6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549  

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

For the month of June 2016

Commission File Number: 001-35755

Delta Technology Holdings Limited

16 Kaifa Avenue

Danyang, Jiangsu, China 212300

Tel: +86 511-8673-3102
(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  þ Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨ No  þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_______________.

Results of Operations and Financial Condition

Following are the unaudited financial results for the six months ended December 31, 2015, 2014 and 2013 of Delta Technology Holdings Limited.

DELTA TECHNOLOGY HOLDINGS LIMITED

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements for the Six Months Ended December 31, 2015, 2014 and 2013 (Unaudited)	Pages
Consolidated Balance Sheets as at December 31, 2015 and June 30, 2015	F-2
Consolidated Statements of Operations and Comprehensive Income for the Six Months Ended December 31, 2015, 2014 and 2013	F-3
Consolidated Statements of Shareholders’ Equity for the Six Months Ended December 31, 2015	F-4
Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2015, 2014 and 2013	F-5
Notes to Unaudited Consolidated Financial Statements	F-6–F-30

F-1

DELTA TECHNOLOGY HOLDINGS LIMITED

Consolidated Balance Sheets

as AT DECEMBER 31, 2015 AND June 30, 2015

	31 December 2015		30 June 2015
	(Unaudited)		(Audited)
ASSETS
Current assets
Cash and cash equivalents	$	567,891	$	217,612
Restricted cash		60,420		26,552,715
Trade and other receivables		105,632,181		120,374,988
Inventories		10,962,042		9,751,596
	$	117,222,534	$	156,896,911
Non-current assets
Property, plant and equipment	$	60,541,933	$	65,260,454
Land use rights		2,189,287		2,833,833
Deferred tax assets		1,514,669		733,588
	$	64,245,889	$	68,827,875
Total assets	$	181,468,423	$	225,724,786
LIABILITIES
Current liabilities
Trade and other payables	$	5,761,743	$	45,279,369
Advances from customers		-		2,233,691
Bank borrowings		78,005,326		73,986,211
Income tax payables		195,590		962,072
Deferred tax liabilities		1,886,226		1,948,948
Dividends payable		35,000,000		35,000,000
Warrants liabilities		708,338		7,906,529
	$	121,557,223	$	167,316,820
Total liabilities	$	121,557,223	$	167,316,820
Capital and reserves
Ordinary shares, $0.0001 par value per share, 150,000,000 shares authorized 9,618,852 and 8,720,994 shares issued and outstanding at December 31, 2015 and June 30, 2015, respectively.	$	962	$	872
Preferred shares, par value $0.0001 per share; 5,000,000 shares authorized; none issued or outstanding		-		-
Additional paid-in capital		45,539,260		41,427,773
Statutory reserves		7,180,500		7,180,500
Retained earnings		7,115,965		(206,982	)
Accumulated other comprehensive income		74,513		10,005,803
Total equity	$	59,911,200	$	58,407,966
Total liabilities and equity	$	181,468,423	$	225,724,786

See notes to consolidated financial statements.

F-2

DELTA TECHNOLOGY HOLDINGS LIMITED

Consolidated Statements of Operations and Comprehensive Income

For THE six MONTHS ENDED DECEMBER 31, 2015, 2014 ANd 2013

	Six Months Ended December 31,
	2015			2014			2013
	(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	30,747,959		$	117,670,355		$	88,651,621
Cost of sales		(26,000,180	)		(107,343,838	)		(79,713,476	)
Gross profit		4,747,779			10,326,517			8,938,145
Operating expenses:
Selling expenses		(885,804	)		(1,363,164	)		(1,356,428	)
General and administrative expenses		(2,332,017	)		(2,686,008	)		(1,644,580	)
Total operating expenses		(3,217,821	)		(4,049,172	)		(3,001,008	)
Other income (expenses):
Interest expenses		(2,027,843	)		(2,416,950	)		(2,014,433	)
Interest income		375,634			2,008,182			1,028,593
Change in fair value of convertible bonds		-			-			329,862
Change in fair value of warrants		7,198,191			-			-
Other gains (loss) - net		21,688			(421,381	)		-
Total other income (expenses)		5,567,670			(830,149	)		(655,978	)
Income before income taxes		7,097,628			5,447,196			5,281,159
Income taxes		225,319			(1,474,052	)		(1,323,757	)
Net income	$	7,322,947		$	3,973,144		$	3,957,402
Other comprehensive income
Foreign currency translation adjustments		(9,931,290	)		1,478,821			746,216
Total other comprehensive income		(9,931,290	)		1,478,821			746,216
Comprehensive (loss) income	$	(2,608,343	)	$	5,451,965		$	4,703,618
Earnings per share attributable to Equity holders of the Company
- Basic	$	0.79		$	0.67		$	0.87
- Diluted	$	0.79		$	0.67		$	0.87
Weighted average shares used in calculating Earnings per ordinary share
- Basic		9,323,108			5,921,144			4,560,000
- Diluted		9,323,108			5,921,144			4,560,000

See notes to consolidated financial statements.

F-3

DELTA TECHNOLOGY HOLDINGS LIMITED

Consolidated Statements of Shareholders’ Equity

For THE six MONTHS ENDED DECEMBER 31, 2015 AND THE YEAR ENDED JUNE 30, 2015

												Accumulated
					Additional							other
	Share capital				paid-in		Statutory		Retained			comprehensive
	Ordinary share		Amount		capital		reserves		Earnings			income			Total
Balance as of July 1, 2014		4,560,000		456		8,852,257		6,196,949		34,370,050			6,039,662			55,459,374
Dividends distribution		-		-		-		-		(35,000,000	)		-			(35,000,000	)
Reverse acquisition		2,337,059		234		32,575,516		-		-			-			32,575,750
Exercise of warrants		1,823,935		182		-		-		-			-			182
Net income for the year		-		-		-		-		1,406,519			-			1,406,519
Foreign currency translation adjustment		-		-		-		-		-			3,966,141			3,966,141
Appropriation to statutory reserves		-		-		-		983,551		(983,551	)		-			-
Balance as of June 30, 2015		8,720,994		872		41,427,773		7,180,500		(206,982	)		10,005,803			58,407,966
Balance as of July 1, 2015		8,720,994		872		41,427,773		7,180,500		(206,982	)		10,005,803			58,407,966
Exercise of warrants		897,858		90		4,111,487		-		-			-			4,111,577
Net income for the year		-		-		-		-		7,322,947			-			7,322,947
Foreign currency translation adjustment		-				-		-		-			(9,931,290	)		(9,931,290	)
Balance as of December 31, 2015 (Unaudited)		9,618,852		962		45,539,260		7,180,500		7,115,965			74,513			59,911,200

See notes to consolidated financial statements.

F-4

DELTA TECHNOLOGY HOLDINGS LIMITED

Consolidated Statements of Cash Flows

For THE six MONTHS ENDED DECEMBER 31, 2015, 2014 AND 2013

	Six Months Ended December 31,
	2015			2014			2013
	(Unaudited)			(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net income		7,322,947			3,973,144			3,957,402
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Change in fair value of warrants		(7,198,191	)		-			-
Depreciation of property and  Equipment		3,399,115			3,186,954			2,102,377
Amortization of land use rights		33,971			44,163			26,516
Gain on disposals of property, plant and equipment		4,105			7,188			-
Gain on disposals of land use rights		5,589			-			-
Deferred income taxes		(780,484	)		252,566			138,261
Allowance for doubtful accounts		1,232,348			361,657			178,310
Changes in assets and liabilities, net of effects of acquisitions and disposals:
Trade and other receivables		8,292,162			12,335,401			(1,723,644	)
Inventories		(1,832,169	)		(575,757	)		(552,922	)
Trade and other payables		(35,788,033	)		(7,323,770	)		(6,595,588	)
Advances from customers		(4,325,243	)		1,781,769			(320,908	)
Income tax payables		(728,950	)		1,030,716			51,396
Net cash provided by (used in) operating activities		(30,362,833	)		15,074,031			(2,738,800	)
Cash flows from investing activities:
Acquisitions of
- Land use rights		-			-			(481,195	)
- Property, plant and equipment and construction in progress		(2,496,996	)		(3,898,468	)		(14,370,596	)
Disposal of land use right		479,022			-			-
Net cash (used in) investing activities		(2,017,974	)		(3,898,468	)		(14,851,791	)
Cash flows from financing activities:
Proceeds from bank borrowings		63,393,347			61,202,282			86,629,884
Repayment of bank borrowings		(55,392,904	)		(68,290,506	)		(64,362,209	)
Proceeds from escrow account		-			5,200,000			-
Change in restricted cash		25,599,849			(12,210,324	)		(5,922,840	)
Net cash provided by (used in) financing activities		33,600,292			(14,098,548	)		16,344,835
Effect of exchange rate changes on cash		(869,206	)		995,589			804,875
(Decrease) increase in cash and cash equivalents		350,279			(1,927,396	)		(440,881	)
Cash and cash equivalents at beginning of period		217,612			9,045,950			3,946,136
Cash and cash equivalents at end of period	$	567,891		$	7,118,554		$	3,505,255
Supplemental disclosures of cash flow information
Interest paid	$	2,027,843		$	2,416,950		$	2,014,433
Tax paid	$	555,166		$	1,198,021		$	1,433,715

See notes to consolidated financial statements.

F-5

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 1 - Organization and Business Operations

Delta Technology Holdings Limited (formerly known as CIS Acquisition Limited, the “Company,” or “Delta Technology,” or “we”) was formed on November 28, 2011, under the laws of the British Virgin Islands. We were formed to acquire, through a merger, stock exchange, asset acquisition, stock purchase or similar acquisition transaction, one or more operating businesses. Although we were not limited to a particular geographic region or industry, we intended to focus on operating businesses with primary operations in Russia and Eastern Europe. We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act.

On December 21, 2012, our IPO of 4,000,000 units was consummated at a public offering price of $10.00 per unit, generating gross proceeds of $40,000,000. Each unit consists of one callable Class A Share, par value $0.0001 per share, and one redeemable warrant. Each redeemable warrant included in the units entitles the holder to purchase one ordinary share at a price of $10.00. Immediately prior to the consummation of the IPO, we completed a private placement of 4,500,000 warrants at a price of $0.75 per warrant, for an aggregate purchase price of $3,375,000, to our founding shareholders and their designees. We sold to the underwriters of the IPO, as additional compensation, an aggregate of 136,000 Class A Shares for $2,720. A total of $41,600,000, which included a portion of the $3,375,000 of proceeds from the private placement of warrants to the founding shareholders and their designees, was placed in trust (the “Trust Account”) pending the completion of our initial acquisition transaction. On March 18, 2012, the ordinary shares and warrants underlying the units sold in the IPO began to trade separately.

On September 16, 2014, a Stock Purchase Agreement (the “Purchase Agreement”) was entered into by and among Delta Technology, Elite Ride Limited, a British Virgin Islands corporation (“Elite”), Delta Advanced Materials Limited, a Hong Kong corporation (“Delta”) and the shareholders of Elite (the “Elite Shareholders”). Upon closing of the Purchase Agreement on September 19, 2014, Delta Technology acquired all of the shares of Elite from Elite Shareholders in exchange for the issuance to Elite Shareholders an aggregate of 6,060,000 ordinary shares, of which 4,560,000 shares were issued at closing and 1,500,000 shares (“Earnout Payment Shares”) are held in escrow and will be released upon meeting of certain performance targets as specified in the Purchase Agreement (the “Acquisition”).

F-6

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 1 - Organization and Business Operations (Continued)

The Earnout Payment Shares, if any, will be issued as follows: (a) 500,000 shares shall be issued if the Company achieves Adjusted Net Income (as defined in the stock purchase agreement) of at least $8 million for the period starting July 1, 2014 and ending June 30, 2015; (b) 500,000 shares shall be issued if the Company achieves Adjusted Net Income of at least $9.2 million for the period starting July 1, 2015 and ending June 30, 2016; (c) 500,000 shares shall be issued if the Company achieves Adjusted Net Income of at least $10.6 million for the period starting July 1, 2016 and ending June 30, 2017 (collectively, the “Net Income Targets”). Further, during the thirteen (13) months post-closing, all material acquisitions made by the Company must be accretive to Company earnings. The Net Income Targets are to be met on an all-or-nothing basis, and there shall be no partial awards.

As a result of the consummation of the Acquisition, Elite is now our wholly subsidiary. Elite was incorporated under British Virgin Islands law on September 13, 2014 solely in contemplation of the Acquisition. It is currently the holding company of all the shares of Delta Advanced Materials Limited, a Hong Kong corporation (“Delta”), which, in turn, holds all the equity interests in four operating subsidiaries in the PRC: Jiangsu Yangtze Delta Fine Chemical Co., Ltd (“Jiangsu Delta”), Jiangsu Zhengxin New Material Research and Development Co., Ltd (“Jiangsu Zhengxin”), Jiangsu Delta Logistics Co., Ltd (“Jiangsu Logistics”), and Binhai Deda Chemical Co., Ltd (“Binhai Deda”) (collectively, the “PRC Subsidiaries”).

The Acquisition was accounted for as a reverse acquisition in accordance with US GAAP. Under this method of accounting, Delta Technology was treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Elite comprising the ongoing operations of the combined entity, Elite senior management comprising the senior management of the combined company, and the former holders of Elite having a controlling interest in terms of the voting power of the combined entity. In accordance with guidance applicable to these circumstances, the Acquisition was considered to be a capital transaction in substance. Accordingly, for accounting purposes, the Acquisition was treated as the equivalent of Elite issuing stock for the net assets of Delta Technology, accompanied by a recapitalization. The net assets of Delta Technology will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Acquisition will be those of Elite.

Delta (formerly known as China Deltachem Holdings Limited) was incorporated in Hong Kong on June 17, 2010. The address of its registered office is Suite D, 19th Floor, Ritz Plaza, 122 Austin Road, Hong Kong. The reporting currency of Delta is the United States Dollar (“$”).The principal activity of Delta is investment holding andcurrently operates four wholly-owned subsidiaries in the People’s Republic of China (“PRC”): Jiangsu Delta, Jiangsu Zhengxin R&D, Jiangsu Logistics, and Binhai Deda. Jiangsu Delta is the principal operating subsidiary of the Company and is engaged in the production of fine specialty chemicals.

F-7

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 1 - Organization and Business Operations (Continued)

On June 15, 2007, Jiangsu Delta was established by S&S International Investment Holding (HK) Limited (“S&S International”), a Hong Kong based investment holding company, as a wholly foreign-owned enterprise (with an initial registered capital of US$42 million, which was later reduced to US$ 28.8 million) located in Zhenjiang City, Jiangsu Province, the PRC.

