Property, Plant and Equipment, net

3 Months Ended

Dec. 31, 2011

Property, Plant and Equipment, net [Text Block]

6.      Property, Plant and Equipment, net

Property, plant and equipment as of September 30, 2011 and December 31, 2011 consisted of the following:

		September 30,			December 31,
		2011			2011
Buildings	$	127,025,347		$	129,644,128
Machinery and equipment		159,355,671			165,826,387
Office equipment		2,519,208			2,559,988
Motor vehicles		1,453,456			1,458,619
		290,353,682			299,489,122
Accumulated depreciation		(80,673,667	)		(86,615,275	)
Construction in progress		45,305,701			41,793,429
Prepayment for acquisition of property, plant and equipment		1,466,207			1,792,444
Assets held for abandonment		744,356			753,646
Net book value		257,196,279			257,213,366
Impairment charge		(13,958,165	)		(16,861,447	)
Carried amount	$	243,238,114		$	240,351,919

(i) Depreciation expense for the three months ended December 31, 2010 and 2011 is included in the condensed interim consolidated statements of operations and comprehensive loss as follows:

		Three months ended December 31,
		2010		2011
Cost of revenues	$	3,321,155	$	3,708,478
Research and development expenses		57,749		140,347
Sales and marketing expenses		123,983		43,765
General and administrative expenses		628,642		822,382
	$	4,131,529	$	4,714,972

(ii) Construction in Progress

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

For the three months ended December 31, 2010 and 2011, the Company capitalized interest of US$117,079 and US$124,854 respectively to the cost of construction in progress.

(iii) Pledged Property, Plant and Equipment

As of September 30, 2011 and December 31, 2011, machinery and equipment with net book value of US$56,376,435 and US$54,341,186 of the Company were pledged as collateral under certain loan arrangements (see Notes 7 and 8).

(iv) Assets held for abandonment

Assets held for abandonment as of September 30, 2011 and December 31, 2011 consisted of the following:

		September 30,		December 31,
		2011		2011
Net book value	$	744,356		753,646
Less: impairment charge		(744,356	)	(753,646	)
Carried amount	$	-		-

The carried amount as of September 30, 2011 and December 31, 2011 composed of the machinery and equipment relating to steel-case cell production line and certain used assets which have been written down to nil.

(v) Impairment Charge

During the course of the Company’s strategic review of its operations. the Company assessed the recoverability of the carrying value of certain property, plant and equipment which resulted in impairment losses of approximately US$ 2.7 million for the three months period ended December 31, 2011. No impairment charged for the three months period ended December 31, 2010.