Concentration of Risks

9 Months Ended

Sep. 30, 2013

Risks and Uncertainties [Abstract]

Concentration of Risks

18. Concentration of Risks

All of the Group’s sales and a majority of its expense transactions are denominated in RMB and a significant portion of the Group’s assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Group in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.

As of September 30, 2013, all of the Company’s cash was on deposit at financial institutions in the PRC where there currently is no rule or regulation requiring such financial institutions to maintain insurance to cover bank deposits in the event of bank failure.

For the three months ended September 30, 2013, one customer accounted for 18% of the Company’s total revenues, and for the three months ended September 30, 2012, four customers accounted for 73.6% of the Company’s total revenues. For the nine months ended September 30, 2013 and 2012, one customer accounted for 14.5% and 27.9% of the Company’s total revenues, respectively.

For the three months ended September 30, 2013, 14.1% of the Company’s raw materials came from one supplier and no single supplier accounted for more than 10% of the Company’s total material purchase for the three months ended September 30, 2012. For the nine months ended September 30, 2013, 24.8% of the Company’s raw materials came from two suppliers. For the nine months ended September 30, 2012, no single supplier accounted for more than 10% of the Company’s total raw materials purchase.