Pursuant to a share transfer agreement entered into on April 13, 2008, Mr. Xin Chao acquired the entire equity interest in Jiangsu Delta from S&S International through Zhengxin International Investment Limited, a Hong Kong corporation (“Zhengxin International”) and became the controller of Jiangsu Delta since then. On May 21, 2008, the acquisition of Jiangsu Delta by Zhengxin International was approved by the Jiangsu Foreign Trade and Economic Cooperation Department in accordance with “The Approval of Alteration of Equities in and Amendment of the Articles of Association of Jiangsu Yantze River Delta Fine Chemical Co, Ltd.” issued by the same authority.

As part of corporate restructuring, Delta acquired Jiangsu Delta for a consideration of $28.8 million pursuant to a sale and purchase agreement dated May 20, 2010. Delta, formerly known as China Deltachem Holdings Limited, as a pure investment holding vehicle controlled by Mr. Chao had an initial issued and paid-up share capital of HK$10,000 comprising 10,000 shares of HK$1.00 each. The said shares were issued at a total subscription price of HK$68,640,000 (equivalent to $8,800,000) with a premium of HK$6,863 per share.

On August 30, 2010, the acquisition of Jiangsu Delta by Delta was approved by the Jiangsu Foreign Trade and Economic Cooperation Department in accordance with “The Approval of Share Transfer of and Amendment of the Articles of Association of Jiangsu Chang San Jiao Chemical Co., Ltd.” issued by the same authority.

On May 26, 2011, Delta carried out a bonus share issue, whereby an additional 39,990,000 ordinary shares of Delta were allotted and issued as bonus shares at a price of HK$1.00 each to all the then shareholders of Delta at the ratio in proportion to their existing shareholding percentage, and credited as fully paid up on a capitalization of the reserve of HK$39,990,000 from the capital reserve of Delta. Subsequent to the bonus issue, Delta’s total issued and paid-up share capital increases to HK$40 million, comprising 40 million shares of HK$1.00 each.

F-8

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 1 - Organization and Business Operations (Continued)

Delta entered into a series of Securities Purchase Agreements dated January 31, 2011, May 16, 2011 and June 30, 2011, respectively, with the funds managed by Korea Investment Partners Co. Ltd. And Kleiner, Perkins, Caufield & Byers (the “Bondholders”), pursuant to which it issued convertible bonds (“Convertible Bonds”) for an aggregate principal amount of US$18 million. The Convertible Bonds have an interest rate of 6.00% per annum and a guaranteed interest rate at maturity of 15.00%. The principal and interests accrued on such Convertible Notes are convertible in whole or in part into the ordinary shares in Delta, on such terms and subject to the conditions of the Securities Purchase Agreements.

On March 28, 2015, Zhenjiang Xinshun Chemical Trading Company Ltd and Jiangsu Delta entered into a sale and purchase agreement, pursuant to which the entire equity interest of Jiangsu Zhengxin R&D was sold to Zhenjiang Xinshun at a consideration of $10,518,189 (RMB64.555 million). Delta had recorded a gain on disposal of US$1,178,093.

Note 2 - Summary of Significant Accounting Policies

Principles of Consolidation and Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).  The consolidated financial statements include the financial statements of the Company, and its wholly-owned subsidiaries.  All intercompany accounts, transactions, and profits have been eliminated upon consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

F-9

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 2 - Summary of Significant Accounting Policies (Continued)

Segment Reporting

The Company operates in one business and geographical segment of manufacturing and sales of organic compounds in the PRC.  ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Given the economic characteristics of the similar nature of the products sold, the type of customer and the method of distribution, the Company operates as one reportable segment as defined by ASC 280, Segment Reporting.

Foreign Currency Translation

The Company’s financial statements are presented in the U.S. dollar ($), which is the Company’s reporting currency and functional currency. The Company’s subsidiaries in the PRC use Renminbi (“RMB”) as their functional currencies. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of income. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of income.

In accordance with ASC 830, Foreign Currency Matters, the Company translated the assets and liabilities into US$ using the rate of exchange prevailing at the applicable balance sheet date and the statements of income and cash flows are translated at an average rate during the reporting period.  Adjustments resulting from the translation are recorded in shareholders’ equity as part of accumulated other comprehensive income.

F-10

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 2 - Summary of Significant Accounting Policies (Continued)

Revenue Recognition

Revenue principally represents organic compound sale revenue. Revenue comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Company’s activities and is recorded net of value added tax (“VAT”). Consistent with the criteria of ASC 605 “Revenue Recognition” (“ASC 605”), the Company recognizes revenue when the following four revenue recognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured.

Revenue from the sale of goods is recognized upon delivery when the significant risks and rewards of ownership of goods have transferred t the buyer, continuing managerial involvement usually associated with ownership and effective control have ceased and the coasts incurred or to be incurred in respect of the transaction can be measured reliably.

Interest income is recognized on a time-proportion basis using the effective interest method.

Borrowing Costs

Borrowing costs are recognised in profit or loss using the effective interest method except for those costs that are directly attributable to assets under construction. Borrowing costs on general borrowings are capitalised by applying a capitalization rate to construction or expenditures that are financed by general borrowings. Borrowing costs on general financing during the six months ended December 31, 2015, 2014 and 2013 were capitalized at a rate of 8.11 %, 7.94% and 7.11% respectively.

F-11

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 2 - Summary of Significant Accounting Policies (Continued)

Leases

The Company accounts for its leases under the provisions of ASC 840, Leases. Certain of the Company’s operating leases provide for minimum annual payments that change over the life of the lease. The aggregate minimum annual payments are expensed on the straight-line basis over the minimum lease term. The Company recognizes a deferred rent liability for minimum step rents when the amount of rent expense exceeds the actual lease payments and it reduces the deferred rent liability when the actual lease payments exceeds the amount of straight-line rent expense. Rent holidays and tenant improvement allowances for store remodels are amortized on the straight-line basis over the initial term of the lease and any option period that is reasonably assured of being exercised.

Restricted Cash

Restricted cash are cash deposited in fixed deposit accounts maintained in the PRC and Hong Kong for the purpose of securing bank borrowings.

Trade Receivables 

Trade receivables are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and determined based on managements’ assessment of known requirements, aging of receivables, payment history, the customer’s current credit worthiness and the economic environment.

Inventories

Inventories are carried at the lower of cost and net realizable value. Cost is determined using the monthly average cost method, except for materials-in-transit. The cost of finished goods comprises raw materials, direct labor, other direct costs and related production overheads (based on normal operating capacity) but excludes costs of idle plant and abnormal waste. Net realizable value is the estimated selling price in the ordinary course of business, less the applicable variable selling expenses.

F-12

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 2 - Summary of Significant Accounting Policies (Continued)

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. The cost of an item of property, plant and equipment initially recognized includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating the manner intended by management. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives as follows:

Buildings	10 or 20 years
Machinery	10 or 20 years
Vehicles	4 years
Plant and equipment	3 to 5 years
Software	5 years

Construction in progress represents buildings and related premises under construction, which is stated at actual construction cost less any impairment loss.

Construction in progress is transferred to the respective category of property and equipment when completed and ready for its intended use.

Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation and amortization of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the consolidated income statements.

Land Use Rights

According to the laws of the PRC, the government owns all the land in the PRC.  Companies or individuals are authorized to possess and use the land only through the land use rights granted by the government. The land use rights represent cost of the rights to use the land in respect of properties located in the PRC. Land use rights are carried at cost and amortized on a straight-line basis over the period of rights of 50 to 52 years.

F-13

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 2 - Summary of Significant Accounting Policies (Continued)

Long-lived Assets

The Company reviews long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows, usually at the store level. The carrying amount of a long-lived asset is not considered recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset. If the asset is determined not to be recoverable, then it is considered to be impaired and the impairment to be recognized is the amount by which the carrying amount of the asset exceeds the fair value of the asset, determined using discounted cash flow valuation techniques, as defined in ASC 360, Property, Plant, and Equipment.

The Company determined the sum of the undiscounted cash flows expected to result from the use of the asset by projecting future revenue and operating expense for each store under consideration for impairment. The estimates of future cash flows involve management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance and economic conditions.

The Company’s evaluation resulted in no long-lived asset impairment charges during the six months ended December 31, 2015, 2014 and 2013.

F-14

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 2 - Summary of Significant Accounting Policies (Continued)

Goodwill

The Company allocates goodwill to reporting units based on the reporting unit expected to benefit from the business combination. The Company evaluates their reporting units on an annual basis and, if necessary, reassigns goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The Company first assesses qualitative factors to determine whether it is more likely than not that goodwill is impaired. If the more likely than not threshold is met, we perform a quantitative impairment test. The Company’s evaluation resulted in goodwill impairment charges of nil, nil and nil respectively during the six months ended December 31, 2015, 2014 and 2013.

Accrual and Disclosure of Loss Contingencies

We determine whether to disclose or accrue for loss contingencies based on an assessment of whether the risk of loss is remote, reasonably possible or probable, and whether it can be reasonably estimated. We analyze, if any, our litigation and regulatory matters based on available information to assess the potential liabilities. Our assessment is developed based on an analysis of possible outcomes under various strategies. We accrue for loss contingencies when such amounts are probable and reasonably estimable. If a contingent liability is only reasonably possible, we will disclose the potential range of the loss, if estimable. We record losses related to contingencies in cost of operations or selling, general and administrative expenses, depending on the nature of the underlying transaction leading to the loss contingency.

F-15

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 2 - Summary of Significant Accounting Policies (Continued)

Convertible bonds

Convertible bonds are presented as current liabilities unless the Company has an unconditional right to defer settlement for at least 12 months after the balance sheet date, in which case they are presented as non-current liabilities. On issuance of convertible foreign currency bonds, the proceeds from convertible bonds issued are allocated to the liability component presented on the balance sheet. The liability component including the conversion option is recognised initially at its fair value, determined using the Binomial Valuation Model. It is subsequently carried at its fair value with fair value changes recognised in profit or loss. When the conversion option is exercised, the carrying amount of the liability component is derecognised with a corresponding recognition of share capital.

Retirement Benefit Plans

Full time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require the Company to make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The Company accounts the mandated defined contribution plan under the vested benefit obligations approach based on the guidance of ASC 715, Compensation-Retirement Benefits.

F-16

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 2 - Summary of Significant Accounting Policies (Continued)

Retained Earnings - Appropriated

The income of the Company’s PRC subsidiaries is distributable to their shareholder after transfer to reserves as required by relevant PRC laws and regulations and the subsidiary’s Articles of Association.  As stipulated by the relevant laws and regulations in the PRC, these PRC subsidiaries are required to maintain reserves which are non-distributable to shareholders. Appropriations to the reserves are approved by the respective boards of directors.

Reserves include statutory reserves and discretionary reserves.  Statutory reserves can be used to make good previous years’ losses, if any, and may be converted into capital in proportion to the existing equity interests of shareholders, provided that the balance after such conversion is not less than 25% of the registered capital.  The appropriation to the statutory reserves must not be less than 10% of net profit after taxation.  Such appropriation may cease to apply if the balance of the fund is equal to 50% of the entity’s registered capital.  

Research and Development Costs

Research and development costs are expensed as incurred. The research and development costs were not material for the six months ended December 31, 2015, 2014 and 2013.

Advertising Expenses

Advertising expenses are expensed as incurred. The advertising expenses were not material for the six months ended December 31, 2015, 2014 and 2013.

F-17

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 2 - Summary of Significant Accounting Policies (Continued)

Income Taxes

The Company follows ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company adopted ASC 740-10-25, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position.  The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize any additional liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25.

Cash and Cash Equivalents

The Company considers all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less to be cash equivalents.

Share Based Payment

Goods and services received or acquired in an equity-settled share based payment transaction, which do not qualify for recognition as assets, are recognised as expenses with a corresponding increase in equity. The Company measures the goods and services received at fair value of the goods and services received, unless that fair value cannot be estimated reliably.

F-18

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 2 - Summary of Significant Accounting Policies (Continued)

Comprehensive Income

The Company has adopted FASB Accounting Standard Codification Topic 220 (“ASC 220”) “Comprehensive income” (formerly known as SFAS No. 130, “Reporting Comprehensive Income”), which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments of the Company.

Fair Value Measurements

ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  ASC 820 establishes three levels of inputs that may be used to measure fair value:

· Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company holds. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

· Level 2 – Valuation based on quoted prices in markets that are not active for which all significant inputs are observable, either directly or indirectly.

· Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

F-19

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 2 - Summary of Significant Accounting Policies (Continued)

Fair Value Measurements (continued)

The Company adopted ASC 820, Fair Value Measurements and Disclosures, on January 1, 2008 for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The Company has also adopted ASC 820, on January 1, 2009 for non financial assets and non financial liabilities, as these items are not recognized at fair value on a recurring basis. The adoption of ASC 820 for all financial assets and liabilities and non-financial assets and non-financial liabilities did not have any impact on the Company’s consolidated financial statements.

Financial instruments include cash, accounts receivable, prepayments and other receivables, short-term borrowings from banks, accounts payable and accrued expenses and other payables. The carrying amounts of cash, accounts receivable, prepayments and other receivables, short-term loans, accounts payable and accrued expenses approximate their fair value due to the short term maturities of these instruments. See footnote 17 regarding the fair value of the Company’s warrants, which are classified as Level 3 liabilities in the fair value hierarchy.

The fair values of the convertible bonds are determined using Binomial Valuation Model.

The fair values of current financial assets and liabilities carried at amortized cost approximate their carrying amounts.

Recently Issued Accounting Guidance

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.

F-20

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 3 - Concentration of Credit Risk

The Company maintains cash in bank deposit accounts in PRC and Hong Kong. The Company performs ongoing evaluations of this institution to limit its concentration risk exposure.

The Company sells organic compound principally in the PRC. Because of this, the Company is subject to regional risks, such as the economy, regional financial conditions and unemployment, weather conditions, power outages, and other natural disasters specific to the region in which the Company operates.

Details of major customers accounting for 10% or more of the Company’s sales or trade receivables are as follows:

	Sales						Trade receivables
	December 31, 2015			June 30, 2015			December 31, 2015			June 30, 2015
Customer A		0.00	%		15.7	%		1.5	%		2.87	%
Customer B		15.0	%		6.17	%		0.00	%		0.00	%

Details of suppliers accounting for 10% or more of the Company’s purchases or trade payables are as follows:

	Purchases						Trade payables
	December 31, 2015			June 30, 2015			December 31, 2015			June 30, 2015
Supplier A		17.11	%		20.4	%		0.0	%		0.29	%
Supplier B		36.99	%		20.0	%		20.10	%		0.00	%
Supplier C		0.0	%		11.2	%		10.22	%		11.66	%

Note 4 - Trade and Other Receivables

	December 31, 2015			June 30, 2015
	(Unaudited)			(Audited)
Notes receivable		761,158			2,553,350
Trade receivables		54,879,148			56,339,927
Less: Allowance for doubtful accounts		(3,538,562	)		(2,521,648	)
Trade receivables – net		51,340,586			53,818,279
Other receivables		47,503,510			41,376,604
Prepayments and deposits		6,026,927			22,626,755
	$	105,632,181		$	120,374,988

Bank borrowings are secured on trade receivables of the Company with carrying amounts of nil, $2,008,623 and $6,983,127 as at December 31, 2015, 2014 and 2013, respectively.

