2.4.0.8106 - Disclosure - ORGANIZATIONtruefalsefalse1false falsefalseP10_01_2012To06_30_2013http://www.sec.gov/CIK0001242513duration2012-10-01T00:00:002013-06-30T00:00:001true 1us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse0Organization, Consolidation and Presentation Of Financial Statements [Abstract]2false 2us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseverboseLabel1falsefalsefalse00 <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;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: Times New Roman, Times, Serif"><b>Note 1 - <u>ORGANIZATION</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"><font style=" ">Computer Graphics International Inc.</font> (“CGII” or “the Company”) (formerly known as AMP Productions, Ltd.), was incorporated under the laws of the State of Nevada on <font style=" FONT-SIZE: 10pt">February 27, 2003</font>. <font style=" ">China Digital Image Organization Co., Limited</font> (“China Digital”) was incorporated in Hong Kong on <font style=" FONT-SIZE: 10pt">August 5, 2009</font>. China Digital holds <font style=" FONT-SIZE: 10pt">100</font>% of Shenzhen Digital Image Technologies Co., Ltd. (“SDIT”), a company incorporated in Shenzhen, Peoples’ Republic of China (“PRC”), and ultimately holds <font style=" FONT-SIZE: 10pt">100</font>% of Shenzhen Digital Image 3D Design and Development Co., Ltd. (“SHENZHEN 3D DESIGN”) and Guangzhou Digital Image Technologies Co., Ltd, the companies incorporated in Shenzhen and Guangzhou, PRC.</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">Pursuant to a series of transactions completed in October, 2010, China Digital became the holding company of SDIT and SHENZHEN 3D DESIGN (the "Group Reorganization"). In October, 2010, China Digital acquired a <font style=" FONT-SIZE: 10pt">100</font>% interest in SDIT (which directly holds a <font style=" FONT-SIZE: 10pt"> 100</font>% interest in SHENZHEN 3D DESIGN) at a consideration of Chinese Renminbi Yuan("CNY")<font style=" FONT-SIZE: 10pt">2,000,000</font> (equivalent to $<font style=" FONT-SIZE: 10pt">283,265</font>). Prior to and after this acquisition, both China Digital and SDIT were controlled by the same party, Hua Zeng. Hua Zeng already controlled and held a <font style=" FONT-SIZE: 10pt">100</font>% interest in SHENZHEN 3D DESIGN in January, 2007. In August, 2010, SDIT acquired a <font style=" FONT-SIZE: 10pt">100</font>% interest of SHENZHEN 3D DESIGN. Prior to and after this acquisition, both SDIT and SHENZHEN 3D DESIGN were controlled by Hua Zeng.</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">Since China Digital, SDIT and SHENZHEN 3D DESIGN were under common control of the ultimate controlling party, Hua Zeng both before and after the completion of the Group Reorganization, the Group Reorganization has been accounted for using merger accounting. The Consolidated Financial Statements have been prepared on the basis as if China Digital had always been the holding company of SDIT and SHENZHEN 3D DESIGN and the group structure had been in existence throughout the periods ended June 30, 2013 and 2012 as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation”.</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 March 31, 2011, CGII entered into and closed a share purchase and exchange agreement (the “Share Exchange Agreement”) with China Digital, the shareholders of China Digital, and Thomas E. Mills, pursuant to which CGII acquired <font style=" FONT-SIZE: 10pt">100</font>% of the issued and outstanding capital stock of China Digital (the “Share Exchange”) in exchange for (i) <font style=" FONT-SIZE: 10pt"> 14,462,684</font> shares of CGII’s common stock, representing <font style=" FONT-SIZE: 10pt">97</font>% of the increased issued and outstanding stock of CGII, and (ii) payment (“the Cash Component”) of $<font style=" FONT-SIZE: 10pt">2,368,471</font>. The Cash Component was payable in full within <font style=" FONT-SIZE: 10pt">12</font> months after the closing.</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">In connection with the Share Exchange, Thomas E. Mills sold <font style=" FONT-SIZE: 10pt">260,124</font> shares of CGII’s common stock to Truth Giver Group Limited, a company incorporated under the laws of the British Virgin Islands and owned by Hua Zeng and Jing Wang, in exchange for an aggregate payment of $<font style=" FONT-SIZE: 10pt">300,000</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">On completion of the Share Exchange, CGII acquired all of the outstanding issued capital of China Digital. For accounting and financial reporting purposes, the acquisition has been treated as a reverse acquisition of CGII by China Digital. On completion of the reverse acquisition, the prior business of CGII was abandoned and all liabilities of CGII were paid off or assumed by Thomas E. Mills, the former director of CGII. For China Digital, the reverse acquisition is accounted for as a recapitalization. Consequently, the assets and liabilities of China Digital have been brought forward at their book value and no goodwill has been recognized on the reverse acquisition of CGII. The historical financial statements prior to March 31, 2011 are those of China Digital.</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, 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, at that time recently formed start-up company involved in three dimensional technology (“Guangzhou”). 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 CNY<font style=" FONT-SIZE: 10pt">6,000,000</font> (equivalent to $<font style=" FONT-SIZE: 10pt">969,587</font>). There is no prior relationship between the Company and its affiliates and Guangzhou and its affiliates.</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 between Li Dongxiang and Zeng Xianguang (together, the “Sellers”) and three non-shareholder employees of Guangzhou Fanyutuo 3D Technology and SDIT 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: 0px"></td> <td style="WIDTH: 28.35pt"> <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: 0px"></td> <td style="WIDTH: 28.35pt"> <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: 0px"></td> <td style="WIDTH: 28.35pt"> <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: 0px"></td> <td style="WIDTH: 28.35pt"> <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: 0px"></td> <td style="WIDTH: 28.35pt"> <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: 0px"></td> <td style="WIDTH: 28.35pt"> <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">The acquisition of Guangzhou was in essence to secure the long term employment of the Sellers and the three non-shareholder employees to work for SDIT.</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">Guangzhou was a start-up company with minimal assets and liabilities that were considered of no real value. Following the acquisition, Guangzhou was placed in dormancy with no business activities undergoing. In light of the aforesaid, the management considers that the acquisition is not a business combination, as defined under ASC Topic 805, in substance and therefore the purchase consideration is accounted for as employee benefits. The employee benefits so expensed are reported under Selling, general and administrative expenses in the Consolidated Statements of Income and Comprehensive Income (Loss)..</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 August 22, 2012, the Company filed dissolution for Shenzhen Digital Image 3D Design and Development Co., Ltd. (“SHENZHEN 3D DESIGN”) and discontinued its operation.</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">The Company operates in a single reportable segment. The principal activities of the Company are engaged in sales in majority of software promotion related products to customers in the nature of demonstration video and motion pictures using the application of three-dimension vision technology.</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">These Consolidated Financial Statements present the Company and its subsidiaries on a historical basis.</font></div> </div> falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=28200181&loc=SL6228881-111685 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 720 -SubTopic 15 -URI http://asc.fasb.org/subtopic&trid=2122524 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6359566&loc=d3e326-107755 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7668296&loc=d3e288-107754 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2197480 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=18733093&loc=d3e5614-111684 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 915 -SubTopic 235 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6472506&loc=d3e38932-110933 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 852 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2209116 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 272 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6373374&loc=d3e70478-108055 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2134480 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2122150 false0Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]falseORGANIZATIONUnKnownUnKnownUnKnownUnKnowntruefalsefalseSheethttp://www.cgii.com/role/Organization12