5. PROPERTY, PLANT AND EQUIPMENT

9 Months Ended

Jul. 31, 2019

Property, Plant and Equipment [Abstract]

NOTE–5

PROPERTY, PLANT AND EQUIPMENT

	July 31, 2019			October 31, 2018

Freehold plantation land	$	7,845,805		$	7,845,805
Leasehold land under development		4,276,764			4,276,764
Freehold land under development		18,091,173			18,091,173
Freehold land and land improvement for rental purpose commercial building		15,191,123			15,191,123
Building structure and improvements		15,857,410			15,857,410
Office furniture, fixture and equipment		170,980			157,084
Motor vehicles		177,285			162,300
Foreign translation difference		(15,242,102	)		(15,884,845	)
		46,368,438			45,696,814
Less: accumulated depreciation		(3,612,627	)		(3,248,963	)
Less: foreign translation difference		448,057			487,503
	$	43,203,868		$	42,935,354

Depreciation expense for the three months ended July 31, 2019 and 2018 was $120,502 and $133,856, respectively.

Depreciation expense for the nine months ended July 31, 2019 and 2018 was $363,664 and $401,740, respectively.

Both commercial buildings in Kuala Lumpur, Malaysia are pledged against the bank loans (note 7).

In April 2015, the Company’s development order regarding the development of 21.8921 hectares (54.10 acres) leasehold land located in Puncak Alam, Malaysia was approved by the Kuala Selangor District Council. The approved order allows the Company to proceed with its plans to construct its Shah Alam 2 Eco Residential Development project. In November 2015, the Company submitted a request to convert some of its planned semi-detached and bungalow home parcels into cluster semi-detached homes to improve the marketability of the Company’s proposed development. On March 4, 2016, the Company received notification from the Kuala Selangor District Council that its revised Development Order relating to the Puncak Alam land was approved on February 24, 2016.

Pursuant to an 8-K filed on July 1, 2016, PGCG Assets entered into a memorandum of understanding (“MOU”) with Yong Tai Berhad, a public listed corporation in the main market of Bursa Malaysia Berhad (“YTB”) engaged in the business of commercial and residential property development, to jointly develop the land (the “Land”) located at Puncak Alam (the “Proposed JV”). The parties terminated the MOU on February 15, 2017, in accordance with the terms of a Mutual Termination of Memorandum of Understanding (the “Termination MOU”). The parties further confirmed that there was no monetary payment due to either party pursuant to the MOU or the Termination MOU.

In light of the termination of the Proposed JV with YTB, the Company plans to develop, market, promote and complete the construction on its own. As at the date of this report, clearing of the land for development is underway. The Company hopes to begin construction in the fourth calendar quarter of 2019 and complete construction by the end of calendar 2021. The Company believes that it will require approximately RM5 to RM10 million in the aggregate to market, promote and complete construction of each phase of our Shah Alam 2 Eco Residential Development Project.

During the course of the Company’s strategic review of its operations, the Company assessed the recoverability of the carrying value of its property, plant and equipment. The impairment charge, if any, represented the excess of carrying amounts of the Company’s property, plant and equipment over the fair values of the assets. The Company believes that there was no impairment of its property, plant and equipment as of July 31, 2019.

PRIME GLOBAL CAPITAL GROUP Inc 10-Q