F-21

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 5 - Inventories

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Finished goods	$	4,476,068	$	6,213,300
Raw materials		6,485,974		3,538,296
	$	10,962,042	$	9,751,596

The cost of inventories recognized as an expense and included in cost of sales amounts to $17,149,858, $79,581,158 and $59,097,269 for the six months ended December 31, 2015, 2014 and 2013, respectively.

Note 6 - Property, Plant and Equipment

	December 31, 2015			June 30, 2015
	(Unaudited)			(Audited)
Buildings	$	13,403,318		$	13,480,382
Machinery		50,928,880			53,540,780
Vehicles		1,286,833			1,911,054
Plant and equipment		12,684,587			13,409,412
Software		85,094			97,151
Construction in progress		5,299,830			4,000,155
		83,688,542			86,438,934
Less: Accumulated depreciation		(23,146,609	)		(21,178,480	)
Property, plant and equipment, net	$	60,541,933		$	65,260,454

Borrowing costs capitalized during the six months ended December 31, 2015, 2014 and 2013 were nil, $691,739 and $6,983,127 respectively.

Machinery with net book value of approximately $11,370,848 was used as collateral of short-term bank borrowings as at December 31, 2015.

The depreciation expenses for the six months ended December 31, 2015, 2014 and 2013 were $3,399,115, $3,186,954 and $2,102,377 respectively.

F-22

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 7 - Land Use Rights

	December 31, 2015			June 30, 2015
	(Unaudited)			(Audited)
Land use rights	$	2,538,720		$	3,222,872
Less: Accumulated amortization		(349,433	)		(389,039	)
Land use rights - net	$	2,189,287		$	2,833,833

Land use rights with net book value of approximately $1,614,124 were used as collateral of short-term bank borrowings as at December 31, 2015.

The Company has disposed Land use rights during the period, the consideration received was $452,955 and the net land use rights disposal was $447,366. The Company has recorded a gain on disposal of $5,589 for six months ended December 31, 2015.

The amortization expenses for the six months ended December 31, 2015, 2014 and 2013 were $33,971, $44,163 and $26,516, respectively.

Twelve months ending December 31,
2015	$	33,971
2016		33,971
2017		33,971
2018		33,971
2019		33,971
Thereafter		2,019,432
Total	$	2,189,287

F-23

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 8 - Trade and Other Payables

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Notes payable	$	-	$	24,626,954
Trade payables		5,070,497		6,658,065
Accruals		373,375		358,747
Other taxes payable		317,871		2,364,945
Other payables		-		11,270,658
	$	5,761,743	$	45,279,369

Note 9 - Due to a Shareholder

The amount due to a shareholder is unsecured, interest free and has no fixed repayment date. The amount outstanding was nil and nil as at December 31, 2015 and June 30, 2015, respectively.

Note 10 - Bank Borrowings

Borrowings primarily consist of loans denominated in Renminbi, and U.S. dollars. Bank borrowings are secured over certain bank deposits, certain trade receivables, certain plant and machinery, and certain land use rights. The bank borrowings are guaranteed by a number of unrelated parties, and Mr. Chao Xin, our Chief Executive Officer, Chairman and a shareholder of the Company.

Note 11 - Dividends Payable

On September 13, 2014, the directors of Delta approved a resolution for a cash dividends distribution of $35,000,000. According to the resolution, the dividends are to be distributed to the Shareholders, Mr. Yan Hong, Mr. Shen Lei and Mr. Chao Xin in accordance with their respective percentage shareholdings in Delta, as to $392,000 to Mr. Yan Hong; as to $392,000 to Mr. Shen Lei; and as to $34,216,000 to Mr. Chao Xin. As at December 31, 2015, the dividends were not paid.

F-24

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 12 - Convertible Bonds

The Company has entered into a series of securities purchase agreements dated January 31, 2011, May 16, 2011 and June 30, 2011 with certain investment funds, pursuant to which it has issued certain bonds for an aggregate principal amount of $18,000,000. Details of the convertible bonds issuance are as follows:

	First batch	Second batch	Third batch
Issue date	January 31, 2011	May 16, 2011	June 30, 2011
Principal amount	$4 million	$10 million	$4 million
Interest rate	6% per annum	6% per annum	6% per annum
Type	Unsecured convertible bond	Unsecured convertible bond	Unsecured convertible bond
Conversion Date	Within 3 years after issue date	Within 3 years after issue date	Within 3 years after issue date
Underlying share	Ordinary Share	Ordinary Share	Ordinary Share
Guaranteed interest rate at maturity	15% per annum	15% per annum	15% per annum
Conversion price	$ 0.8625 per share1	$ 1.04 per share1	$ 1.04 per share1
Adjustments to conversion price	In the event of a share split, share dividends, reverse share split or similar transaction, the Conversion Price shall be automatically adjusted proportionately. Upon the issuance of new share or other equity-linked instruments at a price lower than the then existing Conversion price or on terms more favourable, the Conversion price shall be automatically adjusted downward to the same prices as that of the new equity.
Number of shares convertible	Number of shares convertible = (Principle + 6% conversion interest compounded annually) / Conversion price If an IPO occurs on or before the eighteen (18) month anniversary of the closing date of the initial closing, no conversion interest shall be payable for the first 18 months period.
Payment condition when conversion right is not exercised until maturity date	On the maturity date the Company shall pay Guaranteed interest, calculated from initial issue date and compounded annually, on the then outstanding and unconverted principal amount.
Put option	In the event that an IPO has not been consummated on or prior to the two-year anniversary of the original issue date, the holder of note shall have the right exercisable for a thirty (30) day period following the two-year anniversary of the original issue date to require the Company to redeem with 15% interest rate per annum.

¹ The conversion price is adjusted by the bonus shares

On September 15, 2014, Delta entered into a Settlement Deed with the Noteholders pursuant to which all of the outstanding obligations under Convertible Notes were settled. Pursuant to the Settlement Deed, Delta agreed to (i) cause Elite to issue an aggregate of 10,605 Elite Shares in consideration for the forgiveness of an aggregate of $3,400,000 of the Convertible Notes due to the Noteholders, and (ii) cause Master Kingdom Holdings Ltd., a British Virgin Islands company (“Master Kingdom”), which is owned 100% by Mr. Chao Xin, the principal shareholder of Elite, to enter into a Novation Deed with each of the Noteholders with respect to the repayment of the balance of the Convertible Notes to the Noteholders. Accordingly, on September 18, 2014, Delta, Master Kingdom and the Noteholders entered in a Novation Deed pursuant to which Master Kingdom agreed to assume and repay the remaining indebtedness due to the Noteholders in the aggregate amount of $19,322,981.28. As a result of the foregoing, Delta has no more Convertible Notes outstanding. The conversion price is adjusted by the bonus shares.

F-25

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 12 - Convertible Bonds (continued)

The carrying amount of the convertible bonds at the balance sheet date is derived as follows:

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Face value of convertible bonds	$	-	$	-
Loss on valuation of convertible bonds		-		-
	$	-	$	-

Note 13 - Income Taxes

The income tax provision consisted of the following:

	Six Months Ended December 31,
	2015			2014		2013
	(Unaudited)			(Unaudited)		(Unaudited)
Current income tax expense	$	574,438		$	1,220,404	$	1,002,467
Deferred taxation		(799,757	)		253,648		321,290
	$	(225,319	)	$	1,474,052	$	1,323,757

F-26

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 13 – Income Taxes (continued)

The difference between the income tax expenses and the expected income tax computed at statutory Enterprise Income Tax rate (“EIT”) of the PRC was as follows:

	Six Months Ended December 31,
	2015			2014		2013
	(Unaudited)			(Unaudited)		(Unaudited)
Income before income taxes	$	7,097,628		$	5,447,196	$	5,281,159
Income tax computed at statutory EIT rate (25%)		1,774,407			1,361,799		1,320,290
Effect of different tax rates available to different jurisdictions		19			19,173		4,188
Non-deductible expenses		-			-		-
Change in valuation allowance and others		(1,999,707	)		93,080		(721	)
Income tax expenses	$	(225,319	)	$	1,474,052	$	1,323,757

Deferred income taxes are recongised for tax consequences in future years of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carryforwards. Deferred income tax was measured using the enacted income tax rates for the periods in which they are expected to be reversed. The tax effects of temporary differences that give rise to the following approximate deferred tax assets and liabilities as of December 31, 2015 and June 30, 2015 are presented below:

	December 31, 2015			June 30, 2015
	(Unaudited)			(Audited)
Deferred tax assets (liabilities)
Current portion:
Operating loss carryforward	$	894,493		$	207,868
Accrued receivable		620,176			525,720
Corporation Income Tax in accordance with the PRC State Administration of Taxation		1,886,226			1,948,948
Net deferred tax (liabilities) assets	$	(371,557	)	$	(1,215,360	)

F-27

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 14 - Earnings Per Share

The Company calculates earnings per share in accordance with ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share are computed using the weighted average number of shares outstanding during the fiscal year. Potentially dilutive common shares consist of convertible bonds (using the if-converted method) and exercisable warrants. The following table sets forth the computation of basic and diluted net income per common share:

	Six Months Ended December 31
	2015		2014		2013
	(unaudited)		(unaudited)		(unaudited)
Numerator:
Net income attributable to ordinary shareholders for computing net income per ordinary share – basic	$	124,756	$	3,973,144	$	3,957,402
Gain on valuation of warrants		7,198,191		-		-
Net income attributable to ordinary shareholders for computing net income per ordinary share – diluted	$	7,322,947	$	3,973,144	$	3,957,402
Denominator:
Weighted average number of shares used in calculating net income per ordinary share – basic		9,233,108		5,921,144		4,560,000
Weighted average number of shares used in calculating net income per ordinary share – diluted		9,233,108		5,921,144		4,560,000

The 6,175,570 warrants were not included in the computation of diluted earnings per share as their effects would have been anti-dilutive since the average share price for the six months ended December 31, 2015 was lower than the warrants exercise price.

Net income per ordinary share – basic	$	0.79	$	0.67	$	0.87
Net income per ordinary share – diluted	$	0.79	$	0.67	$	0.87

Note 15 – Operating Lease

The Company did not have any operating lease as of December 31, 2015, 2014 and 2013.

F-28

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 16 –Related Party Transactions

In addition to the information disclosed elsewhere in the financial statements, the following transaction took place between the Company and related parties at terms agreed between the parties:

Guarantees in favour of the Company’s bank borrowings were received from Mr. Chao Xin, our Chief Executive Officer, Chairman and a shareholder for the six months ended December 31, 2015.

Note 17 - Warrants

On December 21, 2012, the company issued 4,000,000 public warrants to the shareholder in connection with the Public Offering. Each class A share will be entitled to one public warrant. Each public warrant entitles the holders to purchase from the Company one ordinary shares at an exercise price of $10.00 commencing on the later of (a) December 18, 2013 and (b) the consolidation of each series of the Company’s ordinary shares into one class of ordinary shares and will expire on the earlier of December 18, 2017 and the date of the Company’s dissolution and liquidation of the Trust Account, unless such public warrant are earlier redeemed.

The public warrants may be redeemed by the Company at a price of $0.01 per public warrant in whole but not in part upon 30 days prior written notice after the public warrants become exercisable, only in the event that the last sale price of the ordinary shares is at least $15.00 per share for any 20 trading days within a 30 trading day period ending on the third business day prior to the date on which notice of redemption is given. In the event that there is no effective registration statement or prospectus covering the ordinary shares issuable upon exercise of the public warrants, holders of the public warrants may elect to exercise them on a cashless basis by paying the exercise price by surrendering their public warrants for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of shares underlying the redeemable warrants, multiplied by the difference between the exercise price of the public warrants and the “fair market value” by (y) the fair market value. The “fair market value” means the average reported last sale price of our ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the public warrants notice is sent to the warrant agent. The Company would receive additional proceeds to the extent the redeemable warrants are exercised on a cashless basis.

In connection with the Private Placement, on December 21, 2012, the founders (CIS Acquisition Holding Co Ltd) and certain of their designees purchased 4,500,000 warrants (the “Placement Warrants”) at a price of $0.75 per warrants for an aggregate purchase price of $3,375,000. The Placement warrants are identical to the public warrants, except that the Placement warrants are (i) subject to certain transfer restrictions described below, (ii) cannot be redeemed by the Company, and (iii) may be exercised during the applicable exercise period, on a for cash or cashless basis, at any time after the consolidation of each series of the Company’s ordinary shares into one class of ordinary shares after consummation of an Acquisition Transaction or post-acquisition tender offer, as the case may be, even if there is not an effective registration statement relating to the shares underlying the Placement warrants, so long as such warrants are held by the founders or their designees, or their affiliates. Notwithstanding the foregoing, if the Placement warrants are held by the holders other than the founders or their permitted transferees, the Placement warrants will only be exercisable by the holders on the same basis as the public warrants included in the units being sold in the Public offering.

As of December 31, 2015, there were 6,175,570 Public warrants outstanding. The Company has referring to the market price of Public warrants to valuation for all the outstanding warrants as at December 31, 2015. The fair value of the Public warrants is $708,337.

F-29

DELTA TECHNOLOGY HOLDINGS LIMITED

Notes to UNAUDITED Consolidated Financial Statements

For the six months ended December 31, 2015, 2014 and 2013

Note 18 - Commitments

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Capital expenditures contracted for are analyzed as follows:
Contracted but not provided for:
Property, plant and equipment	$	1,547,530	$	3,337,864

Note 19 – Legal Proceeding

There had been no legal proceedings in which the Company is a party as at December 31, 2015,

Note 20 - Subsequent Event

There were no events or transactions other than those disclosed in this report, if any, that would require recognition or disclosure in our consolidated financial statements for the six months ended December 31, 2015.

