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Deferred Government Grants

9 Months Ended

Jun. 30, 2015

12.

Deferred Government Grants

Deferred government grants as of September 30, 2014 and June 30, 2015 consist of the following:

		September 30,			June 30,
		2014			2015
Total government grants	$	24,437,131		$	7,425,099
Less: Current portion		(24,437,131	)		(186,125	)
Non-current portion	$	-		$	7,238,974

In September 2013, the Management Committee of Dalian Economic Zone Management Committee (the “Management Committee”) provided a subsidy of RMB150 million to finance the costs incurred in moving our facilities to Dalian, including the loss of sales while the new facilities were being constructed. During the three and nine months ended June 30, 2015, the Company recognized nil and $23,204,113 as income after offset of the related removal expenditures of $1,007,399. No such income or offset was recognized in fiscal 2014.

On October 17, 2014, the Company received a subsidy of $7,444,989 (RMB46,150,000) pursuant to an agreement with the Management Committee dated July 2, 2013 for costs of land use rights and to be used to construct the new manufacturing site in Dalian. Part of the facilities had been completed and was operated in July 2015 and the Company has initiated amortization on a straight-line basis over the estimated useful lives of the depreciable facilities constructed thereon. The Company expects that the remaining facilities will be completed and put into operation by the end of December 2015. During the three and nine months ended June 30, 2015, the Company offset government grants of $19,901 against depreciation expenses of the Dalian facilities.