Quarterly report pursuant to sections 13 or 15(d)

CERTAIN RISKS AND CONCENTRATIONS

v2.4.0.8
CERTAIN RISKS AND CONCENTRATIONS
6 Months Ended
Jun. 30, 2013
Risks and Uncertainties [Abstract]  
Concentration Risk Disclosure [Text Block]
 
25.
CERTAIN RISKS AND CONCENTRATIONS
 
 
(a)
Credit risk 
 
As of June 30, 2013 and December 31, 2012, a substantial portion part of the Company’s cash included bank deposits in accounts maintained within the PRC where there is currently no rule or regulation in place for obligatory insurance to cover bank deposits in the event of bank failure. However, the Company does not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.
 
 
(b)
Major customers
 
Customers accounting for 10% or more of the Company's revenues were as follows:
 
China Dredging
 
 
 
For the Three Months Ended
June 30,
 
For the Six Months Ended
June 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CCCC Shanghai Dredging
  Co., Ltd *
 
 
-
 
 
14
%
 
-
 
 
21
%
CCCC Tianjin Dredging Co.,
  Ltd *
 
 
-
 
 
17
%
 
-
 
 
18
%
CCCC Guangzhou Dredging
  Co., Ltd *
 
 
41
%
 
23
%
 
31
%
 
18
%
Guangdong Jindonghai
  Holding Co. Ltd
 
 
-
 
 
10
%
 
17
%
 
-
 
Nanjing Shuili Engineering
  Co., Ltd
 
 
15
%
 
13
%
 
19
%
 
11
%
China Gezhouba Group Co.,
  Ltd
 
 
23
%
 
-
 
 
23
%
 
-
 
 
 
 
79
%
 
77
%
 
90
%
 
68
%
 

* Indicates customers under control of a common parent company
 
The major customer of the CDGC is China Communications Construction Company Ltd (“CCCC”) and its subsidiaries, including CCCC Guangzhou Dredging Co., Ltd, CCCC Shanghai Dredging Co., Ltd, CCCC Tianjin Dredging Co., Ltd, CCCC Second Harbor Engineering Co., Ltd, CCCC Third Harbor Engineering Co., Ltd and CCCC Fourth Harbor Engineering Co., Ltd. For the three months ended June 30, 2013 and 2012, CCCC and its subsidiaries accounted for 42% and 57%, respectively, of the CDGC’s total contract revenue.  For the six months ended June 30, 2013 and 2012, CCCC and its subsidiaries accounted for 31% and 59%, respectively, of the CDGC’s total contract revenue.
 
CCCC is a state-owned enterprise that acts as a general contractor and performs in significant majority of the port infrastructure and dredging activity in the PRC. CCCC and its subsidiaries subcontract a portion of the required dredging services to specialty contractors. CDGC does not have any relationship with these customers.
 
Merchant Supreme
 
 
 
For the Three Months Ended
June 30,
 
For the Six Months Ended
June 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fujian Xinnong Ocean Fisheries
    Development Co., Ltd
 
 
-
 
 
33
%
 
-
 
 
35
%
Fuzhou Haifeng Dafu Ocean
    Fishing Co., Ltd
 
 
-
 
 
10
%
 
-
 
 
18
%
Shenzhen Western Coast Fisherman
    Pier Co., Ltd.
 
 
11
%
 
-
 
 
25
%
 
-
 
 
 
 
11
%
 
43
%
 
25
%
 
53
%
 
(c)
Major suppliers
 
Suppliers accounting for 10% or more of the Company's total purchases were as follows:
 
China Dredging
 
 
 
For the Three Months Ended
June 30,
 
For the Six Months Ended
June 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplier A
 
 
23
%
 
11
%
 
16
%
 
18
%
Supplier B
 
 
-
 
 
18
%
 
-
 
 
16
%
Supplier C
 
 
21
%
 
16
%
 
30
%
 
15
%
Supplier D
 
 
14
%
 
-
 
 
-
 
 
10
%
Supplier F
 
 
13
%
 
11
%
 
20
%
 
10
%
Supplier H
 
 
21
%
 
16
%
 
17
%
 
11
%
 
 
 
92
%
 
72
%
 
83
%
 
80
%
 
CDGC’s VIE, Fujian Service, is dependent on third-party consumable parts manufacturers for all of its supply of dredging consumable parts. For the three months ended June 30, 2013 and 2012, products purchased from the Fujian Service's three largest suppliers accounted for 65% and 50% of product purchases, respectively. For the six months ended June 30, 2013 and 2012, products purchased from the Fujian Service's three largest suppliers accounted for 67% and 49% of product purchases, respectively. Fujian Service is dependent on the ability of its suppliers to provide products on a timely basis and on favorable pricing terms. The loss of certain principal suppliers or a significant reduction in product availability from principal suppliers could have a material adverse effect on Fujian Service. Fujian Service believes that its relationships with its suppliers are satisfactory, and Fujian Service has never experienced inadequate supply from suppliers.
 
Merchant Supreme
 
 
 
For the Three Months Ended
June 30,
 
For the Six Months Ended
June 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PT. Avona Mina Lestari
 
 
41
%
 
31
%
 
49
%
 
22
%
Supplier A
 
 
29
%
 
42
%
 
21
%
 
50
%
 
 
 
70
%
 
73
%
 
70
%
 
72
%