F-30

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:  June 30, 2016	Delta Technology Holdings Limited
	By:	/s/ Xin Chao
		Name: Xin Chao
		Title:  Chief Executive Officer

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Document And Entity Information	6 Months Ended
	Dec. 31, 2015 shares
Document Information [Line Items]
Document Type	6-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Entity Registrant Name	Delta Technology Holdings Ltd
Entity Central Index Key	0001543268
Current Fiscal Year End Date	--06-30
Entity Filer Category	Non-accelerated Filer
Trading Symbol	DELT
Entity Common Stock, Shares Outstanding	0

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CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Current assets
Cash and cash equivalents	$ 567,891	$ 217,612
Restricted cash	60,420	26,552,715
Trade and other receivables	105,632,181	120,374,988
Inventories	10,962,042	9,751,596
Total current assets	117,222,534	156,896,911
Non-current assets
Property, plant and equipment	60,541,933	65,260,454
Land use rights	2,189,287	2,833,833
Deferred tax assets	1,514,669	733,588
Total Non current assets	64,245,889	68,827,875
Total assets	181,468,423	225,724,786
Current liabilities
Trade and other payables	5,761,743	45,279,369
Advances from customers	0	2,233,691
Bank borrowings	78,005,326	73,986,211
Income tax payables	195,590	962,072
Deferred tax liabilities	1,886,226	1,948,948
Dividends payable	35,000,000	35,000,000
Warrants liabilities	708,338	7,906,529
Total current liabilities	121,557,223	167,316,820
Total liabilities	121,557,223	167,316,820
Capital and reserves
Ordinary shares, $0.0001 par value per share, 150,000,000 shares authorized 9,618,852 and 8,720,994 shares issued and outstanding at December 31, 2015 and June 30, 2015, respectively.	962	872
Preferred shares, par value $0.0001 per share; 5,000,000 shares authorized; none issued or outstanding	0	0
Additional paid-in capital	45,539,260	41,427,773
Statutory reserves	7,180,500	7,180,500
Retained earnings	7,115,965	(206,982)
Accumulated other comprehensive income	74,513	10,005,803
Total equity	59,911,200	58,407,966
Total liabilities and equity	$ 181,468,423	$ 225,724,786

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2015	Jun. 30, 2015
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	9,618,852	8,720,994
Common stock, shares outstanding	9,618,852	8,720,994
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenue	$ 30,747,959	$ 117,670,355	$ 88,651,621
Cost of sales	(26,000,180)	(107,343,838)	(79,713,476)
Gross profit	4,747,779	10,326,517	8,938,145
Operating expenses:
Selling expenses	(885,804)	(1,363,164)	(1,356,428)
General and administrative expenses	(2,332,017)	(2,686,008)	(1,644,580)
Total operating expenses	(3,217,821)	(4,049,172)	(3,001,008)
Other income (expenses):
Interest expenses	(2,027,843)	(2,416,950)	(2,014,433)
Interest income	375,634	2,008,182	1,028,593
Change in fair value of convertible bonds	0	0	329,862
Change in fair value of warrants	7,198,191	0	0
Other gains (loss) - net	21,688	(421,381)	0
Total other income (expenses)	5,567,670	(830,149)	(655,978)
Income before income taxes	7,097,628	5,447,196	5,281,159
Income taxes	225,319	(1,474,052)	(1,323,757)
Net income	7,322,947	3,973,144	3,957,402
Other comprehensive income
Foreign currency translation adjustments	(9,931,290)	1,478,821	746,216
Total other comprehensive income	(9,931,290)	1,478,821	746,216
Comprehensive (loss) income	$ (2,608,343)	$ 5,451,965	$ 4,703,618
Earnings per share attributable to equity holders of the Company - Basic (in dollars per share)	$ 0.79	$ 0.67	$ 0.87
Earnings per share attributable to equity holders of the Company - Diluted (in dollars per share)	$ 0.79	$ 0.67	$ 0.87
Weighted average shares used in calculating earnings per ordinary share - Basic (in shares)	9,323,108	5,921,144	4,560,000
Weighted average shares used in calculating earnings per ordinary share - Diluted (in shares)	9,323,108	5,921,144	4,560,000

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Statutory Reserves [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]
Balance at Jun. 30, 2014	$ 55,459,374	$ 456	$ 8,852,257	$ 6,196,949	$ 34,370,050	$ 6,039,662
Balance (in shares) at Jun. 30, 2014		4,560,000,000
Dividends distribution	(35,000,000)	$ 0	0	0	(35,000,000)	0
Reverse acquisition	32,575,750	$ 234	32,575,516	0	0	0
Reverse acquisition (in shares)		2,337,059
Exercise of warrants	182	$ 182	0	0	0	0
Exercise of warrants (in shares)		1,823,935
Net income for the year	1,406,519	$ 0	0	0	1,406,519	0
Foreign currency translation adjustment	3,966,141	0	0	0	0	3,966,141
Appropriation to statutory reserves	0	0	0	983,551	(983,551)	0
Balance at Jun. 30, 2015	58,407,966	$ 872	41,427,773	7,180,500	(206,982)	10,005,803
Balance (in shares) at Jun. 30, 2015		8,720,994
Exercise of warrants	4,111,577	$ 90	4,111,487	0	0	0
Exercise of warrants (in shares)		897,858
Net income for the year	7,322,947	$ 0	0	0	7,322,947	0
Foreign currency translation adjustment	(9,931,290)		0	0	0	(9,931,290)
Balance at Dec. 31, 2015	$ 59,911,200	$ 962	$ 45,539,260	$ 7,180,500	$ 7,115,965	$ 74,513
Balance (in shares) at Dec. 31, 2015		9,618,852

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net income	$ 7,322,947	$ 3,973,144	$ 3,957,402
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Change in fair value of warrants	(7,198,191)	0	0
Depreciation of property and Equipment	3,399,115	3,186,954	2,102,377
Amortization of land use rights	33,971	44,163	26,516
Gain on disposals of property, plant and equipment	4,105	7,188	0
Gain on disposals of land use rights	5,589	0	0
Deferred income taxes	(780,484)	252,566	138,261
Allowance for doubtful accounts	1,232,348	361,657	178,310
Changes in assets and liabilities, net of effects of acquisitions and disposals:
Trade and other receivables	8,292,162	12,335,401	(1,723,644)
Inventories	(1,832,169)	(575,757)	(552,922)
Trade and other payables	(35,788,033)	(7,323,770)	(6,595,588)
Advances from customers	(4,325,243)	1,781,769	(320,908)
Income tax payables	(728,950)	1,030,716	51,396
Net cash provided by (used in) operating activities	(30,362,833)	15,074,031	(2,738,800)
Cash flows from investing activities:
Acquisitions of - Land use rights	0	0	(481,195)
- Property, plant and equipment and construction in progress	(2,496,996)	(3,898,468)	(14,370,596)
Disposal of land use right	479,022	0	0
Net cash (used in) investing activities	(2,017,974)	(3,898,468)	(14,851,791)
Cash flows from financing activities:
Proceeds from bank borrowings	63,393,347	61,202,282	86,629,884
Repayment of bank borrowings	(55,392,904)	(68,290,506)	(64,362,209)
Proceeds from escrow account	0	5,200,000	0
Change in restricted cash	25,599,849	(12,210,324)	(5,922,840)
Net cash provided by (used in) financing activities	33,600,292	(14,098,548)	16,344,835
Effect of exchange rate changes on cash	(869,206)	995,589	804,875
(Decrease) increase in cash and cash equivalents	350,279	(1,927,396)	(440,881)
Cash and cash equivalents at beginning of period	217,612	9,045,950	3,946,136
Cash and cash equivalents at end of period	567,891	7,118,554	3,505,255
Supplemental disclosures of cash flow information:
Interest paid	2,027,843	2,416,950	2,014,433
Tax paid	$ 555,166	$ 1,198,021	$ 1,433,715

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Organization and Business Operations

6 Months Ended

Dec. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1 - Organization and Business Operations

Delta Technology Holdings Limited (formerly known as CIS Acquisition Limited, the “Company,” or “Delta Technology,” or “we”) was formed on November 28, 2011, under the laws of the British Virgin Islands. We were formed to acquire, through a merger, stock exchange, asset acquisition, stock purchase or similar acquisition transaction, one or more operating businesses. Although we were not limited to a particular geographic region or industry, we intended to focus on operating businesses with primary operations in Russia and Eastern Europe. We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act.

On December 21, 2012, our IPO of 4,000,000 units was consummated at a public offering price of $10.00 per unit, generating gross proceeds of $40,000,000. Each unit consists of one callable Class A Share, par value $0.0001 per share, and one redeemable warrant. Each redeemable warrant included in the units entitles the holder to purchase one ordinary share at a price of $10.00. Immediately prior to the consummation of the IPO, we completed a private placement of 4,500,000 warrants at a price of $0.75 per warrant, for an aggregate purchase price of $3,375,000, to our founding shareholders and their designees. We sold to the underwriters of the IPO, as additional compensation, an aggregate of 136,000 Class A Shares for $2,720. A total of $41,600,000, which included a portion of the $3,375,000 of proceeds from the private placement of warrants to the founding shareholders and their designees, was placed in trust (the “Trust Account”) pending the completion of our initial acquisition transaction. On March 18, 2012, the ordinary shares and warrants underlying the units sold in the IPO began to trade separately.

On September 16, 2014, a Stock Purchase Agreement (the “Purchase Agreement”) was entered into by and among Delta Technology, Elite Ride Limited, a British Virgin Islands corporation (“Elite”), Delta Advanced Materials Limited, a Hong Kong corporation (“Delta”) and the shareholders of Elite (the “Elite Shareholders”). Upon closing of the Purchase Agreement on September 19, 2014, Delta Technology acquired all of the shares of Elite from Elite Shareholders in exchange for the issuance to Elite Shareholders an aggregate of 6,060,000 ordinary shares, of which 4,560,000 shares were issued at closing and 1,500,000 shares (“Earnout Payment Shares”) are held in escrow and will be released upon meeting of certain performance targets as specified in the Purchase Agreement (the “Acquisition”).

The Earnout Payment Shares, if any, will be issued as follows: (a) 500,000 shares shall be issued if the Company achieves Adjusted Net Income (as defined in the stock purchase agreement) of at least $8 million for the period starting July 1, 2014 and ending June 30, 2015; (b) 500,000 shares shall be issued if the Company achieves Adjusted Net Income of at least $9.2 million for the period starting July 1, 2015 and ending June 30, 2016; (c) 500,000 shares shall be issued if the Company achieves Adjusted Net Income of at least $10.6 million for the period starting July 1, 2016 and ending June 30, 2017 (collectively, the “Net Income Targets”). Further, during the thirteen (13) months post-closing, all material acquisitions made by the Company must be accretive to Company earnings. The Net Income Targets are to be met on an all-or-nothing basis, and there shall be no partial awards.

As a result of the consummation of the Acquisition, Elite is now our wholly subsidiary. Elite was incorporated under British Virgin Islands law on September 13, 2014 solely in contemplation of the Acquisition. It is currently the holding company of all the shares of Delta Advanced Materials Limited, a Hong Kong corporation (“Delta”), which, in turn, holds all the equity interests in four operating subsidiaries in the PRC: Jiangsu Yangtze Delta Fine Chemical Co., Ltd (“Jiangsu Delta”), Jiangsu Zhengxin New Material Research and Development Co., Ltd (“Jiangsu Zhengxin”), Jiangsu Delta Logistics Co., Ltd (“Jiangsu Logistics”), and Binhai Deda Chemical Co., Ltd (“Binhai Deda”) (collectively, the “PRC Subsidiaries”).

The Acquisition was accounted for as a reverse acquisition in accordance with US GAAP. Under this method of accounting, Delta Technology was treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Elite comprising the ongoing operations of the combined entity, Elite senior management comprising the senior management of the combined company, and the former holders of Elite having a controlling interest in terms of the voting power of the combined entity. In accordance with guidance applicable to these circumstances, the Acquisition was considered to be a capital transaction in substance. Accordingly, for accounting purposes, the Acquisition was treated as the equivalent of Elite issuing stock for the net assets of Delta Technology, accompanied by a recapitalization. The net assets of Delta Technology will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Acquisition will be those of Elite.

Delta (formerly known as China Deltachem Holdings Limited) was incorporated in Hong Kong on June 17, 2010. The address of its registered office is Suite D, 19th Floor, Ritz Plaza, 122 Austin Road, Hong Kong. The reporting currency of Delta is the United States Dollar (“$”).The principal activity of Delta is investment holding andcurrently operates four wholly-owned subsidiaries in the People’s Republic of China (“PRC”): Jiangsu Delta, Jiangsu Zhengxin R&D, Jiangsu Logistics, and Binhai Deda. Jiangsu Delta is the principal operating subsidiary of the Company and is engaged in the production of fine specialty chemicals.

 

On June 15, 2007, Jiangsu Delta was established by S&S International Investment Holding (HK) Limited (“S&S International”), a Hong Kong based investment holding company, as a wholly foreign-owned enterprise (with an initial registered capital of US$42 million, which was later reduced to US$ 28.8 million) located in Zhenjiang City, Jiangsu Province, the PRC.

Pursuant to a share transfer agreement entered into on April 13, 2008, Mr. Xin Chao acquired the entire equity interest in Jiangsu Delta from S&S International through Zhengxin International Investment Limited, a Hong Kong corporation (“Zhengxin International”) and became the controller of Jiangsu Delta since then. On May 21, 2008, the acquisition of Jiangsu Delta by Zhengxin International was approved by the Jiangsu Foreign Trade and Economic Cooperation Department in accordance with “The Approval of Alteration of Equities in and Amendment of the Articles of Association of Jiangsu Yantze River Delta Fine Chemical Co, Ltd.” issued by the same authority.

As part of corporate restructuring, Delta acquired Jiangsu Delta for a consideration of $28.8 million pursuant to a sale and purchase agreement dated May 20, 2010. Delta, formerly known as China Deltachem Holdings Limited, as a pure investment holding vehicle controlled by Mr. Chao had an initial issued and paid-up share capital of HK$10,000 comprising 10,000 shares of HK$1.00 each. The said shares were issued at a total subscription price of HK$68,640,000 (equivalent to $8,800,000) with a premium of HK$6,863 per share.

On August 30, 2010, the acquisition of Jiangsu Delta by Delta was approved by the Jiangsu Foreign Trade and Economic Cooperation Department in accordance with “The Approval of Share Transfer of and Amendment of the Articles of Association of Jiangsu Chang San Jiao Chemical Co., Ltd.” issued by the same authority.

On May 26, 2011, Delta carried out a bonus share issue, whereby an additional 39,990,000 ordinary shares of Delta were allotted and issued as bonus shares at a price of HK$1.00 each to all the then shareholders of Delta at the ratio in proportion to their existing shareholding percentage, and credited as fully paid up on a capitalization of the reserve of HK$39,990,000 from the capital reserve of Delta. Subsequent to the bonus issue, Delta’s total issued and paid-up share capital increases to HK$40 million, comprising 40 million shares of HK$1.00 each.

Delta entered into a series of Securities Purchase Agreements dated January 31, 2011, May 16, 2011 and June 30, 2011, respectively, with the funds managed by Korea Investment Partners Co. Ltd. And Kleiner, Perkins, Caufield & Byers (the “Bondholders”), pursuant to which it issued convertible bonds (“Convertible Bonds”) for an aggregate principal amount of US$18 million. The Convertible Bonds have an interest rate of 6.00% per annum and a guaranteed interest rate at maturity of 15.00%. The principal and interests accrued on such Convertible Notes are convertible in whole or in part into the ordinary shares in Delta, on such terms and subject to the conditions of the Securities Purchase Agreements.

