SHARE BASED PAYMENTS

12 Months Ended

Sep. 30, 2011

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 8 - SHARE BASED PAYMENTS

On April 19, 2011, the Company issued 1,341,894 shares of the Company’s common stock to Well Trend, an independent party, in exchange for certain consulting services pursuant to the terms of a consultancy agreement dated September 25, 2010 between Well Trend and China Digital (“Consultancy Agreement”).  The consultancy services are to be performed for three years after signing the Consultancy Agreement.  The shares were fully vested and not subject to forfeiture when issued. The fair value of the shares issued was $0.763 per share (adjusted for the effect on 1-for-2.18 reverse stock split) and the total fair value of the shares issued was $1,023,865.  The fair value of the shares issued per share was based on the quoted market price of CGII’s shares. The total fair value of the shares issued would be recognized as share-based payment expense over the period that the consultancy services are performed.  For the years ended September 30, 2011 and 2010, the Company amortized share-based payment expenses of $346,123 and $Nil respectively. The unrecognized share-based payment expense of $677,742 as of September 30, 2011 (2010 : Nil) will be amortized up to September 2013.  There is no tax benefit related to the share-based payment expense recognized.

On June 24, 2011, the Company signed an employment agreement with Yongqing Ma pursuant to which the Company agreed to issue to Yongqing Ma 40,000 shares of its restricted common stock on each of June 30, 2011, 2012 and 2013 (totaling 120,000 shares), as partial remuneration to Yongqing Ma for acting as the chief financial officer of the Company.  The fair value of the shares issued was $1.01 per share at the grant date and the total fair value based on grant date fair value of the 120,000 shares issued is $121,200.  The fair value of the shares issued per share is based on the quoted market price of CGII’s shares.  As of September 30, 2011, 40,000 shares with a grant date fair value of $40,400 were vested.  The remaining 80,000 shares are unvested.  For the years ended September 30, 2011 and 2010, the Company recognized $56,123 and $Nil, respectively, as share-based payment expense.  The total cost related to non-vested shares not yet recognized as of September 30, 2011 was $65,077(2010 : Nil) and will be recognized and accounted for as separate awards based on the grant date value of the shares to be issued in each tranche over the requisite service period up to June 2013.

The Company therefore recognized share-based payment expenses to non-employees and employees in the aggregate amounts of $402,246 and $Nil for the years ended September 30, 2011 and 2010, respectively.