<SEC-DOCUMENT>0001204459-11-001289.txt : 20110510
<SEC-HEADER>0001204459-11-001289.hdr.sgml : 20110510
<ACCEPTANCE-DATETIME>20110510131939
ACCESSION NUMBER:		0001204459-11-001289
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		24
CONFORMED PERIOD OF REPORT:	20110331
FILED AS OF DATE:		20110510
DATE AS OF CHANGE:		20110510

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHINA BAK BATTERY INC
		CENTRAL INDEX KEY:			0001117171
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690]
		IRS NUMBER:				880442833
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32898
		FILM NUMBER:		11826980

	BUSINESS ADDRESS:	
		STREET 1:		BAK INDUSTRIAL PARK, NO. 1 BAK STREET
		STREET 2:		KUICHONG TOWN, LONGGANG DISTRICT
		CITY:			SHENZHEN PEOPLE
		STATE:			F4
		ZIP:			518119
		BUSINESS PHONE:		86-755-8977-0093

	MAIL ADDRESS:	
		STREET 1:		BAK INDUSTRIAL PARK, NO. 1 BAK STREET
		STREET 2:		KUICHONG TOWN, LONGGANG DISTRICT
		CITY:			SHENZHEN PEOPLE
		STATE:			F4
		ZIP:			518119

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MEDINA COFFEE INC
		DATE OF NAME CHANGE:	20000626
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d10q.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<HTML>
<HEAD>
   <TITLE>China BAK Battery, Inc.  - Form 10-Q - Filed by newsfilecorp.com</TITLE>
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<A name=page_1></A>
<P align=center><B><FONT size=5>UNITED STATES </FONT></B><BR><B><FONT
size=5>SECURITIES AND EXCHANGE COMMISSION </FONT></B><BR>Washington, D.C. 20549
</P>
<P align=center><B><FONT size=5>FORM 10&#8722;Q</FONT></B></P>
<P align=center>(Mark One) </P>
<P align=center>[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 </P>
<P align=center>For the quarterly period ended: <B><U>March 31, 2011
</U></B></P>
<P align=center>[&nbsp;&nbsp; ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </P>
<P align=center>For the transition period from _____________ to
_____________</P>
<P align=center>Commission File Number: <U><STRONG>001-32898 </STRONG></U></P>
<P align=center><B><FONT size=6>CHINA BAK BATTERY, INC. </FONT></B>
<font size="6"><BR></font><i>(Exact name of registrant as specified in its charter)
</i> </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center><B>Nevada </B></TD>
    <TD align=center width="50%"><B>88-0442833 </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><i>(State or other jurisdiction of</i></TD>
    <TD align=center width="50%"><i>(I.R.S. Employer Identification No.) </i> </TD></TR>
  <TR vAlign=top>
    <TD align=center><i>&nbsp;incorporation or organization) </i> </TD>
    <TD align=left width="50%"><i>&nbsp; </i> </TD></TR></TABLE>
<P align=center><B>BAK Industrial Park</B><BR><B>No. 1 BAK
Street</B><BR><B>Kuichong Town, Longgang District</B><BR><B>Shenzhen 518119
</B><BR><B>People&#146;s Republic of China </B><BR><i>(Address of principal
executive offices, Zip Code) </i> </P>
<P align=center><B>(86-755) 8977-0093 </B><BR><i>(Registrant&#146;s
telephone number, including area code) </i> </P>
<P align=center><u>
____________________________________________________________________________
<BR></u><i>(Former name, former address and former fiscal year, if changed since last
report) </i> </P>
<P align=justify style="text-indent: 5%">Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. </P>
<P align=center>Yes [X]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No
[&nbsp;&nbsp; ] </P>
<P align=justify style="text-indent: 5%">Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (&#167; 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). </P>
<P align=center>Yes [&nbsp; &nbsp;]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No [&nbsp; &nbsp;]</P>
<P align=justify style="text-indent: 5%">Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of &#147;large accelerated filer,&#148;
&#147;accelerated filer&#148; and &#147;smaller reporting company&#148; in Rule 12b-2 of the
Exchange Act. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center width="50%">Large accelerated filer [&nbsp; ]</TD>
    <TD align=center width="50%">Accelerated
      filer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[X]
    </TD></TR>
  <TR vAlign=top>
    <TD align=center width="50%">&nbsp;</TD>
    <TD align=center width="50%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center width="50%">Non-accelerated filer&nbsp;&nbsp; [&nbsp; ]</TD>
    <TD align=center width="50%">Smaller reporting company [&nbsp;&nbsp; ]
  </TD></TR>
  <TR vAlign=top>
    <TD align=center width="50%"><i>(Do not check if a smaller
      reporting company) </i></TD>
    <TD align=center width="50%">&nbsp;</TD></TR></TABLE>
<P align=justify style="text-indent: 5%">Indicate by check mark whether the registrant is a shell company
  (as defined in Rule 12b-2 of the Exchange Act). </P>
<P align=center>Yes [&nbsp; &nbsp;]&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No [X] </P>
<P align=justify style="text-indent: 5%">The number of shares outstanding of each of the issuer&#146;s
  classes of common stock, as of May 9, 2011 is as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center>Class of Securities </TD>
    <TD align=center width="50%">Shares Outstanding </TD></TR>
  <TR vAlign=top>
    <TD align=center><U><B>Common Stock, $0.001 par value </B></U></TD>
    <TD align=center width="50%"><U><B>63,616,276</B></U></TD>
  </TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_2></A>
<P align=center>&nbsp;</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD align=center >&nbsp;<IMG
      src="cbaklogo.jpg" width="145" height="60"
      border=0></TD>
  </TR>
  <TR vAlign=top>
    <TD align=center><B>CHINA BAK BATTERY, INC.</B> </TD></TR>
  <TR>
    <TD align=center >&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center
    >&nbsp;</TD></TR></TABLE>
<P align=center><B>TABLE OF CONTENTS </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD align=center bgColor=#eeeeee></TD>
    <TD align=center width="80%"  bgColor=#eeeeee
      ><A
      href="#page_3"><STRONG>PART
      I</STRONG> <BR><B>FINANCIAL INFORMATION</B> </A></TD>
    <TD align=right width="9%"  bgColor=#eeeeee>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="80%" >&nbsp; </TD>
    <TD align=right width="9%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_3"><B>ITEM
      1.</B> </A></TD>
    <TD align=left width="80%" bgColor=#eeeeee ><A
      href="#page_3"><B>FINANCIAL
      STATEMENTS</B> </A></TD>
    <TD align=right width="9%" bgColor=#eeeeee><A
      href="#page_3">F-1
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_42"><B>ITEM
      2.</B> </A></TD>
    <TD align=left width="80%" ><A
      href="#page_42"><B>MANAGEMENT&#146;S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND</B> <B>RESULTS OF
      OPERATIONS.</B> </A></TD>
    <TD align=right width="9%"><A
      href="#page_42">1
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_59"><B>ITEM
      3.</B> </A></TD>
    <TD align=left width="80%" bgColor=#eeeeee ><A
      href="#page_59"><B>QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.</B> </A></TD>
    <TD align=right width="9%" bgColor=#eeeeee><A
      href="#page_59">18
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_59"><B>ITEM
      4.</B> </A></TD>
    <TD align=left width="80%" ><A
      href="#page_59"><B>CONTROLS
      AND PROCEDURES.</B> </A></TD>
    <TD align=right width="9%"><A
      href="#page_59">18
      </A></TD></TR>
  <TR>
    <TD bgColor=#eeeeee>&nbsp; </TD>
    <TD width="80%" bgColor=#eeeeee >&nbsp; </TD>
    <TD align=right width="9%" bgColor=#eeeeee>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD align=center></TD>
    <TD align=center width="80%"  ><A
      href="#page_60"><STRONG>PART
      II</STRONG> <BR><B>OTHER INFORMATION</B> </A></TD>
    <TD align=right width="9%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#eeeeee>&nbsp; </TD>
    <TD width="80%" bgColor=#eeeeee >&nbsp; </TD>
    <TD align=right width="9%" bgColor=#eeeeee>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_60"><B>ITEM
      1.</B> </A></TD>
    <TD align=left width="80%" ><A
      href="#page_60"><B>LEGAL
      PROCEEDINGS.</B> </A></TD>
    <TD align=right width="9%"><A
      href="#page_60">19
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_60"><B>ITEM
      1A.</B> </A></TD>
    <TD align=left width="80%" bgColor=#eeeeee ><A
      href="#page_60"><B>RISK
      FACTORS.</B> </A></TD>
    <TD align=right width="9%" bgColor=#eeeeee><A
      href="#page_60">19
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_60"><B>ITEM
      2.</B> </A></TD>
    <TD align=left width="80%" ><A
      href="#page_60"><B>UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.</B> </A></TD>
    <TD align=right width="9%"><A
      href="#page_60">19
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_60"><B>ITEM
      3.</B> </A></TD>
    <TD align=left width="80%" bgColor=#eeeeee ><A
      href="#page_60"><B>DEFAULTS
      UPON SENIOR SECURITIES.</B> </A></TD>
    <TD align=right width="9%" bgColor=#eeeeee><A
      href="#page_60">19
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_60"><B>ITEM
      4.</B> </A></TD>
    <TD align=left width="80%" ><A
      href="#page_60"><B>(REMOVED
      AND RESERVED).</B> </A></TD>
    <TD align=right width="9%"><A
      href="#page_60">19
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_60"><B>ITEM
      5.</B> </A></TD>
    <TD align=left width="80%" bgColor=#eeeeee ><A
      href="#page_60"><B>OTHER
      INFORMATION.</B> </A></TD>
    <TD align=right width="9%" bgColor=#eeeeee><A
      href="#page_60">19
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_60"><B>ITEM
      6.</B> </A></TD>
    <TD align=left width="80%" ><A
      href="#page_60"><B>EXHIBITS.</B>
      </A></TD>
    <TD align=right width="9%"><A
      href="#page_60">19
      </A></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_3></A>
<P align=center><B>PART I </B><BR>
  <B><U>FINANCIAL INFORMATION</U></B><B> </B></P>
<P align=justify><B>ITEM
1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; FINANCIAL
STATEMENTS. </B></P>
<P align=center><B>CHINA BAK BATTERY, INC. AND SUBSIDIARIES </B><BR><B>CONDENSED
INTERIM CONSOLIDATED FINANCIAL STATEMENTS </B><BR>
  <B>FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2011 </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Contents</B>
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>Page</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_4">Condensed Interim
      Consolidated Balance Sheets as of September 30, 2010 and March 31, 2011
      (unaudited) </A></TD>
    <TD align=center width="10%" bgColor=#eeeeee><A href="#page_4">F-2 - F-3
  </A></TD></TR>
  <TR vAlign=top>
    <TD align=left><A href="#page_6">Condensed Interim Consolidated Statements
      of Operations and Comprehensive Loss for the three months ended March 31,
      2010 and 2011 (unaudited) </A></TD>
    <TD align=center width="10%"><a href="#page_6">F-4</a></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_7">Condensed Interim
      Consolidated Statements of Operations and Comprehensive Loss for the six
      months ended March 31, 2010 and 2011 (unaudited) </A></TD>
    <TD align=center width="10%" bgColor=#eeeeee><a href="#page_7">F-5</a></TD></TR>
  <TR vAlign=top>
    <TD align=left><A href="#page_8">Condensed Interim Consolidated Statements
      of Shareholders&#146; Equity for the six months ended March 31, 2010 and 2011
      (unaudited) </A></TD>
    <TD align=center width="10%"><a href="#page_8">F-6</a></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_9">Condensed Interim
      Consolidated Statements of Cash Flows for the three months ended March 31,
      2010 and 2011 (unaudited) </A></TD>
    <TD align=center width="10%" bgColor=#eeeeee><a href="#page_9">F7 - F-8</a></TD></TR>
  <TR vAlign=top>
    <TD align=left><A href="#page_11">Condensed Interim Consolidated
      Statements of Cash Flows for the six months ended March 31, 2010 and 2011
      (unaudited) </A></TD>
    <TD align=center width="10%"><a href="#page_11">F-9 - F-10</a></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_13">Notes to the Condensed
      Consolidated Financial Statements (unaudited) </A></TD>
    <TD align=center width="10%" bgColor=#eeeeee><a href="#page_13">F-11- F-39</a></TD></TR></TABLE>
<P align=center>F-1 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_4></A>
<P align=center><B>PART I </B><BR>
  <B><U>FINANCIAL INFORMATION</U></B><B> </B></P>
<P align=justify><B>Item
1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial
Statements. </B></P>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR><B>Condensed
interim consolidated balance sheets </B><BR><B>As of September 30, 2010 and
March 31, 2011 </B><BR>
  (In US$) </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><I>September 30, </I></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><I>March 31, </I></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><I>Note </I></TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><I>2010 </I></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><I>2011 </I></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><I>(Unaudited) </I></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Assets </B></TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><I>Current assets </I></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash and cash equivalents </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;22,588,635 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;25,557,962 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Pledged deposits </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%">2 </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">9,425,838 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">5,882,359 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Trade accounts receivable, net </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>3 </TD>
    <TD align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>86,198,239 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>91,586,477 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Inventories </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%">4 </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">64,048,366 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">66,797,093 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Prepayments and other receivables </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>5 </TD>
    <TD align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>5,513,221 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,807,485 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Deferred tax assets </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">6,887,723 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">7,451,629 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Total current assets </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">194,662,022 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">201,083,005 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Property, plant and equipment, net </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%">6 </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">228,884,576 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">232,296,998 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Lease prepayments, net </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>31,924,396 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>32,332,093 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Intangible assets, net </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">184,367 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">166,746 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Deferred tax assets </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">1,680,348 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">1,719,874 </TD>
  <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
      assets </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;457,335,709 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;467,598,716 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>See accompanying notes to the condensed interim consolidated
financial statements. </P>
<P align=center>F-2 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_5></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR><B>Condensed
interim consolidated balance sheets </B><BR><B>As of September 30, 2010 and
March 31, 2011 (continued) </B><BR>
  (In US$) </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><I>September 30, </I></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><I>March 31, </I></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><I>Note </I></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><I>2010 </I></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><I>2011 </I></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><I>(Unaudited) </I></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Liabilities </B></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><I>Current liabilities </I></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Short-term bank loans </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>7 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;137,418,187 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;142,447,010 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Current maturities of long-term bank loans </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">8 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">11,956,002 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">15,270,440 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Accounts and bills payable </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>93,724,448 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>109,598,805 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Accrued expenses and other payables </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="12%" align=right style="BORDER-BOTTOM: #000000 1px solid">22,411,066 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="12%" align=right style="BORDER-BOTTOM: #000000 1px solid">19,094,969 </TD>
  <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Total current liabilities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">265,509,703 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">286,411,224 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Long-term bank loans, less current maturities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">8 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">29,890,004 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">15,270,440 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Deferred revenue </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>7,352,941 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>7,390,893 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Other long-term payables </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">9 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">3,431,373 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">10,892,883 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Deferred tax liabilities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>718,912 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>728,907 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Total
      liabilities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>306,902,933 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>320,694,347 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Commitments and contingencies </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>13 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Shareholders&#146; equity </B></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Common stock US$ 0.001 par value; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      100,000,000 authorized; 63,612,526 and 63,616,276 issued
      <BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and outstanding
      as of September 30, 2010 and March 31, 2011 respectively </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">63,613 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">63,617 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Donated shares </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>14,101,689 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>14,101,689 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Additional paid-in capital </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">124,551,522 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">125,485,853 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Statutory reserves </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>7,314,565 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>7,645,303 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Accumulated deficit </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(19,542,138</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(27,614,228</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Accumulated other comprehensive income </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">28,010,135 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">31,288,745 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">154,499,386 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">150,970,979 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Less: Treasury
      shares </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(4,066,610</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(4,066,610</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Total
      shareholders&#146; equity </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">150,432,776 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">146,904,369 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Total liabilities and shareholders&#146; equity    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;457,335,709 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;467,598,716 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>See accompanying notes to the condensed interim consolidated
financial statements. </P>
<P align=center>F-3 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_6></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR><B>Condensed
interim consolidated statements of operations and comprehensive
loss</B><BR><B>For the three months ended March 31, 2010 and 2011
</B><BR>(Unaudited) <BR>
  (In US$) </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><I>Three
      months ended March 31,</I> </TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%"><I>2010</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Net revenues </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;50,423,715 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;46,710,589 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Cost of revenues </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(41,420,960</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(42,261,582</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Gross profit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>9,002,755 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>4,449,007 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Operating expenses: </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="17%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="17%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;Research and development
      expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(1,625,378</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(1,932,735</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;Sales and marketing expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">(1,705,649</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">(2,198,785</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;General and administrative
      expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>(4,818,460</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>(2,149,986</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;Total operating expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(8,149,487</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(6,281,506</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Operating income / (loss) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>853,268 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(1,832,499</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Finance costs, net </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">(2,190,607</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">(2,512,322</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Government grant income </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>78,970 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>30,769 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Other (expense) / income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(145,024</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">48,732 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Loss before income taxes </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(1,403,393</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(4,265,320</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Income tax (expense) / benefits </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(1,146,418</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">181,760 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Net loss </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;(2,549,811</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;(4,083,560</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Other comprehensive (loss) / income </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="17%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="17%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;- Foreign currency
      translation adjustment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>(164,260</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>1,228,458 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;(2,714,071</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;(2,855,102</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Net loss per share: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="17%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="17%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;- Basic </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;(0.04</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;(0.06</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;- Diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;(0.04</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;(0.06</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Weighted average number of shares of common stock: </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="17%"></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="17%"></TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;- Basic </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>62,881,663 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>62,895,246 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;- Diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">62,881,663 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">62,895,246 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>See accompanying notes to the condensed interim consolidated
financial statements. </P>
<P align=center>F-4 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_7></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR><B>Condensed
interim consolidated statements of operations and comprehensive
loss</B><BR><B>For the six months ended March 31, 2010 and 2011
</B><BR>(Unaudited) <BR>
  (In US$) </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><I>Six
      months ended March 31,</I> </TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%"><I>2010</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Net revenues </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;100,651,267 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;110,240,808 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Cost of revenues </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(82,088,632</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(95,795,437</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Gross profit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>18,562,635 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>14,445,371 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Operating expenses: </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="17%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="17%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;Research and development
      expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(3,393,485</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(3,577,479</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;Sales and marketing expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">(3,733,619</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">(4,472,148</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;General and administrative
      expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>(13,455,800</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>(10,028,657</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;Total operating expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(20,582,904</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(18,078,284</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Operating loss </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(2,020,269</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(3,632,913</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Finance costs, net </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">(4,343,733</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">(5,351,962</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Government grant income </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>434,274 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>637,740 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Other (expense) / income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(138,308</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">290,225 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Loss before income taxes </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(6,068,036</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(8,056,910</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Income tax benefits </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">125,898 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">315,558 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Net loss </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;(5,942,138</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;(7,741,352</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Other comprehensive (loss) / income </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="17%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="17%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;- Foreign currency
      translation adjustment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>(271,606</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>3,278,610 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;(6,213,744</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;(4,462,742</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Net loss per share: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="17%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="17%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;- Basic </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;(0.10</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;(0.12</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;- Diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;(0.10</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;(0.12</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Weighted average number of shares of common stock: </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="17%"></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="17%"></TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;- Basic </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>61,984,941 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>62,895,122 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;- Diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">61,984,941 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">62,895,122 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>See accompanying notes to the condensed interim consolidated
financial statements. </P>
<P align=center>F-5 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_8></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR><B>Condensed
interim consolidated statements of shareholders&#146; equity </B><BR><B>For the six
months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited) </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 6pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=center width="6%">&nbsp; </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">&nbsp; </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">&nbsp; </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">&nbsp; </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">&nbsp; </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">Retained </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">Accumulated </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">&nbsp; </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">&nbsp; </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">&nbsp; </TD>
      <TD align=left width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid">Shares
        of common stock </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">&nbsp; </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">Additional </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">&nbsp; </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">earnings / </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">other </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid">Treasury
        shares </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">Total </TD>
      <TD align=left width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=center width="6%">Number of </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">&nbsp; </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">Donated </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">paid-in </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">Statutory </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">(accumulated </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">comprehensive </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">Number of&nbsp;&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">&nbsp; </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD align=center width="6%">shareholders&#146; </TD>
      <TD align=left width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="6%">shares </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="6%">Amount </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="6%">shares </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="6%">capital </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="6%">reserves </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="6%">deficit) </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="6%">income </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="6%">shares </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="6%">Amount </TD>
      <TD align=center width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="6%">equity </TD>
      <TD align=left width="1%">&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="6%">&nbsp; </TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="6%">&nbsp; </TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="6%">&nbsp; </TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="6%">&nbsp; </TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="6%">&nbsp; </TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="6%">&nbsp; </TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="6%">&nbsp; </TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="6%">&nbsp; </TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="6%">&nbsp; </TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="1%">&nbsp;</TD>
      <TD align=right width="6%">&nbsp; </TD>
      <TD align=right width="1%">&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Balance as of October 1, 2009 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>57,737,481 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>&nbsp;57,738 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>&nbsp;14,101,689
      </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>&nbsp;101,161,455
      </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>&nbsp;7,227,195
      </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>&nbsp;13,328,115
      </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>&nbsp;24,791,288
      </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>(721,030</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%"
    bgColor=#e6efff>&nbsp;(4,066,610</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>156,600,870 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Net loss </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>(5,942,138</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>(5,942,138</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Share-based compensation for employee stock
        awards </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>1,944,885 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>1,944,885 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Exercise of stock options awards </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>70,045 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>70 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>226,526 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>226,596 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Issuance of common stock to non- employee
        directors </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>7,500 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>7 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>(7</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Issuance of new common stock </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>5,790,000 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>5,790 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>19,383,694 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>19,389,484 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Appropriation to statutory reserves </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>87,370 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>(87,370</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Foreign currency translation adjustment </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>(271,606</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>(271,606</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Balance as of March 31, 2010 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>63,605,026 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;63,605 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;14,101,689 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;122,716,553 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;7,314,565 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;7,298,607 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;24,519,682 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>(721,030</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;(4,066,610</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>171,948,091 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left></TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Balance as of October 1, 2010 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>63,612,526 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>&nbsp;63,613 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>&nbsp;14,101,689
      </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>&nbsp;124,551,522
      </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>&nbsp;7,314,565
      </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%"
    bgColor=#e6efff>&nbsp;(19,542,138</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>&nbsp;28,010,135
      </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>(721,030</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%"