On March 28, 2015, Zhenjiang Xinshun Chemical Trading Company Ltd and Jiangsu Delta entered into a sale and purchase agreement, pursuant to which the entire equity interest of Jiangsu Zhengxin R&D was sold to Zhenjiang Xinshun at a consideration of $10,518,189 (RMB64.555 million). Delta had recorded a gain on disposal of US$1,178,093.

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Summary of Significant Accounting Policies

6 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Note 2 - Summary of Significant Accounting Policies

Principles of Consolidation and Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).  The consolidated financial statements include the financial statements of the Company, and its wholly-owned subsidiaries.  All intercompany accounts, transactions, and profits have been eliminated upon consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

 

Segment Reporting

The Company operates in one business and geographical segment of manufacturing and sales of organic compounds in the PRC.  ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Given the economic characteristics of the similar nature of the products sold, the type of customer and the method of distribution, the Company operates as one reportable segment as defined by ASC 280, Segment Reporting.

Foreign Currency Translation

The Company’s financial statements are presented in the U.S. dollar ($), which is the Company’s reporting currency and functional currency. The Company’s subsidiaries in the PRC use Renminbi (“RMB”) as their functional currencies. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of income. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of income.

In accordance with ASC 830, Foreign Currency Matters, the Company translated the assets and liabilities into US$ using the rate of exchange prevailing at the applicable balance sheet date and the statements of income and cash flows are translated at an average rate during the reporting period.  Adjustments resulting from the translation are recorded in shareholders’ equity as part of accumulated other comprehensive income.

 

Revenue Recognition

Revenue principally represents organic compound sale revenue. Revenue comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Company’s activities and is recorded net of value added tax (“VAT”). Consistent with the criteria of ASC 605 “Revenue Recognition” (“ASC 605”), the Company recognizes revenue when the following four revenue recognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured.

Revenue from the sale of goods is recognized upon delivery when the significant risks and rewards of ownership of goods have transferred t the buyer, continuing managerial involvement usually associated with ownership and effective control have ceased and the coasts incurred or to be incurred in respect of the transaction can be measured reliably.

Interest income is recognized on a time-proportion basis using the effective interest method.

Borrowing Costs

Borrowing costs are recognised in profit or loss using the effective interest method except for those costs that are directly attributable to assets under construction. Borrowing costs on general borrowings are capitalised by applying a capitalization rate to construction or expenditures that are financed by general borrowings. Borrowing costs on general financing during the six months ended December 31, 2015, 2014 and 2013 were capitalized at a rate of 8.11 %, 7.94% and 7.11% respectively.

Leases

The Company accounts for its leases under the provisions of ASC 840, Leases. Certain of the Company’s operating leases provide for minimum annual payments that change over the life of the lease. The aggregate minimum annual payments are expensed on the straight-line basis over the minimum lease term. The Company recognizes a deferred rent liability for minimum step rents when the amount of rent expense exceeds the actual lease payments and it reduces the deferred rent liability when the actual lease payments exceeds the amount of straight-line rent expense. Rent holidays and tenant improvement allowances for store remodels are amortized on the straight-line basis over the initial term of the lease and any option period that is reasonably assured of being exercised.

Restricted Cash

Restricted cash are cash deposited in fixed deposit accounts maintained in the PRC and Hong Kong for the purpose of securing bank borrowings.

Trade Receivables 

Trade receivables are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and determined based on managements’ assessment of known requirements, aging of receivables, payment history, the customer’s current credit worthiness and the economic environment.

Inventories

Inventories are carried at the lower of cost and net realizable value. Cost is determined using the monthly average cost method, except for materials-in-transit. The cost of finished goods comprises raw materials, direct labor, other direct costs and related production overheads (based on normal operating capacity) but excludes costs of idle plant and abnormal waste. Net realizable value is the estimated selling price in the ordinary course of business, less the applicable variable selling expenses.

 

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. The cost of an item of property, plant and equipment initially recognized includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating the manner intended by management. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives as follows:

Buildings	10 or 20 years
Machinery	10 or 20 years
Vehicles	4 years
Plant and equipment	3 to 5 years
Software	5 years

Construction in progress represents buildings and related premises under construction, which is stated at actual construction cost less any impairment loss.

Construction in progress is transferred to the respective category of property and equipment when completed and ready for its intended use.

Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation and amortization of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the consolidated income statements.

Land Use Rights

According to the laws of the PRC, the government owns all the land in the PRC.  Companies or individuals are authorized to possess and use the land only through the land use rights granted by the government. The land use rights represent cost of the rights to use the land in respect of properties located in the PRC. Land use rights are carried at cost and amortized on a straight-line basis over the period of rights of 50 to 52 years.

Long-lived Assets

The Company reviews long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows, usually at the store level. The carrying amount of a long-lived asset is not considered recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset. If the asset is determined not to be recoverable, then it is considered to be impaired and the impairment to be recognized is the amount by which the carrying amount of the asset exceeds the fair value of the asset, determined using discounted cash flow valuation techniques, as defined in ASC 360, Property, Plant, and Equipment.

The Company determined the sum of the undiscounted cash flows expected to result from the use of the asset by projecting future revenue and operating expense for each store under consideration for impairment. The estimates of future cash flows involve management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance and economic conditions.

The Company’s evaluation resulted in no long-lived asset impairment charges during the six months ended December 31, 2015, 2014 and 2013.

 

Goodwill

The Company allocates goodwill to reporting units based on the reporting unit expected to benefit from the business combination. The Company evaluates their reporting units on an annual basis and, if necessary, reassigns goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The Company first assesses qualitative factors to determine whether it is more likely than not that goodwill is impaired. If the more likely than not threshold is met, we perform a quantitative impairment test. The Company’s evaluation resulted in goodwill impairment charges of nil, nil and nil respectively during the six months ended December 31, 2015, 2014 and 2013.

Accrual and Disclosure of Loss Contingencies

We determine whether to disclose or accrue for loss contingencies based on an assessment of whether the risk of loss is remote, reasonably possible or probable, and whether it can be reasonably estimated. We analyze, if any, our litigation and regulatory matters based on available information to assess the potential liabilities. Our assessment is developed based on an analysis of possible outcomes under various strategies. We accrue for loss contingencies when such amounts are probable and reasonably estimable. If a contingent liability is only reasonably possible, we will disclose the potential range of the loss, if estimable. We record losses related to contingencies in cost of operations or selling, general and administrative expenses, depending on the nature of the underlying transaction leading to the loss contingency.

 

Convertible bonds

Convertible bonds are presented as current liabilities unless the Company has an unconditional right to defer settlement for at least 12 months after the balance sheet date, in which case they are presented as non-current liabilities. On issuance of convertible foreign currency bonds, the proceeds from convertible bonds issued are allocated to the liability component presented on the balance sheet. The liability component including the conversion option is recognised initially at its fair value, determined using the Binomial Valuation Model. It is subsequently carried at its fair value with fair value changes recognised in profit or loss. When the conversion option is exercised, the carrying amount of the liability component is derecognised with a corresponding recognition of share capital.

Retirement Benefit Plans

Full time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require the Company to make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The Company accounts the mandated defined contribution plan under the vested benefit obligations approach based on the guidance of ASC 715, Compensation-Retirement Benefits.

 

Retained Earnings - Appropriated

The income of the Company’s PRC subsidiaries is distributable to their shareholder after transfer to reserves as required by relevant PRC laws and regulations and the subsidiary’s Articles of Association.  As stipulated by the relevant laws and regulations in the PRC, these PRC subsidiaries are required to maintain reserves which are non-distributable to shareholders. Appropriations to the reserves are approved by the respective boards of directors.

Reserves include statutory reserves and discretionary reserves.  Statutory reserves can be used to make good previous years’ losses, if any, and may be converted into capital in proportion to the existing equity interests of shareholders, provided that the balance after such conversion is not less than 25% of the registered capital.  The appropriation to the statutory reserves must not be less than 10% of net profit after taxation.  Such appropriation may cease to apply if the balance of the fund is equal to 50% of the entity’s registered capital.  

Research and Development Costs

Research and development costs are expensed as incurred. The research and development costs were not material for the six months ended December 31, 2015, 2014 and 2013.

Advertising Expenses

Advertising expenses are expensed as incurred. The advertising expenses were not material for the six months ended December 31, 2015, 2014 and 2013.

 

Income Taxes

The Company follows ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company adopted ASC 740-10-25, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position.  The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize any additional liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25.

Cash and Cash Equivalents

The Company considers all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less to be cash equivalents.

Share Based Payment

Goods and services received or acquired in an equity-settled share based payment transaction, which do not qualify for recognition as assets, are recognised as expenses with a corresponding increase in equity. The Company measures the goods and services received at fair value of the goods and services received, unless that fair value cannot be estimated reliably.

 

Comprehensive Income

The Company has adopted FASB Accounting Standard Codification Topic 220 (“ASC 220”) “Comprehensive income” (formerly known as SFAS No. 130, “Reporting Comprehensive Income”), which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments of the Company.

Fair Value Measurements

ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  ASC 820 establishes three levels of inputs that may be used to measure fair value:

· Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company holds. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

· Level 2 – Valuation based on quoted prices in markets that are not active for which all significant inputs are observable, either directly or indirectly.

· Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

  

The Company adopted ASC 820, Fair Value Measurements and Disclosures, on January 1, 2008 for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The Company has also adopted ASC 820, on January 1, 2009 for non financial assets and non financial liabilities, as these items are not recognized at fair value on a recurring basis. The adoption of ASC 820 for all financial assets and liabilities and non-financial assets and non-financial liabilities did not have any impact on the Company’s consolidated financial statements.

Financial instruments include cash, accounts receivable, prepayments and other receivables, short-term borrowings from banks, accounts payable and accrued expenses and other payables. The carrying amounts of cash, accounts receivable, prepayments and other receivables, short-term loans, accounts payable and accrued expenses approximate their fair value due to the short term maturities of these instruments. See footnote 17 regarding the fair value of the Company’s warrants, which are classified as Level 3 liabilities in the fair value hierarchy.

The fair values of the convertible bonds are determined using Binomial Valuation Model.

The fair values of current financial assets and liabilities carried at amortized cost approximate their carrying amounts.

Recently Issued Accounting Guidance

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.

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Concentration of Credit Risk

6 Months Ended

Dec. 31, 2015

Risks and Uncertainties [Abstract]

Concentration Risk Disclosure [Text Block]

Note 3 - Concentration of Credit Risk

The Company maintains cash in bank deposit accounts in PRC and Hong Kong. The Company performs ongoing evaluations of this institution to limit its concentration risk exposure.

The Company sells organic compound principally in the PRC. Because of this, the Company is subject to regional risks, such as the economy, regional financial conditions and unemployment, weather conditions, power outages, and other natural disasters specific to the region in which the Company operates.

Details of major customers accounting for 10% or more of the Company’s sales or trade receivables are as follows:

	Sales						Trade receivables
	December 31, 2015			June 30, 2015			December 31, 2015			June 30, 2015
Customer A		0.00	%		15.7	%		1.5	%		2.87	%
Customer B		15.0	%		6.17	%		0.00	%		0.00	%

Details of suppliers accounting for 10% or more of the Company’s purchases or trade payables are as follows:

	Purchases						Trade payables
	December 31, 2015			June 30, 2015			December 31, 2015			June 30, 2015
Supplier A		17.11	%		20.4	%		0.0	%		0.29	%
Supplier B		36.99	%		20.0	%		20.10	%		0.00	%
Supplier C		0.0	%		11.2	%		10.22	%		11.66	%

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Trade and Other Receivables

6 Months Ended

Dec. 31, 2015

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 4 - Trade and Other Receivables

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Notes receivable		761,158		2,553,350
Trade receivables		54,879,148		56,339,927
Less: Allowance for doubtful accounts		(3,538,562)		(2,521,648)
Trade receivables – net		51,340,586		53,818,279
Other receivables		47,503,510		41,376,604
Prepayments and deposits		6,026,927		22,626,755
	$	105,632,181	$	120,374,988

Bank borrowings are secured on trade receivables of the Company with carrying amounts of nil, $2,008,623 and $6,983,127 as at December 31, 2015, 2014 and 2013, respectively.

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Inventories

6 Months Ended

Dec. 31, 2015

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 5 - Inventories

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Finished goods	$	4,476,068	$	6,213,300
Raw materials		6,485,974		3,538,296
	$	10,962,042	$	9,751,596

The cost of inventories recognized as an expense and included in cost of sales amounts to $17,149,858, $79,581,158 and $59,097,269 for the six months ended December 31, 2015, 2014 and 2013, respectively.

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Property, Plant and Equipment

6 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

Note 6 - Property, Plant and Equipment

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Buildings	$	13,403,318	$	13,480,382
Machinery		50,928,880		53,540,780
Vehicles		1,286,833		1,911,054
Plant and equipment		12,684,587		13,409,412
Software		85,094		97,151
Construction in progress		5,299,830		4,000,155
		83,688,542		86,438,934
Less: Accumulated depreciation		(23,146,609)		(21,178,480)
Property, plant and equipment, net	$	60,541,933	$	65,260,454

Borrowing costs capitalized during the six months ended December 31, 2015, 2014 and 2013 were nil, $691,739 and $6,983,127 respectively.

Machinery with net book value of approximately $11,370,848 was used as collateral of short-term bank borrowings as at December 31, 2015.

The depreciation expenses for the six months ended December 31, 2015, 2014 and 2013 were $3,399,115, $3,186,954 and $2,102,377 respectively.

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Land Use Rights

6 Months Ended

Dec. 31, 2015

Land Use Rights Disclosure [Abstract]

Land Use Rights Disclosure [Text Block]

Note 7 - Land Use Rights

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Land use rights	$	2,538,720	$	3,222,872
Less: Accumulated amortization		(349,433)		(389,039)
Land use rights - net	$	2,189,287	$	2,833,833

Land use rights with net book value of approximately $1,614,124 were used as collateral of short-term bank borrowings as at December 31, 2015.

The Company has disposed Land use rights during the period, the consideration received was $452,955 and the net land use rights disposal was $447,366. The Company has recorded a gain on disposal of $5,589 for six months ended December 31, 2015.

The amortization expenses for the six months ended December 31, 2015, 2014 and 2013 were $33,971, $44,163 and $26,516, respectively.

Twelve months ending December 31,
2015	$	33,971
2016		33,971
2017		33,971
2018		33,971
2019		33,971
Thereafter		2,019,432
Total	$	2,189,287

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Trade and Other Payables

6 Months Ended

Dec. 31, 2015

Other Liabilities Disclosure [Abstract]

Other Liabilities Disclosure [Text Block]

Note 8 - Trade and Other Payables

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Notes payable	$	-	$	24,626,954
Trade payables		5,070,497		6,658,065
Accruals		373,375		358,747
Other taxes payable		317,871		2,364,945
Other payables		-		11,270,658
	$	5,761,743	$	45,279,369

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Due to a Shareholder

6 Months Ended

Dec. 31, 2015

Related Party Transactions Due To Shareholder Disclosure [Abstract]

Related Party Transactions Due To Shareholder Disclosure [Text Block]

Note 9 - Due to a Shareholder

The amount due to a shareholder is unsecured, interest free and has no fixed repayment date. The amount outstanding was nil and nil as at December 31, 2015 and June 30, 2015, respectively.

