| Related Party Transactions Disclosure [Text Block] |
NOTE 11 – RELATED PARTIES TRANSACTIONS The Company conducted transactions with certain of the Company’s officers and directors, as well as with the following related parties:
| Name of related parties |
| Relationship |
| Xinrong Zhuo
|
| CEO, Director and major shareholder of the Company, a Family Member*
|
| Ping Lin
|
| Spouse of Xinrong Zhuo, a Family Member and shareholder of Hong Long
|
| Panxing Zhuo
|
| Father of Xinrong Zhuo, a Family Member
|
| Honghong Zhuo
|
| Shareholder of Pingtan Fishing,daughter of Xinrong Zhuo and a Family Member
|
| Qing Lin
|
| Brother-in-law of Xinrong Zhuo, a Family Member
|
| Longfei Zhuo
|
| Cousin of Xinrong Zhuo
|
| Sunqiang Zhou
|
| Brother-in-law of Xinrong Zhuo, a Family Member
|
| Cheng Chen
|
| Cousin of Xinrong Zhuo, a Family Member and shareholder of Hong Long
|
| Xiaojie Wu
|
| Brother-in-law of Xinrong Zhuo
|
| Xiaoqin Xu
|
| An employee of an affiliate company
|
| Xiaomei Yang
|
| An employee of the Company and niece of Xinrong Zhuo
|
| Xiaofang Zhuo
|
| Cousin of Xinrong Zhuo
|
| Longhua Zhuo
|
| Sister of Xinrong Zhuo
|
| Zhiyan Lin
|
| Shareholder and legal representative of Pingtan Fishing, a Family Member
|
| Fujian Yihai Investment Co., Ltd.
|
| An affiliate company majority owned by Longjie Zhuo, sibling of Xinrong Zhuo
|
| Fuzhou Haifeng Dafu Ocean Fishing Co., Ltd.
|
| An affiliate company owned by Longfei Zhuo and Honghong Zhuo
|
| Fujian Lutong Highway Engineering Construction Co., Ltd.
|
| An affiliate company majority owned by Xiaojie Wu, brother-in-law of Xinrong Zhuo
|
| Name of related parties | | Relationship |
| Fujian Haiyi International Shipping Agency Co., Ltd. | | An affiliate company to which the Company acted as a trustee equity owner. Haiyi International is ultimately majority owned and controlled by Sunqiang Zhou |
| Fujian Xinnong Ocean Fisheries Development Co., Ltd. | | An affiliate company to which the Company acted as a trustee equity owner. Xinnong is ultimately owned and controlled by Xiaojie Wu |
| Fuzhou Haoyouli Fisheries Development Co., Ltd. | | An affiliate company to which the Company acted as trustee equity owner. Haoyouli is ultimately owned and controlled by Sunqiang Zhou |
| Fuzhou Honglong Ocean Fishery Co., Ltd. (“Hong Long”) | | An affiliate company majority owned and controlled by Ping Lin |
| Fujian Province Ocean Fishery Co., Ltd. | | An affiliate company majority owned and controlled by Fuzhou Honglong Ocean Fishery Co., Ltd. |
| PT. Avona Mina Lestari | | An affiliate company controlled by Xinrong Zhuo family domiciled in Indonesia, engaged in fishing base management and fishing vessel service |
| PT. Dwikarya Reksa Abadi | | An affiliate company controlled by Xinrong Zhuo family domiciled in Indonesia, engaged in fishing base management and fishing vessel service |
| Haifeng Dafu Enterprise Company Limited | | An affiliate company ultimately controlled by Xinrong Zhuo and domiciled in the Hong Kong Special Administrative Region of the PRC (“Hong Kong”) |
| Hai Yi Shipping Limited | | An affiliate company ultimately controlled by Xinrong Zhuo and domiciled in Hong Kong Administrative Region of the PRC (“Hong Kong”) |
| China Communication Materials Central and South Co., Ltd. | | An affiliate company majority-owned by Fujian Lutong Highway Engineering |
| Fujian International Trading and Transportation Co., Ltd. | | An affiliate company owned by Yihai Investment and Longhao Zhuo, sibling of Xinrong Zhuo and a Family Member |
| Fuzhou Dongxing Longju Real Estate Co., Ltd. | | An affiliate company owned by Xinrong Zhuo |
| Shenzhen Western Coast Fisherman Pier Co., Ltd. | | An affiliate company owned by Xinrong Zhuo |
| Pingtan Heshun Fuel Co., Ltd. | | An affiliate company under Xinrong Zhuo’s common control |
| Fuzhou Hairong Trading Co., Ltd. | | An affiliate company under Xinrong Zhuo’s common control |
| Hong Fa Shipping Limited | | An affiliate company ultimately owned by Xinrong Zhuo and domiciled in Hong Kong Administrative Region of the PRC (“Hong Kong”) |
* Family Member: Pursuant to a Family Agreement executed on November 23, 2004, among Xinrong Zhuo and certain of his family members, Xinrong Zhuo is the sole decision maker of Pingtan Fishing and is responsible for all of Pingtan Fishing’s operation and management, including financial management. The person who subjects to this Family Agreement is called Family Member.
