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LOANS
 9 Months Ended
Sep. 30, 2014
LOANS [Text Block]
8.

LOANS

Short-term loans

Short-term loans consist of the following:

      September 30,2014 (Unaudited)         December31,2013  
  Lender   Interest rate     Maturity date     Balance     Interest rate     Maturity date     Balance  
  Bank of China   Libor+ 2.7% 1     Jun.3, 2015   $ 3,500,000     Libor+ 1.5% 1     Apr.22, 2014   $ 3,500,000  
  Industrial and Commercial Bank of China               -     6.16%     Mar.13, 2014     3,274,000  
  Jiangsu Sheyang Rural Commercial Bank               -     7.80%     Sep.2, 2014     3,274,000  
  Jiangsu Sheyang Rural Commercial Bank   7.80%     Jun.20, 2015     1,625,000                 -  
  Jiangsu Sheyang Rural Commercial Bank   7.80%     Jan.20, 2015     812,500                 -  
  Total             $  5,937,500               $  10,048,000  

Note 1 the effective interest rate was 3.27% and 2.3% as of September 30, 2014 and December 31, 2013, respectively.

All of short-term loans were denominated in RMB or USD for working capital purpose, with weighted average balances of US$9,971,747 and US$5,906,242 ; with weighted average interest rates of 5.72% and 4.84% for nine months ended September 30, 2014 and 2013, respectively, and with weighted average balances of US$11,747,293 and US$7,352,913 ; with weighted average interest rates of 5.14% and 5.05% for the three months ended September 30, 2014 and 2013, respectively.

The Bank of China loans amounting to US$3,500,000 was guaranteed by Shengda Group Co., Limited (“SD Group”), a related party (Note 11), as of September 30, 2014. The Jiangsu Sheyang Rural Commercial Bank loan amounting to US$2,437,500 was guaranteed by Great Shengda.

Current portion of long-term loans
Current portion of long-term loans consist of the following:

      September 30,2014 (Unaudited)           December31,2013        
            Maturity                   Maturity        
  Lender   Interest rate     date     Balance     Interest rate      date     Balance  
  Bank of China             $ -     Libor+ 2.5% 1     Feb.28,2014   $ 4,500,000  

Note 1 the effective interest rate was 3.7% as of December 31, 2013.

The current portion of long-term loans was denominated in USD for working capital purpose, with weighted average balances of US$972,527 and US$9,000,000, with weighted average interest rates of 4.05% and 3.71% for nine months ended September 30, 2014 and 2013, respectively; and with weighted average balance of nil and US$9,000,000, with weighted average interest rates of nil and 3.71% for three months ended September30, 2014 and 2013, respectively.

The loan was pledged with restricted cash amounting to US$5,156,550 as of December 31, 2013.

Long-term loans
Long-term loans consist of the following:

      September30,2014 (Unaudited)           December31,2013        
            Maturity                 Maturity        
  Lender   Interest rate     date     Balance     Interest rate     date     Balance  
  Bank of China   Libor+ 2.3% 1     Feb.17,2016   $ 4,500,000               $   -  

Note 1 the effective interest rate was 3.27% as of September 30, 2014.

The long term loans were denominated in USD for working capital purpose, with weighted average balances of US$3,560,440 and nil, with weighted average interest rates of 3.27% and nil for the nine months ended September 30, 2014 and 2013, respectively; and with weighted average balances of US$4,500,000 and nil, with weighted average interest rates of 3.27% and nil for the three months ended September30, 2014 and 2013.

The loan was pledged with restricted cash amounting to US$4,972,500 as of September 30, 2014. The following table summarizes the unused lines of credit:

      September30,2014 (Unaudited)            December31,2013        
      Starting     Maturity     Facility     Unused     Starting     Maturity     Facility     Unused  
  Lender   date     date     amount     facility     date     date     amount     facility  
  Bank of China             $   -   $   -     Mar.19,2013     Mar.18,2014   $ 13,096,000   $ 8,450,100  
  Bank of China               -     -     Mar.19,2013     Mar.18,2014     8,185,000     8,185,000  
  Bank of China               -     -     Sep.5,2013     Sep.4,2014     13,096,000     11,459,000  
  Bank of China   Oct.8,2014     Sept.21,2015   $ 13,000,000   $ 8,687,500                 -     -  
  Industrial Commercial Bank of China   Nov.15,2012     Nov.15,2014     11,375,000     11,375,000     Nov.15,2012     Nov.15,2014     11,459,000     8,185,000  
  Jiangsu Sheyang Rural Commercial Bank   Mar.25, 2013     Mar.24,2016     3,250,000     3,250,000     Mar.25,2013     Mar.24, 2016     3,274,000     3,274,000  
  Jiangsu Sheyang Rural Commercial Bank   Dec.30,2013     Dec.20,2016     3,250,000     812,500     Mar.30, 2013     Dec.20,2016     3,274,000     -  
  Total             $ 30,875,000   $ 24,125,000               $ 52,384,000   $ 39,553,100  

The facilities of Bank of China and Industrial and Commercial Bank of China were guaranteed by SD Group, a related party, for working capital and general corporate purposes (Note 11).

The facility of Jiangsu Sheyang Rural Commercial Bank was pledged with Shuangsheng’s property and guaranteed by Great Shengda. All the unused facilities can be withdrawn upon demand.