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Bank Borrowings

6 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Short-term Debt [Text Block]

Note 10 - Bank Borrowings

Borrowings primarily consist of loans denominated in Renminbi, and U.S. dollars. Bank borrowings are secured over certain bank deposits, certain trade receivables, certain plant and machinery, and certain land use rights. The bank borrowings are guaranteed by a number of unrelated parties, and Mr. Chao Xin, our Chief Executive Officer, Chairman and a shareholder of the Company.

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Dividends Payable

6 Months Ended

Dec. 31, 2015

Dividends Payable [Abstract]

Dividends Payable [Text Block]

Note 11 - Dividends Payable

On September 13, 2014, the directors of Delta approved a resolution for a cash dividends distribution of $35,000,000. According to the resolution, the dividends are to be distributed to the Shareholders, Mr. Yan Hong, Mr. Shen Lei and Mr. Chao Xin in accordance with their respective percentage shareholdings in Delta, as to $392,000 to Mr. Yan Hong; as to $392,000 to Mr. Shen Lei; and as to $34,216,000 to Mr. Chao Xin. As at December 31, 2015, the dividends were not paid.

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Convertible Bonds

6 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 12 - Convertible Bonds

The Company has entered into a series of securities purchase agreements dated January 31, 2011, May 16, 2011 and June 30, 2011 with certain investment funds, pursuant to which it has issued certain bonds for an aggregate principal amount of $18,000,000. Details of the convertible bonds issuance are as follows:

	First batch	Second batch	Third batch
Issue date	January 31, 2011	May 16, 2011	June 30, 2011
Principal amount	$4 million	$10 million	$4 million
Interest rate	6% per annum	6% per annum	6% per annum
Type	Unsecured convertible bond	Unsecured convertible bond	Unsecured convertible bond
Conversion Date	Within 3 years after issue date	Within 3 years after issue date	Within 3 years after issue date
Underlying share	Ordinary Share	Ordinary Share	Ordinary Share
Guaranteed interest rate at maturity	15% per annum	15% per annum	15% per annum
Conversion price	$ 0.8625 per share1	$ 1.04 per share1	$ 1.04 per share1
Adjustments to conversion price	In the event of a share split, share dividends, reverse share split or similar transaction, the Conversion Price shall be automatically adjusted proportionately. Upon the issuance of new share or other equity-linked instruments at a price lower than the then existing Conversion price or on terms more favourable, the Conversion price shall be automatically adjusted downward to the same prices as that of the new equity.
Number of shares convertible	Number of shares convertible = (Principle + 6% conversion interest compounded annually) / Conversion price If an IPO occurs on or before the eighteen (18) month anniversary of the closing date of the initial closing, no conversion interest shall be payable for the first 18 months period.
Payment condition when conversion right is not exercised until maturity date	On the maturity date the Company shall pay Guaranteed interest, calculated from initial issue date and compounded annually, on the then outstanding and unconverted principal amount.
Put option	In the event that an IPO has not been consummated on or prior to the two-year anniversary of the original issue date, the holder of note shall have the right exercisable for a thirty (30) day period following the two-year anniversary of the original issue date to require the Company to redeem with 15% interest rate per annum.

¹ The conversion price is adjusted by the bonus shares

On September 15, 2014, Delta entered into a Settlement Deed with the Noteholders pursuant to which all of the outstanding obligations under Convertible Notes were settled. Pursuant to the Settlement Deed, Delta agreed to (i) cause Elite to issue an aggregate of 10,605 Elite Shares in consideration for the forgiveness of an aggregate of $3,400,000 of the Convertible Notes due to the Noteholders, and (ii) cause Master Kingdom Holdings Ltd., a British Virgin Islands company (“Master Kingdom”), which is owned 100% by Mr. Chao Xin, the principal shareholder of Elite, to enter into a Novation Deed with each of the Noteholders with respect to the repayment of the balance of the Convertible Notes to the Noteholders. Accordingly, on September 18, 2014, Delta, Master Kingdom and the Noteholders entered in a Novation Deed pursuant to which Master Kingdom agreed to assume and repay the remaining indebtedness due to the Noteholders in the aggregate amount of $19,322,981.28. As a result of the foregoing, Delta has no more Convertible Notes outstanding. The conversion price is adjusted by the bonus shares.

The carrying amount of the convertible bonds at the balance sheet date is derived as follows:

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Face value of convertible bonds	$	-	$	-
Loss on valuation of convertible bonds		-		-
	$	-	$	-

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Income Taxes

6 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 13 - Income Taxes

The income tax provision consisted of the following:

	Six Months Ended December 31,
	2015		2014		2013
	(Unaudited)		(Unaudited)		(Unaudited)
Current income tax expense	$	574,438	$	1,220,404	$	1,002,467
Deferred taxation		(799,757)		253,648		321,290
	$	(225,319)	$	1,474,052	$	1,323,757

 

The difference between the income tax expenses and the expected income tax computed at statutory Enterprise Income Tax rate (“EIT”) of the PRC was as follows:

	Six Months Ended December 31,
	2015		2014		2013
	(Unaudited)		(Unaudited)		(Unaudited)
Income before income taxes	$	7,097,628	$	5,447,196	$	5,281,159
Income tax computed at statutory EIT rate (25%)		1,774,407		1,361,799		1,320,290
Effect of different tax rates available to different jurisdictions		19		19,173		4,188
Non-deductible expenses		-		-		-
Change in valuation allowance and others		(1,999,707)		93,080		(721)
Income tax expenses	$	(225,319)	$	1,474,052	$	1,323,757

Deferred income taxes are recongised for tax consequences in future years of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carryforwards. Deferred income tax was measured using the enacted income tax rates for the periods in which they are expected to be reversed. The tax effects of temporary differences that give rise to the following approximate deferred tax assets and liabilities as of December 31, 2015 and June 30, 2015 are presented below:

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Deferred tax assets (liabilities)
Current portion:
Operating loss carryforward	$	894,493	$	207,868
Accrued receivable		620,176		525,720
Corporation Income Tax in accordance with the PRC State Administration of Taxation		1,886,226		1,948,948
Net deferred tax (liabilities) assets	$	(371,557)	$	(1,215,360)

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Earnings Per Share

6 Months Ended

Dec. 31, 2015

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 14 - Earnings Per Share

The Company calculates earnings per share in accordance with ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share are computed using the weighted average number of shares outstanding during the fiscal year. Potentially dilutive common shares consist of convertible bonds (using the if-converted method) and exercisable warrants. The following table sets forth the computation of basic and diluted net income per common share:

	Six Months Ended December 31
	2015		2014		2013
	(unaudited)		(unaudited)		(unaudited)
Numerator:
Net income attributable to ordinary shareholders for computing net income per ordinary share – basic	$	124,756	$	3,973,144	$	3,957,402
Gain on valuation of warrants		7,198,191		-		-
Net income attributable to ordinary shareholders for computing net income per ordinary share – diluted	$	7,322,947	$	3,973,144	$	3,957,402
Denominator:
Weighted average number of shares used in calculating net income per ordinary share – basic		9,233,108		5,921,144		4,560,000
Weighted average number of shares used in calculating net income per ordinary share – diluted		9,233,108		5,921,144		4,560,000

The 6,175,570 warrants were not included in the computation of diluted earnings per share as their effects would have been anti-dilutive since the average share price for the six months ended December 31, 2015 was lower than the warrants exercise price.

 

Net income per ordinary share – basic	$	0.79	$	0.67	$	0.87
Net income per ordinary share – diluted	$	0.79	$	0.67	$	0.87

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Operating Lease

6 Months Ended

Dec. 31, 2015

Leases, Operating [Abstract]

Operating Leases of Lessor Disclosure [Text Block]

Note 15 – Operating Lease

The Company did not have any operating lease as of December 31, 2015, 2014 and 2013.

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Related Party Transactions

6 Months Ended

Dec. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 16 –Related Party Transactions

In addition to the information disclosed elsewhere in the financial statements, the following transaction took place between the Company and related parties at terms agreed between the parties:

Guarantees in favour of the Company’s bank borrowings were received from Mr. Chao Xin, our Chief Executive Officer, Chairman and a shareholder for the six months ended December 31, 2015.

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Warrants

6 Months Ended

Dec. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Note 17 - Warrants

On December 21, 2012, the company issued 4,000,000 public warrants to the shareholder in connection with the Public Offering. Each class A share will be entitled to one public warrant. Each public warrant entitles the holders to purchase from the Company one ordinary shares at an exercise price of $10.00 commencing on the later of (a) December 18, 2013 and (b) the consolidation of each series of the Company’s ordinary shares into one class of ordinary shares and will expire on the earlier of December 18, 2017 and the date of the Company’s dissolution and liquidation of the Trust Account, unless such public warrant are earlier redeemed.

The public warrants may be redeemed by the Company at a price of $0.01 per public warrant in whole but not in part upon 30 days prior written notice after the public warrants become exercisable, only in the event that the last sale price of the ordinary shares is at least $15.00 per share for any 20 trading days within a 30 trading day period ending on the third business day prior to the date on which notice of redemption is given. In the event that there is no effective registration statement or prospectus covering the ordinary shares issuable upon exercise of the public warrants, holders of the public warrants may elect to exercise them on a cashless basis by paying the exercise price by surrendering their public warrants for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of shares underlying the redeemable warrants, multiplied by the difference between the exercise price of the public warrants and the “fair market value” by (y) the fair market value. The “fair market value” means the average reported last sale price of our ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the public warrants notice is sent to the warrant agent. The Company would receive additional proceeds to the extent the redeemable warrants are exercised on a cashless basis.

In connection with the Private Placement, on December 21, 2012, the founders (CIS Acquisition Holding Co Ltd) and certain of their designees purchased 4,500,000 warrants (the “Placement Warrants”) at a price of $0.75 per warrants for an aggregate purchase price of $3,375,000. The Placement warrants are identical to the public warrants, except that the Placement warrants are (i) subject to certain transfer restrictions described below, (ii) cannot be redeemed by the Company, and (iii) may be exercised during the applicable exercise period, on a for cash or cashless basis, at any time after the consolidation of each series of the Company’s ordinary shares into one class of ordinary shares after consummation of an Acquisition Transaction or post-acquisition tender offer, as the case may be, even if there is not an effective registration statement relating to the shares underlying the Placement warrants, so long as such warrants are held by the founders or their designees, or their affiliates. Notwithstanding the foregoing, if the Placement warrants are held by the holders other than the founders or their permitted transferees, the Placement warrants will only be exercisable by the holders on the same basis as the public warrants included in the units being sold in the Public offering.

As of December 31, 2015, there were 6,175,570 Public warrants outstanding. The Company has referring to the market price of Public warrants to valuation for all the outstanding warrants as at December 31, 2015. The fair value of the Public warrants is $708,337.

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Commitments

6 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments Disclosure [Text Block]

Note 18 - Commitments

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Capital expenditures contracted for are analyzed as follows:
Contracted but not provided for:
Property, plant and equipment	$	1,547,530	$	3,337,864

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Legal Proceeding

6 Months Ended

Dec. 31, 2015

Disclosure Text Block [Abstract]

Legal Matters and Contingencies [Text Block]

Note 19 – Legal Proceeding

There had been no legal proceedings in which the Company is a party as at December 31, 2015,

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Subsequent Event

6 Months Ended

Dec. 31, 2015

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 20 - Subsequent Event

There were no events or transactions other than those disclosed in this report, if any, that would require recognition or disclosure in our consolidated financial statements for the six months ended December 31, 2015.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation and Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).  The consolidated financial statements include the financial statements of the Company, and its wholly-owned subsidiaries.  All intercompany accounts, transactions, and profits have been eliminated upon consolidation.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Segment Reporting, Policy [Policy Text Block]

Segment Reporting

The Company operates in one business and geographical segment of manufacturing and sales of organic compounds in the PRC.  ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Given the economic characteristics of the similar nature of the products sold, the type of customer and the method of distribution, the Company operates as one reportable segment as defined by ASC 280, Segment Reporting.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

The Company’s financial statements are presented in the U.S. dollar ($), which is the Company’s reporting currency and functional currency. The Company’s subsidiaries in the PRC use Renminbi (“RMB”) as their functional currencies. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of income. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of income.

In accordance with ASC 830, Foreign Currency Matters, the Company translated the assets and liabilities into US$ using the rate of exchange prevailing at the applicable balance sheet date and the statements of income and cash flows are translated at an average rate during the reporting period.  Adjustments resulting from the translation are recorded in shareholders’ equity as part of accumulated other comprehensive income.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

Revenue principally represents organic compound sale revenue. Revenue comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Company’s activities and is recorded net of value added tax (“VAT”). Consistent with the criteria of ASC 605 “Revenue Recognition” (“ASC 605”), the Company recognizes revenue when the following four revenue recognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured.

Revenue from the sale of goods is recognized upon delivery when the significant risks and rewards of ownership of goods have transferred t the buyer, continuing managerial involvement usually associated with ownership and effective control have ceased and the coasts incurred or to be incurred in respect of the transaction can be measured reliably.

Interest income is recognized on a time-proportion basis using the effective interest method.

Borrowing Costs [Policy Text Block]

Borrowing Costs

Borrowing costs are recognised in profit or loss using the effective interest method except for those costs that are directly attributable to assets under construction. Borrowing costs on general borrowings are capitalised by applying a capitalization rate to construction or expenditures that are financed by general borrowings. Borrowing costs on general financing during the six months ended December 31, 2015, 2014 and 2013 were capitalized at a rate of 8.11 %, 7.94% and 7.11% respectively.

Lease, Policy [Policy Text Block]

Leases

The Company accounts for its leases under the provisions of ASC 840, Leases. Certain of the Company’s operating leases provide for minimum annual payments that change over the life of the lease. The aggregate minimum annual payments are expensed on the straight-line basis over the minimum lease term. The Company recognizes a deferred rent liability for minimum step rents when the amount of rent expense exceeds the actual lease payments and it reduces the deferred rent liability when the actual lease payments exceeds the amount of straight-line rent expense. Rent holidays and tenant improvement allowances for store remodels are amortized on the straight-line basis over the initial term of the lease and any option period that is reasonably assured of being exercised.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted Cash

Restricted cash are cash deposited in fixed deposit accounts maintained in the PRC and Hong Kong for the purpose of securing bank borrowings.

Trade and Other Accounts Receivable, Unbilled Receivables, Policy [Policy Text Block]

Trade Receivables 

Trade receivables are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and determined based on managements’ assessment of known requirements, aging of receivables, payment history, the customer’s current credit worthiness and the economic environment.