    bgColor=#e6efff>&nbsp;(4,066,610</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>150,432,776 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Net loss </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>(7,741,352</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>(7,741,352</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Share-based compensation for employee stock
        awards </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>934,335 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>934,335 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Issuance of common stock to non- employee
        directors </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>3,750 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>4 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>(4</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Appropriation to statutory reserves </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>330,738 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>(330,738</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Foreign currency translation adjustment </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>3,278,610 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>3,278,610 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="6%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Balance as of March 31, 2011 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>63,616,276 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;63,617 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;14,101,689 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;125,485,853 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;7,645,303 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;(27,614,228</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;31,288,745 </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>(721,030</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>&nbsp;(4,066,610</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="6%" bgColor=#e6efff>146,904,369 </TD>
      <TD vAlign=bottom align=left width="1%"
  bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify>See accompanying notes to the condensed interim consolidated
financial statements. </P>
<P align=center>F-6 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_9></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR><B>Condensed
interim consolidated statements of cash flows </B><BR><B>For the three months
ended March 31, 2010 and 2011 </B><BR>(Unaudited) <BR>
  (In US$) </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><I>Three
      months ended March 31,</I> </TD>
    <TD align=right width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><I>2010</I> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><I>2011</I> </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Cash flow from operating activities</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net loss </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(2,549,811</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(4,083,560</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Adjustments to reconcile net loss to net cash (used in ) /
      provided by operating activities: </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Depreciation and
      amortization </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>4,600,067 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>4,655,882 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Provision for / (recovery of) doubtful
      debts </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">921,213 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(613,782</TD>
    <TD align=left width="2%">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Provision for /
      (recovery of) obsolete inventories </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>142,130 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(737,407</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Share-based compensation </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">799,675 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">409,316 </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Deferred income
      taxes </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>200,170 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(182,041</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Deferred revenue </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(58,587</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(60,795</TD>
    <TD align=left width="2%">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Exchange loss /
      (gain) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>416,069 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(135,060</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Changes in operating assets and liabilities:
    </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Trade accounts receivable </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(10,399,402</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">1,996,606 </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Inventories </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,475,403 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,656,539 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Prepayments and other receivables
    </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">4,754,453 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">1,284,517 </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Accounts and bills
      payable </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(7,593,860</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(1,272,685</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Accrued expenses and other payables
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">3,774,284 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(292,823</TD>
    <TD align=left width="2%">) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net cash (used in) / provided by operating activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(1,518,196</TD>
    <TD align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">2,624,707 </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Cash flow from investing activities</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Purchases of property, plant and equipment </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(3,803,885</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(6,349,350</TD>
    <TD align=left width="2%">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Purchases of intangible assets </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(135</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net cash used in investing activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;(3,804,020</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;(6,349,350</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
  </TR>
</TABLE>
<P align=justify>See accompanying notes to the condensed interim consolidated
financial statements. </P>
<P align=center>F-7 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_10></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR><B>Condensed
interim consolidated statements of cash flows </B><BR><B>For the three months
ended March 31, 2010 and 2011(continued)</B><BR>(Unaudited) <BR>
  (In US$) </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><I>Three
      months ended March 31,</I> </TD>
    <TD align=right width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><I>2010</I> </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><I>2011</I> </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Cash flow from financing activities</B>
    </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Proceeds from borrowings </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;100,894,215 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;66,874,383 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Repayment of borrowings </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(74,554,760</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(72,954,215</TD>
    <TD align=left width="2%">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Decrease in pledged deposits </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>1,017,887 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>10,567,373 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net cash provided by financing activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>27,357,342 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>4,487,541 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Effect of exchange rate changes on cash and cash</B> <B>equivalents</B>
    </TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>(693,641</B></TD>
    <TD align=left width="2%"><B>)</B> </TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>268,172</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Net increase in cash and cash equivalents</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>21,341,485</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>1,031,070</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Cash and cash equivalents at the beginning
      of period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>18,302,923</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>24,526,892</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Cash and cash equivalents at the end of
      period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;39,644,408</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;25,557,962</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Supplemental disclosure of cash flow information:</B>
    </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash received during the period for: </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Bills receivable discounted to banks
    </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;5,184,165 </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash paid during the period for: </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Income taxes </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;42,097 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Interest, net of
      amounts capitalized </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;1,819,958 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;2,348,209 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>See accompanying notes to the condensed interim consolidated
financial statements.</P>
<P align=center>F-8</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_11></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR><B>Condensed
interim consolidated statements of cash flows </B><BR><B>For the six months
ended March 31, 2010 and 2011 </B><BR>(Unaudited) <BR>
  (In US$) </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><I>Six
      months ended March 31,</I> </TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><I>2010</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Cash flow from operating activities</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net loss </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(5,942,138</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(7,741,352</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Adjustments to reconcile net loss to net cash (used in ) /
      provided by operating activities: </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Depreciation and
      amortization </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>8,792,802 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>8,975,240 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Provision for doubtful debts </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">5,657,549 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">2,447,086 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Recovery of obsolete
      inventories </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(138,125</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(737,407</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Share-based compensation </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,944,885 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">934,335 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Deferred income
      taxes </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(1,294,485</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(417,791</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Deferred revenue </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(117,174</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(120,891</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Exchange loss/(gain)</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>153,511 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(200,587</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Changes in operating assets and liabilities:    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Trade accounts receivable </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(5,924,142</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(5,875,117</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Inventories </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(10,097,219</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(571,497</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Prepayments and other receivables    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(3,442,801</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,805,828 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Accounts and bills
      payable </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(12,388,975</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>14,689,029 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Accrued expenses and other payables    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">3,905,219 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">7,823,961 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net cash (used in) / provided by operating activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(18,891,093</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">21,010,837 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Cash flow from investing activities</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Purchases of property, plant and equipment </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(7,708,534</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(12,317,071</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Purchases of intangible assets </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(1,638</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net cash used in investing activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;(7,710,172</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;(12,317,071</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
</TABLE>
<P align=justify>See accompanying notes to the condensed interim consolidated
financial statements. </P>
<P align=center>F-9 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_12></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR><B>Condensed
interim consolidated statements of cash flows </B><BR><B>For the six months
ended March 31, 2010 and 2011(continued)</B><BR>(Unaudited) <BR>
  (In US$) </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><I>Six
      months ended March 31,</I> </TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><I>2010</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Cash flow from financing activities</B>
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Proceeds from borrowings </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;141,832,103 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;94,628,666 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Repayment of borrowings </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(138,268,619</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(104,714,179</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Decrease  in pledged deposits </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>13,088,683 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,809,754 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Proceeds from issuance of capital stock, net </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">19,616,080 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net cash provided by / (used in) financing activities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">36,268,247 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(6,275,759</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Effect of exchange rate changes on cash
      and cash</B> <B>equivalents</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>(700,926</B></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>551,320</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Net increase in cash and cash equivalents</B>
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>8,966,056</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>2,969,327</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Cash and cash equivalents at the beginning of period</B>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>30,678,352</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>22,588,635</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Cash and cash equivalents at the end of period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    ><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%"><B>&nbsp;39,644,408</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    ><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%"><B>&nbsp;25,557,962</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Supplemental disclosure of cash flow information:</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash received during the period for: </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Bills receivable
      discounted to banks </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;585,969 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;14,279,747 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash paid during the period for: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Income taxes </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;222,339 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;42,097 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Interest, net of amounts capitalized
    </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;3,642,153 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;4,750,809 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>See accompanying notes to the condensed interim consolidated
financial statements.</P>
<P align=center>F-10</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_13></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR><B>Notes to
the condensed interim consolidated financial statements</B><BR><B>For the six
months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited) </P>
<P align=justify><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;Principal
Activities, Basis of Presentation and Organization </B></P>
<P align=justify><I>Principal Activities</I></P>
<P align=justify>China BAK Battery, Inc. (&#147;China BAK&#148;) is a corporation formed
in the State of Nevada on October 4, 1999 as Medina Copy, Inc. The Company
changed its name to Medina Coffee, Inc. on October 6, 1999 and subsequently
changed its name to China BAK Battery, Inc. on February 14, 2005. China BAK and
its subsidiaries (hereinafter, collectively referred to as the &#147;Company&#148;) are
principally engaged in the manufacture, commercialization and distribution of a
wide variety of standard and customized lithium ion (known as "Li-ion" or
"Li-ion cell") rechargeable batteries for use in cellular telephones, as well as
various other portable electronic applications, including high-power handset
telephones, laptop computers, power tools, digital cameras, video camcorders,
MP3 players, electric bicycles, hybrid/electric motors, and general industrial
applications. </P>
<P align=justify>The shares of the Company traded in the over-the-counter market
through the Over-the-Counter Bulletin Board from 2005 until May 31, 2006, when
the Company obtained approval to list its common stock on The NASDAQ Global
Market, and trading commenced that same date under the symbol "CBAK". </P>
<P align=justify><I>Basis of Presentation and Organization</I></P>
<P align=justify>As of March 31, 2011, the Company&#146;s subsidiaries consisted of:
i) BAK International Limited (&#147;BAK International&#148;), a wholly owned limited
liability company incorporated in Hong Kong on December 29, 2003 as BATCO
International Limited, which changed its name to BAK International Limited on
November 3, 2004; ii) Shenzhen BAK Battery Co., Ltd. (&#147;Shenzhen BAK&#148;), a wholly
owned limited liability company established on August 3, 2001 in the People&#146;s
Republic of China (&#147;PRC&#148;); iii) BAK Electronics (Shenzhen) Co., Ltd. (&#147;BAK
Electronics&#148;), a wholly owned limited liability company established on August
15, 2005 in the PRC; iv) BAK International (Tianjin) Ltd. (&#147;BAK Tianjin&#148;), a
wholly owned limited liability company established on December 12, 2006 in the
PRC; v) BAK Battery Canada Ltd. (&#147;BAK Canada&#148;), a wholly owned limited liability
company established on December 20, 2006 in Canada as BAK Canada Battery Ltd.,
which changed its name to BAK Battery Canada Ltd. on December 22, 2006; vi) BAK
Europe GmbH (&#147;BAK Europe&#148;), a wholly owned limited liability company established
in Germany on November 28, 2007; vii) BAK Telecom India Private Limited (&#147;BAK
India&#148;), a wholly owned limited liability company established in India on August
14, 2008; and viii) Tianjin Meicai New Materials Technology Co., Ltd. (&#147;Tianjin
Meicai&#148;), a wholly owned limited liability company established on February 22,
2011 in the PRC. BAK International beneficially owns 100% of BAK India partly
through a nominee agreement with one of its employees.</P>
<P align=justify>BAK Tianjin was established in Tianjin Technology Industrial
District on December 12, 2006 as a wholly owned subsidiary of BAK International
with registered capital of US$99,990,000. Pursuant to BAK Tianjin&#146;s articles of
association and relevant PRC regulations, BAK International was required to
contribute US$20,000,000 to BAK Tianjin as capital (representing 20% of BAK
Tianjin&#146;s registered capital) before March 11, 2007. An extension from the
Business Administration Bureau of Beichen District, Tianjin, was obtained to
make this contribution no later than December 11, 2007. On November 16, 2007,
BAK International contributed approximately US$20,000,000 capital to BAK
Tianjin. The remaining US$79,990,000 was originally required to be fully
contributed no later than December 11, 2008 and an extension from the Business
Administration Bureau of Beichen District, Tianjin, was obtained to make this
contribution no later than December 11, 2009. On November 16, 2009, BAK
International contributed approximately US$9,000,000 capital to BAK Tianjin and
as of November 16, 2009, the total contribution from BAK International was
US$29,000,000. The remaining US$70,990,000 was originally required to be fully
contributed no later than December 11, 2009 and an extension from the Business
Administration Bureau of Beichen District, Tianjin, was obtained to make this
contribution no later than December 2012. BAK Tianjin is principally engaged in
the manufacture of larger lithium ion batteries for use in cordless power tools
and various types of vehicles. </P>
<P align=center>F-11</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_14></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P
align=justify><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal
Activities, Basis of Presentation and Organization (continued)</B></P>
<P align=justify><I>Basis of Presentation and Organization (continued)</I></P>
<P align=justify>On November 6, 2004, BAK International, a non-operating holding
company that had substantially the same shareholders as Shenzhen BAK, entered
into a share swap transaction with the shareholders of Shenzhen BAK for the
purpose of the subsequent reverse acquisition of the Company as described below.
Pursuant to the terms of the share swap transaction, BAK International acquired
all of the outstanding shares of Shenzhen BAK for US$11.5 million in cash, while
the shareholders of Shenzhen BAK acquired substantially all of the outstanding
shares of BAK International for US$11.5 million in cash. As a result, Shenzhen
BAK became a wholly-owned subsidiary of BAK International. After the share swap
transaction was completed, there were 31,225,642 shares of BAK International
stock outstanding, exactly the same as the number of shares of capital stock of
Shenzhen BAK that had been outstanding immediately prior to the share swap, and
the shareholders of BAK International were substantially the same as the
shareholders of Shenzhen BAK prior to the share swap. Consequently, the share
swap transaction between BAK International and the shareholders of Shenzhen BAK
was accounted for as a reverse acquisition of Shenzhen BAK with no adjustment to
the historical basis of the assets and liabilities of Shenzhen BAK. </P>
<P align=justify>On January 20, 2005, the Company completed a share swap
transaction with the shareholders of BAK International. The share swap
transaction, also referred to as the &#147;reverse acquisition&#148; of the Company, was
consummated under Nevada law pursuant to the terms of a Securities Exchange
Agreement entered by and among China BAK, BAK International and the shareholders
of BAK International on January 20, 2005. Pursuant to the Securities Exchange
Agreement, the Company issued 39,826,075 shares of common stock, par value
US$0.001 per share, to the shareholders of BAK International (including
31,225,642 shares to the original shareholders and 8,600,433 shares to new
investors who had purchased shares in the private placement described below),
representing approximately 97.2% of the Company&#146;s post-exchange issued and
outstanding common stock, in exchange for 100% of the outstanding capital stock
of BAK International. </P>
<P align=justify>The share swap transaction has been accounted for as a
capital-raising transaction of the Company whereby the historical financial
statements and operations of Shenzhen BAK are consolidated using historical
carrying amounts. The 1,152,458 shares of China BAK outstanding prior to the
stock exchange transaction were accounted for at the net book value at the time
of the transaction, which was a deficit of US$1,672. </P>
<P align=justify>Also on January 20, 2005, immediately prior to consummating the
share swap transaction, BAK International executed a private placement of its
common stock with unrelated investors whereby it issued an aggregate of
8,600,433 shares of common stock for gross proceeds of US$17,000,000. In
conjunction with this financing, Mr. Xiangqian Li, the Chairman and Chief
Executive Officer of the Company, agreed to place 2,179,550 shares of the
Company&#146;s common stock owned by him into an escrow account pursuant to an Escrow
Agreement dated January 20, 2005 (the &#147;Escrow Agreement&#148;). Pursuant to the
Escrow Agreement, 50% of the escrowed shares were to be released to the
investors in the private placement if audited net income of the Company for the
fiscal year ended September 30, 2005 was not at least US$12,000,000, and the
remaining 50% were to be released to investors in the private placement if
audited net income of the Company for the fiscal year ended September 30, 2006
was not at least US$27,000,000. If the audited net income of the Company for the
fiscal years ended September 30, 2005 and 2006 reached the above-mentioned
targets, the 2,179,550 shares would be released to Mr. Xiangqian Li in the
amount of 50% upon reaching the 2005 target and the remaining 50% upon reaching
the 2006 target. </P>
<P align=justify>Under accounting principles generally accepted in the United
States of America (&#147;US GAAP&#148;), escrow agreements such as the one established by
Mr. Xiangqian Li generally constitute compensation if, following attainment of a
performance threshold, shares are returned to a company officer. The Company
determined that without consideration of the compensation charge, the
performance thresholds for the year ended September 30, 2005 would be achieved.
However, after consideration of a related compensation charge, the Company
determined that such thresholds would not have been achieved. The Company also
determined that, even without consideration of a compensation charge, the
performance thresholds for the year ended September 30, 2006 would not be
achieved. No compensation charge was recorded by the Company for the years ended
September 30, 2005 and 2006. </P>
<P align=center>F-12</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_15></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P
align=justify><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal
Activities, Basis of Presentation and Organization (continued)</B></P>
<P align=justify><I>Basis of Presentation and Organization (continued)</I></P>
<P align=justify>While the 1,089,775 escrow shares relating to the 2005
performance threshold were previously released to Mr. Xiangqian Li, Mr.
Xiangqian Li executed a further undertaking on August 21, 2006 to return those
shares to the escrow agent for the distribution to the relevant investors.
However, such shares were not returned to the escrow agent, but, pursuant to a
Delivery of Make Good Shares, Settlement and Release Agreement between the
Company, BAK International and Mr. Li entered into on October 22, 2007 (the &#147;Li
Settlement Agreement&#148;), such shares were ultimately delivered to the Company as
described below. Because the Company failed to satisfy the performance threshold
for the fiscal year ended September 30, 2006, the remaining 1,089,775 escrow
shares relating to the fiscal year 2006 performance threshold were released to
the relevant investors. As Mr. Li has not retained any of the shares placed into
escrow, and as the investors party to the Escrow Agreement are only shareholders
of the Company and do not have and are not expected to have any other
relationship to the Company, the Company has not recorded a compensation charge
for the years ended September 30, 2005 and 2006. </P>
<P align=justify>At the time the escrow shares relating to the 2006 performance
threshold were transferred to the investors in fiscal year 2007, the Company
should have recognized a credit to donated shares and a debit to additional
paid-in capital, both of which are elements of shareholders&#146; equity. This entry
is not material because total ordinary shares issued and outstanding, total
shareholders&#146; equity and total assets do not change; nor is there any impact on
income or earnings per share. Therefore, previously filed consolidated financial
statements for the fiscal year ended September 30, 2007 will not be restated.
This share transfer has been reflected in these financial statements by
reclassifying the balances of certain items as of October 1, 2007. The balances
of donated shares and additional paid-in capital as of October 1, 2007 were
credited and debited by US$7,955,358 respectively.</P>
<P align=justify>In November 2007, Mr. Xiangqian Li delivered the 1,089,775
shares related to the 2005 performance threshold to BAK International pursuant
to the Li Settlement Agreement; BAK International in turn delivered the shares
to the Company. Such shares (other than those issued to investors pursuant to
the 2008 Settlement Agreements, as described below) are now held by the Company.
Upon receipt of these shares, the Company and BAK International released all
claims and causes of action against Mr. Xiangqian Li regarding the shares, and
Mr. Xiangqian Li released all claims and causes of action against the Company
and BAK International regarding the shares. Under the terms of the Li Settlement
Agreement, the Company commenced negotiations with the investors who
participated in the Company&#146;s January 2005 private placement in order to achieve
a complete settlement of BAK International&#146;s obligations (and the Company&#146;s
obligations to the extent it has any) under the applicable agreements with such
investors. </P>
<P align=justify>Beginning on March 13, 2008, the Company has entered into
settlement agreements (the &#147;2008 Settlement Agreements&#148;) with certain investors
in the January 2005 private placement. </P>
<P align=justify>Pursuant to the 2008 Settlement Agreements, the Company and the
settling investors have agreed, without any admission of liability, to a
settlement and mutual release from all claims relating to the January 2005
private placement, including all claims relating to the escrow shares related to
the 2005 performance threshold that had been placed into escrow by Mr. Xiangqian
Li, as well as all claims, including claims for liquidated damages relating to
registration rights granted in connection with the January 2005 private
placement. Under the 2008 Settlement Agreement, the Company has made settlement
payments to each of the settling investors of the number of shares of the
Company&#146;s common stock equivalent to 50% of the number of the escrow shares
related to the 2005 performance threshold these investors had claimed; aggregate
settlement payments as of March 31, 2011 amounted to 368,745 shares. Share
payments to date have been made in reliance upon the exemptions from
registration provided by Section 4(2) and/or other applicable provisions of the
Securities Act of 1933, as amended. In accordance with the 2008 Settlement
Agreements, the Company filed a registration statement covering the resale of
such shares which was declared effective by the SEC on June 26, 2008. </P>
<P align=justify>The Company&#146;s condensed interim consolidated financial
statements have been prepared in accordance with US GAAP.</P>
<P align=center>F-13</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_16></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Principal
Activities, Basis of Presentation and Organization (continued)</B></P>
<P align=justify><I>Basis of Presentation and Organization (continued)</I></P>
<P align=justify>The interim results of operations are not necessarily
indicative of the results to be expected for the fiscal year ending September
30, 2011. The Company&#146;s consolidated balance sheet as of September 30, 2010 has
been taken from the Company&#146;s audited consolidated balance sheet as of that
date. All other financial statements contained herein are unaudited and, in the
opinion of management, contain all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of financial position,
results of operations and cash flows for the periods presented. The Company&#146;s
accounting policies and certain other disclosure are set forth in the notes to
the consolidated financial statements contained in the Company&#146;s Annual Report
on Form 10-K for the year ended September 30, 2010. These financial statements
should be read in conjunction with the Company&#146;s audited consolidated financial
statements and notes thereto. </P>
<P align=justify>The preparation of financial statements in conformity with US
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting periods. Actual results could
differ from those estimates. This basis of accounting differs in certain
material respects from that used for the preparation of the books of account of
the Company&#146;s principal subsidiaries, which are prepared in accordance with the
accounting principles and the relevant financial regulations applicable to
enterprises with limited liabilities established in the PRC, Hong Kong, India,
Canada or Germany, the accounting standards used in the places of their
domicile. The accompanying condensed interim consolidated financial statements
reflect necessary adjustments not recorded in the books of account of the
Company&#146;s subsidiaries to present them in conformity with US GAAP. </P>
<P align=justify>The Company has a working capital deficiency and accumulated
deficit from net losses incurred for each of the three years in the fiscal year
ended September 30, 2010 and for the six months ended March 31, 2011. These
factors may raise doubts about the Company&#146;s ability to continue as a going
concern. The interim consolidated financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern. The Company accordingly has developed a strategic plan to
generate a positive cash flow from operating activities for the fiscal year
ending September 30, 2011 (the &#147;FY2011 Turnaround Plan&#148;). Under the FY2011
Turnaround Plan, the Company will implement cost reductions on both
manufacturing costs and operating expenses to improve profit margins as well as
reduce receivable turnover days through stronger credit controls.</P>
<P align=center>F-14</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_17></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P
align=justify><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal
Activities, Basis of Presentation and Organization (continued)</B></P>
<P align=justify><B><I>Recently Issued Accounting Standards</I></B></P>
<P align=justify>In January 2010, the FASB issued ASU 2010-06, Fair Value
Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements, or ASU 2010-06 that expands the required disclosures about fair
value measurements. This guidance provides for new disclosures requiring the
Company to (i) disclose separately the amounts of significant transfers in and
out of Level 1 and Level 2 fair value measurements and describe the reasons for
the transfers and (ii) present separately information about purchases, sales,
issuances and settlements in the reconciliation of Level 3 fair value
measurements. This guidance also provides clarification of existing disclosures
requiring the Company to (i) determine each class of assets and liabilities
based on the nature and risks of the investments rather than by major security
type and (ii) for each class of assets and liabilities, disclose the valuation
techniques and inputs used to measure fair value for both Level 2 and Level 3
fair value measurements. ASU 2010-06 is effective for interim and annual
reporting periods beginning after December 15, 2009, except for the disclosures
about purchases, sales, issuances, and settlements in the roll forward of
activity in Level 3 fair value measurements. Those disclosures are effective for
fiscal years beginning after December 15, 2010, and for interim periods within
those fiscal years. Early application is permitted. The adoption of ASU 2010-06
has no material impact on the Company&#146;s financial statements.</P>
<P align=justify>In April 2010, the FASB issued ASU 2010-13, Compensation-Stock
Compensation (Topic 718) - Effect of Denominating the Exercise Price of a
Share-Based Payment Award in the Currency of the Market in Which the Underlying
Equity Security Trades - a consensus of the FASB Emerging Issues Task Force, or
ASU 2010-13. ASU 2010-13 provides amendments to Topic 718 to clarify that an
employee share-based payment award with an exercise price denominated in the
currency of a market in which a substantial portion of the entity&#146;s equity
securities trades should not be considered to contain a condition that is not a
market, performance, or service condition. Therefore, an entity would not
classify such an award as a liability if it otherwise qualifies as equity. The
amendments in this update do not expand the recurring disclosures required by
Topic 718. Disclosures currently required under Topic 718 are applicable to a
share-based payment award, including the nature and the term of share-based
payment arrangements. The amendments in this update are effective for fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2010. The adoption of ASU 2010-13 has no material impact on the
Company&#146;s financial statements.</P>
<P align=justify>In April 2010, the FASB issued ASU 2010-17, Revenue
Recognition&#151;Milestone Method (Topic 605)&#151;Revenue Recognition, or ASU 2010-17.
ASU 2010-17 provides guidance on defining the milestone and determining when the
use of the milestone method of revenue recognition for research or development
transactions is appropriate. It provides criteria for evaluating if the
milestone is substantive and clarifies that a vendor can recognize consideration
that is contingent upon achievement of a milestone as revenue in the period in
which the milestone is achieved, if the milestone meets all the criteria to be
considered substantive. ASU 2010-17 is effective for us in our first quarter of
fiscal 2012 and should be applied prospectively. Early adoption is permitted.
