, shares | 19,304,921 | 19,304,921 |
Parent Company [Member] | ||
Balance | $ 133,026,992 | $ 184,589,266 |
Net income | 19,219,394 | |
Distribution to controlling shareholders in connection with plant and land use rights exchange with entity under common control | (70,781,668) | |
Balance | 133,026,992 | |
Common Stock [Member] | ||
Distribution to controlling shareholders in connection with plant and land use rights exchange with entity under common control | 0 | |
Common Stock [Member] | Parent Company [Member] | ||
Balance | $ 38,609 | $ 38,609 |
Balance, shares | 19,304,921 | 19,304,921 |
Net income | $ 0 | $ 0 |
Distribution to controlling shareholders in connection with plant and land use rights exchange with entity under common control | 0 | |
Balance | $ 38,609 | $ 38,609 |
Balance, shares | 19,304,921 | 19,304,921 |
Additional paid-in capital [Member] | ||
Distribution to controlling shareholders in connection with plant and land use rights exchange with entity under common control | $ (70,781,668) | |
Additional paid-in capital [Member] | Parent Company [Member] | ||
Balance | $ (28,582,654) | 42,199,014 |
Net income | 0 | 0 |
Distribution to controlling shareholders in connection with plant and land use rights exchange with entity under common control | (70,781,668) | |
Balance | (28,582,654) | (28,582,654) |
Accumulated deficit [Member] | ||
Distribution to controlling shareholders in connection with plant and land use rights exchange with entity under common control | 0 | |
Accumulated deficit [Member] | Parent Company [Member] | ||
Balance | 161,571,037 | 142,351,643 |
Net income | 24,324,221 | 19,219,394 |
Distribution to controlling shareholders in connection with plant and land use rights exchange with entity under common control | 0 | |
Balance | $ 185,895,258 | $ 161,571,037 |