Inventory, Policy [Policy Text Block]

Inventories

Inventories are carried at the lower of cost and net realizable value. Cost is determined using the monthly average cost method, except for materials-in-transit. The cost of finished goods comprises raw materials, direct labor, other direct costs and related production overheads (based on normal operating capacity) but excludes costs of idle plant and abnormal waste. Net realizable value is the estimated selling price in the ordinary course of business, less the applicable variable selling expenses.

Property, Plant and Equipment, Policy [Policy Text Block]

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. The cost of an item of property, plant and equipment initially recognized includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating the manner intended by management. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives as follows:

Buildings	10 or 20 years
Machinery	10 or 20 years
Vehicles	4 years
Plant and equipment	3 to 5 years
Software	5 years

Construction in progress represents buildings and related premises under construction, which is stated at actual construction cost less any impairment loss.

Construction in progress is transferred to the respective category of property and equipment when completed and ready for its intended use.

Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation and amortization of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the consolidated income statements.

Land Use Rights Policy [Policy Text Block]

Land Use Rights

According to the laws of the PRC, the government owns all the land in the PRC.  Companies or individuals are authorized to possess and use the land only through the land use rights granted by the government. The land use rights represent cost of the rights to use the land in respect of properties located in the PRC. Land use rights are carried at cost and amortized on a straight-line basis over the period of rights of 50 to 52 years.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Long-lived Assets

The Company reviews long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows, usually at the store level. The carrying amount of a long-lived asset is not considered recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset. If the asset is determined not to be recoverable, then it is considered to be impaired and the impairment to be recognized is the amount by which the carrying amount of the asset exceeds the fair value of the asset, determined using discounted cash flow valuation techniques, as defined in ASC 360, Property, Plant, and Equipment.

The Company determined the sum of the undiscounted cash flows expected to result from the use of the asset by projecting future revenue and operating expense for each store under consideration for impairment. The estimates of future cash flows involve management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance and economic conditions.

The Company’s evaluation resulted in no long-lived asset impairment charges during the six months ended December 31, 2015, 2014 and 2013.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill

The Company allocates goodwill to reporting units based on the reporting unit expected to benefit from the business combination. The Company evaluates their reporting units on an annual basis and, if necessary, reassigns goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The Company first assesses qualitative factors to determine whether it is more likely than not that goodwill is impaired. If the more likely than not threshold is met, we perform a quantitative impairment test. The Company’s evaluation resulted in goodwill impairment charges of nil, nil and nil respectively during the six months ended December 31, 2015, 2014 and 2013.

Commitments and Contingencies, Policy [Policy Text Block]

Accrual and Disclosure of Loss Contingencies

We determine whether to disclose or accrue for loss contingencies based on an assessment of whether the risk of loss is remote, reasonably possible or probable, and whether it can be reasonably estimated. We analyze, if any, our litigation and regulatory matters based on available information to assess the potential liabilities. Our assessment is developed based on an analysis of possible outcomes under various strategies. We accrue for loss contingencies when such amounts are probable and reasonably estimable. If a contingent liability is only reasonably possible, we will disclose the potential range of the loss, if estimable. We record losses related to contingencies in cost of operations or selling, general and administrative expenses, depending on the nature of the underlying transaction leading to the loss contingency.

Debt, Policy [Policy Text Block]

Convertible bonds

Convertible bonds are presented as current liabilities unless the Company has an unconditional right to defer settlement for at least 12 months after the balance sheet date, in which case they are presented as non-current liabilities. On issuance of convertible foreign currency bonds, the proceeds from convertible bonds issued are allocated to the liability component presented on the balance sheet. The liability component including the conversion option is recognised initially at its fair value, determined using the Binomial Valuation Model. It is subsequently carried at its fair value with fair value changes recognised in profit or loss. When the conversion option is exercised, the carrying amount of the liability component is derecognised with a corresponding recognition of share capital.

Pension and Other Postretirement Plans, Policy [Policy Text Block]

Retirement Benefit Plans

Full time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require the Company to make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The Company accounts the mandated defined contribution plan under the vested benefit obligations approach based on the guidance of ASC 715, Compensation-Retirement Benefits.

Retained Earnings Appropriated [Policy Text Block]

Retained Earnings - Appropriated

The income of the Company’s PRC subsidiaries is distributable to their shareholder after transfer to reserves as required by relevant PRC laws and regulations and the subsidiary’s Articles of Association.  As stipulated by the relevant laws and regulations in the PRC, these PRC subsidiaries are required to maintain reserves which are non-distributable to shareholders. Appropriations to the reserves are approved by the respective boards of directors.

Reserves include statutory reserves and discretionary reserves.  Statutory reserves can be used to make good previous years’ losses, if any, and may be converted into capital in proportion to the existing equity interests of shareholders, provided that the balance after such conversion is not less than 25% of the registered capital.  The appropriation to the statutory reserves must not be less than 10% of net profit after taxation.  Such appropriation may cease to apply if the balance of the fund is equal to 50% of the entity’s registered capital. 

Research and Development Expense, Policy [Policy Text Block]

Research and Development Costs

Research and development costs are expensed as incurred. The research and development costs were not material for the six months ended December 31, 2015, 2014 and 2013.

Advertising Costs, Policy [Policy Text Block]

Advertising Expenses

Advertising expenses are expensed as incurred. The advertising expenses were not material for the six months ended December 31, 2015, 2014 and 2013.

Income Tax, Policy [Policy Text Block]

Income Taxes

The Company follows ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company adopted ASC 740-10-25, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position.  The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize any additional liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

The Company considers all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less to be cash equivalents.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Share Based Payment

Goods and services received or acquired in an equity-settled share based payment transaction, which do not qualify for recognition as assets, are recognised as expenses with a corresponding increase in equity. The Company measures the goods and services received at fair value of the goods and services received, unless that fair value cannot be estimated reliably.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income

The Company has adopted FASB Accounting Standard Codification Topic 220 (“ASC 220”) “Comprehensive income” (formerly known as SFAS No. 130, “Reporting Comprehensive Income”), which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments of the Company.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements

ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  ASC 820 establishes three levels of inputs that may be used to measure fair value:

· Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company holds. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

· Level 2 – Valuation based on quoted prices in markets that are not active for which all significant inputs are observable, either directly or indirectly.

· Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

  

The Company adopted ASC 820, Fair Value Measurements and Disclosures, on January 1, 2008 for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The Company has also adopted ASC 820, on January 1, 2009 for non financial assets and non financial liabilities, as these items are not recognized at fair value on a recurring basis. The adoption of ASC 820 for all financial assets and liabilities and non-financial assets and non-financial liabilities did not have any impact on the Company’s consolidated financial statements.

Financial instruments include cash, accounts receivable, prepayments and other receivables, short-term borrowings from banks, accounts payable and accrued expenses and other payables. The carrying amounts of cash, accounts receivable, prepayments and other receivables, short-term loans, accounts payable and accrued expenses approximate their fair value due to the short term maturities of these instruments. See footnote 17 regarding the fair value of the Company’s warrants, which are classified as Level 3 liabilities in the fair value hierarchy.

The fair values of the convertible bonds are determined using Binomial Valuation Model.

The fair values of current financial assets and liabilities carried at amortized cost approximate their carrying amounts.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Guidance

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Public Utility Property, Plant, and Equipment [Table Text Block]

Depreciation is computed using the straight-line method over the estimated useful lives as follows:

Buildings	10 or 20 years
Machinery	10 or 20 years
Vehicles	4 years
Plant and equipment	3 to 5 years
Software	5 years

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Concentration of Credit Risk (Tables)

6 Months Ended

Dec. 31, 2015

Risks and Uncertainties [Abstract]

Fair Value, Concentration of Risk [Table Text Block]

Details of major customers accounting for 10% or more of the Company’s sales or trade receivables are as follows:

	Sales						Trade receivables
	December 31, 2015			June 30, 2015			December 31, 2015			June 30, 2015
Customer A		0.00	%		15.7	%		1.5	%		2.87	%
Customer B		15.0	%		6.17	%		0.00	%		0.00	%

Details of suppliers accounting for 10% or more of the Company’s purchases or trade payables are as follows:

	Purchases						Trade payables
	December 31, 2015			June 30, 2015			December 31, 2015			June 30, 2015
Supplier A		17.11	%		20.4	%		0.0	%		0.29	%
Supplier B		36.99	%		20.0	%		20.10	%		0.00	%
Supplier C		0.0	%		11.2	%		10.22	%		11.66	%

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Trade and Other Receivables (Tables)

6 Months Ended

Dec. 31, 2015

Receivables [Abstract]

Schedule of Debt [Table Text Block]

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Notes receivable		761,158		2,553,350
Trade receivables		54,879,148		56,339,927
Less: Allowance for doubtful accounts		(3,538,562)		(2,521,648)
Trade receivables – net		51,340,586		53,818,279
Other receivables		47,503,510		41,376,604
Prepayments and deposits		6,026,927		22,626,755
	$	105,632,181	$	120,374,988

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Inventories (Tables)

6 Months Ended

Dec. 31, 2015

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Finished goods	$	4,476,068	$	6,213,300
Raw materials		6,485,974		3,538,296
	$	10,962,042	$	9,751,596

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Property, Plant and Equipment (Tables)

6 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Buildings	$	13,403,318	$	13,480,382
Machinery		50,928,880		53,540,780
Vehicles		1,286,833		1,911,054
Plant and equipment		12,684,587		13,409,412
Software		85,094		97,151
Construction in progress		5,299,830		4,000,155
		83,688,542		86,438,934
Less: Accumulated depreciation		(23,146,609)		(21,178,480)
Property, plant and equipment, net	$	60,541,933	$	65,260,454

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Land Use Rights (Tables)

6 Months Ended

Dec. 31, 2015

Land Use Rights Disclosure [Abstract]

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Land use rights	$	2,538,720	$	3,222,872
Less: Accumulated amortization		(349,433)		(389,039)
Land use rights - net	$	2,189,287	$	2,833,833

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

The amortization expenses for the six months ended December 31, 2015, 2014 and 2013 were $33,971, $44,163 and $26,516, respectively.

Twelve months ending December 31,
2015	$	33,971
2016		33,971
2017		33,971
2018		33,971
2019		33,971
Thereafter		2,019,432
Total	$	2,189,287

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Trade and Other Payables (Tables)

6 Months Ended

Dec. 31, 2015

Other Liabilities Disclosure [Abstract]

Other Liabilities [Table Text Block]

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Notes payable	$	-	$	24,626,954
Trade payables		5,070,497		6,658,065
Accruals		373,375		358,747
Other taxes payable		317,871		2,364,945
Other payables		-		11,270,658
	$	5,761,743	$	45,279,369

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Convertible Bonds (Tables)

6 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Schedule Of Convertible Debt [Table Text Block]

The carrying amount of the convertible bonds at the balance sheet date is derived as follows:

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Face value of convertible bonds	$	-	$	-
Loss on valuation of convertible bonds		-		-
	$	-	$	-

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Income Taxes (Tables)

6 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The income tax provision consisted of the following:

	Six Months Ended December 31,
	2015		2014		2013
	(Unaudited)		(Unaudited)		(Unaudited)
Current income tax expense	$	574,438	$	1,220,404	$	1,002,467
Deferred taxation		(799,757)		253,648		321,290
	$	(225,319)	$	1,474,052	$	1,323,757

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The difference between the income tax expenses and the expected income tax computed at statutory Enterprise Income Tax rate (“EIT”) of the PRC was as follows:

	Six Months Ended December 31,
	2015		2014		2013
	(Unaudited)		(Unaudited)		(Unaudited)
Income before income taxes	$	7,097,628	$	5,447,196	$	5,281,159
Income tax computed at statutory EIT rate (25%)		1,774,407		1,361,799		1,320,290
Effect of different tax rates available to different jurisdictions		19		19,173		4,188
Non-deductible expenses		-		-		-
Change in valuation allowance and others		(1,999,707)		93,080		(721)
Income tax expenses	$	(225,319)	$	1,474,052	$	1,323,757

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The tax effects of temporary differences that give rise to the following approximate deferred tax assets and liabilities as of December 31, 2015 and June 30, 2015 are presented below:

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Deferred tax assets (liabilities)
Current portion:
Operating loss carryforward	$	894,493	$	207,868
Accrued receivable		620,176		525,720
Corporation Income Tax in accordance with the PRC State Administration of Taxation		1,886,226		1,948,948
Net deferred tax (liabilities) assets	$	(371,557)	$	(1,215,360)

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Earnings Per Share (Tables)

6 Months Ended

Dec. 31, 2015

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table sets forth the computation of basic and diluted net income per common share:

	Six Months Ended December 31
	2015		2014		2013
	(unaudited)		(unaudited)		(unaudited)
Numerator:
Net income attributable to ordinary shareholders for computing net income per ordinary share – basic	$	124,756	$	3,973,144	$	3,957,402
Gain on valuation of warrants		7,198,191		-		-
Net income attributable to ordinary shareholders for computing net income per ordinary share – diluted	$	7,322,947	$	3,973,144	$	3,957,402
Denominator:
Weighted average number of shares used in calculating net income per ordinary share – basic		9,233,108		5,921,144		4,560,000
Weighted average number of shares used in calculating net income per ordinary share – diluted		9,233,108		5,921,144		4,560,000

The 6,175,570 warrants were not included in the computation of diluted earnings per share as their effects would have been anti-dilutive since the average share price for the six months ended December 31, 2015 was lower than the warrants exercise price.