The Company is currently evaluating the impact of the adoption of ASU 2010-17 on
its financial statements.</P>
<P align=justify>In July 2010, the FASB issued ASU 2010-20, Disclosures about
the Credit Quality of Financing Receivables and the Allowance for Credit Losses
(Topic 310)&#151;Receivables, or ASU 2010- 20. ASU 2010-20 enhances the disclosure
requirements about the credit quality and related allowance for credit losses of
financing receivables. ASU 2010-20 is effective for interim and annual reporting
periods on or after December 15, 2010. The adoption of ASU 2010-20 has no
material impact on the Company&#146;s financial statements. </P>
<P align=center>F-15</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_18></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P
align=justify><B>2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pledged
Deposits </B></P>
<P align=justify>Pledged deposits as of September 30, 2010 and March 31, 2011
consisted of the following: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>September 30,</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>March 31,</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Pledged deposits with banks
      for: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="17%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="17%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Construction payable </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="17%">&nbsp;463,410 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="17%">&nbsp;4,211,961 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Short-term bank loans (Note 7) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>658,508 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Bills payable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">8,303,920 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">1,670,398 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;9,425,838 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;5,882,359 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>Deposits pledged for construction payable are generally
released when the relevant construction projects are completed. </P>
<P align=justify><B>3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade
Accounts Receivable, net </B></P>
<P align=justify>Trade accounts receivable as of September 30, 2010 and March
31, 2011 consisted of the following: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>September 30,</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>March 31,</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Trade accounts receivable </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;98,625,901 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;104,563,112 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Less: Allowance for doubtful accounts </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(23,354,925</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(26,349,819</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>75,270,976 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>78,213,293 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Bills receivable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">10,927,263 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">13,373,184 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;86,198,239 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;91,586,477 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>An analysis of the allowance for doubtful accounts for the six
months ended March 31, 2010 and 2011 is as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>Six months ended March 31,</I> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%"
    >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Balance at beginning of
      period </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;13,081,331 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;23,354,925 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Addition of bad debt expense, net </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">5,648,694 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">2,447,086 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Foreign exchange adjustment
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>2,092 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>547,808 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Balance at end of period </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;18,732,117 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;26,349,819 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=center>F-16 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_19></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P
align=justify><B>4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories
</B></P>
<P align=justify>Inventories as of September 30, 2010 and March 31, 2011
consisted of the following: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>September 30,</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>March 31,</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Raw materials </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;18,357,473 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;21,629,811 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Work-in-progress </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">6,771,843 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">11,103,896 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Finished goods </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>47,458,604 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>42,048,007 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>72,587,920 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>74,781,714 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Less: Provision for obsolete inventories </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(8,539,554</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(7,984,621</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff >&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="17%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="17%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;64,048,366 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;66,797,093 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify>Part of the Company&#146;s inventories with carrying value of
US$22,417,504 and US$22,905,659 as of September 30, 2010 and March 31, 2011,
respectively, was pledged as collateral under certain loan agreements (see Note
7). </P>
<P
align=justify><B>5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepayments
and Other Receivables </B></P>
<P align=justify>Prepayments and other receivables as of September 30, 2010 and
March 31, 2011 consisted of the following: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>September 30,</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>March 31,</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Prepayments for raw materials
      and others</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;2,198,770 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;1,589,888 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Other receivables </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">3,952,530 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">2,878,214 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Less: Allowance for doubtful
      accounts </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>(638,079</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>(660,617</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;5,513,221 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;3,807,485 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=center>F-17 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_20></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property,
Plant and Equipment, net </B></P>
<P align=justify>Property, plant and equipment as of September 30, 2010 and
March 31, 2011 consisted of the following: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>September 30,</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>March 31,</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Buildings </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;121,050,663 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;124,663,241 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Machinery and equipment </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">135,127,265 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">140,475,044 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Office equipment </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>2,207,168 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>2,354,595 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Motor vehicles </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">1,416,369 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">1,447,891 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>259,801,465 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>268,940,771 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF" >&nbsp;</TD>
    <TD align=left >Accumulated depreciation </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">(61,340,759</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">(71,350,162</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Construction in progress </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>33,791,211 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>39,364,632 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF" >&nbsp;</TD>
    <TD align=left >Prepayment for acquisition of property, plant
      and equipment </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">2,550,733 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">1,391,940 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD width="5%" bgcolor="#FFFFFF" >&nbsp;</TD>
    <TD align=left >Assets held for abandonment </TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="17%" align=right style="BORDER-BOTTOM: #000000 1px solid">1,043,835 </TD>
    <TD width="2%" align=left >&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="17%" align=right style="BORDER-BOTTOM: #000000 1px solid">1,063,327 </TD>
    <TD width="2%" align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF" >&nbsp;</TD>
    <TD align=left bgColor=#FFFFFF >Net book value </TD>
    <TD align=left width="1%"  bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#FFFFFF>235,846,485 </TD>
    <TD align=left width="2%"  bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#FFFFFF>239,410,508 </TD>
    <TD align=left width="2%"  bgColor=#FFFFFF>&nbsp;</TD></TR>
  <TR bgcolor="#E6EFFF">
    <TD width="5%" bgcolor="#FFFFFF" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF" >&nbsp;</TD>
    <TD align=left bgColor=#FFFFFF >Impairment charge </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#FFFFFF>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#FFFFFF>(6,961,909</TD>
    <TD align=left width="2%"  bgColor=#FFFFFF>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#FFFFFF>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#FFFFFF>(7,113,510</TD>
    <TD align=left width="2%"  bgColor=#FFFFFF>) </TD></TR>
  <TR bgcolor="#E6EFFF">
    <TD width="5%" bgcolor="#FFFFFF" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF" >&nbsp;</TD>
    <TD align=left bgColor=#FFFFFF >Carried amount </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#FFFFFF>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#FFFFFF>&nbsp;228,884,576 </TD>
    <TD align=left width="2%"  bgColor=#FFFFFF>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#FFFFFF>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#FFFFFF>&nbsp;232,296,998 </TD>
    <TD align=left width="2%"
  bgColor=#FFFFFF>&nbsp;</TD></TR></TABLE>
<P align=center>F-18</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_21></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P
align=justify><B>6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property,
Plant and Equipment, net (continued) </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><I>(i)</I> </TD>
    <TD>
      <P align=justify><I>Depreciation expense for the six months ended March
      31, 2010 and 2011 is included in the condensed interim consolidated
      statements of operations and comprehensive loss as
  follows:</I></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><I>Six
      months ended March 31,</I> </TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Cost of revenues </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;6,499,739 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;6,743,209 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Research and development expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">282,843 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">208,154 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF" >Sales and marketing expenses </TD>
    <TD width="1%" align=left bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD width="17%" align=right bgcolor="#E6EFFF">195,494 </TD>
    <TD width="2%" align=left bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD width="1%" align=left bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD width="17%" align=right bgcolor="#E6EFFF">243,916 </TD>
    <TD width="2%" align=left bgcolor="#E6EFFF" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#FFFFFF >General and administrative expenses </TD>
    <TD width="1%" align=left  bgColor=#FFFFFF style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="17%" align=right bgColor=#FFFFFF style="BORDER-BOTTOM: #000000 1px solid">1,019,415 </TD>
    <TD align=left width="2%"  bgColor=#FFFFFF>&nbsp;</TD>
    <TD width="1%" align=left  bgColor=#FFFFFF style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="17%" align=right bgColor=#FFFFFF style="BORDER-BOTTOM: #000000 1px solid">1,292,048 </TD>
    <TD align=left width="2%"  bgColor=#FFFFFF>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#E6EFFF >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#E6EFFF>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#E6EFFF>&nbsp;7,997,491 </TD>
    <TD align=left width="2%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#E6EFFF>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#E6EFFF>&nbsp;8,487,327 </TD>
    <TD align=left width="2%"
  bgColor=#E6EFFF>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><I>(ii) Construction in Progress</I></P>
<P align=justify>Construction in progress mainly comprises capital expenditures
for construction of the Company&#146;s new corporate campus, including offices and
factories. </P>
<P align=justify>For the six months ended March 31, 2010 and 2011, the Company
capitalized interest of US$548,798 and US$240,449 respectively to the cost of
construction in progress. </P>
<P align=justify><I>(iii) Pledged Property, Plant and Equipment</I><BR></P>
<P align=justify>As of September 30, 2010 and March 31, 2011, machinery and
equipment with net book value of US$59,735,854 and US$58,763,355 of the Company
were pledged as collateral under certain loan arrangements (see Notes 7 and 8).
</P>
<P align=justify><I>(iv) Assets held for abandonment</I></P>
<P align=justify>Assets held for abandonment as of September 30, 2010 and March
31, 2011 consisted of the following: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>September 30,</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>March 31,</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Net book value </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;1,043,835 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>1,063,327 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Less: impairment charge </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(819,874</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(846,487</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Carried amount </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;223,961 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>216,840 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>The carried amount as of March 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 their salvage value of $216,840.</P>
<P align=center>F-19</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_22></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short-term
Bank Loans </B></P>
<P align=justify>The Company obtained several short-term loan facilities from
financial institutions in the PRC. These facilities were secured by the
Company&#146;s assets with the following carrying values: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>September 30,</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>March 31,</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Pledged deposits (Note 2) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;658,508 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Inventories (Note 4) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">22,417,504 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">22,905,659 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Machinery and equipment, net
      (Note 6) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>31,788,414 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>26,409,205 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;54,864,426 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;49,314,864 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify>As of September 30, 2010 and March 31, 2011, the Company had
several short-term bank loans with aggregate outstanding balances of
US$137,418,187 and US$142,447,010, respectively. The loans were primarily
obtained for general working capital, carried interest rates ranging from 4.56%
to 6.39% per annum, and had maturity dates ranging from 3 to 12 months. Each
loan is guaranteed by Mr. Xiangqian Li, who did not receive any compensation for
acting as guarantor. </P>
<P align=justify>As of March 31, 2011, the Company had pledged the land use
rights certificate in relation to the land on which Shenzhen BAK&#146;s corporate
campus had been constructed for short-term bank loans amounting to US$61,081,758
borrowed from Shenzhen Eastern Branch, Agricultural Bank of China. As of March
31, 2011, the aggregate net book value of the buildings and land use rights in
relation to the land use rights certificate was US$115,951,734. </P>
<P align=justify><B>8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-term
  Bank Loans</B></P>
<P align=justify>As of September 30, 2010 and March 31, 2011, the Company had
long-term bank loans of US$41,846,006 and US$30,540,880, respectively. As of
March 31, 2011, US$7,635,220 was borrowed under a four-year long-term loan
credit facility from China Development Bank, bearing interest at the benchmark
rate of the People&#146;s Bank of China (&#147;PBOC&#148;) for three-year to five-year
long-term loans, which is currently 5.94% per annum. This long-term bank loan is
repayable on February 28, 2016. </P>
<P align=justify>Two other long-term loans totaled an aggregate borrowed amount
of US$7,635,220 as of March 31, 2011. These loans were borrowed under a
five-year long-term loan credit facility from Shenzhen Eastern Branch,
Agricultural Bank of China, and carry interest at 90% of the benchmark rate of
the PBOC for three-year to five-year long-term loans. The first loan of
US$6,108,176 currently carries interest at 5.184% per annum and is repayable on
January 25, 2012. The second loan of US$1,527,044 currently carries annual
interest of 5.184% and is repayable on January 25, 2012. Another loan of
US$15,270,440 as of March 31, 2011 was borrowed under a four-year long-term loan
credit facility from Tianjin Branch, Agricultural Bank of China and carries
interest at the benchmark rate of the PBOC for three-year to five-year long-term
loans, which is currently 5.76% per annum. This loan is repayable in two
installments of US$7,635,220 on December 26, 2011 and US$7,635,220 on May 26,
2012. </P>
<P align=center>F-20</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_23></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P
align=justify><B>8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term
  Bank Loans (continued)</B></P>
<P align=justify>The long-term bank loan with China Development Bank is: (i)
guaranteed by Mr. Xiangqian Li; (ii) secured by certain shares of the Company
owned by Mr. Xiangqian Li; and (iii) to be secured by the property ownership and
land use rights certificate relating to the land on which the Company&#146;s Research
and Development Test Centre is to be constructed and the facilities to be
constructed thereon. On April 7, 2010, the pledge of the land use rights
certificate to China Development Bank was approved by the relevant government
bureau. On April 20, 2010, the relevant land use rights certificate was pledged
to China Development Bank. </P>
<P align=justify>The long-term bank loan with Shenzhen Eastern Branch,
Agricultural Bank of China is: (i) guaranteed by Mr. Xiangqian Li; (ii) secured
by the Company&#146;s machinery and equipment with carrying values of US$30,408,945
as of March 31, 2011 (see Note 6); and (iii) secured by the property ownership
certificate and land use rights certificate in relation to the land on which
Shenzhen BAK&#146;s corporate campus had been constructed and any machinery and
equipment purchased and used in the campus subsequent to such construction. </P>
<P align=justify>The long-term bank loan with Tianjin Branch, Agricultural Bank
of China is secured by the machinery and equipment purchased for the automated
high-power lithium battery cells production line in Tianjin with carrying values
of US$1,945,205 as of March 31, 2011. </P>
<P align=justify>Mr. Xiangqian Li did not receive any compensation for pledging
his shares in the Company or acting as guarantor for the above long-term bank
loans. </P>
<P align=justify>The aggregate maturities of long-term bank loans as of March
31, 2011 are as follows: </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>

  <TR vAlign=top>
    <TD align=center>Fiscal years ending on March 31, </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="22%" >&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center bgColor=#e6efff>2012 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="22%" bgColor=#e6efff >&nbsp;15,270,440
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>2013 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="22%" >7,635,220 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center bgColor=#e6efff>2014 or after</TD>
    <TD width="1%" align=left  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="22%" align=right bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >7,635,220 </TD>
    <TD width="2%" align=left  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="22%" >&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="22%"
    bgColor=#e6efff >&nbsp;30,540,880 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE></DIV>
<P align=justify><B>9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
Long-term payables </B></P>
<P align=justify>Other long-term payables as of March 31, 2011 include  a government subsidy of approximately US$7,500,000 received for
the company&#146;s
automated high-power lithium battery project from the National Development and
Reform Commission and the Ministry of Industry and Information Technology.</P>
<P align=center>F-21</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_24></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>10&nbsp;&nbsp;&nbsp;&nbsp; Share-based Compensation</B></P>
<P align=justify><I>(i)</I><I> </I><I>Options </I></P>
<P align=justify>The Company grants share options to officers and employees and
restricted shares of common stock to its non-employee directors as rewards for
their services. </P>
<P align=justify><B>Stock Option Plan</B></P>
<P align=justify>In May 2005, the Board of Directors adopted the China BAK
Battery, Inc. 2005 Stock Option Plan (the &#147;Plan&#148;). The Plan originally
authorized the issuance of up to 4,000,000 shares of the Company&#146;s common stock,
pursuant to stock options granted under the Plan, or as grants of restricted
stock. The exercise price of options granted pursuant to the Plan must be at
least equal to the fair market value of the Company&#146;s common stock at the date
of the grant. Fair market value is determined at the discretion of the
designated committee on the basis of reported sales prices for the Company&#146;s
common stock over a ten business day period ending on the grant date. The Plan
will terminate on May 16, 2055. On July 28, 2008, the Company&#146;s stockholders
approved certain amendments to the Plan, including an amendment increasing the
total number of shares available for issuance under the Plan to 8,000,000. </P>
<P align=justify>Pursuant to the Plan, the Company granted options to purchase
2,000,000 shares of common stock with an exercise price of US$6.25 per share on
May 16, 2005. In accordance with the vesting provisions of the grants, the
options became vested and exercisable under the following schedule: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="5%"  >&nbsp;</TD>
    <TD align=center width="29%">Percentage of </TD>
    <TD align=center width="5%"  >&nbsp;</TD>
    <TD align=center width="29%">Initial </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Number of Shares
    </TD>
    <TD align=center width="5%"  >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">Options Issued </TD>
    <TD align=center width="5%"  >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">Vesting Date </TD></TR>
  <TR vAlign=top>
    <TD align=center bgColor=#e6efff>800,000 </TD>
    <TD align=center width="5%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="29%" bgColor=#e6efff>40% </TD>
    <TD align=center width="5%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="29%" bgColor=#e6efff>July 1, 2007 </TD></TR>
  <TR vAlign=top>
    <TD align=center>600,000 </TD>
    <TD align=center width="5%"  >&nbsp;</TD>
    <TD align=center width="29%">30% </TD>
    <TD align=center width="5%"  >&nbsp;</TD>
    <TD align=center width="29%">January 1, 2008 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      bgColor=#e6efff>600,000 </TD>
    <TD align=center width="5%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="29%"
    bgColor=#e6efff>30% </TD>
    <TD align=center width="5%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="29%" bgColor=#e6efff>July 1, 2008 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center>2,000,000 </TD>
    <TD align=center width="5%"  >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="29%">100%
    </TD>
    <TD align=left width="5%"  >&nbsp;</TD>
    <TD align=left width="29%">&nbsp; </TD></TR></TABLE>
<P align=center>F-22</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_25></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>10&nbsp;&nbsp;&nbsp; &nbsp;Share-based Compensation (continued)</B></P>
<P align=justify>Subsequent to the grant date, options to purchase 200,000
shares of common stock were forfeited because the optionees terminated their
employment with the Company. In addition, on September 28, 2006, options to
purchase a total of 1,400,000 shares of common stock were cancelled pursuant to
the Termination and Release Agreements signed on that day. </P>
<P align=justify>A summary of share option plan activity for these options
during the six months ended March 31, 2011 is presented below: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">Weighted </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">Weighted </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">average </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">average </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">remaining </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">Aggregate </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">Number of </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">exercise price </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">contractual </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">intrinsic </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">shares </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">per
      share </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">term
    </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">value (1)</TD>
    <TD align=left width="2%" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of October 1, 2010 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>200,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;6.25 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercised </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Forfeited </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cancelled </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>200,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;6.25 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>0.1 years </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercisable as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">200,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;6.25 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">0.1
      years </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify>(1) Aggregate intrinsic value represents the value of the
Company&#146;s closing stock price on March 31, 2011 (US$1.81) in excess of the
exercise price multiplied by the number of options outstanding or exercisable.
</P>
<P align=justify>The weighted-average grant-date fair value of options granted
during 2005 was US$3.67 per share. No non-cash share-based compensation expense
was recognized in respect of these share options for the six months ended March
31, 2010 and 2011. </P>
<P align=justify>The fair value of the above option awards was estimated on the
date of grant using the Black-Scholes Option Valuation Model together with the
following assumptions: </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected volatility </TD>
    <TD align=right width="35%" bgColor=#e6efff >59.85% </TD></TR>
  <TR vAlign=top>
    <TD align=left>Expected dividends </TD>
    <TD align=right width="35%" >Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected life </TD>
    <TD align=right width="35%" bgColor=#e6efff >6 years </TD></TR>
  <TR vAlign=top>
    <TD align=left>Risk-free interest rate </TD>
    <TD align=right width="35%" >4.13% </TD></TR></TABLE></DIV>
<P align=justify>As of March 31, 2011, there were no unrecognized compensation
costs related to non-vested share options. </P>
<P align=justify>Pursuant to the Plan, the Company also granted options to
purchase 1,501,500 shares of the Company&#146;s common stock with a weighted-average
exercise price of US$3.28 per share on June 25, 2007. In accordance with the
vesting provisions of the grants, the options will become vested and exercisable
during the period from December 31, 2007 to February 9, 2012 according to each
employee&#146;s respective agreement. </P>
<P align=center>F-23</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_26></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>10&nbsp;&nbsp;&nbsp;&nbsp; Share-based Compensation (continued)</B></P>
<P align=justify>A summary of share option plan activity for these options
during the six months ended March 31, 2011 is presented below: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Number of<br>      Shares </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted <br>
average <br>
exercise<br>price per <br>
share </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted <br>
average<br>
remaining<br>contractua<br>
l term </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Aggregate <br>
    intrinsic <br>
    value (1)</TD>
    <TD width="2%" align=center valign="bottom" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of October 1, 2010 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>923,500 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;3.29 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercised </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Forfeited </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cancelled </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>923,500 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;3.29 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>2.4 years </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercisable as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">665,500 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;3.18 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">1.9
      years </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify>(1) Aggregate intrinsic value represents the value of the
Company&#146;s closing stock price on March 31, 2011 (US$1.81) in excess of the
exercise price multiplied by the number of options outstanding or exercisable.
</P>
<P align=justify>The weighted-average grant-date fair value of options granted
during 2007 was US$2.15 per share. The Company recorded non-cash share-based
compensation expense of US$114,742 and US$49,224 For the six months ended March
31, 2010 and 2011 respectively, in respect of share options granted on June 25,
2007, which was allocated to cost of revenues, sales and marketing expenses,
general and administrative expenses and research and development expenses
respectively. </P>
<P align=justify>The fair value of the above option awards granted on June 25,
2007 was estimated on the date of grant using the Black-Scholes Option Valuation
Model that uses the following assumptions: </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected volatility </TD>
    <TD align=right width="35%" bgColor=#e6efff >69.44% </TD></TR>
  <TR vAlign=top>
    <TD align=left>Expected dividends </TD>
    <TD align=right width="35%" >Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected life </TD>
    <TD align=right width="35%" bgColor=#e6efff >4 - 10 years
  </TD></TR>
  <TR vAlign=top>
    <TD align=left>Risk-free interest rate </TD>
    <TD align=right width="35%" >5.09% </TD></TR></TABLE></DIV>
<P align=justify>As of March 31, 2011, there were unrecognized compensation
costs of US$24,604 related to the above non-vested share options. These costs
are expected to be recognized over a weighted average period of 0.1 year. </P>
<P align=justify>Pursuant to the Plan, the Company also granted options to
purchase 360,000 shares of common stock with an exercise price of US$4.30 per
share on January 28, 2008. In accordance with the vesting provisions of the
grants, the options will become vested and exercisable during the period from
April 28, 2008 to January 28, 2011 according to each employee&#146;s respective
agreement. </P>
<P align=center>F-24</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_27></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>10&nbsp;&nbsp;&nbsp;&nbsp; Share-based Compensation (continued)</B></P>
<P align=justify>A summary of share option plan activity for these options
during the six months ended March 31, 2011 is presented below: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;   </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"> Number <br>
    of Shares </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted<br>      average<br>
    exercise <br>
    price <br>
    per share </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted<br>
    average<br>    remaining<br>    contractual<br>
    term </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"> Aggregate <br>
    intrinsic<br>    value (1)</TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of October 1, 2010 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>360,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;4.30 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercised </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Forfeited </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cancelled </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>360,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;4.30 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>1.8 years </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercisable as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">360,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;4.30 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">1.8
      years </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify>(1) Aggregate intrinsic value represents the value of the
Company&#146;s closing stock price on March 31, 2011 (US$1.81) in excess of the
exercise price multiplied by the number of options outstanding or exercisable.
</P>
<P align=justify>The weighted average grant-date fair value of options granted
on January 28, 2008 was US$3.59 per share. The Company recorded non-cash
share-based compensation expense of US$105,291 and US$14,812 for the six months
ended March 31, 2010 and 2011, respectively, in respect of share options granted
on January 28, 2008, which was allocated to general and administrative expenses
and research and development expenses respectively. </P>
<P align=justify>The fair value of the above option awards granted on January
28, 2008 was estimated on the date of grant using the Black-Scholes Option
Valuation Model that uses the following assumptions. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected volatility </TD>
    <TD align=right width="35%" bgColor=#e6efff >120.23% </TD></TR>
  <TR vAlign=top>
    <TD align=left>Expected dividends </TD>
    <TD align=right width="35%" >Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected life </TD>
    <TD align=right width="35%" bgColor=#e6efff >5 years </TD></TR>
  <TR vAlign=top>
    <TD align=left>Risk-free interest rate </TD>
    <TD align=right width="35%" >3.59% </TD></TR></TABLE></DIV>
<P align=justify>As of March 31, 2011, there were no unrecognized compensation
costs related to non-vested share options. </P>
<P align=justify>On May 29, 2008, the Compensation Committee of the Company&#146;s
Board of Directors recommended and approved the grant of options to purchase
1,080,000 shares of the Company&#146;s common stock to Mr. Xiangqian Li and options
to purchase 170,000 shares to five other employees, with an exercise price of
US$4.18 per share. In accordance with the vesting provisions of the grants, the
options will become vested and exercisable during the period from September 30,
2008 to May 29, 2012 according to each employee&#146;s respective agreement. </P>
<P align=center>F-25</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_28></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>10&nbsp;&nbsp;&nbsp; &nbsp;Share-based Compensation (continued)</B></P>
<P align=justify>A summary of share option plan activity for these options
during the six months ended March 31, 2011 is presented below: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">Weighted </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">Weighted </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">average </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">average </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">remaining </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD width="12%" align=center nowrap>Aggregate </TD>
  <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD width="12%" align=center nowrap>Number of </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD width="12%" align=center nowrap>exercise price </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD width="12%" align=center nowrap>contractual </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">intrinsic </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">shares </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">per
      share </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">term
    </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">value (1)</TD>
    <TD align=left width="2%" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of October 1, 2010 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,250,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;4.18 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercised </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Forfeited </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cancelled </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>1,250,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;4.18 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>2.1 years </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercisable as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">695,837 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;4.18 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">1.0
      years </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify>(1) Aggregate intrinsic value represents the value of the
Company&#146;s closing stock price on March 31, 2011 (US$1.81) in excess of the
exercise price multiplied by the number of options outstanding or exercisable.
</P>
<P align=justify>The weighted average grant-date fair value of options granted
on May 29, 2008 was US$2.36 per share. The Company recorded non-cash share-based
compensation expense of US$353,080 and US$121,198 for the six months ended March
31, 2010 and 2011 respectively, in respect of share options granted on May 29,
2008, which was allocated to general and administrative expenses and research
and development expenses respectively. </P>
<P align=justify>The fair value of the above option awards granted on May 29,
2008 was estimated on the date of grant using the Black-Scholes Option Valuation
Model that uses the following assumptions. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected volatility </TD>
    <TD align=right width="35%" bgColor=#e6efff
      ><SUP>59.48</SUP>% </TD></TR>
  <TR vAlign=top>
    <TD align=left>Expected dividends </TD>
    <TD align=right width="35%" >Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected life </TD>
    <TD align=right width="35%" bgColor=#e6efff >5 years </TD></TR>
  <TR vAlign=top>
    <TD align=left>Risk-free interest rate </TD>
    <TD align=right width="35%" ><SUP>4.01</SUP>%
</TD></TR></TABLE></DIV>
<P align=justify>As of March 31, 2011, there were unrecognized compensation
costs of US$51,492 related to the above non-vested share options. These costs
are expected to be recognized over a weighted average period of 0.3 years. </P>
<P align=justify>On June 22, 2009, the Compensation Committee of the Company&#146;s
Board of Directors recommended and approved the grant of options to purchase
1,928,200 shares of the Company&#146;s common stock to certain key employees,
officers and consultants with an exercise price of US$2.81 per share. In
accordance with the vesting provisions of the grants, the options will become
vested and exercisable over five years in twenty equal quarterly installments on
the first day of each fiscal quarter beginning on October 1, 2009. </P>
<P align=center>F-26</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_29></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>10&nbsp;&nbsp;&nbsp; &nbsp;Share-based Compensation (continued)</B></P>
<P align=justify>A summary of share option plan activity for these options
during the six months ended March 31, 2011 is presented below: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Number <br>
    of shares </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Weighted <br>
    average<br>
    exercise <br>
    price <br>
    per share </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Weighted <br>
    average <br>
    remaining<br>    contractual<br>
    term </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Aggregate<br>
    intrinsic<br>    value (1)</TD>
    <TD width="2%" align=left valign="bottom" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of October 1, 2010 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,694,355 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;2.81 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercised </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Forfeited </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>51,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2.81 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cancelled </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>1,643,355 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;2.81 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>5.2 years </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercisable as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">420,800 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;2.81 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">5.2
      years </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify>(1) Aggregate intrinsic value represents the value of the
Company&#146;s closing stock price on March 31, 2011 (US$1.81) in excess of the
exercise price multiplied by the number of options outstanding or exercisable.
</P>
<P align=justify>The weighted average grant-date fair value of options granted
on June 22, 2009 was US$2.46 per share. The Company recorded non-cash
share-based compensation expense of US$983,568 and of US$519,752 for the six
months ended March 31, 2010 and 2011, respectively, in respect of share options
granted on June 22, 2009, which was allocated to general and administrative
expenses and research and development expenses respectively. </P>
<P align=justify>The fair value of the above option awards granted on June 22,
2009 was estimated on the date of grant using the Black-Scholes Option Valuation
Model that uses the following assumptions. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected volatility </TD>
    <TD align=right width="35%" bgColor=#e6efff >111.03% </TD></TR>
  <TR vAlign=top>
    <TD align=left>Expected dividends </TD>
    <TD align=right width="35%" >Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected life </TD>
    <TD align=right width="35%" bgColor=#e6efff >7 years </TD></TR>
  <TR vAlign=top>
    <TD align=left>Risk-free interest rate </TD>
    <TD align=right width="35%" >3.69% </TD></TR></TABLE></DIV>
<P align=justify>As of March 31, 2011, there were unrecognized compensation
costs of US$1,228,678 related to the above non-vested share options. These costs
are expected to be recognized over a weighted average period of 1.9 years. </P>
<P align=justify>On June 26, 2009, the Compensation Committee of the Company&#146;s
Board of Directors recommended and approved the grant of options to purchase
75,000 shares of the Company&#146;s common stock to certain key management with an
exercise price of US$3.24 per share. In accordance with the vesting provisions
of the grants, the options will become vested and exercisable over five years in
twenty equal quarterly installments on the first day of each fiscal quarter
beginning on October 1, 2009. </P>
<P align=center>F-27</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_30></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>10&nbsp;&nbsp;&nbsp;&nbsp; Share-based Compensation (continued)</B></P>
<P align=justify>A summary of share option plan activity for these options
during the six months ended March 31, 2011 is presented below: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Number <br>
    of shares </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted<br>
    average<br>
    exercise<br>    price <br>
    per share </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted <br>
    average <br>
    remaining<br>    contractual<br>
    term </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Aggregate <br>
    intrinsic<br>    value (1)</TD>
    <TD width="2%" align=left valign="bottom" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of October 1, 2010 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>75,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;3.24 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercised </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Forfeited </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cancelled </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>75,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;3.24 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>5.2 years </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercisable as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">18,750 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;3.24 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">5.2
      years </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify>(1) Aggregate intrinsic value represents the value of the
Company&#146;s closing stock price on March 31, 2011 (US$1.81) in excess of the
exercise price multiplied by the number of options outstanding or exercisable.
