| 20. | PROPERTIES. PLANT AND EQUIPMENT |
| Plant | Machinery | Office equipment | Motor vehicles | Furniture and fixtures | Leasehold improvements-factories and offices | Leasehold improvements-shops | Distributor shops’ furniture and fixtures | Total | ||||||||||||||||||||||||||||
| COST | ||||||||||||||||||||||||||||||||||||
| At January 1, 2016 | 30,479,750 | 1,040,458 | 130,975 | 130,681 | 156,349 | 750,464 | 3,920,325 | 3,203,483 | 39,812,485 | |||||||||||||||||||||||||||
| Additions | - | 27,637 | 14,495 | - | 317 | 141,271 | - | - | 183,720 | |||||||||||||||||||||||||||
| Disposals | - | (142,425 | ) | (2,397 | ) | - | (699 | ) | - | (3,416,591 | ) | (2,998,722 | ) | (6,560,834 | ) | |||||||||||||||||||||
| Translation adjustment | (1,948,208 | ) | (66,504 | ) | (8,372 | ) | (8,353 | ) | (9,994 | ) | (47,968 | ) | (250,580 | ) | (204,761 | ) | (2,544,740 | ) | ||||||||||||||||||
| At December 31, 2016 | 28,531,542 | 859,166 | 134,701 | 122,328 | 145,973 | 843,767 | 253,154 | - | 30,890,631 | |||||||||||||||||||||||||||
| Additions | 965,792 | 15,893 | - | - | - | - | - | - | 981,685 | |||||||||||||||||||||||||||
| Disposals | - | - | (12,490 | ) | (43,215 | ) | (1,836 | ) | - | - | - | (57,541 | ) | |||||||||||||||||||||||
| Translation adjustment | 1,758,824 | 52,963 | 8,304 | 7,541 | 8,999 | 52,014 | 15,606 | - | 1,904,251 | |||||||||||||||||||||||||||
| At December 31, 2017 | 31,256,158 | 928,022 | 130,515 | 86,654 | 153,136 | 895,781 | 268,760 | - | 33,719,026 | |||||||||||||||||||||||||||
| DEPRECIATION | ||||||||||||||||||||||||||||||||||||
| At January 1, 2016 | (1,199,268 | ) | (765,500 | ) | (75,573 | ) | (111,127 | ) | (134,786 | ) | (358,958 | ) | (3,920,325 | ) | (2,710,227 | ) | (9,275,764 | ) | ||||||||||||||||||
| Provided for the year | (1,283,919 | ) | (69,007 | ) | (20,528 | ) | (5,867 | ) | (10,812 | ) | (99,622 | ) | - | (374,763 | ) | (1,864,518 | ) | |||||||||||||||||||
| Eliminated upon disposal of assets | - | 85,455 | 1,351 | - | 357 | - | 3,416,591 | 2,911,757 | 6,415,511 | |||||||||||||||||||||||||||
| Translation adjustment | 76,655 | 48,929 | 4,830 | 7,103 | 8,615 | 22,944 | 250,580 | 173,233 | 592,889 | |||||||||||||||||||||||||||
| At December 31, 2016 | (2,406,532 | ) | (700,123 | ) | (89,920 | ) | (109,891 | ) | (136,626 | ) | (435,636 | ) | (253,154 | ) | - | (4,131,882 | ) | |||||||||||||||||||
| Provided for the year | (1,377,553 | ) | (48,120 | ) | (14,495 | ) | (174 | ) | (3,202 | ) | (114,764 | ) | - | - | (1,558,308 | ) | ||||||||||||||||||||
| Eliminated upon disposal of assets | - | - | 10,071 | 38,893 | 1,432 | - | - | - | 50,396 | |||||||||||||||||||||||||||
| Translation adjustment | (148,350 | ) | (43,159 | ) | (5,543 | ) | (6,774 | ) | (8,422 | ) | (26,855 | ) | (15,606 | ) | - | (254,709 | ) | |||||||||||||||||||
| At December 31, 2017 | (3,932,435 | ) | (791,402 | ) | (99,887 | ) | (77,946 | ) | (146,818 | ) | (577,255 | ) | (268,760 | ) | - | (5,894,503 | ) | |||||||||||||||||||
| CARRYING AMOUNT | ||||||||||||||||||||||||||||||||||||
| At December 31, 2016 | 26,125,010 | 159,043 | 44,781 | 12,437 | 9,347 | 408,131 | - | - | 26,758,749 | |||||||||||||||||||||||||||
| At December 31, 2017 | 27,323,723 | 136,620 | 30,628 | 8,708 | 6,318 | 318,526 | - | - | 27,824,523 | |||||||||||||||||||||||||||
Net exchange differences from translating the financial statements from functional currency to presentation currency were $(1,649,540) and $(1,669,507) as at December 31, 2017 and 2016.
Depreciation expense for the years ended December 31, 2017, 2016 and 2015 were $1,510,213, $1,942,735, and $2,015,437, respectively. There was no impairment loss charged for the periods presented.
Depreciation is provided on straight-line basis for all property, plant and equipment over their estimated useful lives of the assets as follows:
| Useful life | Residual Value | ||||||
| Plant | 20 years | 10 | % | ||||
| Machinery | 5 years | 10 | % | ||||
| Office equipment | 5 years | 10 | % | ||||
| Motor vehicles | 5 years | 10 | % | ||||
| Furniture and fixtures | 5 years | 10 | % | ||||
| Leasehold improvements-factories and offices | Shorter of estimated useful life of 5 years or lease term | 10 | % | ||||
| Leasehold improvements-shops | Shorter of estimated useful life of 5 years or lease term | Nil | |||||
| Distributor shops’ furniture and fixtures | 1.5 years | Nil | |||||
Plant includes buildings owned by Anhui Kaixin built on the following land:
| Location | Description | Gross area (m2) | |||
| Jinxi Town, Longshan Road, Taihu City, Anhui Province, the PRC | Dormitory | 8,573 | |||
| Jinxi Town, Longshan Road, Taihu City, Anhui Province, the PRC | Factory | 22,292 |
The buildings were pledged as security for the outstanding bank loans as set forth in note 31.
The gross carrying amount of the fully depreciated property, plant and equipment that is still in use is $38,851 and $32,803 as at December 31, 2017 and 2016, respectively.
In 2012, the Company performed a revaluation of certain equipment. The revaluation was performed by an independent appraiser on November 10, 2012 and, as a result of the revaluation, the Company recognized a revaluation surplus in the amount of 184,272. The amount is classified as revaluation reserve. Since the surplus has not been realized, the amount recognized is not available for distribution. There was no movement in the revaluation reserve during 2017 and 2016. The carrying amount that would have been recognized had the assets been carried under the cost model is as follows:
| As at December 31, | |||||||||
| 2017 | 2016 | ||||||||
| Machinery | 95,826 | 141,075 | |||||||
| Motor Vehicles | 35 | 33 | |||||||
| Office Equipment | 2,661 | 3,202 | |||||||
| Furniture and fixtures | 739 | 1,844 | |||||||
| 99,261 | 146,154 | ||||||||