2.4.0.8118 - Disclosure - MONIES HELD BY A LEGAL FIRM AND PROVISION FOR EMPLOYEE BENEFITStruefalsefalse1falsefalsefalseP10_01_2012To06_30_2013http://www.sec.gov/CIK0001242513duration2012-10-01T00:00:002013-06-30T00:00:001true1cgii_MoniesHeldByLegalFirmAndProvisionForEmployeeBenefitsAbstractcgii_falsenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2cgii_MoniesHeldByLegalFirmAndProvisionForEmployeeBenefitsTextBlockcgii_falsenadurationfalsefalsefalsefalsefalsefalsefalsefalseverboseLabel1falsefalsefalse00 <table border="0" style="clear:both;width:100%; table-layout:fixed;"> <tr> <td></td> </tr> </table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif"><b>Note 13 - <u>MONIES HELD BY A LEGAL FIRM AND PROVISION FOR EMPLOYEE BENEFITS</u></b></font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif">On September 26, 2011, the Company’s wholly-owned subsidiary Shenzhen Digital Image Technologies Co., Ltd. (“SDIT”) entered into a Letter of Intent for Share Purchase (the “Acquisition Agreement”) with Li Dongxiang and Zeng Xianguang (together, the “Sellers”) with respect to the shares of Guangzhou Fanyutuo 3D Technology Co., Ltd. (“Guangzhou”), a recently formed start-up company involved in three dimensional technology. Pursuant to the terms of the Acquisition Agreement, the Sellers agreed to sell all of the capital stock of Guangzhou to SDIT in exchange for $<font style=" FONT-SIZE: 10pt">969,587</font> (CNY<font style=" FONT-SIZE: 10pt">6,000,000</font>).</font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif">A Supplemental Letter of Intent for Share Purchase Agreement (“Supplemental Agreement”) was entered into on September 26, 2011.</font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif">Extracts to the Supplemental Agreement are :</font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> <table style="clear:both;MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"></td> <td style="WIDTH: 0.5in"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif"> i)</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif">The Sellers and three non-shareholder employees of Guangzhou guarantee themselves to work for SDIT;</font></div> </td> </tr> </table> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> <table style="clear:both;MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"></td> <td style="WIDTH: 0.5in"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif"> ii)</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif">5 working days after execution of the Supplemental Agreement, <font style=" FONT-SIZE: 10pt">50</font>% of the amount of $969,587 (CNY6,000,000) shall be paid to the Sellers through the legal firm witnessing the transaction;</font></div> </td> </tr> </table> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> <table style="clear:both;MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"></td> <td style="WIDTH: 0.5in"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif"> iii)</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif">5 working days after completion of two years employment by the Sellers and the three non-shareholder employees with SDIT, <font style=" FONT-SIZE: 10pt">30</font>% of the amount of $969,587 (CNY6,000,000) shall be paid to the Sellers through the legal firm witnessing the transaction;</font></div> </td> </tr> </table> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> <table style="clear:both;MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"></td> <td style="WIDTH: 0.5in"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif"> iv)</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif">5 working days after completion of three years employment by the Sellers and the three non-shareholder employees with SDIT, <font style=" FONT-SIZE: 10pt">20</font>% of the amount $969,587 (CNY6,000,000) shall be paid to the Sellers through the legal firm witnessing the transaction;</font></div> </td> </tr> </table> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> <table style="clear:both;MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"></td> <td style="WIDTH: 0.5in"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif"> v)</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif">As the Supplemental Agreement forms part and parcel of the Acquisition Agreement, in accordance with the terms of the Acquisition Agreement, any dispute arising from the Agreement, both parties shall resolve by mutual negotiations or in the event of such negotiations fail, the dispute should be resolved by arbitrations or by Court Action in PRC;</font></div> </td> </tr> </table> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> <table style="clear:both;MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"></td> <td style="WIDTH: 0.5in"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif"> vi)</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif">In the event that any one of the Sellers and the three non-shareholder employees left employment with SDIT during the three years Agreement period, the acquisition price shall not establish.