</P>
<P align=justify>The weighted average grant-date fair value of options granted
on June 26, 2009 was US$2.86 per share. The Company recorded non-cash
share-based compensation expense of US$48,884 and US$25,716 for the six months
ended March 31, 2010 and 2011, respectively, in respect of share options granted
on June 26, 2009, which was allocated to research and development expenses.</P>
<P align=justify>The fair value of the above option awards granted on June 26,
2009 was estimated on the date of grant using the Black-Scholes Option Valuation
Model that uses the following assumptions. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected volatility </TD>
    <TD align=right width="35%" bgColor=#e6efff >113.58% </TD></TR>
  <TR vAlign=top>
    <TD align=left>Expected dividends </TD>
    <TD align=right width="35%" >Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected life </TD>
    <TD align=right width="35%" bgColor=#e6efff >7 years </TD></TR>
  <TR vAlign=top>
    <TD align=left>Risk-free interest rate </TD>
    <TD align=right width="35%" >3.51% </TD></TR></TABLE></DIV>
<P align=justify>As of March 31, 2011, there were unrecognized compensation
costs of US$66,332 related to the above non-vested share options. These costs
are expected to be recognized over a weighted average period of 1.7 years. </P>
<P align=justify>On March 11, 2010, the Compensation Committee of the Company&#146;s
Board of Directors recommended and approved the grant of options to purchase
50,000 shares of the Company&#146;s common stock to certain key management with an
exercise price of US$2.58 per share. In accordance with the vesting provisions
of the grants, the options will become vested and exercisable over two years in
two equal installments beginning on each anniversary of the grant day on March
11, 2010. </P>
<P align=center>F-28</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_31></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>10&nbsp;&nbsp;&nbsp; &nbsp;Share-based Compensation (continued)</B></P>
<P align=justify>A summary of share option plan activity for these options
during the six months ended March 31, 2011 is presented below: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Number <br>
    of shares </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted<br>
      average <br>
exercise<br>price<br>
per share </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted <br>
    average <br>
    remaining <br>
    contractual<br>
    term </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Aggregate<br>
    intrinsic <br>
    value (1)</TD>
    <TD width="2%" align=left valign="bottom" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of October 1, 2010 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>50,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;2.58 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercised </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Forfeited </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>50,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2.58 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cancelled </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercisable as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">-</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">-</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify>(1) Aggregate intrinsic value represents the value of the
Company&#146;s closing stock price on March 31, 2011 (US$1.81) in excess of the
exercise price multiplied by the number of options outstanding or exercisable.
</P>
<P align=justify>The weighted average grant-date fair value of options granted
on March 11, 2010 was US$1.51 per share. The Company recorded non-cash
share-based compensation expense of US$3,100 for the six months ended March 31,
2010 in respect of share options granted on March 11, 2010 and no non-cash
share-based compensation expense was recognized in respect of these share
options for the six months ended March 31, 2011.</P>
<P align=justify>The fair value of the above option awards granted on March 11,
2010 was estimated on the date of grant using the Black-Scholes Option Valuation
Model that uses the following assumptions. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected volatility </TD>
    <TD align=right width="35%" bgColor=#e6efff >76.32% </TD></TR>
  <TR vAlign=top>
    <TD align=left>Expected dividends </TD>
    <TD align=right width="35%" >Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected life </TD>
    <TD align=right width="35%" bgColor=#e6efff >4 years </TD></TR>
  <TR vAlign=top>
    <TD align=left>Risk-free interest rate </TD>
    <TD align=right width="35%" >3.72% </TD></TR></TABLE></DIV>
<P align=justify>As of March 31, 2011, there were no unrecognized compensation
costs related to non-vested share options. </P>
<P align=justify>On April 8, 2010, the Compensation Committee of the Company&#146;s
Board of Directors recommended and approved the grant of options to purchase
100,000 shares of the Company&#146;s common stock to certain key management with an
exercise price of US$2.43 per share. In accordance with the vesting provisions
of the grants, the options will become vested and exercisable in eight equal
installments beginning on each quarter after September 30, 2010. </P>
<P align=center>F-29</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_32></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>10&nbsp;&nbsp;&nbsp;&nbsp; Share-based Compensation (continued)</B></P>
<P align=justify>A summary of share option plan activity for these options
during the six months ended March 31, 2011 is presented below: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Number <br>
    of shares </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted <br>
    average<br>
    exercise <br>
    price <br>
    per share </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted <br>
    average<br>
    remaining<br>    contractual<br>
    term </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Aggregate<br>
    intrinsic <br>
    value (1)</TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of October 1, 2010 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>100,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;2.43 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercised </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Forfeited </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cancelled </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>100,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;2.43 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>6.4 years </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercisable as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">25,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;2.43 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">6.4
      years </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
<TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify>(1) Aggregate intrinsic value represents the value of the
Company&#146;s closing stock price on March 31, 2011 (US$1.81) in excess of the
exercise price multiplied by the number of options outstanding or exercisable.
</P>
<P align=justify>The weighted average grant-date fair value of options granted
on April 8, 2010 was US$1.41 per share. The Company recorded non-cash
share-based compensation expense of US$26,926 for the six months ended March 31,
2011 in respect of share options granted on April 8, 2010 which was allocated to
research and development expense. </P>
<P align=justify>The fair value of the above option awards granted on April 8,
2010 was estimated on the date of grant using the Black-Scholes Option Valuation
Model that uses the following assumptions. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected volatility </TD>
    <TD align=right width="35%" bgColor=#e6efff >51.79% </TD></TR>
  <TR vAlign=top>
    <TD align=left>Expected dividends </TD>
    <TD align=right width="35%" >Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected life </TD>
    <TD align=right width="35%" bgColor=#e6efff >7.5 years </TD></TR>
  <TR vAlign=top>
    <TD align=left>Risk-free interest rate </TD>
    <TD align=right width="35%" >3.90% </TD></TR></TABLE></DIV>
<P align=justify>As of March 31, 2011, there were unrecognized compensation
costs of US$65,064 related to the above non-vested share options. These costs
are expected to be recognized over a weighted average period of 2.2 years. </P>
<P align=justify>On July 23, 2010, the Compensation Committee of the Company&#146;s
Board of Directors recommended and approved the grant of options to purchase
80,000 shares of the Company&#146;s common stock to certain key management with an
exercise price of US$1.58 per share. In accordance with the vesting provisions
of the grants, the options will become vested and exercisable in eight equal
installments beginning on each quarter after September 30, 2010.</P>
<P align=center>F-30</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_33></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>10&nbsp;&nbsp;&nbsp;&nbsp; Share-based Compensation (continued)</B></P>
<P align=justify>A summary of share option plan activity for these options
during the six months ended March 31, 2011 is presented below:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Number <br>
    of shares </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted<br>
    average <br>
    exercise <br>
    price <br>
    per share </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted <br>
    average <br>
    remaining <br>
    contractual<br>
    term </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">Aggregate<br>
    intrinsic<br>    value (1)</TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of October 1, 2010 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>80,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;1.58 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercised </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Forfeited </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>80,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1.58 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cancelled </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Outstanding as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercisable as of March 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">-</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">-</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify>(1) Aggregate intrinsic value represents the value of the
Company&#146;s closing stock price on March 31, 2011 (US$1.81) in excess of the
exercise price multiplied by the number of options outstanding or exercisable.
</P>
<P align=justify>The weighted average grant-date fair value of options granted
on July 23, 2010 was US$1.58 per share. No non-cash share-based compensation
expense was recognized in respect of these share options for the six months
ended March 31, 2011, in respect of share options granted on July 23, 2010. </P>
<P align=justify>The fair value of the above option awards granted on July 23,
2010 was estimated on the date of grant using the Black-Scholes Option Valuation
Model that uses the following assumptions. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected volatility </TD>
    <TD align=right width="35%" bgColor=#e6efff >58.50% </TD></TR>
  <TR vAlign=top>
    <TD align=left>Expected dividends </TD>
    <TD align=right width="35%" >Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected life </TD>
    <TD align=right width="35%" bgColor=#e6efff >5.0 years </TD></TR>
  <TR vAlign=top>
    <TD align=left>Risk-free interest rate </TD>
    <TD align=right width="35%" >2.99% </TD></TR></TABLE></DIV>
<P align=justify>As of March 31, 2011, there were no unrecognized compensation
costs related to non-vested share options.</P>
<P align=justify><I>(ii)</I><I> </I><I>Restricted Shares</I></P>
<P align=justify>Pursuant to the Plan and in accordance with the China BAK
Battery, Inc. Compensation Plan for Non-Employee Directors, the Company granted
5,000 restricted shares to each of the existing elected independent directors
with a fair value of US$1.68 per share on July 1, 2010. The eligible directors
shall vest in their rights under the restricted shares according to the
following schedule:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(i) </TD>
    <TD>
      <P align=justify>25% of the restricted shares granted will immediately
      vest on the grant date; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(ii) </TD>
    <TD>
      <P align=justify>The remaining 75% of the restricted shares will vest in
      three equal quarterly installments on the last day of each subsequent
      quarter or in three equal quarterly installments on the last day of each
      calendar quarter beginning on the last day of the first full calendar
      quarter after the grant date.</P></TD></TR></TABLE>
<P align=justify>The Company recorded non-cash share-based compensation expense
of US$6,854 for the six months ended March 31, 2011, in respect of the
restricted shares granted in July 1, 2010, which was allocated to general and
administrative expenses.</P>
<P align=justify>The first and second 25% of the restricted shares were already
issued as fully paid shares of common stock to the Company&#146;s three independent
directors on August 4, 2010 and October 6, 2010. According to the resolution of
Compensation Committee on December 28, 2010, the third and forth 25% of the
restricted shares were cancelled. As of March 31, 2011, there were no
unrecognized compensation costs associated with these restricted shares granted
to non-employee directors. </P>
<P align=center>F-31</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_34></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>10&nbsp;&nbsp;&nbsp;&nbsp; Share-based Compensation (continued)</B></P>
<P align=justify>Pursuant to the Plan, the Compensation Committee of the
Company&#146;s Board of Directors recommended and approved the grant of 500,000
restricted shares to Chief Executive Officer, Mr. Xiangqian Li with a fair value
of US$2.81 per share on June 22, 2009. In accordance with the vesting schedule
of the grant, the restricted shares will vest in twenty equal quarterly
installments on the first day of each fiscal quarter beginning on October 1,
2009. </P>
<P align=justify>The Company recorded non-cash share-based compensation expense
of US$322,424 and of US$169,853 for the six months ended March 31, 2010 and 2011
respectively in respect of the restricted shares granted on June 22, 2009, which
was allocated to general and administrative expenses. </P>
<P align=justify>As of March 31, 2011, there were unrecognized stock-based
compensation costs of US$421,257 associated with these restricted shares granted
to Mr. Xiangqian Li. These costs are expected to be recognized over a
weighted-average period of 2.9 years. </P>
<P align=justify>As the Company itself is an investment holding company which is
not expected to generate operating profits to realize the tax benefits arising
from its net operating loss carried forward, no income tax benefits were
recognized for such stock-based compensation cost under the Stock Option Plan
for the six months ended March 31, 2010 and 2011. </P>
<P align=center>F-32</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_35></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>11&nbsp;&nbsp;&nbsp;&nbsp; Net Loss per Share</B></P>
<P align=justify>The calculation of basic net loss per share is based on the net
loss for the six months ended March 31, 2011 attributable to equity shareholders
of $7,741,352 (six months ended March 31, 2010: $5,942,138) and the
weighted average number of shares of common stock of 62,895,122 issued and
outstanding during the six months ended March 31, 2011 (six months ended March
31, 2010: 61,984,941). </P>
<P align=justify>The effects of 4,488,655 shares of stock options, 503,750
shares of restricted stock and 1,447,500 warrants outstanding during the six
months ended or as of March 31, 2010 were all anti-dilutive and the effects of
4,551,855 shares of stock options, 500,000 shares of restricted stock and
1,447,500 warrants outstanding during the six months ended or as of March 31,
2011 were all anti-dilutive. As such, basic and diluted net loss per share for
the six months ended March 31, 2010 and 2011 are the same. </P>
<P align=justify><B>12&nbsp;&nbsp;&nbsp;&nbsp; Fair Value of Financial Instruments</B></P>
<P align=justify>The fair value of a financial instrument is the amount at which
the instrument could be exchanged in a current transaction between willing
parties. The carrying amounts of financial assets and liabilities, such as cash
and cash equivalents, pledged deposits, trade accounts receivable, other
receivables, short-term bank loans, long-term bank loans, accounts and bills
payable and other payables, approximate their fair values because of the short
maturity of these instruments and market rates of interest. </P>
<P align=center>F-33</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_36></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>13&nbsp;&nbsp;&nbsp; &nbsp;Commitments and
Contingencies</B></P>
<P align=justify><I>(i) Capital Commitments </I></P>
<P align=justify>As of September 30, 2010 and March 31, 2011, the Company had
the following contracted capital commitments: </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>

  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>September 30,</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>March 31,</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >For construction of buildings
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;1,784,549 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;1,296,035 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >For purchases of equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">4,166,911 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">4,131,215 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff >&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="17%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="17%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;5,951,460 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;5,427,250 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE></DIV>
<P align=justify><I>(ii) Land Use Rights and Property Ownership Certificate
</I></P>
<P align=justify>According to the relevant PRC laws and regulations, a land use
rights certificate, along with government approvals for land planning, project
planning and construction, needs to be obtained before construction of a
building is commenced. A property ownership certificate shall be granted by the
government upon application under the condition that the aforementioned
certificate and government approvals have been obtained. </P>
<P align=justify>The Company did not obtain the land use right certificate and
approvals for project-planning and construction relating to the premises
occupied by the Company, BAK Industrial Park, before construction of the
buildings was commenced. On July 3, 2009, the Company had obtained the approval
for project-planning and construction from the local government of Shenzhen. As
of March 31, 2011, the Company has obtained the aforementioned land use rights
certificate and government approvals and was in the process of negotiating with
the relevant government for the application and acquisition of the appropriate
property ownership certificate. </P>
<P align=justify>Management believes that the Company will ultimately be granted
a property ownership certificate, and that there should be no legal barriers for
the Company to obtain a property ownership certificate for the premises
presently occupied by the Company in BAK Industrial Park. However, in the event
that the Company fails to obtain the property ownership certificate relating to
BAK Industrial Park, there is a risk that the building constructed will need to
be vacated as illegitimate constructions and the Company might be subject to
penalties and fines. However, management believes that this possibility, while
present, is remote. </P>
<P align=center>F-34</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_37></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>13&nbsp;&nbsp;&nbsp; &nbsp;Commitments and Contingencies
(continued) </B></P>
<P align=justify><I>(ii) Land Use Rights and Property Ownership Certificate
(continued) </I></P>
<P align=justify>Pursuant to the land use rights certificate relating to the
Company&#146;s Tianjin facility, the Tianjin government had requested that the
Company complete the construction of the Tianjin facility before September 30,
2008. As of March 31, 2011, the Company was in the process of negotiating with
the relevant government bureau for the extension of the completion date. If the
Company fails to obtain the approval for the extension of the completion date
from the relevant government bureau, there is a risk that the land use rights
certificate relating to the Company&#146;s Tianjin facility will become invalid.
However, management believes that this possibility, while present, is remote.
</P>
<P align=justify>Pursuant to the land use rights certificate that the Company
obtained relating to the Research and Development Test Centre to be constructed
in Shenzhen, the Company must complete at least 25% of the construction of the
Research and Development Test Centre by September 30, 2008. On November 11, 2008
and May 27, 2009, the Company has signed two supplement agreements with Shenzhen
government to increase the dimensions of the Research and Development Test
Centre. According to the supplement agreements, the Company is required to
complete the construction by May 6, 2011. According to the property ownership
and land use rights certificate, such rights may not be pledged without the
approval of the relevant government office. The Company is required to pledge
its property ownership and land use rights certificate in relation to the
Research and Development Test Centre to China Development Bank according to the
loan agreement entered into with it. On April 7, 2010, the pledge of the land
use rights certificate to China Development Bank was approved by the relevant
government bureau. On April 20, 2010, the relevant land use rights certificate
was pledged to China Development Bank. </P>
<P align=justify>On December 15, 2008, the Company purchased insurance for its
manufacturing facilities at BAK Industrial Park in Shenzhen, China. Under the
insurance policy entered into with Ping An Property &amp; Casualty Insurance
Company of China, Ltd, the insured amount for our manufacturing facilities at
BAK Industrial Park is RMB585,373,070 (approximately $85.8 million) for the
period from November 26, 2008 to August 25, 2010. On August 20, 2010, the
Company purchased the new insurance for its manufacturing facilities at BAK
Industrial Park in Shenzhen, China. Under the new insurance policy entered into
with Ping An Property &amp; Casualty Insurance Company of China, Ltd, the
insured amount for our manufacturing facilities at BAK Industrial Park is
RMB550,000,000 (approximately $82.2 million) for the period from August 26, 2010
to March 26, 2012. </P>
<P align=justify>On July 2, 2010, the Company purchased insurance for its
manufacturing facilities in Tianjin, China. Under the insurance policy entered
into with Ping An Property &amp; Casualty Insurance Company of China, Ltd, the
insured amount for our manufacturing facilities in Tianjin is RMB220,991,420
(approximately $33.0 million) for the period from July 2, 2010 to July 2, 2011.
</P>
<P align=justify>The Company is not able to insure its new Research and
Development Test Centre to be constructed in Shenzhen, China, until it receives
the required property ownership and land use rights certificates. Upon receipt
of such certificates, the Company intends to procure such insurance. As
discussed above, the Company has obtained the land use rights certificate to the
land relating to these facilities. The application for a property ownership
certificate is in process with respect to the Company&#146;s facilities in Shenzhen.
</P>
<P align=center>F-35</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_38></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>13&nbsp;&nbsp;&nbsp; &nbsp;Commitments and Contingencies
(continued)</B></P>
<P align=justify><I>(iii) Guarantees </I></P>
<P align=justify>In order to secure the supplies of certain raw materials and
equipment and upon the request of suppliers, the Company has given guarantees to
certain suppliers which are summarized as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>September 30,</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>March 31,</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Guaranteed for Shenzhen
      Tongli Hi-tech Co. Ltd. - a non-related party </TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="17%"
      bgColor=#e6efff>&nbsp;2,241,750 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="17%" bgColor=#e6efff>&nbsp;2,290,566
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >Guaranteed for Hunan Reshine New Material
      Ltd. - a non-related party </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%" >5,978,001 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%">6,108,176 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Guaranteed for Nanjing
      Special Metal Equipment Co. Ltd. - a non-related party </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%"
      bgColor=#e6efff>14,197,752 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%" bgColor=#e6efff>11,452,830 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="17%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="17%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Guaranteed for Siping Juyuan
      Hanyang Plate Heat Exchanger Co. Ltd. - a non-related party </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%"
      bgColor=#e6efff>2,989,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%" bgColor=#e6efff>3,054,088 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="17%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="17%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Guaranteed for Shanghai
      Global Children Products Co. Ltd.&#150; a non-related party </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%"
      bgColor=#e6efff>747,250 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%" bgColor=#e6efff>763,522 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="17%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="17%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Guaranteed for Beijing
      Triolion Technology Co. Ltd. &#150; a non-related party </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%"
      bgColor=#e6efff>597,800 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="17%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="17%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Guaranteed for Tianjin Bike
      New Energy Research Institute - a non-related party </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%"  bgColor=#e6efff>-
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%" bgColor=#e6efff>7,635,220 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="17%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="17%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Guaranteed for Shenzhen Yasu
      Technology Co. Ltd. - a non-related party </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%"
      bgColor=#e6efff>4,483,501 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="17%" bgColor=#e6efff>4,581,132 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD align=left  >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="17%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="17%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Guaranteed for Shenzhen
      B&amp;G Technology Development Co. Ltd. - a non-related party </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="17%" bgColor=#e6efff>8,967,001 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="17%" bgColor=#e6efff>9,162,264 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="17%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="17%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="17%" bgColor=#e6efff>&nbsp;40,202,055 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="17%" bgColor=#e6efff>&nbsp;45,047,798 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>Management has assessed the fair value of the obligation
arising from the above financial guarantees and considered it immaterial to the
condensed interim consolidated financial statements. Therefore, no obligations
in respect of the above guarantees were recognized as of March 31, 2011. </P>
<P align=justify><I>(iv) Outstanding Discounted Bills and Transferred Bills</I></P>
<P align=justify>From time to time, the Company factors bills receivable to
banks and endorses the bank acceptance bills received to its suppliers, vendors
or other parties for settlement of its liabilities to these creditors. At the
time of the factoring and transfer, all rights and privileges of holding the
receivables are transferred to the banks and the creditors. The Company removes
the assets from its books and records a corresponding expense for the amount of
the discount. The Company remains contingently liable on the amount outstanding
in the event the bill issuer defaults. </P>
<P align=justify>The Company&#146;s outstanding discounted and transferred bills as
of September 30, 2010 and March 31, 2011 are summarized as follows: </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>

  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>September 30,</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><I>March 31,</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2010</I> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><I>2011</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Bank acceptance bills </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;21,464,186 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;10,809,913 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE></DIV>
<P align=center>F-36</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_39></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>14&nbsp;&nbsp;&nbsp;&nbsp; Significant Concentrations
</B></P>
<P align=justify><I>(a) Customers and Credit Concentrations</I></P>
<P align=justify>No customer individually comprised 10% or more of net revenue
for the six months ended March 31, 2010 and 2011.</P>
<P align=justify><I>(b) Credit Risk</I></P>
<P align=justify>Financial instruments that potentially subject the Company to a
significant concentration of credit risk consist primarily of cash and cash
equivalents and pledged deposits. As of September 30, 2010 and March 31, 2011,
substantially all of the Company&#146;s cash and cash equivalents and pledged
deposits were held by major financial institutions located in the PRC, which
management believes are of high credit quality. </P>
<P align=center>F-37</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_40></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>15&nbsp;&nbsp;&nbsp;&nbsp; Segment Information </B></P>
<P align=justify>The Company currently engages in the manufacture,
commercialization and distribution of a wide variety of standard and customized
lithium ion rechargeable batteries for use in a wide array of applications.
