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Property, Plant and Equipment, net

12 Months Ended

Sep. 30, 2011

Property, Plant and Equipment, net [Text Block]

8	Property, Plant and Equipment, net

	Property, plant and equipment as of September 30, 2010 and 2011 consist of the following:

			2010			2011
	Buildings	$	121,050,663		$	127,025,347
	Machinery and equipment		135,127,265			159,355,671
	Office equipment		2,207,168			2,519,208
	Motor vehicles		1,416,369			1,453,456
			259,801,465			290,353,682
	Accumulated depreciation		(61,340,759	)		(80,673,667	)
	Construction in progress		33,791,211			45,305,701
	Prepayment for acquisition of property, plant and equipment		2,550,733			1,466,207
	Assets held for abandonment		1,043,835			744,356
	Net book value	$	235,846,485		$	257,196,279

	Impairment charge		(6,961,909	)		(13,958,165	)

	Carried amount	$	228,884,576		$	243,238,114

	Property, plant and equipment with net book value of US$185,039 were sold during the year ended September 30,

	2011 for US$656,483, resulting in a profit of $471,444. There was no disposal during the year of 2010.

(i)	Depreciation expense is included in the consolidated statements of operations and comprehensive income /(loss) as follows:

			200 9			2010			2011
	Cost of revenues	$	9,291,825		$	14,177,675		$	14,190,901
	Research and development expenses		479,980			545,316			487,914
	Sales and marketing expenses		444,060			433,196			392,390
	General and administrative expenses		1,896,383			2,408,001			2,737,675
		$	12,112,248		$	17,564,188		$	17,808,880

(ii)	Construction in Progress

	Construction in progress mainly comprises capital expenditures for construction of the Company’s new corporate campus, including offices, factories and staff dormitories.

	For the years ended September 30, 2009, 2010 and 2011, the Company capitalized interest of US$723,527, US$465,869 and US$368,227, respectively, to the cost of construction in progress.

(iii)	Pledged Property, Plant and Equipment

	As of September 30, 2010 and 2011, machinery and equipment with net book value of US$59,735,854 and US$56,376,435 of the Company were pledged as collateral under certain loan arrangements (see Notes 11 and 12).


(iv)	Assets held for abandonment

	Assets held for abandonment as of September 30, 2010 and 2011 consist of the following:

			2010			2011
	Net book value	$	1,043,835			744,356
	Less: impairment charge		(819,874	)		(744,356	)
	Carried amount	$	223,961			-

	The carried amount as of September 30, 2010 and 2011 composed of the machinery and equipment relating to steel-case cell production line and certain used assets which have been written down to their salvage value of US$223,961 and nil.

(v)	Impairment charge

	During the course of the Company’s strategic review of its operations in the years ended September 30, 2010 and 2011, the Company assessed the recoverability of the carrying value of certain property, plant and equipment which resulted in impairment losses of approximately US$7.0 million and US$6.5 million, respectively.

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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