</font></div> </td> </tr> </table> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif; COLOR: black"> M</font><font style="FONT-FAMILY: Times New Roman, Times, Serif">anagement considers that in the event that any one of the Sellers or the three non-shareholder employees terminates employment with SDIT before completion of the three years Agreement period, any payment that had paid to the Sellers under the terms of the Supplemental Agreement will not be repaid back to the Company. The unpaid balance in respect of the remaining Agreement period, shall cease to be payable to the Sellers and that the Acquisition price shall then be reduced in proportion to the number of Sellers and the three non-shareholder employees left employment before completion of the three years Agreement period.</font></div>  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif">Management also considers that the acquisition is in fact to secure three years continuing employment of the Sellers and three non-shareholder employees of Guangzhou by SDIT.</font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif">On September 28, 2011, SDIT paid the full amount of $969,587 (CNY6,000,000) to the legal firm witnessing the transaction under escrow.</font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif">50% of the amount $969,587 i.e. $<font style=" FONT-SIZE: 10pt">484,794</font> (CNY<font style=" FONT-SIZE: 10pt">3,000,000</font>) was then paid to the Sellers following execution of the Supplemental Agreement and that the remaining balance $<font style=" FONT-SIZE: 10pt">484,793</font> (CNY<font style=" FONT-SIZE: 10pt">3,000,000</font>) remains under the custody of the legal firm witnessing the transaction under escrow for future payments to the Sellers in accordance with the terms of the Supplemental Agreement.</font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif">The Company therefore accounts for :</font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> <table style="clear:both;MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"></td> <td style="WIDTH: 35.45pt"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif"> (a)</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif">50% of the amount, $484,794 (CNY3,000,000) that was paid to the Sellers following execution of the Supplemental Agreement as employee benefits and expensed to Consolidated Statement of Operations and Comprehensive Income (Loss);</font></div> </td> </tr> </table> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> <table style="clear:both;MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"></td> <td style="WIDTH: 35.45pt"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif"> (b)</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif">30% of the amount, $<font style=" FONT-SIZE: 10pt">290,876</font> (CNY<font style=" FONT-SIZE: 10pt">1,800,000</font>) is expensed over the two years Agreement period with the corresponding entry credited to provision for employee benefits in the Balance Sheet.</font></div> </td> </tr> </table> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> <table style="clear:both;MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"></td> <td style="WIDTH: 35.45pt"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif"> (c)</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="FONT-FAMILY: Times New Roman, Times, Serif">20% of the amount, $<font style=" FONT-SIZE: 10pt">193,917</font> (CNY<font style=" FONT-SIZE: 10pt">1,200,000</font>) is expensed over the three years Agreement period with the corresponding entry credited to provision for employee benefits in the Balance Sheet.</font></div> </td> </tr> </table> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif">In total, the Company incurred employee benefits of US$<font style=" FONT-SIZE: 10pt">155,638</font> and $<font style=" FONT-SIZE: 10pt">624,531</font> for nine months ended June 30, 2013 and 2012 respectively under the Acquisition Agreement and the Supplemental Agreement.</font></div>  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif">In total, the Company incurred employee benefits of US$<font style=" FONT-SIZE: 10pt">52,325</font> and $<font style=" FONT-SIZE: 10pt">51,524</font> for the three months ended June 30, 2013 and 2012 respectively under the Acquisition Agreement and the Supplemental Agreement.</font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif">As of June 30, 2013 and September 30, 2012, the unamortized balances of employee benefits were $<font style=" FONT-SIZE: 10pt">117,158</font> and $<font style=" FONT-SIZE: 10pt">268,393</font>, respectively.</font></div> </div> falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for the monies that were held by the legal firm and the provision for the employee benefits as reported during the period.No definition available.false0falseMONIES HELD BY A LEGAL FIRM AND PROVISION FOR EMPLOYEE BENEFITSUnKnownUnKnownUnKnownUnKnowntruefalsefalseSheethttp://www.cgii.com/role/MoniesHeldByLegalFirmAndProvisionForEmployeeBenefits12