During the six months ended March 31, 2011, the Company manufactured five types
of Li-ion rechargeable batteries: aluminum-case cell, battery pack, cylindrical
cell, lithium polymer cell and high-power lithium battery cell. The Company&#146;s
products are sold to packing plants operated by third parties primarily for use
in mobile phones and other electronic devices. Net revenues for the six months
ended March 31, 2010 and 2011 were as follows: </P>
<P align=justify><I>Net revenues by product: </I></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="10" align=center style="BORDER-BOTTOM: #000000 1px solid"> <I>Six
      months ended March 31,</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><I>2010</I> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><I>2011</I> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">%</TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Aluminum-case cell </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;52,443,541 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>52.10 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;46,848,778 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>42.50 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Battery pack </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">21,305,633 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">21.17 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">29,697,236 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">26.94 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cylindrical cells </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>21,499,654 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>21.36 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>25,668,780 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>23.28 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Lithium polymer cells </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">4,886,728 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">4.86 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">5,140,245 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">4.66 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>High-power lithium battery cells </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>515,711 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>0.51 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>2,885,769 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>2.62 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;100,651,267 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">100.00 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;110,240,808 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">100.00 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><I>Net revenues by geographic area: </I></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD colspan="10" align=center style="BORDER-BOTTOM: #000000 1px solid"> <I>Six
      months ended March 31,</I> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><I>2010</I> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><I>2011</I> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=center>&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">%</TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>PRC Mainland </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;69,032,783 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>68.59 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;77,589,671 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>70.38 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>PRC Taiwan </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">15,045,833 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">14.95 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">19,893,333 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">18.05 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>India </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2,524,113 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2.51 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>5,635,636 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>5.11 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Europe </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">287,610 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">0.28 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">610,231 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">0.55 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Hong Kong, China </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>12,548,381 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>12.46 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>4,219,393 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3.83 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Others </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">1,212,547 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">1.21
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">2,292,544 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">2.08
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;100,651,267 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>100.00 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;110,240,808 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>100.00 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>Substantially all of the Company&#146;s long-lived assets are
located in the PRC. </P>
<P align=center>F-38 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_41></A>
<P align=center><B>China BAK Battery, Inc. and subsidiaries </B><BR>
  <B>Notes to the condensed interim consolidated financial statements</B><BR>
  <B>For the six months ended March 31, 2010 and 2011 </B><BR>
  (Unaudited)</P>
<P align=justify><B>16&nbsp;&nbsp;&nbsp;&nbsp; Subsequent Events</B></P>
<P align=justify>The Company evaluated  all events or transactions that  occurred after March 31, 2011  through the date these financial  statements were issued and has  determined that there is no material
recognizable nor subsequent events or transactions which would require
recognition or disclosure in the financial statements. </P>
<P align=center>F-39</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_42></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>
      <P align=justify><B>ITEM 2.</B> </P></TD>
    <TD align=left width="90%" >
      <P align=justify><B>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS</B> <B>OF OPERATIONS.</B> </P></TD></TR></TABLE>
<P align=justify><B>Special Note Regarding Forward Looking Statements</B></P>
<P align=justify>Statements contained in this Report include &#147;forward-looking
statements&#148; within the meaning of such term in Section 27A of the Securities Act
of 1933, as amended, or the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking
statements involve known and unknown risks, uncertainties and other factors
which could cause actual financial or operating results, performances or
achievements expressed or implied by such forward-looking statements not to
occur or be realized. Forward-looking statements made in this Report generally
are based on our best estimates of future results, performances or achievements,
predicated upon current conditions and the most recent results of the companies
involved and their respective industries. Forward-looking statements may be
identified by the use of forward-looking terminology such as &#147;may,&#148; &#147;will,&#148;
&#147;could,&#148; &#147;should,&#148; &#147;project,&#148; &#147;expect,&#148; &#147;believe,&#148; &#147;estimate,&#148; &#147;anticipate,&#148;
&#147;intend,&#148; &#147;continue,&#148; &#147;potential,&#148; &#147;opportunity&#148; or similar terms, variations of
those terms or the negative of those terms or other variations of those terms or
comparable words or expressions. Potential risks and uncertainties include,
among other things, such factors as:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>our ability to continue as a going concern; </P>
  <LI>
  <P>our anticipated growth strategies and our ability to manage the expansion
  of our business operations effectively; </P>
  <LI>
  <P>our future business development, results of operations and financial
  condition; </P>
  <LI>
  <P>our ability to fund our operations and manage our substantial short-term
  indebtedness; </P>
  <LI>
  <P>our ability to maintain or increase our market share in the competitive
  markets in which we do business; </P>
  <LI>
  <P>our ability to keep up with rapidly changing technologies and evolving
  industry standards, including our ability to achieve technological advances;
  </P>
  <LI>
  <P>our dependence on the growth in demand for the portable electronic devices
  that are powered by our products; </P>
  <LI>
  <P>our ability to diversify our product offerings and capture new market
  opportunities; </P>
  <LI>
  <P>our ability to obtain original equipment manufacturer, or OEM,
  qualifications from brand names; </P>
  <LI>
  <P>our ability to source our needs for skilled labor, machinery and raw
  materials economically; </P>
  <LI>
  <P>our ability to secure raw materials in the future and to manage the costs
  of raw materials or to secure alternative or substitute raw materials; </P>
  <LI>
  <P>our ability to maintain low costs without damaging our competitive
  position; </P>
  <LI>
  <P>uncertainties with respect to the PRC legal and regulatory environment;
</P>
  <LI>
  <P>our ability to remediate any material weaknesses in our internal control
  over financial reporting; </P>
  <LI>
  <P>our ability to obtain property ownership rights to our facilities; and </P>
  <LI>
  <P>other risks identified in this Report and in our other reports filed with
  the U.S. Securities and Exchange Commission, or SEC. </P></LI></UL>
<P align=justify>Additional disclosures regarding factors that could cause our
results and performance to differ from results or performance anticipated by
this Report are discussed in other reports that we file with the SEC, including
without limitation our Annual Report on Form 10-K for the fiscal year ended
September 30, 2010, or the 2010 Form 10-K. Readers are urged to carefully review
and consider the various disclosures made by us in this Report and our other
filings with the SEC. These reports attempt to advise interested parties of the
risks and factors that may affect our business, financial condition and results
of operations and prospects. The forward-looking statements made in this Report
speak only as of the date hereof and we disclaim any obligation to provide updates, revisions or
amendments to any forward-looking statements to reflect changes in our
expectations or future events.</P>
<P align=center>1</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_43></A>
<P align=justify><B>Use of Terms</B></P>
<P align=justify>Except as otherwise indicated by the context, all references in
this Report to: &#147;we,&#148; &#147;us,&#148; &#147;our&#148; and the &#147;Company&#148; are to the combined business
of China BAK Battery, Inc. and its consolidated subsidiaries. Unless the context
requires otherwise, all references to: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>&#147;BAK Canada&#148; are to our Canadian subsidiary, BAK Battery Canada Ltd.; </P>
  <LI>
  <P>&#147;BAK Electronics&#148; are to our PRC subsidiary, BAK Electronics (Shenzhen)
  Co., Ltd.; </P>
  <LI>
  <P>&#147;BAK Europe&#148; are to our German subsidiary, BAK Europe GmbH; </P>
  <LI>
  <P>&#147;BAK India&#148; are to our Indian subsidiary, BAK Telecom India Private
  Limited; </P>
  <LI>
  <P>&#147;BAK International&#148; are to our Hong Kong subsidiary, BAK International
  Limited; </P>
  <LI>
  <P>&#147;BAK Tianjin&#148; are to our PRC subsidiary, BAK International (Tianjin) Ltd.;
  </P>
  <LI>
  <P>&#147;China,&#148; &#147;Chinese&#148; and &#147;PRC&#148; are to the People&#146;s Republic of China,
  excluding for the purposes of this Report only, Taiwan, Hong Kong and Macau;
  </P>
  <LI>
  <P>&#147;Exchange Act&#148; are to the Securities Exchange Act of 1934, as amended; </P>
  <LI>
  <P>&#147;RMB&#148; are to Renminbi, the legal currency of China; and </P>
  <LI>
  <P>&#147;Securities Act&#148; are to the Securities Act of 1933, as amended; </P>
  <LI>
  <P>&#147;Shenzhen BAK&#148; refers to our PRC subsidiary, Shenzhen BAK Battery Co.,
  Ltd.; </P>
  <LI>
  <P>&#147;Tianjin Meicai&#148; refers to our PRC subsidiary, Tianjin Meicai New Materials
  Technology Co., Ltd.; </P>
  <LI>
  <P>&#147;U.S. dollar,&#148; &#147;$&#148; and &#147;US$&#148; are to the legal currency of the United States
  of America. </P></LI></UL>
<P align=justify><B>Overview</B></P>
<P align=justify>We are a leading global manufacturer of lithium based battery
cells. We produce battery cells that are the principal component of rechargeable
batteries commonly used to power the following applications: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>cellular phones and smart phones&#151;customer categories include OEM customers
  and replacement battery manufacturers; </P>
  <LI>
  <P>notebook computers; </P>
  <LI>
  <P>portable consumer electronics, such as digital cameras, portable media
  players, portable gaming devices, personal digital assistants, or PDAs,
  camcorders, digital cameras, and Bluetooth headsets; and </P>
  <LI>
  <P>light electric vehicles, hybrid electric vehicles, electric vehicles,
  cordless power tools, and uninterruptible power supplies, or UPS. </P></LI></UL>
<P align=justify>We conduct all of our operations in China, in close proximity
to China&#146;s electronics manufacturing base and its rapidly growing market.
Historically, we have primarily manufactured prismatic lithium-ion cells for the
cellular phone replacement battery market and the OEM market. Our products are
packed into batteries by third-party battery pack manufacturers in accordance
with the specifications of manufacturers of portable electronic applications. At
the request of our customers that order prismatic battery packs, we also engage
battery pack manufacturers to assemble our prismatic cells into batteries for a
fee and then sell battery packs to these customers both for the replacement and
OEM markets. </P>
<P align=center>2</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_44></A>
<P align=justify>As we expand our production capacity and add other lithium-ion
battery cell product lines in response to evolving market demands, we have
derived and will continue to derive an increasing portion of our revenues from
our other product lines.</P>
<P align=justify><B>Second Fiscal Quarter Financial Performance Highlights</B></P>
<P align=justify>During the second quarter of fiscal year 2011, we generated
$46.7 million in net revenues, down 26.5% from $63.5 million last quarter and
down 7.9% from $50.4 million for the same quarter in fiscal year 2010. </P>
<P align=justify>Gross profit for the second quarter of fiscal year 2011 was
$4.4 million, down 55.5% from $10.0 million last quarter and down 50.6% from
$9.0 million in the same quarter of last year. Gross margin was 9.5%, compared
with 15.7% last quarter and 17.9% in the year ago period. The decline in gross
profit was mainly attributable to a decline in sales volume and the selling
price of prismatic cells as a result of traditional seasonality and intense
market price competition. In addition, the decline in selling price of
cylindrical cells also caused the decline in gross profit. </P>
<P align=justify>We had access to $235.5 million<B> </B>in short-term credit
facilities and $45.8 million<B> </B>in long-term credit facilities as of March
31, 2011. As of March 31, 2011, the principal outstanding amounts included
short-term bank loans of $142.4 million, long-term bank loans of $15.3
million<B> </B>maturing within one year, long-term bank loans of $15.3
million<B> </B>maturing in over one year, and bills payable of $46.1 million,
leaving $72.7 million<B> </B>of short-term funds available for additional cash
needs. In addition, on July 10, 2008, our $60.0 million shelf registration
statement was declared effective by the SEC, pursuant to which we have raised
$36.6 million in gross revenue from common stock purchases and issued common
stock warrants exercisable for up to $21.6 million in additional gross proceeds.
As $16.0 million of these warrants were not exercised before their expiration,
we may raise up to an additional $17.8 million in gross proceeds from future
equity financings under this shelf registration statement. </P>
<P align=justify><B>Financial Statement Presentation</B></P>
<P align=justify><B><I>Net revenues</I></B>. Our net revenues represent the
invoice value of our products sold, net of value added taxes, or VAT, sales
returns, trade discounts and allowances. We are subject to VAT, which is levied
on most of our products at the rate of 17% on the invoice value of our products.
Provision for sales returns are recorded as a reduction of revenue in the same
period that revenue is recognized. The provision for sales returns represents
our best estimate of the amount of goods that will be returned from our
customers based on historical sales returns data. </P>
<P align=justify><B><I>Cost of Revenues</I></B>. Cost of revenues consists
primarily of material costs, employee remuneration for staff engaged in
production activity, equity-based compensation, depreciation and related
expenses that are directly attributable to the production of products. Cost of
revenues also includes write-downs of inventory to lower of cost or market. Cost
of revenues from the sales of battery packs includes the fees we pay to pack
manufacturers for assembling our prismatic cells into battery packs.</P>
<P align=justify><B><I>Research and Development Expenses</I></B>. Research and
development expenses are primarily comprised of remuneration for R&amp;D staff,
equity-based compensation, depreciation and maintenance expenses relating to
R&amp;D equipment, and R&amp;D material costs. </P>
<P align=justify><B><I>Sales and Marketing Expense</I></B><I>s</I>. Sales and
marketing expenses consist primarily of remuneration for staff involved in
selling and marketing efforts, including staff engaged in the packaging of goods
for shipment, advertising cost, depreciation, equity-based compensation and
travel and entertainment expenses. We do not pay slotting fees to retail
companies for displaying our products, engage in cooperative advertising
programs, participate in buy-down programs or similar arrangements. No material
estimates are required by management to determine our actual marketing or
advertising costs for any period. </P>
<P align=justify><B><I>General and Administrative Expenses</I></B>. General and
administrative expenses consist primarily of employee remuneration, equity-based
compensation, professional fees, insurance, benefits, general office expenses,
depreciation, liquidated damages, and bad debt expenses. </P>
<P align=justify><B><I>Fixed Assets Impairment Charges</I></B>. Impairment
charges consist primarily of impairment losses for long-lived assets. These
losses reflect the amounts by which the carrying values of these assets exceed
their estimated fair value as determined by their estimated future discounted
cash flows. </P>
<P align=justify><B><I>Finance Costs, Net</I></B>. Finance costs consist
primarily of interest income, interest on bank loans, net of capitalized
interest, and bank charges. </P>
<P align=center>3</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_45></A>
<P align=justify><B><I>Government Grant Income / Other Income and
Expenses</I></B>. Income from government grants consist primarily of grant funds
awarded to Shenzhen BAK as consideration for its contributions to the Shenzhen
area&#146;s economy and as subsidies for land-use rights at BAK Industrial Park. Our
Tianjin subsidiary also received a government grant for its R&amp;D and
production work on electric vehicles. No present or future obligations arise
from the receipt of these funds. No present or future obligations arise from the
receipt of these funds. </P>
<P align=justify><B><I>Income Taxes</I></B>. Under PRC income tax laws and
regulations, before January 1, 2008, a foreign-invested enterprise, or FIE, was
generally subject to an enterprise income tax rate of 33.0%, which included a
30.0% state income tax and a 3.0% local income tax. However, from at least
calendar year 2002 through calendar year 2007, an enterprise recognized as a
&#147;Manufacturing Enterprise Located in Special Economic Zone&#148; under PRC tax laws
was entitled to a preferential income tax rate of 15%. Moreover, a
foreign-invested manufacturing enterprise, starting from its first profitable
calendar year after offset of accumulated tax losses, was entitled to a two-year
exemption from enterprise income tax followed by a three-year 50% reduction in
its enterprise income tax rate, also referred to herein as the &#147;tax holiday.&#148; An
enterprise qualified for such treatment may receive a further tax rate reduction
related to the size of qualified capital contributions received. In addition,
from at least calendar year 2002 through calendar year 2007, an enterprise
qualified as an &#147;advanced technology enterprise&#148; under PRC tax law was also
entitled to a 50% reduction of income taxes. </P>
<P align=justify>On March 16, 2007, the National People&#146;s Congress of the PRC
determined to adopt the new corporate income tax law, or the New CIT Law. The
New CIT Law unifies the application scope, tax rate, tax deduction and
preferential policy for both domestic enterprises and FIEs. The New CIT Law
became effective on January 1, 2008. According to the New CIT Law, the
applicable income tax rate for Shenzhen BAK, BAK Electronics and BAK Tianjin
will be 25% after their preferential tax holidays and the transition period have
ended. During the transition period, tax rates for subject entities was 18% and
20% for the calendar years 2008 and 2009, respectively, and is expected to be
22% and 24% for the calendar years 2010 and 2011, respectively, before the
application of applicable tax holidays or other tax preferences. </P>
<P align=justify>Shenzhen BAK and BAK Electronics are both registered and
operate in Shenzhen, the PRC, and are each recognized as &#147;Manufacturing
Enterprise Located in Special Economic Zone.&#148; As a result, they have been
entitled to a preferential enterprise income tax rate of 15%. In accordance with
the relevant income tax laws, the profits of Shenzhen BAK and BAK Electronics
were fully exempted from income tax for two years from the first profitable
calendar year of operations after offset of accumulated taxable losses, followed
by a 50% exemption for the immediate next three calendar years. </P>
<P align=justify>The tax holiday of Shenzhen BAK commenced in 2002, the first
  calendar year in which Shenzhen BAK had assessable profit, and ended on December
  31, 2006. In addition, due to additional capital contributed by BAK International
  to Shenzhen BAK in both 2005 and 2006 and Shenzhen BAK&#146;s qualification
  as an advanced technology enterprise in 2007 and 2008, Shenzhen BAK was granted
  a preferential income tax rate of 7.5%, 11.8% and 12.6% for calendar years 2007,
  2008 and 2009, respectively. In accordance with the transition period of the
  New CIT Law and before considering the above-mentioned tax concessions, Shenzhen
  BAK&#146;s income tax rate for calendar years 2010 and 2011 are expected to
  be 22% and 24%, respectively, and starting in calendar year 2012, it is expected
  to be subject to an income tax rate of 25%. Therefore, Shenzhen BAK&#146;s income
  tax rates after consideration of its tax concessions are expected to be 15%
  for both calendar years 2010 and 2011and starting in calendar year 2012, it
  is expected to be subject to an income tax rate of 25%.</P>
<P align=justify>For BAK Electronics, established in August 2005, the same tax
holiday was in effect for calendar years 2006 and 2007, making BAK Electronics
fully exempt from any enterprise income tax. Following the tax holiday, a
three-year 50% reduction in BAK Electronics&#146; enterprise income tax rate
commenced. Pursuant to the transition period of the New CIT Law, BAK
Electronics&#146; income tax rates for calendar years 2010 and 2011 were expected to
be 22% and 24%, respectively, and starting in calendar year 2012 it was expected
to be subject to an income tax rate of 25%. Taking the 50% reduction into
account, BAK Electronics&#146; income tax rates are now expected to be 11% and 24%
for calendar years 2010 and 2011, respectively, with no change in its expected
2012 tax rate of 25%. BAK Electronics did not incur any enterprise income tax
for calendar year 2010 due to the current tax losses. </P>
<P align=justify>Shenzhen BAK and BAK Electronics received in aggregate a tax
benefit of $233,000 pursuant to their transitional tax rate for the six months
ended March 31, 2011, or $0.004 per basic share.</P>
<P align=justify>Tianjin Meicai is currently paying no enterprise income tax due
to current tax losses.<B> </B></P>
<P align=justify>BAK Tianjin is currently paying no enterprise income tax due to
cumulative tax losses.</P>
<P align=justify>Our Canadian, German, Indian, and Hong Kong subsidiaries&#151;BAK
Canada, BAK Europe, BAK India, and BAK International&#151;are subject to profits
taxes in their respective countries at rates of 38%, 25%, 30%, and 16.5%
respectively. </P>
<P align=center>4</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_46></A>
<P align=justify>However, because they do not have any assessable income derived
from or arising in those countries, they have not paid any such tax.</P>
<P align=justify>Our effective tax benefit rate was 3.9% for the six months
ended March 31, 2011 and our effective tax expense rate was 2.1% for the six
months ended March 31, 2010. </P>
<P align=justify>Pursuant to the Provisional Regulation of China on Value Added
Tax and its implementing rules, all entities and individuals that are engaged in
the sale of goods, the provision of repairs and replacement services and the
importation of goods in China are generally required to pay VAT at a rate of
17.0% of the gross sales proceeds received, less any deductible VAT already paid
or borne by the taxpayer. Further, when exporting goods, the exporter is
entitled to some or all of the refund of VAT that it has already paid or borne.
Our imported raw materials that are used for manufacturing export products and
are deposited in bonded warehouses are exempt from import VAT. </P>
<P align=justify><B>Results of Operations</B></P>
<P align=justify><B><U>Comparison of Three Months Ended March 31, 2011 and March
31, 2010</U></B><B> </B></P>
<P align=justify>The following table sets forth key components of our results of
operations for the periods indicated. All amounts, other than percentages, are
in thousands of U.S. dollars.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>Three Months Ended</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>March
      31,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2011</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2010</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>$Change</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%"><B>%
      Change</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net revenues </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;46,711 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;50,423 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(3,712</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(7.4</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cost of revenues </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">42,262 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">41,421 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">841 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">2.0 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Gross profit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>4,449 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>9,002 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(4,553</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(50.6</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Operating expenses: </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Research and development
      expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,933 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,625 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>308 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>19.0 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Sales and marketing expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">2,199 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,705 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">494 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">29.0 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;General and administrative
      expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>2,150 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>4,819 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(2,669</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(55.4</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Total operating expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">6,282
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">8,149
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(1,867</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(22.9</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Operating (loss) / income </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(1,833</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>853 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(2,686</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(314.9</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Finance costs, net </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(2,512</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(2,190</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">322 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">14.7 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Government grant income </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>31 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>79 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(48</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(60.8</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Other income / (expenses) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">49 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(145</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">194 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">133.8 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Income tax benefits / (expenses) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>182 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(1,146</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>1,328 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>115.9 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net loss </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;(4,083</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;(2,549</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;1,534 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">60.2
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B><I>Net Revenues</I></B>. Net revenues decreased to $46.7
million for the three months ended March 31, 2011 as compared to $50.4 million
for the same period of the prior year, a decrease of $3.7 million or 7.4%. The
following sets forth the breakdown of our net revenues by battery cell type for
the periods indicated.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>Three Months Ended</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>March
      31,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2011</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2010</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>(in thousands)</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Prismatic cells </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Aluminum-case cells </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;16,251 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;24,581 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Battery packs </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>12,799 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>10,386 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cylindrical cells </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">15,198 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">13,386 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Lithium polymer cells </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,676 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,718 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>High-power lithium battery cells </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">787 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">352 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;46,711 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;50,423 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<UL style="TEXT-ALIGN: justify">
  <LI>Net revenues from sales of aluminum-case cells decreased to $16.3 million
  in the three months ended March 31, 2011, from $24.6 million in the same
  period in fiscal year 2010, a decrease of $8.3 million or 33.9%, resulting
  from a decrease in our average selling price of 8.2% and a decrease in our sales
  volume of 19.8% driven by decreased sales in the PRC. <br>
  </LI></UL>
<P align=center>5</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_47></A>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Net revenues from sales of battery packs increased to $12.8 million in the
    three months ended March 31, 2011, from $10.4 million in the same period in
    fiscal year 2010, an increase of $2.4 million or 23.2%. This resulted from
    an increase in sales volume of 26.4% due to increased export sales, offset
    by a 15.7% decrease in average selling price. <br>
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Net revenues from sales of cylindrical cells increased to $15.2 million
    in the three months ended March 31, 2011, from $13.4 million in the same period
    in fiscal year 2010, an increase of $1.8 million or 13.5%, due to an increase
    in sales volume of 36.8% driven by increased sales to laptop manufacturers
    and offset by a decrease in our average selling prices of 16.8% which was
    driven by strong market competition on price. <br>
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">We sold $1.7 million in lithium polymer cells in the three months ended
    March 31, 2011, compared to $1.7 million in lithium polymer cells in the same
    period in fiscal year 2010, a decrease of $42,000 or 2.4%, resulting from
    a decrease of 25.8% in sales volume and offset by an increase of 20.0% in
    our average selling price. The decrease in sales volume was primary due to
    a slowdown in orders from new customers and some current clients postponed
    launching new products. <br>
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">We also sold approximately $787,000 in high-power lithium battery cells
    in the three months ended March 31, 2011, as compared to $352,000 in high-power
    lithium battery cells in the same period of fiscal year 2010, due to our increased
    sales of products used in electric bicycles, power tools, uninterruptible
    power supplies, and other applications from our Tianjin facility. </LI>
</UL>
<P align=justify><B><I>Cost of Revenues</I></B>. Cost of revenues increased to
$42.3 million for the three months ended March 31, 2011, as compared to $41.4
million for the same period in fiscal year 2010, an increase of $841,000 or 2.0%. The increase in cost of revenues correlates to an increase of unit cylindrical
costs over the three months ended March 31, 2011.</P>
<P align=justify>As a result, gross profit for the three months ended March 31,
2011 was $4.4 million, or 9.5% of net revenues, as compared to gross profit of
$9.0 million, or 17.9% of net revenues, for the same period in fiscal year 2010.