 

Net income per ordinary share – basic	$	0.79	$	0.67	$	0.87
Net income per ordinary share – diluted	$	0.79	$	0.67	$	0.87

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Commitments (Tables)

6 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Other Commitments [Table Text Block]

	December 31, 2015		June 30, 2015
	(Unaudited)		(Audited)
Capital expenditures contracted for are analyzed as follows:
Contracted but not provided for:
Property, plant and equipment	$	1,547,530	$	3,337,864

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Organization and Business Operations (Details Textual) HKD / shares in Units, $ / shares in Units, ¥ in Thousands	1 Months Ended									6 Months Ended	12 Months Ended
	Mar. 28, 2015 USD ($)	Mar. 28, 2015 CNY (¥)	Sep. 19, 2014 shares	Dec. 21, 2012 USD ($) $ / shares shares	Jun. 30, 2011 USD ($)	May 16, 2011 USD ($)	Jan. 31, 2011 USD ($)	May 20, 2010 USD ($) shares	May 20, 2010 HKD shares	Jun. 30, 2011 USD ($)	Jun. 30, 2015 USD ($) $ / shares shares	Dec. 31, 2015 USD ($) $ / shares	Dec. 31, 2011 USD ($) shares	Dec. 31, 2011 HKD HKD / shares shares	May 26, 2011 HKD HKD / shares shares	May 20, 2010 HKD HKD / shares	Jun. 15, 2007 USD ($)
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Common Stock, Par or Stated Value Per Share | $ / shares											$ 0.0001	$ 0.0001
Common Stock Held in Trust | $				$ 41,600,000
Proceeds from Sale of Equity Method Investments	$ 10,518,189	¥ 64,555
Gain (Loss) on Disposition of Stock in Subsidiary or Equity Method Investee, Total | $	$ 1,178,093
Convertible Debt [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Debt Instrument, Face Amount | $					$ 4,000,000	$ 10,000,000	$ 4,000,000			$ 4,000,000	$ 0	$ 0	$ 18,000,000
Debt Instrument, Interest Rate, Stated Percentage					6.00%	6.00%	6.00%			6.00%
Debt Instrument, Interest Rate, Increase (Decrease)					15.00%	15.00%	15.00%			15.00%
Jiangsu Delta [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Sale of Stock, Price Per Share | HKD / shares																HKD 1.00
Sale of Stock, Consideration Received on Transaction | $								$ 28,800,000
Sale of Stock, Consideration Received Per Transaction | HKD									HKD 10,000
Sale of Stock, Number of Shares Issued in Transaction | shares								10,000	10,000
Jiangsu Delta [Member] | Maximum [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Initial Registered Capital | $																	$ 42,000,000
Jiangsu Delta [Member] | Minimum [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Initial Registered Capital | $																	$ 28,800,000
Delta Advanced [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Shares Issued, Price Per Share | HKD / shares														HKD 1.00	HKD 1.00
Total Issued Subscription Price								$ 8,800,000								HKD 68,640,000
Premium Per Share On Share Issued | HKD / shares																HKD 6,863
Additional Shares Issued Through Bonus Shares | shares													40,000,000	40,000,000	39,990,000
Additional Value Issued Through Bonus Shares | HKD														HKD 40,000,000	HKD 39,990,000
British Virgin Islands Corporation [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares			6,060,000
Stock Issued During Period, Shares, Acquisitions | shares			4,560,000
Common Stock, Capital Shares Reserved for Future Issuance | shares			1,500,000
Business Acquisition, Equity Interest Issued or Issuable, Description			Earnout Payment Shares, if any, will be issued as follows: (a) 500,000 shares shall be issued if the Company achieves Adjusted Net Income (as defined in the stock purchase agreement) of at least $8 million for the period starting July 1, 2014 and ending June 30, 2015; (b) 500,000 shares shall be issued if the Company achieves Adjusted Net Income of at least $9.2 million for the period starting July 1, 2015 and ending June 30, 2016; (c) 500,000 shares shall be issued if the Company achieves Adjusted Net Income of at least $10.6 million for the period starting July 1, 2016 and ending June 30, 2017 (collectively, the “Net Income Targets”).
Common Stock [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Stock Issued During Period, Shares, Acquisitions | shares											2,337,059
Common Class A [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Stock Issued During Period, Value, Issued for Services | $				2,720
Private Placement [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Proceeds from Issuance of Warrants | $				$ 3,375,000
Stock Issued During Period, Shares, New Issues | shares				4,500,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares				$ 0.75
IPO [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Stock Issued During Period, Value, New Issues | $				$ 40,000,000
Stock Issued During Period, Shares, New Issues | shares				4,000,000
Shares Issued, Price Per Share | $ / shares				$ 10.00
IPO [Member] | Common Stock [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Shares Issued, Price Per Share | $ / shares				10.00
IPO [Member] | Common Class A [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Common Stock, Par or Stated Value Per Share | $ / shares				$ 0.0001
Under Writers [Member] | Common Class A [Member]
Organization Plan Of Business Operations Liquidity And Going Concern [Line Items]
Stock Issued During Period, Shares, Issued for Services | shares				136,000

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Summary of Significant Accounting Policies (Details)	6 Months Ended
	Dec. 31, 2015
Building [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	20 years
Building [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Machinery and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	20 years
Machinery and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	4 years
Plant and equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Plant and equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Software [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years

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Summary of Significant Accounting Policies (Details Textual)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Accounting Policies [Line Items]
Subordinated Borrowing, Interest Rate	8.11%	7.94%	7.11%
Maximum [Member] | Use Rights [Member]
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	52 years
Minimum [Member] | Use Rights [Member]
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	50 years

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Concentration of Credit Risk (Details)	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Jun. 30, 2015
Customer A [Member] | Sales [Member]
Product Information [Line Items]
Concentration Risk, Percentage	0.00%	15.70%
Customer A [Member] | Trade receivables [Member]
Product Information [Line Items]
Concentration Risk, Percentage	1.50%	2.87%
Customer B [Member] | Sales [Member]
Product Information [Line Items]
Concentration Risk, Percentage	15.00%	6.17%
Customer B [Member] | Trade receivables [Member]
Product Information [Line Items]
Concentration Risk, Percentage	0.00%	0.00%
Supplier A [Member] | Purchases [Member]
Product Information [Line Items]
Concentration Risk, Percentage	17.11%	20.40%
Supplier A [Member] | Trade payables [Member]
Product Information [Line Items]
Concentration Risk, Percentage	0.00%	0.29%
Supplier B [Member] | Purchases [Member]
Product Information [Line Items]
Concentration Risk, Percentage	36.99%	20.00%
Supplier B [Member] | Trade payables [Member]
Product Information [Line Items]
Concentration Risk, Percentage	20.10%	0.00%
Supplier C [Member] | Purchases [Member]
Product Information [Line Items]
Concentration Risk, Percentage	0.00%	11.20%
Supplier C [Member] | Trade payables [Member]
Product Information [Line Items]
Concentration Risk, Percentage	10.22%	11.66%

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Trade and Other Receivables (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	$ 761,158	$ 2,553,350
Trade receivables	54,879,148	56,339,927
Less: Allowance for doubtful accounts	(3,538,562)	(2,521,648)
Trade receivables - net	51,340,586	53,818,279
Other receivables	47,503,510	41,376,604
Prepayments and deposits	6,026,927	22,626,755
Trade and other receivables, Total	$ 105,632,181	$ 120,374,988

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Trade and Other Receivables (Details Textual) - USD ($)	Dec. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	$ 2,008,623	$ 6,983,127

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Inventories (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Inventory [Line Items]
Finished goods	$ 4,476,068	$ 6,213,300
Raw materials	6,485,974	3,538,296
Inventories, Total	$ 10,962,042	$ 9,751,596

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Inventories (Details Textual) - USD ($)	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Inventory [Line Items]
Inventory for Long-term Contracts or Programs, Gross	$ 17,149,858	$ 79,581,158	$ 59,097,269

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Property, Plant and Equipment (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	$ 83,688,542	$ 86,438,934
Less: Accumulated depreciation	(23,146,609)	(21,178,480)
Property, plant and equipment, net	60,541,933	65,260,454
Building [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	13,403,318	13,480,382
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	50,928,880	53,540,780
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	1,286,833	1,911,054
Plant and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	12,684,587	13,409,412
Software [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	85,094	97,151
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	$ 5,299,830	$ 4,000,155

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Property, Plant and Equipment (Details Textual) - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Jun. 30, 2015
Short-term Bank Loans and Notes Payable	$ 78,005,326			$ 73,986,211
Depreciation, Total	3,399,115	$ 3,186,954	$ 2,102,377
Other Long-term Debt, Noncurrent	0	$ 691,739	$ 6,983,127
Machinery and Equipment [Member]
Short-term Bank Loans and Notes Payable	$ 11,370,848

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Land Use Rights (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Land use rights	$ 2,538,720	$ 3,222,872
Less: Accumulated amortization	(349,433)	(389,039)
Land use rights - net	$ 2,189,287	$ 2,833,833

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Land Use Rights (Details 1)	Dec. 31, 2015 USD ($)
Twelve months ending December 31,
2015	$ 33,971
2016	33,971
2017	33,971
2018	33,971
2019	33,971
Thereafter	2,019,432
Total	$ 2,189,287

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Land Use Rights (Details Textual) - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Jun. 30, 2015
Short-term Bank Loans and Notes Payable	$ 78,005,326			$ 73,986,211
Amortization of Leased Asset	33,971	$ 44,163	$ 26,516
Land Use Rights Sold	447,366
Proceeds from Sale of Intangible Assets	479,022	0	0
Gain (Loss) on Disposition of Intangible Assets	(5,589)	$ 0	$ 0
Use Rights [Member]
Short-term Bank Loans and Notes Payable	$ 1,614,124

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Trade and Other Payables (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Notes payable	$ 0	$ 24,626,954
Trade payables	5,070,497	6,658,065
Accruals	373,375	358,747
Other taxes payable	317,871	2,364,945
Other payables	0	11,270,658
Accounts Payable and Accrued Liabilities, Current, Total	$ 5,761,743	$ 45,279,369

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Dividends Payable (Details Textual) - USD ($)	Dec. 31, 2015	Jun. 30, 2015	Sep. 13, 2014
Dividends Payable [Line Items]
Dividends Payable, Current	$ 35,000,000	$ 35,000,000	$ 35,000,000
Mr. Yan Hong [Member]
Dividends Payable [Line Items]
Dividends Payable, Current			392,000
Mr. Shen Lei [Member]
Dividends Payable [Line Items]
Dividends Payable, Current			392,000
Mr. Chao Xin [Member]
Dividends Payable [Line Items]
Dividends Payable, Current			$ 34,216,000

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Convertible Bonds (Details) - Convertible Debt [Member] - USD ($)		1 Months Ended			6 Months Ended
		Jun. 30, 2011	May 16, 2011	Jan. 31, 2011	Jun. 30, 2011	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2011
Debt Instrument [Line Items]
Debt Instrument, Convertible, Principal amount		$ 4,000,000	$ 10,000,000	$ 4,000,000	$ 4,000,000	$ 0	$ 0	$ 18,000,000
Debt Instrument, Convertible, Interest rate		6.00%	6.00%	6.00%	6.00%
Debt Instrument, Convertible, Type		Unsecured convertible bond	Unsecured convertible bond	Unsecured convertible bond
Debt Instrument, Convertible, Conversion Date		Within 3 years after issue date	Within 3 years after issue date	Within 3 years after issue date
Debt Instrument, Convertible, Underlying share		Ordinary Share	Ordinary Share	Ordinary Share
Debt Instrument, Convertible, Guaranteed interest rate at maturity		15.00%	15.00%	15.00%	15.00%
Debt Instrument, Convertible, Conversion price	[1]	$ 1.04	$ 1.04	$ 0.8625	$ 1.04

[1] The conversion price is adjusted by the bonus shares

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Convertible Bonds (Details 1) - Convertible Debt [Member] - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2011	Jun. 30, 2011	May 16, 2011	Jan. 31, 2011
Debt Instrument [Line Items]
Face value of convertible bonds	$ 0	$ 0	$ 18,000,000	$ 4,000,000	$ 10,000,000	$ 4,000,000
Loss on valuation of convertible bonds	0	0
Convertible Debt	$ 0	$ 0

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Convertible Bonds (Details Textual) - Convertible Debt [Member] - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2011	Jun. 30, 2011	May 16, 2011	Jan. 31, 2011
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 0	$ 0	$ 18,000,000	$ 4,000,000	$ 10,000,000	$ 4,000,000
Debt Instrument, Number of Shares Convertible, Description	Number of shares convertible = (Principle + 6% conversion interest compounded annually) / Conversion priceIf an IPO occurs on or before the eighteen (18) month anniversary of the closing date of the initial closing, no conversion interest shall be payable for the first 18 months period.
Debt Instrument, Redemption, Description	In the event that an IPO has not been consummated on or prior to the two-year anniversary of the original issue date, the holder of note shall have the right exercisable for a thirty (30) day period following the two-year anniversary of the original issue date to require the Company to redeem with 15% interest rate per annum.
Debt Conversion, Converted Instrument, Shares Issued		10,605
Debt Conversion, Original Debt, Amount		$ 3,400,000
Convertible Debt, Current		$ 19,322,981.28
Master Kingdom Holdings Limited [Member]
Debt Instrument [Line Items]
Noncontrolling Interest, Ownership Percentage by Parent		100.00%

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Income Taxes (Details) - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Current income tax expense	$ 574,438	$ 1,220,404	$ 1,002,467
Deferred taxation	(780,484)	252,566	138,261
Income Tax Expense (Benefit)	$ (225,319)	$ 1,474,052	$ 1,323,757

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Income Taxes (Details 1) - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income before income taxes	$ 7,097,628	$ 5,447,196	$ 5,281,159
Income tax computed at statutory EIT rate (25%)	1,774,407	1,361,799	1,320,290
Effect of different tax rates available to different jurisdictions	19	19,173	4,188
Non-deductible expenses	0	0	0
Change in valuation allowance and others	(1,999,707)	93,080	(721)
Income tax expenses	$ (225,319)	$ 1,474,052	$ 1,323,757

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Income Taxes (Details 2) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Current portion:
Operating loss carryforward	$ 894,493	$ 207,868
Accrued receivable	620,176	525,720
Corporation Income Tax in accordance with the PRC State Administration of Taxation	1,886,226	1,948,948
Net deferred tax (liabilities) assets	$ (371,557)	$ (1,215,360)

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Earnings Per Share (Details) - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Numerator:
Net income attributable to ordinary shareholders for computing net income per ordinary share - basic	$ 124,756	$ 3,973,144	$ 3,957,402
Gain on valuation of warrants	7,198,191	0	0
Net income attributable to ordinary shareholders for computing net income per ordinary share - diluted	$ 7,322,947	$ 3,973,144	$ 3,957,402
Denominator:
Weighted average number of shares used in calculating net income per ordinary share - basic	9,323,108	5,921,144	4,560,000
Weighted average number of shares used in calculating net income per ordinary share - diluted	9,323,108	5,921,144	4,560,000
Net income per ordinary share - basic	$ 0.79	$ 0.67	$ 0.87
Net income per ordinary share - diluted	$ 0.79	$ 0.67	$ 0.87

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Earnings Per Share (Details Textual)	6 Months Ended
	Dec. 31, 2015 shares
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	6,175,570

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Warrants (Details Textual) - USD ($)	1 Months Ended
	Dec. 21, 2012	Dec. 31, 2015
Private Placement [Member]
Stock Issued During Period, Shares, New Issues	4,500,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.75
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants	$ 3,375,000
Warrant [Member]
Stock Issued During Period, Shares, New Issues	4,000,000
Investment Warrant Exercise Price	$ 10.00
Reedemable Warrant [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.01
Warrant Expiration Period	30 days
Share Price	$ 15.00
Public Warrant [Member]
Class of Warrant or Right, Outstanding		6,175,570
Derivative Liability, Fair Value, Gross Liability		$ 708,337

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Commitments (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Contracted but not provided for:
Property, plant and equipment	$ 1,547,530	$ 3,337,864