Property, Plant and Equipment, net

6 Months Ended

Mar. 31, 2012

Property, Plant and Equipment, net [Text Block]

6 Property, Plant and Equipment, net

Property, plant and equipment as of September 30, 2011 and March 31, 2012 consisted of the following:

		September 30,			March 31,
		2011			2012
Buildings	$	127,025,347		$	129,771,228
Machinery and equipment		159,355,671			166,862,662
Office equipment		2,519,208			2,577,421
Motor vehicles		1,453,456			1,460,843
		290,353,682			300,672,154
Accumulated depreciation		(80,673,667	)		(91,699,519	)
Construction in progress		45,305,701			45,489,683
Prepayment for acquisition of property, plant and equipment		1,466,207			2,275,061
Assets held for abandonment		744,356			767,303
Net book value		257,196,279			257,504,682
Impairment charge		(13,958,165	)		(16,887,157	)
Carried amount	$	243,238,114		$	240,617,525

(i) Depreciation expense for the six months ended March 31, 2011 and 2012 is included in the condensed interim consolidated statements of operations and comprehensive loss as follows:

		Six months ended March 31,
		2011		2012
Cost of revenues	$	6,743,209	$	7,411,674
Research and development expenses		208,154		289,785
Sales and marketing expenses		243,916		86,861
General and administrative expenses		1,292,048		1,639,477
	$	8,487,327	$	9,427,797

(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 six months ended March 31, 2011 and 2012, the Company capitalized interest of US$240,449 and US$770,353 respectively to the cost of construction in progress.

(iii) Pledged Property, Plant and Equipment

As of September 30, 2011 and March 31, 2012, machinery and equipment with net book value of US$56,376,435 and US$51,180,603 of the Company were pledged as collateral under certain loan arrangements (see Notes 7).

(iv) Assets held for abandonment

Assets held for abandonment as of September 30, 2011 and March 31, 2012 consisted of the following:

		September 30,		March 31,
		2011		2012
Net book value	$	744,356		767,303
Less: impairment charge		(744,356	)	(767,303	)
Carried amount	$	-		-

The carried amount as of September 30, 2011 and March 31, 2012 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 six months period ended March 31, 2012. No impairment charged for the six months period ended March 31, 2011.