The decrease in our gross profit as a percentage of net revenues was primarily
due to a significant decrease in sales volume for prismatic cells and a decrease
in the average selling price for prismatic and cylindrical cells during the
three months ended March 31, 2011 as compared to the same period of 2010. </P>
<P align=justify><B><I>Research and Development Costs</I></B>. Research and
development costs increased to $1.9<B> </B>million for the three months ended
March 31, 2011, as compared to $1.6 million for the same period in fiscal year
2010, an increase of $308,000 or 19.0%. Salaries and cost of benefits of
R&amp;D staff increased $373,000 primarily in response to guidance issued to
Shenzhen-based companies by relevant local government authorities during the
three months ended June 30, 2010 and effective July 1, 2010. </P>
<P align=justify><B><I>Sales and Marketing Expenses</I></B>. Sales and marketing
expenses increased to $2.2 million for the three months ended March 31, 2011, as
compared to $1.7 million for the same period in fiscal year 2010, an increase of
$494,000, or 29.0%. Salaries and benefits of sales and marketing staff
increased $372,000 primarily in response to guidance issued to Shenzhen-based
companies by relevant local government authorities during the three months ended
June 30, 2010 and effective July 1, 2010. As a percentage of revenues, sales and
marketing expenses have increased to 4.7% for the three months ended March 31,
2011 from 3.3% for the same period in 2010, due to the decrease in revenues from
sales during the three months ended March 31, 2011. </P>
<P align=justify><B><I>General and Administrative Expenses</I></B>. General and
administrative expenses decreased to $2.2 million, or 4.6% of revenues, for the
three months ended March 31, 2011, as compared to $4.8 million, or 9.6% of
revenues, for the same period in fiscal year 2010, a decrease of $2.7 million,
or 55.4%. Bad debt expenses decreased by $1.7 million during the three months
ended March 31, 2011. We also recognized exchange gain of $1.3 million for the
three months ended March 31, 2011, compared with exchange loss of $416,000 for
the three months ended March 31, 2010. </P>
<P align=justify><B><I>Operating Loss</I></B>. As a result of the above,
operating loss totaled $1.8 million for the three months ended March 31, 2011,
as compared to an operating income of $853,000 for the same period of the prior
year, a decrease of $2.7 million, or 314.8%. </P>
<P align=center>6</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_48></A>
<P align=justify><B><I>Finance Costs, Net</I></B>. Finance costs, net, increased
to $2.5 million for the three months ended March 31, 2011, as compared to $2.2
million for the same period of the prior fiscal year, an increase of $321,000<B>
</B>or 14.7%. The increase in net finance costs is mainly attributable to an
increase in the average bank loan interest rates on both our short-term and
long-term bank loans during the three months ended March 31, 2011. </P>
<P align=justify><B><I>Government Grant Income / Other Income and
Expenses</I></B>.<B><I> </I></B>We had deferred revenue from government grant
income of $31,000<B> </B>and other income of $49,000<B> </B>for the three-month
period ended March 31, 2011, as compared to government grant income of
$79,000<B> </B>and other expense of $145,000 for the same period of the prior
fiscal year. The government grant income for the three months ended March 31,
2011 and March 31, 2010 mainly consisted of subsidies to pay for the land use
rights to our corporate campus at BAK Industrial Park and government grant funds
to subsidize certain lithium battery projects. No present or future obligation
will arise from the receipt of such income. </P>
<P align=justify><B><I>Income Tax Benefits (Expense)</I></B>. Income tax
benefits were $182,000 for the three months ended March 31, 2011, as compared to
income tax expenses of $1.1 million for the same period of 2010. The change was
the result of a deferred tax provision during the three months ended March 31,
2011. </P>
<P align=justify><B><I>Net Loss</I></B>. As a result of the foregoing, we had a
net loss of $4.1 million for the three months ended March 31, 2011 compared to
$2.5 million for the same period of 2010. </P>
<P align=justify><B><U>Comparison of Six Months Ended March 31, 2011 and March
  31, 2010</U></B></P>
<P align=justify>The following table sets forth key components of our results of
operations for the periods indicated. All amounts, other than percentages, are
in thousands of U.S. dollars.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>Six Months Ended</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>March
      31,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2011</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2010</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>$Change</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%"><B>%
      Change</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net revenues </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;110,241 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;100,651 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;9,590 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>9.5 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cost of revenues </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">95,795 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">82,089 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">13,706 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">16.7
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Gross profit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>14,446 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>18,562 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(4,117</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(22.2</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Operating expenses: </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Research and development
      expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,577 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,393 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>184 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>5.4 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Sales and marketing expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">4,472 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">3,734 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">738 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">19.8 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;General and administrative
      expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>10,029 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>13,456 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(3,427</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(25.5</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Total operating expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">18,078 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">20,583 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(2,505</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(12.2</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Operating loss </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(3,632</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(2,021</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,611 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>79.9 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Finance costs, net </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(5,352</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(4,344</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,008 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">23.2 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Government grant income </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>638 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>434 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>204 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>47.0 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Other income / (expenses) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">290 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(138</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">428 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(310.1</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Income tax benefit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>316 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>126 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>190 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>150.8 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net loss </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;(7,741</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;(5,943</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;1,798 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">30.2
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B><I>Net Revenues</I></B>. Net revenues increased to $110.2
million for the six months ended March 31, 2011 as compared to $100.6 million
for the same period of the prior year, an increase of $9.6 million or 9.5%. The
following sets forth the breakdown of our net revenues by battery cell type for
the periods indicated. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>Six Months Ended</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>March
      31,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2011</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2010</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>(in thousands)</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Prismatic cells </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Aluminum-case cells</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;46,849 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;52,444 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Battery packs </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>29,697 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>21,306 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cylindrical cells </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">25,669 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">21,500 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Lithium polymer cells </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>5,140 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>4,886 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>High-power lithium battery cells </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">2,886
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">515 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;110,241 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;100,651 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>7</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_49></A>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-top: 0; margin-bottom: 12">Net revenues from sales of aluminum-case cells decreased to $46.8 million
  in the six months ended March 31, 2011, from $52.4 million in the same period
  in fiscal year 2010, a decrease of $5.6 million or 10.7%, resulting from a
  decrease in our average selling price of 8.6% and sales volume of 11.2% driven
  by decreased sales in the PRC. </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 12">Net revenues from sales of battery packs increased to $29.7 million in the
  six months ended March 31, 2011, from $21.3 million in the same period in
  fiscal year 2010, an increase of $8.4 million or 39.4%. This resulted from an
  increase in sales volume of 6.7% due to increased export sales, offset by a
  2.5% decrease in average selling price. </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 12">Net revenues from sales of cylindrical cells increased to $25.7 million in
  the six months ended March 31, 2011, from $21.5 million in the same period in
  fiscal year 2010, an increase of $4.2 million or 19.4%. This resulted from an
  increase in sales volume of 43.7% due to increased export sales, offset by a
  8.6% decrease in average selling price driven by fierce market price
  competition. </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 12">We sold $5.1 million in lithium polymer cells in the six months ended March
  31, 2011, compared to $4.9 million in lithium polymer cells in the same period
  in fiscal year 2010, an increase of $254,000 or 5.2%, resulting from an
  increase of 34.0% in our average selling price, offset by a decrease of 19.8%
  in sales volume. </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 12">We also sold approximately $2.9 million in high-power lithium battery cells
  in the six months ended March 31, 2011, as compared to $515,000 in high-power
  lithium battery cells in the same period of fiscal year 2010, due to our
  increased sales of products used in electric bicycles, power tools,
  uninterruptible power supplies, and other applications from our Tianjin
  facility. </P></LI></UL>
<P align=justify><B><I>Cost of Revenues</I></B>. Cost of revenues increased to
$95.8 million for the six months ended March 31, 2011, as compared to $82.1
million for the same period in fiscal year 2010, an increase of $13.7 million<B>
</B>or 16.7%. The increase in cost of revenues correlates to an increase of
cylindrical battery cell unit costs over the six months ended March 31,
2011.</P>
<P align=justify>As a result, gross profit for the six months ended March 31,
2011 was $14.4 million, or 13.1% of net revenues, as compared to gross profit of
$18.6 million, or 18.4% of net revenues, for the same period in fiscal year
2010. Our decrease in gross profit as a percentage of net revenues was primarily
due to a decrease in prismatic sales volume and a decrease in the average
selling price in both prismatic and cylindrical cells during the six months
ended March 31, 2011, as compared to the same period of 2010. </P>
<P align=justify><B><I>Research and Development Costs</I></B>. Research and
development costs increased to $3.5 million for the six months ended March 31,
2011, as compared to $3.4 million for the same period in fiscal year 2010, an
increase of $184,000 or 5.4%. Salaries and costs of benefits of R&amp;D staff
increased $324,000 primarily as a response to guidance issued to Shenzhen-based
companies by relevant local government authorities during the three months ended
June 30, 2010 and effective July 1, 2010. Equity-based compensation included in
R&amp;D costs during the six months ended March 31, 2011 decreased by $167,000
compared to the six months ended March 31, 2010 as charges relating to
outstanding stock options to R&amp;D staff had already been reflected in large
part in the same periods in the fiscal year 2010. </P>
<P align=justify><B><I>Sales and Marketing Expenses</I></B>. Sales and marketing
expenses increased to $4.5 million for the six months ended March 31, 2011, as
compared to $3.7 million for the same period in fiscal year 2010, an increase of
$738,000, or 19.8%. Salaries and welfare increased $443,000 primarily due to
increased basic salaries and benefits in response to guidance issued to
Shenzhen-based companies by relevant local government authorities during the
three months ended June 30, 2010 and effective July 1, 2010. As a percentage of
revenues, sales and marketing expenses have increased to 4.1% for the six months
ended March 31, 2011 from 3.7% for the same period in 2010, due to the
significant decrease in revenues from sales. </P>
<P align=justify><B><I>General and Administrative Expenses</I></B>. General and
administrative expenses decreased to $10.0 million, or 9.1% of revenues, for the
six months ended March 31, 2011, as compared to $13.5 million, or 13.4% of
revenues, for the same period in fiscal year 2010, a decrease of $3.4 million,
or 25.5%. Bad debt expenses decreased by $3.2 million during the six months
ended March 31, 2011. </P>
<P align=justify><B><I>Operating Loss</I></B>. As a result of the above,
operating loss totaled $3.6 million for the six months ended March 31, 2011, as
compared to $2.0 million for the same period of the prior year, an increase of
$1.6 million, or 79.9%. </P>
<P align=center>8</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_50></A>
<P align=justify><B><I>Finance Costs, Net</I></B>. Finance costs, net, increased
to $5.4 million for the six months ended March 31, 2011, as compared to $4.3
million for the same period of the prior fiscal year, an increase of $1.0
million<B> </B>or 23.2%. The increase in net finance costs is mainly
attributable to an increase in the average bank loan interest rates on both our
short-term and long-term bank loans and in discounts charged for bills
receivable recognized during the six months ended March 31, 2011. </P>
<P align=justify><B><I>Government Grant Income / Other Income and
Expenses</I></B>.<B><I> </I></B>We had deferred revenue from government grant
income of $638,000<B> </B>and other income of $290,000<B> </B>for the six months
ended March 31, 2011, as compared to government grant income of $434,000<B>
</B>and other expenses of $138,000 for the same period of the prior fiscal year.
The government grant income for the six month months ended March 31, 2011 and
2010 mainly consisted of subsidies to pay for the land use rights to our
corporate campus at BAK Industrial Park and government grant funds to subsidize
certain lithium battery projects. No present or future obligation will arise
from the receipt of such income. </P>
<P align=justify><B><I>Income Tax Benefits (Expense)</I></B>. Income tax
benefits were $316,000<B> </B>for the six months ended March 31, 2011, as
compared to income tax benefits of $126,000 for the same period of 2010. The
change was the result of a deferred tax provision during the six months ended
March 31, 2011. </P>
<P align=justify><B><I>Net Loss</I></B>. As a result of the foregoing, we had a
net loss of $7.7 million<B> </B>for the six months ended March 31, 2011 compared
to $5.9 million for the same period of 2010. </P>
<P align=justify><B>Liquidity and Capital Resources</B></P>
<P align=justify>We have historically financed our liquidity requirements from a
variety of sources, including short-term bank loans, long-term bank loans and
bills payable under bank credit agreements, sale of bills receivable and
issuance of capital stock. As of March 31, 2011, we had cash and cash
equivalents of $25.6 million, as compared to $22.6 million as of September 30,
2010. In addition, we had pledged deposits amounting to $5.9 million and $9.4
million as of March 31, 2011 and September 30, 2010, respectively. Typically,
our banks require their borrowers to maintain deposits of approximately 10% to
100% of the outstanding loan balances and bills payable. The individual bank
loans have maturities ranging from three to twelve months which coincides with
the periods the cash remains pledged to the banks. </P>
<P align=justify>We had access to $235.5 million<B> </B>in short-term credit
facilities and $45.8 million<B> </B>in long-term credit facilities as of March
31, 2011. As of March 31, 2011, the principal outstanding amounts included
short-term bank loans of $142.4 million, long-term bank loans of $15.3
million<B> </B>maturing within one year, long-term bank loans of $15.3
million<B> </B>maturing in over one year, and bills payable of $46.1 million,
leaving $72.7 million<B> </B>of short-term funds available for additional cash
needs. In addition, on July 10, 2008, our $60.0 million shelf registration
statement was declared effective by the SEC, pursuant to which we have raised
$36.6 million in cash from common stock purchases and issued common stock
warrants exercisable for up to $21.6 million in additional gross proceeds. As
$16.0 million of these warrants were not exercised before their expiration, we
may raise up to an additional $17.8 million in gross proceeds from future equity
financings under this shelf registration statement. </P>
<P align=justify>The following table sets forth a summary of our cash flows for
the periods indicated: </P>
<P align=center><B>Cash Flow</B> <BR>
  (All amounts in thousands of U.S. dollars) </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>Six Months Ended</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>March
      31</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2011</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2010</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net cash provided by / (used in) operating
      activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;21,011 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(18,891</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net cash used in investing activities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(12,317</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(7,710</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net cash (used in) / provided by financing
      activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(6,276</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>36,268 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Effect of exchange rate on cash and cash equivalents </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">551 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(701</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net increase in cash and cash equivalents </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2,969 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>8,966 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash and cash equivalents at beginning of the period </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">22,589 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">30,678 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash and cash equivalents at end of period
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>25,558 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>39,644 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>9 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_51></A>
<P align=justify><B><I>Operating Activities</I></B></P>
<P align=justify>Net cash provided by operating activities was $21.0 million<B>
</B>in the six months ended March 31, 2011, compared to $18.9 million of net
cash used in operating activities in the same period in fiscal year 2010. The
increase of $39.9 million in operating activities was mainly attributable to
longer credit terms we obtained from our suppliers. </P>
<P align=justify><B><I>Investing Activities</I></B></P>
<P align=justify>Net cash used in investing activities was $12.3 million in the
six months ended March 31, 2011, compared to $7.7 million of net cash used in
investing activities in the same period in fiscal year 2010. The net cash used
in investing activities during the period ended March 31, 2011 was mainly used
for procurement of machinery and equipment for our cylindrical cell line and
prismatic cell production line and construction of our Research and Development
Test Centre in Shenzhen. </P>
<P align=justify><B><I>Financing Activities</I></B></P>
<P align=justify>Net cash used in financing activities was $6.3 million<B>
</B>in the six months ended March 31, 2011, compared to $36.3 million net cash
provided by financing activities in the same period in 2010. This was mainly
attributable to (i) net proceeds of $19.6 million from a private placement of
our common stock completed in October 2009, (ii) a $9.3 million decrease in cash
deposits at banks as collateral in the six months ended March 31, 2011, and
(iii) decreased borrowings, net of repayments, of $13.5 million in the six
months ended March 31, 2011. </P>
<P align=justify>As of March 31, 2011, the principal amounts outstanding under
our credit facilities and lines of credit were as follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>Amount</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>Borrowed</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>(includes</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>Maximum</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>bank loans</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>Amount</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>and bills</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>Available</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>payable)</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>(in thousands)</B> </TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Short-term credit facilities:</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Agricultural Bank of China </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;61,082 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;61,082 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Shenzhen Development Bank </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>30,541 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>22,906 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>China CITIC Bank </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">12,216 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">12,216 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Bank of China </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>68,717 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>53,888 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>China Everbright Bank </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">18,325 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">13,988 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Bank of Communications </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>7,635 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Industrial Bank </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">9,544 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">7,635 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Guangdong Development Bank </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>15,270 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Tianjin Branch, Bank of Dalian </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">12,216 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">6,418
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Subtotal&#151;Short-term credit facilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">&nbsp;235,546 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">&nbsp;178,133 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Long-term credit facilities:</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Agricultural Bank of China </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>7,635 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>7,635 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>China Development Bank </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">22,905 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">7,635 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Agricultural Bank of China, Tianjin Jinxin
      Branch </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>15,271 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>15,271 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Subtotal&#151;Long-term credit facilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;45,811 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;30,541 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Lines of Credit:</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Shenzhen Branch, Bank of China </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">8,150 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Tianjin Branch, Bank of China </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>134 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Tianjin Branch, Bank of Dalian </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,959 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Shanghai Pudong Development Bank </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>185 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Subtotal&#151;Lines of credit </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;10,428 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Total Principal Outstanding </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;281,357 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;219,102 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>10</P>
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<P align=justify>The above principal outstanding amounts under credit facilities
and lines of credit included short-term bank loans of $142.4 million, long-term
bank loans of $15.3 million maturing within one year and long-term bank loans of
$15.3 million maturing in over one year, and bills payable of $46.1 million.
</P>
<P align=justify>For the purpose of presentation, the effect of increases in
bills payable balances is included in operating activities in the statements of
cash flows. </P>
<P align=justify>During the three months ended March 31, 2011, we repaid 25 loans
  totaling approximately $73.0 million, renewed three comprehensive credit facility
  agreements with a maximum loan amount of approximately $47.7 million, and six
  short-term bank loan agreements became effective totaling approximately $42.8
  million. The material financing terms of these loans are described below. </P>
<P align=justify>On January 20, 2011, we renewed our comprehensive credit
facility agreement with Shenzhen Development Bank, Longgang Branch, or Shenzhen
Development Bank, to provide a maximum loan amount of RMB 200 million
(approximately $30.5 million). Loans may be drawn at any time from January 26,
2011 to January 18, 2012 and will be due based on each loan agreement. This
credit facility agreement was guaranteed by BAK International, BAK Tianjin and
Mr. Xiangqian Li, and also was secured by $22.9 million of inventory. As of
March 31, 2011, we had three outstanding short-term loans under the
comprehensive credit facility with Shenzhen Development Bank totaling
approximately $22.9 million. The first loan, dated January 25, 2011, was
approximately $10.7 million, carried a floating interest rate equal to the
benchmark rate of the PBOC on the date of the loan agreement and adjusted
quarterly, and is repayable on January 24, 2012. The second loan, dated January
30, 2011, was approximately $9.2 million, carried a floating interest rate equal
to the benchmark rate of the PBOC on the date of the loan agreement and adjusted
quarterly, and is repayable on January 29, 2012. The third loan, dated August 4,
2010, was approximately $3.0 million, carried a floating interest rate at 95% of
the benchmark rate of the PBOC on the date of the loan agreement and adjusted
quarterly, and is repayable on June 14, 2011. The third loan was borrowed after
a predecessor loan was repaid on August 2, 2010, not December 31, 2010 as had
been reported in our Form 10-Q for the fiscal quarter ended December 31, 2010.
</P>
<P align=justify>On December 26, 2010, we renewed our comprehensive credit
facility agreement with Industrial Bank, Shenzhen Hi-tech District Branch, or
Shenzhen Industrial Bank, to provide a maximum loan amount of RMB 62.5 million
(approximately $9.5 million). Loans may be drawn at any time over the one-year
period beginning December 26, 2010 and will be due based on each loan agreement.
This credit facility agreement was guaranteed by BAK International, BAK Tianjin
and Mr. Xiangqian Li. As of March 31, 2011, we had borrowed approximately $7.6
million<B> </B>under the loan agreement, carrying annual interest rate at 6.391%
and the due date is December 10, 2011. </P>
<P align=justify>On October 27, 2010, we renewed our comprehensive credit
facility agreement with Tianjin Branch, Bank of Dalian, or Bank of Dalian, to
provide a maximum loan amount of RMB 80 million (approximately $12.3 million),
effective January 2011. Loans may be drawn at any time over the period from
October 27, 2010 to January 26, 2012 and will be due based on each loan
agreement. This credit facility agreement was guaranteed up to RMB 50 million by
Shenzhen BAK Battery Co., Ltd. and Mr. Xiangqian Li. As of March 31, 2011, we
had borrowed approximately $6.1 million under a loan agreement dated October 27,
2010, bearing annual interest of 6.116%, adjusted monthly, repayable on October
26, 2011, and $0.3 million notes payable under this credit facility agreement.
In addition, we had also borrowed $1.9 million of short term loans separate from
the credit facility. </P>
<P align=justify>During the first quarter of our fiscal year ended September 30,
2011, we renewed our guaranty contract with Shanghai Pudong Development Bank to
provide guaranty for the loans drawn from November 30, 2010 to October 25, 2011.
The maximum guaranty amount for all loans will be RMB 30 million (approximately
$4.6 million). As of March 31, 2011, we had borrowed approximately $0.2 million
of notes payable outside any credit facility.</P>
<P align=justify>As of March 31, 2011, we had a comprehensive credit facility
agreement with Agricultural Bank of China, Shenzhen Eastern Branch, or
Agricultural Bank &#150; Shenzhen Branch, to provide a maximum loan amount of RMB 500
million (approximately $75.7 million), including RMB 400 million (approximately
$60.6 million) of one-year term credit facilities and RMB 100 million
(approximately $15.1 million) of five-year term credit facilities. This
comprehensive credit facility agreement renewed a predecessor credit facility
agreement between Shenzhen BAK and Agricultural Bank &#150; Shenzhen Branch dated
November 26, 2009 and governs all loans that were subject to the predecessor
agreement at the time of the renewal. New loans may be drawn under this credit
facility from November 15, 2010 through November 10, 2011, with the term of the
loan established at the time each new loan is drawn, except as to funds borrowed
under a loan agreement between Shenzhen BAK and Agricultural Bank &#150; Shenzhen
Branch dated November 23, 2006 and effective December 18, 2006, or the 2006 Loan
Agreement, which may be drawn at any time within five years of December 18,
2006, and which will mature five years after such funds are drawn. Pursuant to
the comprehensive credit facility, Shenzhen BAK must obtain prior approval from Agricultural Bank &#150; Shenzhen Branch
to renew long-term loans that are subject to this credit facility. In addition,
Shenzhen BAK undertook to ensure that the percentage of certain business
conducted with Agricultural Bank &#150; Shenzhen Branch relative to such business it
conducts with all financial institutions combined be at least equal to the
percentage of its indebtedness to Agricultural Bank &#150; Shenzhen Branch relative
to its indebtedness to all financial institutions combined (referred to as the
&#147;Percentages Undertaking&#148;). The &#147;business&#148; referred to in the preceding sentence
refers to the volume of transactional payments that are drawn from Shenzhen
BAK&#146;s accounts with Agricultural Bank &#150;Shenzhen Branch or applicable financial
institutions and the amount of foreign currencies deposited with Agricultural
Bank &#150; Shenzhen Branch or applicable financial institutions. Shenzhen BAK also
undertook not to issue any dividends without the written consent of Agricultural
Bank &#150; Shenzhen Branch prior to the expiration of all loans under this credit
facility (this undertaking and the Percentages Undertaking are collectively
referred to as the &#147;Undertakings&#148;). The obligations of Shenzhen BAK under this
comprehensive credit facility are guaranteed by Mr. Xiangqian Li, BAK Tianjin,
and BAK International. Shenzhen BAK&#146;s obligations under this credit facility
agreement are also guaranteed by Shenzhen BAK&#146;s pledge of the property ownership
and land use rights certificates relating to its manufacturing and other
facilities in Shenzhen, PRC, known as BAK Industrial Park. In the event that
Shenzhen BAK breaches any of the Undertakings or any guaranteed party breaches
any of its guaranty obligations, Agricultural Bank &#150; Shenzhen Branch may, in
addition to exercising any other applicable remedies under the applicable
agreements, accelerate repayment of all loan amounts governed by this credit
facility. </P>
<P align=center>11</P>
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<P align=justify>As of March 31, 2011, we had six outstanding short-term loans
under the comprehensive credit facility with Agricultural Bank &#150; Shenzhen
Branch, totaling approximately $61.1 million, carrying annual interest at 5.31%
and 5.0445%, adjusted quarterly. The first loan, of approximately $9.2 million,
carried annual interest at 5.0445% and was due on April 20, 2011. We repaid this
loan on April 12, 2011. The second loan, of approximately $11.5 million, carried
annual interest at 5.0445% and was due on April 22, 2011. We repaid this loan on
April 14, 2011. The third loan, of approximately $13.7 million, carried annual
interest at 5.0445% and was due on April 19, 2011. We repaid this loan on April
15, 2011.<B> </B>The fourth loan, of approximately $11.5 million, currently
carries annual interest at 95% of the benchmark rate of the People&#146;s Bank of
China, or PBOC and is due on December 21, 2011. The fifth loan, of approximately
$7.6 million, currently carries annual interest at the benchmark rate of the
PBOC and is due on January 11, 2012. The sixth loan, of approximately $7.6
million, currently carries annual interest at the benchmark rate of the PBOC and
is due on January 18, 2012. Each of the loan agreements specifically provides
for acceleration of repayment of the loan under certain conditions, as well as
other penalties and remedies. </P>
<P align=justify>As of March 31, 2011, we also had two five-year term loans
totaling approximately $7.6 million under the Agricultural Bank &#150; Shenzhen
Branch comprehensive credit facility carrying interest at 90% of the benchmark
rate of the PBOC for three-year to five-year long-term loans. The first loan, of
approximately $6.1 million, currently carries annual interest of 5.184% and is
due on January 25, 2012. The second loan, of approximately $9.1 million,
currently carries annual interest of 5.184% and is due in two installments of
approximately $7.6 million on January 25, 2011, which we repaid on January 25,
2011, and approximately $1.5 million on January 25, 2012, respectively. These
five-year term loans are specifically: (i) guaranteed by Mr. Xiangqian Li; (ii)
secured by Shenzhen BAK&#146;s machinery and equipment with carrying values of
approximately $26.4 million as of March 31, 2011; and (iii) secured by the
property ownership and land use rights certificates with an aggregate net book
value of $114.1 million as of March 31, 2011 in relation to the land on which
Shenzhen BAK&#146;s corporate campus had been constructed and any machinery and
equipment purchased and used at the campus subsequent to such construction. </P>
<P align=justify>As of March 31, 2011, we had a comprehensive credit facility
agreement with China Everbright Bank to provide a maximum amount of RMB 120
million (approximately $18.3 million) including RMB 40 million to support bank
acceptance bills (instruments commonly used in China that are similar to letters
of credit) and RMB 80 million to cover discounts on our notes receivable due to
their assignment to certain banks, suppliers, vendors, and other creditors from
November 8, 2010 to November 8, 2011. This credit facility agreement is
guaranteed by BAK International and Mr. Xiangqian Li. As of March 31, 2011, we
had borrowed $14.0 million of notes payable under this credit facility. </P>
<P align=justify>As of March 31, 2011, we had a credit facility with Shenzhen
Branch, China CITIC Bank to provide a maximum loan amount of RMB 80 million
(approximately $12.2 million). This credit facility was guaranteed by BAK
International and Mr. Xiangqian Li. As of March 31, 2011, we had borrowed $12.2
million under two loans at floating interest rate of 5.0445%, with a rate in
line with the benchmark interest rate adjustment of the PBOC under this credit
facility. The first loan, of approximately $6.0 million, carried floating
interest of 5.0445% and is repayable on June 11, 2011. The second loan, of
approximately $6.1 million, also carried floating interest of 5.0445% and is
also repayable on June 11, 2011.</P>
<P align=justify>As of March 31, 2011, we had also borrowed $0.1 million of
notes payable outside any credit facility from Bank of China, Tianjin Branch,
Tianjin Branch, or Bank of China. </P>
<P align=center>12</P>
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<P align=justify>As of March 31, 2011, we had a credit facility agreement with
Bank of China to provide a maximum loan amount of RMB 450 million (approximately
$68.7 million). This credit facility was guaranteed by BAK International and Mr.
Xiangqian Li, and also is secured by machinery and equipment with carrying
values of approximately $30.4 million as of March 31, 2011. As of March 31,
2011, we had two outstanding short-term loans under the comprehensive credit
facility. The first loan, of approximately $22.8 million, currently carries
annual interest of 5.31% and is due on March 11, 2011. The second loan, of
approximately $7.7 million, currently carries annual interest at 95% of the
benchmark rate of the PBOC and is due on November 9, 2011, and $23.3 million of
notes payable under this credit facility agreement. We had also borrowed $8.1
million of notes payable separate from the credit facility.</P>
<P align=justify>As of March 31, 2011, we had a six-year long-term loan
agreement expiring on December 30, 2015 of RMB 150 million (approximately $22.9
million) with Shenzhen Branch, China Development Bank, or China Development
Bank. The long-term loan is secured by Shenzhen BAK&#146;s pledge of its land use
rights certificates, property ownership and equipment built-up by use of this
long-term loan pursuant to the loan agreement. According to the property
ownership and land use rights certificate that we obtained in relation to this
facility, the certificate may not be pledged without the approval of the
relevant government office. On April 7, 2010, the pledge of the land use rights
certificate to China Development Bank was approved by the relevant government
bureau. For further discussion regarding the status of property ownership rights
relating to this facility, please see &#147;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations &#150; Capital Expenditures.&#148; The
obligations of Shenzhen BAK under this loan agreement are guaranteed by Mr.