Prepaid expense – related parties At September 30, 2014 and December 31, 2013, prepaid expense – related parties consisted of the following:
| | | September 30, 2014 | | December 31, 2013 | |
| | | | | (As Restated) | |
| Prepaid fuel cost to Hai Yi Shipping Limited | | $ | 1,668,242 | | $ | - | |
| Prepaid fuel cost to Haifeng Dafu Enterprise | | | 1,439,600 | | | - | |
| | | $ | 3,107,842 | | $ | - | |
Deferred expense – related parties At September 30, 2014 and December 31, 2013, deferred expense – related parties amount consisted of the following:
| | | September 30, | | December 31, | |
| | | 2014 | | 2013 | |
| | | | | (As Restated) | |
| Prepaid fishing licenses application fee to PT. Avona Mina Lestari | | $ | 448,211 | | $ | - | |
| Prepaid fishing licenses application fee to Hong Long | | | 742,340 | | | - | |
| Deferred vessel maintenance service charge - PT. Avona Mina Lestari | | | 416,281 | | | - | |
| Deferred vessel maintenance service charge - Hong Long | | | 629,456 | | | - | |
| | | $ | 2,236,288 | | $ | - | |
The above mentioned deferred vessel maintenance service charge will be amortized over the rest of the corresponding service periods and the Company reflects the amortization of deferred vessel maintenance service fee in cost of revenue. PT. Avona Mina Lestari and Hong Long act as agent to apply fishing licenses for the Company and pay the related fishing licenses application fee on behalf of the Company. Therefore, the Company either prepays or reimburses them for fishing licenses application fee paid on behalf of the Company. Accounts payable - related parties At September 30, 2014 and December 31, 2013, accounts payable - related parties amount consisted of the following:
| Name of related parties | | September 30, 2014 | | December 31, 2013 | |
| | | | | (As Restated) | |
| PT. Avona Mina Lestari | | $ | 2,443,810 | | $ | 1,967,151 | |
| Hong Long | | | 1,348,821 | | | 6,214,491 | |
| Hai Yi Shipping Limited | | | - | | | 251,341 | |
| Haifeng Dafu Enterprise Company Limited | | | - | | | 377,216 | |
| Hong Fa Shipping Limited | | | 551,183 | | | 4,996,031 | |
| Zhiyan Lin | | | - | | | 1,375 | |
| | | $ | 4,343,814 | | $ | 13,807,605 | |
From time to time, PT. Avona Mina Lestari and Hong Long made payments to various unrelated third parties on behalf of the Company. At September 30, 2014 and December 31, 2013, the Company owed PT. Avona Mina Lestari and Hong Long $3,792,631 and $8,181,642, respectively. These advances are short-term in nature, non-interest bearing, unsecured and payable on demand. The rest of Accounts payable – related parties are primarily comprised of payable for service charge. These accounts payable – related parties amounts are short-term in nature, non-interest bearing, unsecured and payable on demand. Due to related parties Certain of the Company’s officers and directors, from time to time, have provided advances to the Company for working capital purpose. These advances are short-term in nature, non-interest bearing, unsecured and payable on demand. At September 30, 2014 and December 31, 2013, the due to related parties amount consisted of the following:
| | | September 30, 2014 | | December 31, 2013 | |
| | | | | (As Restated) | |
| Advance from Xinrong Zhuo | | $ | 650,000 | | $ | - | |
| Accrued compensation for Xinrong Zhuo | | | 3,348 | | | - | |
| Accrued compensation for Roy Yu | | | 20,000 | | | - | |
| | | $ | 673,348 | | $ | - | |
Sales to related party During the three and nine months ended September 30, 2014 and 2013, sales to related party were as follows:
| | | Three Months Ended September | | Nine Months Ended | |
| | | 30, | | September 30, | |
| | | 2014 | | 2013 | | 2014 | | 2013 | |
| | | | | (As Restated) | | | | (As Restated) | |
| Sale of frozen fish and other marine catches to Shenzhen Western Coast Fisherman Pier Co., Ltd | | $ | - | | $ | 32,615 | | $ | - | | $ | 10,338,269 | |
Purchase from related parties
During the three and nine months ended September 30, 2014 and 2013, purchase from related parties was as follows:
