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TRADE RECEIVALBES, NET
 6 Months Ended
Sep. 30, 2012
Receivables [Abstract]  
Loans, Notes, Trade and Other Receivables, Excluding Allowance for Credit Losses [Text Block]
8. TRADE RECEIVALBES, NET

 

Trade receivables consist of:

    As of
September 30,		     As of
 March 31,		  
    2012     2012  
    US$’000     US$’000  
             
Trade receivables     16,920       12,711  
Less Allowance for doubtful debts (Note)     (13,484 )     (6 )
                 
      3,436       12,705  

 

Note: In order to comply with the tightened environment protection policy, the Company has adopted the internal batteries formation technique to produce lead acid batteries since July 2011. However, this technique is relatively new and complicated for the Company and up to the date of this report, the Company is still unable to handle it well as compared to its original production technique, the external batteries formation technique. As such, the Company was unable to produce batteries with stable quality. During the six months ended September 30, 2012, the return rate of those internal formation batteries within the warranty period has increased significantly to 30% as compared with 10% of external formation batteries during the six months ended September, 2011.

 

Batteries are a significant part of electric bicycles. The quality of batteries directly affects the quality of electric bicycles. In September 2012, two of our factory customers which are major electric bicycles manufacturers, claimed that they had suffered losses from the poor quality of the Company’s battery products and denied to settle their outstanding debts with the Company.

 

Up to the date of this report, the Company is still negotiating with them for the settlement. However, management expects that the negotiation will not be finalized within a short period of time and it is highly likely that these factory customers would not make any settlement to the Company during the negotiation period. Management believes that the opportunity to recover the debts from these customers is remote and therefore has made an allowance for doubtful debts amounting to US$13,478,000 during the 3 and 6 months ended September 30, 2012.