Xiangqian Li. We had borrowed approximately $7.6<B> </B>million under a loan
agreement dated March 1, 2010, bearing annual interest of 5.90%, adjusted
monthly, and repayable within 72 months.</P>
<P align=justify>As of March 31, 2011, we had a four-year, long-term loan
agreement expiring May 26, 2012 of RMB 100 million (approximately $15.3 million)
with Agricultural Bank of China, Tianjin Branch, or Agricultural Bank &#150; Tianjin
Branch. This loan agreement is secured by the machinery and equipment purchased
for the automated high-power lithium battery cells production line at our
Tianjin facility with carrying values of approximately $1.9 million as of March
31, 2011. As of March 31, 2011, we had borrowed $15.3 million under this loan
agreement, payable in two installments: (i) RMB 50 million (approximately $7.6
million) on December 26, 2011; and (ii) RMB 50 million (approximately $7.7
million) on May 26, 2012. </P>
<P align=justify>We had negative working capital of $85.3 million as of March
31, 2011, as compared to negative working capital of $70.8 million as of
September 30, 2010. Current assets as of March 31, 2011 were $201.1 million
compared with $194.6 million as of September 30, 2010, an increase of $6.5
million. Current liabilities as of March 31, 2011 were $286.4 million compared
with $265.5 million as of September 30, 2010, an increase of $20.9 million. We
had short-term bank loans maturing in less than one year of $142.4 million and
long-term bank loans maturing within one year of $15.3 million as of March 31,
2011, or a total of $157.7 million of loans maturing within one year, as
compared to a total of $149.4 million of such loans as of September 30, 2010, an
increase of $8.3 million. We had long-term bank loans maturing in over one year
of $15.3 million as of March 31, 2011, as compared to $29.9 million of such
loans as of September 30, 2010, a decrease of $14.6 million. </P>
<P align=justify>We believe that our current cash and cash equivalents and
anticipated cash flow from operations will be sufficient to meet our anticipated
cash needs, including our cash needs for working capital and capital
expenditures for at least the next 12 months. We may, however, require
additional cash due to changing business conditions or other future
developments, including any investments or acquisitions we may decide to pursue.
If our existing cash and amount available under existing credit facilities is
insufficient to meet our requirements, we may seek to sell additional equity
securities, debt securities or borrow from lending institutions. We can make no
assurances that financing will be available in the amounts we need or on terms
acceptable to us, if at all. The sale of additional equity securities, including
convertible debt securities, would dilute the interests of our current
shareholders. The incurrence of debt would divert cash for working capital and
capital expenditures to service debt obligations and could result in operating
and financial covenants that restrict our operations and our ability to pay
dividends to our shareholders. If we are unable to obtain additional equity or
debt financing as required, our business operations and prospects may
suffer.</P>
<P align=justify><B><I>Capital Expenditures</I></B></P>
<P align=justify>We made capital expenditures of $12.3 and $7.7 million in the
six months ended March 31, 2011 and 2010, respectively. Our capital expenditures
were used primarily to purchase plant and equipment to expand our production
capacity. </P>
<P align=justify>The following table sets forth the breakdown of our capital
expenditures by use for the periods indicated. </P>
<P align=center>13</P>
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noShade SIZE=5>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>Six Months Ended</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>March
      31,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2011</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2010</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>(in thousands)</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Construction costs </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;2,055 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;884 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Purchase of equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">10,262 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">6,824
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Total capital expenditures </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;12,317 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;7,708 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>We estimate that our total capital expenditures in fiscal year
2011 will reach approximately $35.0 million, to purchase manufacturing equipment
for our production lines and for the construction of our new Research and
Development Test Centre at our Shenzhen facility. </P>
<P align=justify>We have completed the construction and put into use facilities
measuring 218,178 square meters comprised of manufacturing facilities,
warehousing and packaging facilities, dormitory space, dining halls and
administrative offices at the BAK Industrial Park in Shenzhen. Of that space,
approximately 81,411 square meters are manufacturing facilities. We have also
completed the construction and put into use facilities measuring 65,907 square
meters comprised of manufacturing facilities, dormitory space, dining halls and
other facilities in Tianjin. Of that space, approximately 44,129 square meters
are manufacturing facilities. The primary reasons for our continuing investments
in the facilities in Tianjin are to realize the benefits of our prior investment
in these facilities, to position the Company to capitalize on our knowledge of
and experience with established markets for lithium-phosphate technology, such
as electric bicycles, cordless power tools, and to penetrate emerging consuming
markets for this technology, such as electric cars, electric buses, light
electric vehicles, and hybrid electric vehicles. We have received several
contracts to supply high-power lithium cells for use in electric cars, electric
bicycles, UPS, and other applications. </P>
<P align=justify>According to the relevant PRC laws and regulations, a land use
right certificate, along with government approvals for land planning, project
planning, and construction must be obtained before the construction of any
building is commenced. An ownership certificate will be granted by the
government upon application under the condition that the aforementioned
certificate and government approvals are obtained. We recently obtained the land
use right to the tract of property on which we have constructed and on which we
plan further construction of our manufacturing facilities and other related
facilities in Shenzhen. While we have been constructing and have completed a
substantial part of the construction of our facilities with the approval of the
local government of Kuichong Township of Longgang District of Shenzhen, we
understand it did not have the authority to grant us the land use rights
certificate. However, the Company obtained approval for project planning and
construction from the government of Shenzhen on June 20, 2007. Under an
agreement with the government of Shenzhen for the acquisition of the land use
rights to BAK Industrial Park dated June 29, 2007, effective June 2008, the
government agreed to provide us with the land use rights certificate relating to
BAK Industrial Park on the condition that the Company would pay it an additional
$11,819,841. According to a notice received from the government of Shenzhen on
June 6, 2008, the Company obtained government grants of $7,889,991 to subsidize
this additional payment. As of September 30, 2008, the Company had fully paid
the remaining cost of $3,929,850 and had obtained the land use rights
certificate for BAK Industrial Park. </P>
<P align=justify>We have insurance for our manufacturing facilities for Shenzhen
BAK located in BAK Industrial Park and our manufacturing facilities at our
Tianjin facility. However, we are not able to insure our new Research and
Development Test Centre to be constructed in Shenzhen, China, until we receive
the required certificate of property ownership. Upon receipt of the certificate
of property ownership, we intend to procure such insurance. The applications for
the related certificates of property ownership rights are in process with
respect to our facilities at BAK Industrial Park and Tianjin (see discussion of
our Research and Development Test Centre below). As we have been granted the
land use rights certificate to the premises presently occupied by the Company in
BAK Industrial Park, there should be no legal barriers for us to obtain a
property ownership certificate for this property. However, it is possible that
the Shenzhen government may determine that even with our land use rights
certificate, the buildings constructed at BAK Industrial Park were still
constructed without the proper authority and must be vacated as illegitimate
constructions, and we might be subject to penalties and fines. However, we
believe that this possibility, while present, is remote. </P>
<P align=justify>As of September 30, 2007, we had fully paid the lease
prepayment amount of $14.1 million for the acquisition of land use rights
regarding our Tianjin facility. As of September 30, 2008, we had obtained the
relevant land use rights certificate to this facility. As of March 31, 2011, we
were in the process of obtaining the relevant property ownership rights
certificate to this facility.</P>
<P align=center>14</P>
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<P align=justify>Pursuant to our land use rights certificate relating to our
Tianjin facility, the Tianjin government had originally requested that we
complete construction of the Tianjin facility before September 30, 2008. As of
September 30, 2008, we had not done so. Notwithstanding this requirement, we
have obtained an extension from the Business Administration Bureau of Beichen
District, Tianjin, to make the remaining contribution of the registered capital
by December 11, 2009, which we interpreted as an extension of the completion
date of construction to this date. On November 16, 2009, BAK International
contributed approximately US$9,000,000 capital to BAK Tianjin and as of November
16, 2009, the total contribution from BAK International was US$29,000,000. The
remaining US$70,990,000 was originally required to be fully contributed no later
than December 11, 2009 and an extension from the Business Administration Bureau
of Beichen District, Tianjin, was obtained to complete this contribution no
later than December 2012. As of March 31, 2011, we were in the process of
negotiating with the relevant government bureau for the extension of the
completion date of the construction of the Tianjin facility. </P>
<P align=justify>As of September 30, 2007, we had paid the lease prepayment
amount of $717,000 for the acquisition of land use rights for a new Research and
Development Test Centre to be constructed in Shenzhen, China. As of September
30, 2008, we had obtained the relevant property ownership and land use rights
certificate. Pursuant to the property ownership and land use rights certificate,
we are required to complete at least 25% of the construction of the new Research
and Development Test Centre facility by September 30, 2008. As of September 30,
2008, we had not done so. Notwithstanding this requirement, the Shenzhen
government has agreed to increase the dimensions of the Research and Development
Test Centre and signed two supplemental agreements with us. According to the
supplemental agreements, we are required to complete the construction by May 6,
2011. As of March 31, 2011, we are in the process of applying for an extension
from the Shenzhen government. In addition, according to the property ownership
and land use rights certificate, such land may not be pledged without the
approval of the relevant government office. We are required to pledge our
property ownership and land use rights certificate in relation to the new
Research and Development Test Centre to China Development Bank pursuant to the
loan agreement entered into with it. On April 7, 2010, the pledge of the land
use rights certificate to China Development Bank was approved by the relevant
government bureau. On April 20, 2010, the relevant land use rights certificate
was pledged to China Development Bank. In addition, the so-named &#147;property
ownership and land use rights certificate&#148; relating to this facility that we
were issued lacks certain terms relating to property ownership rights, which
appears to indicate that the granting government has so far only granted us the
relevant land use rights. As a result, this certificate may not be adequate
evidence of our property ownership rights to this property. We anticipate that
the government will re-grant this certificate with adequate property ownership
indicia after we have satisfied the above construction requirement and followed
certain procedures. </P>
<P align=justify><B>Contractual Obligations and Commercial Commitments</B></P>
<P align=justify>Please refer to Item 7, &#147;Management&#146;s Discussion and Analysis
of Financial Condition and Results of Operations &#150;Contractual Obligations and
Commercial Commitments&#148; in the 2010 Form 10-K for a discussion of our
contractual obligations and commercial commitments as of September 30, 2010.
There were no material changes outside the ordinary course of our business in
our contractual obligations and commercial commitments for the quarter ended
March 31, 2011.</P>
<P align=justify><B>Off-Balance Sheet Transactions</B></P>
<P align=justify>In the ordinary course of business practices in China, we enter
into transactions with banks or other lenders where we guarantee the debt of
other parties. These parties may be related to or unrelated to us. Conversely,
our debt with lenders may also be guaranteed by other parties which may be
related or unrelated to us. </P>
<P align=justify>Under U.S. GAAP, these transactions may not be recorded on our
balance sheet or may be recorded in amounts different than the full contract or
notional amount of the transaction. Our primary off-balance sheet arrangements
would result from our loan guaranties in which Shenzhen BAK, BAK International,
BAK Tianjin, and/or Mr. Xiangqian Li, our director, Chairman, President, and
Chief Executive Officer, would provide contractual assurance of the debt, or
guarantee the timely re-payment of principal and interest of the guaranteed
party. Neither Shenzhen BAK, BAK International, BAK Tianjin, nor Mr. Xiangqian
Li received, nor is entitled to receive, any consideration for the
above-referenced guarantees, and we are not independently obligated to indemnify
any of those guarantors for any amounts paid by them pursuant to any
guarantee.</P>
<P align=justify>Typically, no fees are received for this service. Thus, in
those transactions, Shenzhen BAK would have a contingent obligation related to
the guarantee of payment in the event the underlying loan is in default. </P>
<P align=justify>Transactions described above require accounting treatment under
ASC Topic 460 &#147;Guarantees&#148;. Under that standard, we would be required to
recognize the fair value of guarantees issued or modified after December 31,
2002, for non-contingent guarantee obligations, and also a liability for contingent
guarantee obligations based on the probability that the guaranteed party will
not perform under the contractual terms of the guaranty agreement. </P>
<P align=center>15</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<P align=justify>We have assessed the contingent liabilities arising from the
above-described guarantees and have considered them immaterial to the
consolidated financial statements. Therefore, no liabilities in respect of the
guarantees were recognized as of March 31, 2011. As of March 31, 2011, we
provided the guarantees for the following non-related parties: Nanjing Special
Metal Equipment Co., Ltd., Hunan Reshine New Material Ltd, Shenzhen Tongli
Hi-tech Co. Ltd., Shenzhen B&amp;G Technology Development Co. Ltd., Shanghai
Global Children Products Co. Ltd., Shenzhen Yasu Technology Co. Ltd., Beijing
Triolion Technology Co. Ltd., Siping Juyuan Hanyang Plate Heat Exchanger Co. Ltd
and Tianjin Bike New Energy Research Institute. The maximum amount of our
exposure for these guarantees was $45.0 million and $40.2 million at March 31,
2011 and September 30, 2010, respectively. </P>
<P align=justify><B>Critical Accounting Policies</B></P>
<P align=justify>Our consolidated financial information has been prepared in
accordance with U.S. GAAP, which requires us to make judgments, estimates and
assumptions that affect (1) the reported amounts of our assets and liabilities,
(2) the disclosure of our contingent assets and liabilities at the end of each
fiscal period and (3) the reported amounts of revenues and expenses during each
fiscal period. We continually evaluate these estimates based on our own
historical experience, knowledge and assessment of current business and other
conditions, our expectations regarding the future based on available information
and reasonable assumptions, which together form our basis for making judgments
about matters that are not readily apparent from other sources. Since the use of
estimates is an integral component of the financial reporting process, our
actual results could differ from those estimates. Some of our accounting
policies require a higher degree of judgment than others in their application.
</P>
<P align=justify>When reviewing our financial statements, the following also
should be considered: (1) our selection of critical accounting policies, (2) the
judgment and other uncertainties affecting the application of those policies,
and (3) the sensitivity of reported results to changes in conditions and
assumptions. We believe the following accounting policies involve the most
significant judgment and estimates used in the preparation of our financial
statements. </P>
<P align=justify><B><I>Recoverability of Long-Lived Assets</I></B></P>
<P align=justify>Our business is capital intensive and has required, and will
continue to require, significant investments in property, plant and equipment.
As of March 31, 2011 and September 30, 2010, the carrying amount of property,
plant and equipment, net was $232.3 million and $228.9 million, respectively. We
assess the recoverability of property, plant and equipment to be held and used
by a comparison of the carrying amount of an asset or group of assets to the
future net undiscounted cash flows expected to be generated by the asset or
group of assets. If such assets are considered impaired, the impairment
recognized is measured as the amount by which the carrying amount of the assets
exceeds the fair value of the assets. </P>
<P align=justify>A prolonged general economic downturn and, specifically, a
continued downturn in the battery cell industry as well as other market factors
could intensify competitive pricing pressure, create an imbalance of industry
supply and demand, or otherwise diminish volumes or profits. Such events,
combined with changes in interest rates, could adversely affect our estimates of
future net cash flows to be generated by our long-lived assets. Consequently, it
is possible that our future operating results could be materially and adversely
affected by additional impairment charges related to the recoverability of our
long-lived assets.</P>
<P align=justify>We have not recognized any additional impairment charges for
the long-lived assets for the six months ended March 31, 2011.</P>
<P align=justify><B><I>Inventory Obsolescence</I></B></P>
<P align=justify>We review our inventory for potential impairment on a quarterly
or more frequent basis as deemed necessary. Such review includes, but is not
limited to, reviewing the levels of inventory versus customer requirements and
obsolescence. The review and evaluation also considers the potential sale of
impaired inventory at lower than market prices. At each balance sheet date, we
identify inventories that are worth less than cost and write them down to their
net realizable value and the difference is charged to our cost of revenues of
that period. Though management considers such write-down of inventories adequate
and proper, changes in sales volumes due to unexpected economic or competitive
conditions are among the factors that could materially affect the adequacy of
such write-down.</P>
<P align=center>16</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<P align=justify><B><I>Allowance for Doubtful Accounts</I></B></P>
<P align=justify>The allowance for doubtful accounts is our best estimate of the
amount of probable credit losses in our accounts receivable. We determine the
allowance based on historical write-off experience, customer specific facts and
economic conditions. Bad debt expense is included in the general and
administrative expenses. We review outstanding account balances individually for
collectability. Account balances are charged off against the allowance after all
means of collection have been exhausted and the potential for recovery is
considered remote. As of March 31, 2011 and September 30, 2010, we had not
charged off any balances as we had yet to exhaust all means of collection.</P>
<P align=justify><B><I>Equity-Based Compensation</I></B></P>
<P align=justify>We adopted the provisions of ASC Topic 718 &#147;Compensation &#150;
Stock Compensation,&#148; which requires the use of the fair value method of
accounting for share-based compensation. Under the fair value based method,
compensation cost related to employee stock options or similar equity
instruments is measured at the grant date based on the value of the award and is
recognized over the service period, which is usually the vesting period. ASC
Topic 718 also requires measurement of cost of a liability-classified award
based on its current fair value. The fair value of the liability-classified
award will be subsequently re-measured at each reporting date through the
settlement date. Change in fair value during the requisite service period will
be recognized as compensation cost over that period. </P>
<P align=justify>We determine fair value using the Black-Scholes model. Under
this model, certain assumptions, including the risk-free interest rate, the
expected life of the options and the estimated fair value of our ordinary shares
and the expected volatility, are required to determine the fair value of the
options. If different assumptions had been used, the fair value of the options
would have been different from the amount we computed and recorded, which would
have resulted in either an increase or decrease in the compensation expense.</P>
<P align=justify>Pursuant to ASC Topic 718, we have recognized compensation
costs of $934,000<B> </B>in relation to stock-based awards to our employees and
non-employee directors for the six months ended March 31, 2011, as an increase
in both the operating costs and shareholder&#146;s equity.</P>
<P align=justify><B>Recently Issued Accounting Pronouncements </B></P>
<P align=justify>Please refer to note 1 to our condensed interim consolidated
financial statements, &#147;Principal Activities, Basis of Presentation and
Organization &#150; Recently Issued Accounting Standards,&#148; for a discussion of
relevant pronouncements. </P>
<P align=justify><B>Exchange Rates</B></P>
<P align=justify>The financial records of Shenzhen BAK, BAK Electronics, BAK
Tianjin and Tianjin Meicai are maintained in RMB. In order to prepare our
financial statements, we have translated amounts in RMB into amounts in U.S.
dollars. The amounts of our assets and liabilities on our balance sheets are
translated using the closing exchange rate as of the date of the balance sheet.
Revenues, expenses, gains and losses are translated using the average exchange
rate prevailing during the period covered by such financial statements.
Adjustments resulting from the translation, if any, are included in our
cumulative other comprehensive income/(loss) in our stockholders&#146; equity section
of our balance sheet. All other amounts that were originally booked in RMB and
translated into U.S. dollars were translated using the closing exchange rate on
the date of recognition. Consequently, the exchange rates at which the amounts
in those comparisons were computed varied from year to year. </P>
<P align=justify>The exchange rates used to translate amounts in RMB into U.S.
dollars in connection with the preparation of our financial statements were as
follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>RMB
      per U.S. Dollar</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="12%"><B>2011</B> </TD>
    <TD vAlign=bottom align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="12%"><B>2010</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance sheet items as of March 31 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>6.5486 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>6.8259 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Amounts included in the statement of operations and comprehensive
      income, statement of changes in stockholders&#146; equity and statement
      of cash flows for the six months ended March 31 </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">6.6178 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">6.8275 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance sheet items as of September 30 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>6.6912 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>17</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<P align=justify><B>ITEM
3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK.</B></P>
<P align=justify><B>Interest Rate Risk</B></P>
<P align=justify>We are exposed to interest rate risk primarily with respect to
our short-term bank loans and long-term bank loans. Although the interest rates,
which are based on the banks&#146; prime rates with respect to our short-term loans
are fixed for the terms of the loans, the terms are typically three to twelve
months for short-term bank loans and interest rates are subject to change upon
renewal. There were no material changes in interest rates for short-term bank
loans renewed during the three months ended March 31, 2011.</P>
<P align=justify>Please refer to Item 2, &#147;Management&#146;s Discussion and Analysis
of Financial Condition and Results of Operations &#151;Liquidity and Capital
Resources &#151; Financing Activities&#148; for a discussion of our credit facilities and
loan agreements.</P>
<P align=justify>A hypothetical 1.0% increase in the annual interest rates for
all of our credit facilities under which we had outstanding borrowings at March
31, 2011, would increase net loss before provision for income taxes by
approximately $1.7 million, or 40.5%, for the three months ended March 31,
2011.<B> </B>Management monitors the banks&#146; prime rates in conjunction with our
cash requirements to determine the appropriate level of debt balances relative
to other sources of funds. We have not entered into any hedging transactions in
an effort to reduce our exposure to interest rate risk. </P>
<P align=justify><B>Foreign Exchange Risk</B></P>
<P align=justify>Although our reporting currency is the U.S. dollar, the
financial records of our operating subsidiaries are maintained in their local
currency, the RMB, which is our functional currency. Approximately 97.4% of our
revenues and 98.8% of our costs and expenses for the three months ended March
31, 2011 are denominated in RMB, with the balance denominated in U.S. dollars.