| | | Three Months Ended September | | Nine Months Ended | |
| | | 30, | | September 30, | |
| | | 2014 | | 2013 | | 2014 | | 2013 | |
| | | | | (As Restated) | | | | (As Restated) | |
| Purchase of fuel, fishing nets and other on board consumables | | | | | | | | | | | | | |
| from PT. Avona Mina Lestari | | $ | - | | $ | 4,080,300 | | $ | - | | $ | 15,696,740 | |
| from Hong Fa Shipping Limited | | | 7,740,333 | | | - | | | 27,957,529 | | | - | |
| from Haifeng Dafu Enterprise Co., Ltd. | | | 29,491 | | | - | | | 29,491 | | | - | |
| from Hai Yi Shipping Ltd. | | | 254,605 | | | - | | | 254,605 | | | - | |
| from PT. Dwikarya Reksa Abadi | | | - | | | 752,850 | | | - | | | 752,850 | |
| | | | 8,024,429 | | | 4,833,150 | | | 28,241,625 | | | 16,449,590 | |
| | | | | | | | | | | | | | |
| Purchase of vessel maintenance service | | | | | | | | | | | | | |
| from PT. Avona Mina Lestari | | | 1,260,652 | | | 1,099,929 | | | 3,581,161 | | | 2,415,303 | |
| from PT. Dwikarya Reksa Adadi | | | 1,400,840 | | | - | | | 3,955,437 | | | - | |
| | | | 2,661,492 | | | 1,099,929 | | | 7,536,598 | | | 2,415,303 | |
| Purchase of transportation service | | | | | | | | | | | | | |
| from Fuzhou Honglong Ocean Fishery Co., Ltd. | | | 1,735,365 | | | - | | | 7,770,602 | | | - | |
| from Haifeng Dafu Enterprise Company Limited | | | 456,717 | | | 539,144 | | | 1,987,658 | | | 2,263,004 | |
| from Hai Yi Shipping Limited | | | 159,220 | | | - | | | 929,919 | | | 735,890 | |
| from Hong Fa Shipping Limited | | | 563,268 | | | 1,061,852 | | | 2,049,184 | | | 2,231,917 | |
| from PT. Avona Mina Lestari | | | - | | | - | | | - | | | 35,149 | |
| | | | 2,914,570 | | | 1,600,996 | | | 12,737,363 | | | 5,265,960 | |
| Purchase of Indonesia vessel agent service | | | | | | | | | | | | | |
| from PT. Avona Mina Lestari (1) | | | 381,127 | | | 248,479 | | | 1,124,531 | | | 593,516 | |
| from PT. Dwikarya Reksa Abadi | | | 335,392 | | | - | | | 989,581 | | | - | |
| | | $ | 716,519 | | $ | 248,479 | | $ | 2,114,112 | | $ | 593,516 | |
(1). PT. Avona Mina Lestari and PT. Dwikarya Reksa Abadi act as Pingtan Fishing’s agent to apply and renew Indonesia fishing licenses and Pingtan Fishing pays the agent service fee to them. Operating lease On July 31, 2012, Pingtan Fishing entered into a lease for office space with Ping Lin (the “Office Lease”). Pursuant to the Office Lease, annual payments of approximately $14,000 (RMB 84,000) are due for each year of the term. The term of the Office Lease is 3 years and expires on August 1, 2015. For the three months ended September 30, 2014 and 2013, rent expense related to the Office Lease amounted approximately $3,000. For the nine months ended September 30, 2014 and 2013, rent expense related to the Office Lease amounted approximately $10,000. Future minimum rental payments required under the Office Lease is as follows:
| Twelve-month period Ending September 30: | | Amount | |
| 2015 | | $ | 11,376 | |
Rental and related administrative service agreement On July 1, 2013, the Company entered into a service agreement with Hai Yi Shipping Limited that provides the Company a portion of use of premises located in Hong Kong as office and provides related administrative service (the “Service Agreement”). Pursuant to the Service Agreement, monthly payments of approximately $38,000 (HK$298,500) are due for each month of the term. The term of the Service Agreement is 1.5 years and expires on December 31, 2014. For the three months ended September 30, 2014 and 2013, rent expense and corresponding administrative service charge related to the Service Agreement amounted to approximately $115,000. For the nine months ended September 30, 2014 and 2013, rent expense and corresponding administrative service charge related to the Service Agreement amounted to approximately $346,000 and $115,000, respectively.
Future minimum rental and related administrative service charge payment required under the Service Agreement is as follows:
| Twelve-month periods ending September 30: | | Amount | |
| 2014 | | $ | 115,340 | |
|