Approximately 99.6% of our assets except for cash were denominated in RMB as of
March 31, 2011. As a result, we are exposed to foreign exchange risk as our
revenues and results of operations may be affected by fluctuations in the
exchange rate between U.S. dollars and RMB. If the RMB depreciates against the
U.S. dollar, the value of our RMB revenues, earnings and assets as expressed in
our U.S. dollar financial statements will decline. Assets and liabilities of our
operating subsidiaries are translated into U.S. dollars at the exchange rate at
the balance sheet date, their equity accounts are translated at historical
exchange rates, and their income and expenses items are translated using the
average rate for the period. Any resulting exchange differences are recorded in
accumulated other comprehensive income or loss. An average appreciation
(depreciation) of the RMB against the U.S. dollar of 5% would increase
(decrease) our comprehensive income by $9.1 million based on our outstanding
revenues, costs and expenses, assets, and liabilities denominated in RMB as of
March 31, 2011. As of March 31, 2011, our accumulated other comprehensive income
was $31.3 million. We have not entered into any hedging transactions in an
effort to reduce our exposure to foreign exchange risk. </P>
<P align=justify><B>Inflation Risk</B></P>
<P align=justify>Inflationary factors such as increases in the cost of our
products and overhead costs may adversely affect our operating results. Although
we do not believe that inflation has had a material impact on our financial
position or results of operations to date, a high rate of inflation in the
future may have an adverse effect on our ability to maintain current levels of
gross margin and selling and general and administrative expenses as a percentage
of net revenues if the selling prices of our products do not increase with these
increased costs.</P>
<P align=justify><B>ITEM
4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CONTROLS AND
PROCEDURES.</B></P>
<P align=justify><B>Disclosure Controls and Procedures</B></P>
<P align=justify>As required by Rule 13a-15 under the Exchange Act, our
management has carried out an evaluation, with the participation and under the
supervision of our chief executive officer and interim chief financial officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures as of March 31, 2011. Disclosure controls and procedures refer to
controls and other procedures designed to ensure that information required to be
disclosed in the reports we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the SEC and that such information is accumulated and
communicated to our management, including our chief executive officer and
interim chief financial officer, as appropriate, to allow timely decisions
regarding required disclosure. In designing and evaluating our disclosure
controls and procedures, management recognizes that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired</P>
<P align=center>18</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<A name=page_60></A>
<P align=justify>control objectives, and management is required to apply its
judgment in evaluating and implementing possible controls and procedures.</P>
<P align=justify>Management conducted its evaluation of disclosure controls and
procedures under the supervision of our chief executive officer and our interim
chief financial officer. Based upon, and as of the date of this evaluation, our
chief executive officer and interim chief financial officer concluded that our
disclosure controls and procedures were effective as of March 31, 2011.<B>
</B></P>
<P align=justify><B>Changes in Internal Control over Financial Reporting</B></P>
<P align=justify>There were no changes in our internal controls over financial
reporting during our fiscal quarter ended March 31, 2011 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting<B>.</B> </P>
<P align=center><B>PART II</B><BR>
  <B><U>OTHER INFORMATION</U></B></P>
<P align=justify><B>ITEM
1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; LEGAL
PROCEEDINGS.</B></P>
<P align=justify>None.</P>
<P align=justify><B>ITEM 1A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RISK
FACTORS.</B></P>
<P align=justify>There have been no material changes to the risk factors
disclosed in our 2010 Form 10-K. Investors are directed to Item 1, &#147;Risk
Factors&#148; of the 2010 Form 10-K. </P>
<P align=justify><B>ITEM
2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. </B></P>
<P align=justify>None.<B> </B></P>
<P align=justify><B>ITEM
3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; DEFAULTS UPON
SENIOR SECURITIES. </B></P>
<P align=justify>None. </P>
<P align=justify><B>ITEM
4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (REMOVED AND
RESERVED). </B></P>
<P align=justify><B>ITEM
5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; OTHER
INFORMATION. </B></P>
<P align=justify>We have no information to disclose that was required to be in a
report on Form 8-K during the period covered by this Report, but was not
reported. There have been no material changes to the procedures by which
security holders may recommend nominees to our board of directors. </P>
<P align=justify><B>ITEM
6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EXHIBITS.</B></P>
<P align=justify>The following exhibits are filed as part of this report or
incorporated by reference: <B>[To be updated with loan agreements, material
agreements, etc.] </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Exhibit No.</B>
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="88%"
    ><B>Description</B> </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit31-1.htm">31.1</a> </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit31-1.htm">Certifications
        of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit31-2.htm">31.2 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit31-2.htm">Certifications
        of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit32-1.htm">32.1 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit32-1.htm">Certifications
        of Principal Executive Officer furnished pursuant to 18 U.S.C. Section
        1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
        2002. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit32-2.htm">32.2 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit32-2.htm">Certifications
        of Principal Financial Officer furnished pursuant to 18 U.S.C. Section
        1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
        2002.</a> </P></TD>
  </TR>
</TABLE>
<P align=center>19 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_61></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Exhibit No.</B>
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="88%"
    > <P align=justify><B>Description</B> </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-1.htm">99.1</a> </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-1.htm">Comprehensive
        Credit Facility Agreement of Maximum Amount (English summary), dated December
        26, 2010, between Shenzhen BAK Battery Co., Ltd. and Shenzhen Hi-Tech
        District Branch, Industrial Bank Co. Ltd. </a> </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-2.htm">99.2 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-2.htm">Loan
        Agreement (English summary), dated December 26, 2010, between Shenzhen
        BAK Battery Co., Ltd. and Shenzhen Hi-Tech District Branch, Industrial
        Bank Co. Ltd. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-3.htm">99.3 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-3.htm">Guaranty
        Contract of Maximum Amount (English summary), dated December 26, 2010,
        between BAK International Limited and Shenzhen Hi-Tech District Branch,
        Industrial Bank Co. Ltd. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-4.htm">99.4 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-4.htm">Guaranty
        Contract of Maximum Amount (English summary), dated December 26, 2010,
        between BAK International (Tianjin) Ltd. and Shenzhen Hi-Tech District
        Branch, Industrial Bank Co. Ltd. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-5.htm">99.5 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-5.htm">Guaranty
        Contract of Maximum Amount (English summary), dated December 26, 2010,
        between Xiangqian Li and Shenzhen Hi-Tech District Branch, Industrial
        Bank Co. Ltd. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-6.htm">99.6 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-6.htm">Comprehensive
        Credit Facility Agreement of Maximum Amount (English summary), dated October
        27, 2010, between BAK International (Tianjin) Ltd. and Tianjin Branch,
        Bank of Dalian. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-7.htm">99.7</a> </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-7.htm">Guaranty
        Contract of Maximum Amount (English summary), dated October 27, 2010,
        between Shenzhen BAK Battery Co., Ltd, Xiangqian Li , and Tianjin Branch,
        Bank of Dalian. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-8.htm">99.8</a> </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-8.htm">Comprehensive
        Credit Facility Agreement of Maximum Amount (English summary), dated January
        20, 2011, between Shenzhen BAK Battery Co., Ltd and Shenzhen Longgang
        Branch, Shenzhen Development Bank. </a> </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-9.htm">99.9</a> </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-9.htm">Loan
        Agreement (English summary), dated August 4, 2010, between Shenzhen BAK
        Battery Co., Ltd. and Longgang Branch, Shenzhen Development Bank Co.,
        Ltd. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-10.htm">99.10 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-10.htm">Loan
        Agreement (English summary), dated January 25, 2011, between Shenzhen
        BAK Battery Co., Ltd. and Longgang Branch, Shenzhen Development Bank Co.,
        Ltd. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-11.htm">99.11 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-11.htm">Loan
        Agreement (English summary), dated January 30, 2011, between Shenzhen
        BAK Battery Co., Ltd. and Longgang Branch, Shenzhen Development Bank Co.,
        Ltd. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-12.htm">99.12 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-12.htm">Mortgage
        Contract of Maximum Amount (English summary), dated January 20, 2011,
        between Shenzhen BAK Battery Co., Ltd. and Longgang Branch, Shenzhen Development
        Bank Co., Ltd. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-13.htm">99.13</a> </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-13.htm">Guaranty
        Contract of Maximum Amount (English summary), dated January 21, 2011,
        between BAK International Limited and Longgang Branch, Shenzhen Development
        Bank. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-14.htm">99.14 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-14.htm">Guaranty
        Contract of Maximum Amount (English summary), dated January 21, 2011,
        between BAK International (Tianjin) Ltd. and Longgang Branch, Shenzhen
        Development Bank. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-15.htm">99.15 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-15.htm">Guaranty
        Contract of Maximum Amount (English summary), dated January 21, 2011,
        between Xiangqian Li and Longgang Branch, Shenzhen Development Bank</a>.
      </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-16.htm">99.16 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-16.htm">Guaranty
        Contract of Maximum Amount (English summary), dated November 30, 2010,
        between Shenzhen BAK Battery Co., Ltd. and Tianjin Branch, Shanghai Pudong
        Development Bank. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-17.htm">99.17 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-17.htm">Loan
        Agreement (English summary), dated January 11, 2011, between Shenzhen
        BAK Battery Co., Ltd. and Shenzhen Eastern Branch, Agricultural Bank of
        China. </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit99-18.htm">99.18 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit99-18.htm">Loan
        Agreement (English summary), dated January 18, 2011, between Shenzhen
        BAK Battery Co., Ltd. and Shenzhen Eastern Branch, Agricultural Bank of
        China. </a></P></TD>
  </TR>
</TABLE>
<P align=center>20</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_62></A>
<P align=center><B>SIGNATURES </B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Date: May 10, 2011 </TD>
    <TD colspan="2" align=left ><STRONG>CHINA BAK BATTERY, INC.</STRONG> </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="5%" >&nbsp; </TD>
    <TD width="45%" >&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="5%" >By: </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="45%"
    >/s/ Xiangqian Li </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="5%" >&nbsp; </TD>
    <TD align=left width="45%" >Xiangqian Li, Chief Executive Officer </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="5%" >&nbsp; </TD>
    <TD align=left width="45%" ><I>(Principal Executive Officer)</I> </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="5%" >&nbsp; </TD>
    <TD width="45%" >&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="5%" >By: </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="45%"
    >/s/ Ke Marcus Cui </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="5%" >&nbsp; </TD>
    <TD align=left width="45%" >Ke Marcus Cui, Interim Chief Financial Officer
    </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="5%" >&nbsp; </TD>
    <TD align=left width="45%" ><I>(Principal Financial Officer and Principal</I>
    </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="5%" >&nbsp; </TD>
    <TD align=left width="45%" ><I>Accounting Officer)</I> </TD>
  </TR>
</TABLE>
<BR>
<HR align=center width="100%" color=black noShade SIZE=5>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>exhibit31-1.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>


<HTML>
<HEAD>
   <TITLE>China BAK Battery, Inc. - Exhibit 31.1 - Filed by newsfilecorp.com</TITLE>
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<HR noshade align="center" width=100% size=3 color="black">
<A name=page_1></A>
<P align=right><B>Exhibit 31.1 </B></P>
<P align=center><B>CERTIFICATIONS</B> </P>
<P align=justify>I, Xiangqian Li, certify that:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD colSpan=2>
      <P align=justify>I have reviewed this quarterly report on Form 10-Q of
      China BAK Battery, Inc.;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD colSpan=2>
      <P align=justify>Based on my knowledge, this report does not contain any
      untrue statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances under
      which such statements were made, not misleading with respect to the period
      covered by this report;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD colSpan=2>
      <P align=justify>Based on my knowledge, the financial statements, and
      other financial information included in this report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      report;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4. </TD>
    <TD colSpan=2>
      <P align=justify>The registrant&#146;s other certifying officer and I are
      responsible for establishing and maintaining disclosure controls and
      procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
      internal control over financial reporting (as defined in Exchange Act
      Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD>
      <P align=justify>Designed such disclosure controls and procedures, or
      caused such disclosure controls and procedures to be designed under our
      supervision, to ensure that material information relating to the
      registrant, including its consolidated subsidiaries, is made known to us
      by others within those entities, particularly during the period in which
      this report is being prepared;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD>
      <P align=justify>Designed such internal control over financial reporting,
      or caused such internal control over financial reporting to be designed
      under our supervision, to provide reasonable assurance regarding the
      reliability of financial reporting and the preparation of financial
      statements for external purposes in accordance with generally accepted
      accounting principles;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD>
      <P align=justify>Evaluated the effectiveness of the registrant&#146;s
      disclosure controls and procedures and presented in this report our
      conclusions about the effectiveness of the disclosure controls and
      procedures, as of the end of the period covered by this report based on
      such evaluation; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">d) </TD>
    <TD>
      <P align=justify>Disclosed in this report any change in the registrant&#146;s
      internal control over financial reporting that occurred during the
      registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal
      quarter in the case of an annual report) that has materially affected, or
      is reasonably likely to materially affect, the registrant&#146;s internal
      control over financial reporting; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">5. </TD>
    <TD colSpan=2>
      <P align=justify>The registrant&#146;s other certifying officer and I have
      disclosed, based on our most recent evaluation of internal control over
      financial reporting, to the registrant&#146;s auditors and the audit committee
      of the registrant&#146;s board of directors (or persons performing the
      equivalent functions):</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD>
      <P align=justify>All significant deficiencies and material weaknesses in
      the design or operation of internal control over financial reporting which
      are reasonably likely to adversely affect the registrant&#146;s ability to
      record, process, summarize and report financial information; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD>
      <P align=justify>Any fraud, whether or not material, that involves
      management or other employees who have a significant role in the
      registrant&#146;s internal control over financial
reporting.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>Date: May 10, 2011 </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>/s/ Xiangqian Li
    </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Xiangqian Li </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Chief Executive Officer </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><I>(Principal Executive Officer)</I> </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR></TABLE><BR>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>exhibit31-2.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>


<HTML>
<HEAD>
   <TITLE>China BAK Battery, Inc. - Exhibit 31.2 - Filed by newsfilecorp.com</TITLE>
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<HR noshade align="center" width=100% size=3 color="black">
<A name=page_1></A>
<P align=right><B>Exhibit 31.2 </B></P>
<P align=center><B>CERTIFICATIONS</B> </P>
<P align=justify>I, Ke Marcus Cui, certify that:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD colSpan=2>
      <P align=justify>I have reviewed this quarterly report on Form 10-Q of
      China BAK Battery, Inc.;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD colSpan=2>
      <P align=justify>Based on my knowledge, this report does not contain any
      untrue statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances under
      which such statements were made, not misleading with respect to the period
      covered by this report;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD colSpan=2>
      <P align=justify>Based on my knowledge, the financial statements, and
      other financial information included in this report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      report;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4. </TD>
    <TD colSpan=2>
      <P align=justify>The registrant&#146;s other certifying officer and I are
      responsible for establishing and maintaining disclosure controls and
      procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
      internal control over financial reporting (as defined in Exchange Act
      Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD>
      <P align=justify>Designed such disclosure controls and procedures, or
      caused such disclosure controls and procedures to be designed under our
      supervision, to ensure that material information relating to the
      registrant, including its consolidated subsidiaries, is made known to us
      by others within those entities, particularly during the period in which
      this report is being prepared;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD>
      <P align=justify>Designed such internal control over financial reporting,
      or caused such internal control over financial reporting to be designed
      under our supervision, to provide reasonable assurance regarding the
      reliability of financial reporting and the preparation of financial
      statements for external purposes in accordance with generally accepted
      accounting principles;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD>
      <P align=justify>Evaluated the effectiveness of the registrant&#146;s
      disclosure controls and procedures and presented in this report our
      conclusions about the effectiveness of the disclosure controls and
      procedures, as of the end of the period covered by this report based on
      such evaluation; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">d) </TD>
    <TD>
      <P align=justify>Disclosed in this report any change in the registrant&#146;s
      internal control over financial reporting that occurred during the
      registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal
      quarter in the case of an annual report) that has materially affected, or
      is reasonably likely to materially affect, the registrant&#146;s internal
      control over financial reporting; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">5. </TD>
    <TD colSpan=2>
      <P align=justify>The registrant&#146;s other certifying officer and I have
      disclosed, based on our most recent evaluation of internal control over
      financial reporting, to the registrant&#146;s auditors and the audit committee
      of the registrant&#146;s board of directors (or persons performing the
      equivalent functions):</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD>
      <P align=justify>All significant deficiencies and material weaknesses in
      the design or operation of internal control over financial reporting which
      are reasonably likely to adversely affect the registrant&#146;s ability to
      record, process, summarize and report financial information; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD>
      <P align=justify>Any fraud, whether or not material, that involves
      management or other employees who have a significant role in the
      registrant&#146;s internal control over financial
reporting.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>Date: May 10, 2011 </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>/s/ Ke Marcus Cui
    </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Ke Marcus Cui </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Interim Chief Financial Officer </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><I>(Principal Financial and Accounting Officer)</I> </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR></TABLE><BR>
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<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>exhibit32-1.htm
<DESCRIPTION>EXHIBIT 32.1
<TEXT>


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<P align=right><B>Exhibit 32.1 </B></P>
<P align=center><B>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
</B><BR><B>AS ADOPTED PURSUANT TO SECTION 906 </B><BR>
  <B>OF THE SARBANES-OXLEY ACT OF 2002 </B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
undersigned, Xiangqian Li, the Chief Executive Officer of CHINA BAK BATTERY,
INC. (the &#147;Company&#148;), DOES HEREBY CERTIFY that: </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;&nbsp; The Company&#146;s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2011 (the &#147;Report&#148;), fully complies with the requirements of Section
13(a) of the Securities Exchange Act of 1934; and </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;&nbsp; Information contained in the Report fairly presents, in all
material respects, the financial condition and results of operation of the
Company. </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; IN
WITNESS WHEREOF, each of the undersigned has executed this statement this
10th day of May, 2011.&nbsp; <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="50%">/s/
      Xiangqian Li </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">Xiangqian Li </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">Chief Executive Officer </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%"><I>(Principal Executive Officer)</I>
  </TD></TR></TABLE>
<P align=justify>A signed original of this written statement required by Section
906 has been provided to China BAK Battery, Inc. and will be retained by China
BAK Battery, Inc. and furnished to the Securities and Exchange Commission or its
staff upon request. </P>
<P align=justify>The forgoing certification is being furnished to the Securities
and Exchange Commission pursuant to &#167; 18 U.S.C. Section 1350. It is not being
filed for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, and is not to be incorporated by reference into any filing of the
Company, whether made before or after the date hereof, regardless of any general
incorporation language in such filing. </P>
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<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>exhibit32-2.htm
<DESCRIPTION>EXHIBIT 32.2
<TEXT>


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<P align=right><B>Exhibit 32.2 </B></P>
<P align=center><B>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
</B><BR><B>AS ADOPTED PURSUANT TO SECTION 906 </B><BR>
  <B>OF THE SARBANES-OXLEY ACT OF 2002 </B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
undersigned, Ke Marcus Cui, the Interim Chief Financial Officer of CHINA BAK
BATTERY, INC. (the &#147;Company&#148;), DOES HEREBY CERTIFY that: </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;&nbsp; The Company&#146;s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2011 (the &#147;Report&#148;), fully complies with the requirements of Section
13(a) of the Securities Exchange Act of 1934; and </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;&nbsp; Information contained in the Report fairly presents, in all
material respects, the financial condition and results of operation of the
Company. </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; IN
WITNESS WHEREOF, each of the undersigned has executed this statement this
10th day of May, 2011. <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="50%">/s/ Ke
      Marcus Cui </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">Ke Marcus Cui </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">Interim Chief Financial Officer </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%"><I>(Principal Financial and Accounting
      Officer)</I> </TD></TR></TABLE>
<P align=justify>A signed original of this written statement required by Section
906 has been provided to China BAK Battery, Inc. and will be retained by China
BAK Battery, Inc. and furnished to the Securities and Exchange Commission or its
staff upon request. </P>
<P align=justify>The forgoing certification is being furnished to the Securities
and Exchange Commission pursuant to &#167; 18 U.S.C. Section 1350. It is not being
filed for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, and is not to be incorporated by reference into any filing of the
Company, whether made before or after the date hereof, regardless of any general
incorporation language in such filing. </P>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>6
<FILENAME>exhibit99-1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
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<P align="justify">
<B><U>Comprehensive Credit Facility Agreement of Maximum Amount (&#147;Credit Facility Agreement&#148;) Entered into by and between Shenzhen BAK Battery Co., Ltd (the &#147;Company&#148;) and Shenzhen Hi-Tech District Branch, Industrial Bank CO. Ltd
(the &#147;Creditor&#148;) Dated December 26, 2010</U></B><B> </B></P>
<P align="justify">
<B>Main articles:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
Contract number: Xingyinshen Gaoxinqu Shouxinzi(2010)013;</LI>
<LI>
Maximum amount of credit facilities to be provided: RMB 62.5 million;</LI>
<LI>
Term: from December 26, 2010 to December 26, 2011;</LI>
<LI>
Purpose of the loan is to provide working capital for the Company;</LI>
<LI>
Remedies in the event of breach of contract include adjustment of the credit amount, suspension of credit, imposition of punitive interest and overdue interest, an increase of guarantee deposit and the call back of loan principal and interest before
maturity.</LI>
</UL>
<P align="justify">
<B>Headlines of the articles omitted</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
Termination and explanation</LI>
<LI>
Procedure on using the comprehensive credit facility</LI>
<LI>
Guarantee</LI>
<LI>
Rights and obligations of the Creditor</LI>
<LI>
Declaration and undertaking of the Company</LI>
<LI>
Obligations of the Company</LI>
<LI>
Instances of Breach of Contract and its Liability</LI>
<LI>
Continuity of Obligations</LI>
<LI>
Disputation settlement</LI>
<LI>
Validity</LI>
<LI>
Supplement articles</LI>
</UL>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>7
<FILENAME>exhibit99-2.htm
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
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<B><U>Summary of Loan Agreement Entered into by and between Shenzhen BAK Battery Co., Ltd.
<br>
(&#147;the Company&#148;) and Shenzhen Hi-Tech District Branch, Industrial Bank CO. Ltd
<br>
(&#147;the Creditor&#148;) dated December 26, 2010</U></B><B> </B></P>
<P align="justify">
<B>Main contents</B><BR>
</P>
<TABLE BCLLIST style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
<TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Contract number: Xingyinshen Gaoxinqu Shouxinduanjiezi(2010)021;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Loan principal: RMB 50 million;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Loan term: from January 19, 2011 to December 10, 2011;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Fixed interest rate: annually 6.391%;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<LI type="square">&nbsp;</LI> 	</TD>
	<TD>
<P align="justify">Interest accrued and settled per month, interest settlement day is the 20th day of each month;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<LI type="square">&nbsp;</LI> 	</TD>
	<TD>
<P align="justify">Penalty interest rate for delayed repayment: 6.391% plus 50% *6.391%;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<LI type="square">&nbsp;</LI> 	</TD>
	<TD>
<P align="justify">Penalty interest rate for embezzlement of loan proceeds: 6.391% plus 50% *6.391%;</P>
	</TD>
</TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Purpose of the loan is to provide working capital for the Company;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Advanced repayment of loan needs to be approved by the Creditor;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Breach of contract penalties: correct the breach of contract in time limit; suspension of loan unprovided; release loan agreement, demand prepayment of loan principal and interest before maturity; imposition of punitive interest
incurred due to delayed loan; imposition of punitive interest for embezzlement of loan; imposition of plural interest for unpaid interest; withdraw from any accounts of the Company the loan principal, interest and other fees; compensation for the
Creditor&#146;s expenses incurred due to demanding the loan principal and interest in case of litigation, etc.</P>
	</TD>
</TR>
</TABLE>
<P align="justify">
<B>Headlines of the articles omitted:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Termination and explanation</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Loan arrangement</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Interest clearing of the loan</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Payment of the loan</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Rights and obligations of both the Creditor and the Company</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Declaration and undertaking of the Company</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Interest penalty of loan</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Guarantee</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Continuity of Obligations</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Disputation settlement</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Validity</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Supplement articles</LI>
</UL>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>8
<FILENAME>exhibit99-3.htm
<DESCRIPTION>EXHIBIT 99.3
<TEXT>
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<B><U>Summary of Guaranty Contract of Maximum Amount ( the &#147;Contract&#148;) Entered into by and
between BAK International Limited (the &#147;Guarantor&#148;) and Shenzhen Hi-Tech District Branch,
Industrial Bank CO. Ltd (the
&#147;Creditor&#148;) on December 26, 2010</U></B><B> </B></P>
<P align="justify">
<B>Main contents:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Guaranty Contract number: Xingyinshen Gaoxinqu Shouxin (baozheng)zi(2010)013;</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">BAK International Limited undertakes to assume joint and several liabilities for</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Shenzhen BAK Battery Co., Ltd (the &#147;Obligor&#148;)&#146;s indebtedness towards Industrial Bank under the Comprehensive Credit Facility Agreement of Maximum Amount (reference no.: Xingyinshen Gaoxinqu Shouxinzi (2010)013) from December 26, 2010
to December 26, 2011, and the maximum amount secured is RMB 62.5 million. </LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12"> <B>Guaranty Responsibility</B>: The
guaranty under this Contract shall be guaranty with joint and several
liabilities. The guarantor is obligated to pay off the debt in the event the
obligor is unable to pay off the debt (including the creditor declares the debt
becomes mature in advance to its original expiry date due to default of the
obligor or the guarantor).</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12"> <B>Scope of Guaranty: </B>The guaranty shall cover all of the loan principal, interest, penalty interest,
breach of contract compensation, damages, undertaking fee and all the expenses such as litigation cost, lawyer&#146;s fee, notification cost and public notice cost etc. which is incurred to the Creditor in realizing its creditor&#146;s right. </LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12"> <B>Guaranty period:</B> The guaranty period is from the effective date of this Contract to two years after the expiry of the term of the Credit Facility Agreement and relevant agreement entered into under the Credit Facility Agreement. </LI>
</UL>
<P align="justify">
<B>Headlines of the articles omitted:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Termination and explanation</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Payment on demand</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Declaration and undertaking of the Guarantor</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Obligations of the Guarantor</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Instances of Breach of Contract and its Liability</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Independence of Guarantor&#146;s obligations</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Continuity of Obligations</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Disputation settlement</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Validity</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Supplement articles</LI>
</UL>

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<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>9
<FILENAME>exhibit99-4.htm
<DESCRIPTION>EXHIBIT 99.4
<TEXT>
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<P align="justify">
<B><U>Summary of Guaranty Contract of Maximum Amount ( the &#147;Contract&#148;) Entered into by and&nbsp;between BAK International (Tianjin) Ltd. (the &#147;Guarantor&#148;) and Shenzhen Hi-Tech District Branch,
Industrial Bank CO. LTD (the
&#147;Creditor&#148;) on December 26, 2010</U></B><B> </B></P>
<P align="justify">
<B>Main contents:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Guaranty Contract number: Xingyinshen Gaoxinqu Shouxin (baozheng)zi(2010)014;</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">BAK International (Tianjin) Ltd. undertakes to assume joint and several liabilities for
Shenzhen BAK Battery Co., Ltd (the &#147;Obligor&#148;)&#146;s indebtedness towards Industrial Bank under the Comprehensive Credit Facility Agreement of Maximum Amount (reference no.: Xingyinshen Gaoxinqu Shouxinzi (2010)013) from December 26, 2010
to December 26, 2011, and the maximum amount secured is RMB 62.5 million. </LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12"> <B>Guaranty Responsibility</B>: The
guaranty under this Contract shall be guaranty with joint and several
liabilities. The guarantor is obligated to pay off the debt in the event the
obligor is unable to pay off the debt (including the creditor declares the debt
becomes mature in advance to its original expiry date due to default of the
obligor or the guarantor). </LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12"> <B>Scope of Guaranty: </B>The guaranty shall cover all of the loan principal, interest, penalty interest,
breach of contract compensation, damages, undertaking fee and all the expenses such as litigation cost, lawyer&#146;s fee, notification cost and public notice cost etc. which is incurred to the Creditor in realizing its creditor&#146;s right. </LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12"> <B>Guaranty period:</B> The guaranty period is from the effective date of this Contract to two years after the expiry of the term of the Credit Facility Agreement and relevant agreement entered into under the Credit Facility Agreement. </LI>
</UL>
<P align="justify">
<B>Headlines of the articles omitted:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Termination and explanation</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Payment on demand</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Declaration and undertaking of the Guarantor</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Obligations of the Guarantor</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Instances of Breach of Contract and its Liability</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Independence of Guarantor&#146;s obligations</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Continuity of Obligations</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Disputation settlement</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Validity</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Supplement articles</LI>
</UL>

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<DOCUMENT>
<TYPE>EX-99.5
<SEQUENCE>10
<FILENAME>exhibit99-5.htm
<DESCRIPTION>EXHIBIT 99.5
<TEXT>
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<B><U>Summary of Guaranty Contract of Maximum Amount ( the &#147;Contract&#148;) Entered into by
<br>
and between Xiangqian Li (the &#147;Guarantor&#148;) and Shenzhen Hi-Tech District Branch,
<br>
Industrial Bank CO. Ltd (the &#147;Creditor&#148;) on
December 26, 2010</U></B><B> </B></P>
<P align="justify">
<B>Main contents:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Guaranty Contract number: Xingyinshen Gaoxinqu Shouxinge(baozheng)zi(2010)016;</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Xiangqian Li undertakes to assume joint and several liabilities for Shenzhen BAK&nbsp;
Battery Co., Ltd (the &#147;Obligor&#148;)&#146;s indebtedness towards Industrial Bank under the Comprehensive Credit Facility Agreement of Maximum Amount (reference no.: Xingyinshen Gaoxinqu Shouxinzi (2010)013) from December 26, 2010 to December
26, 2011, and the maximum amount secured is RMB 62.5 million. </LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12"> <B>Guaranty Responsibility</B>: The
guaranty under this Contract shall be guaranty with joint and several
liabilities. The guarantor is obligated to pay off the debt in the event the
obligor is unable to pay off the debt (including the creditor declares the debt
becomes mature in advance to its original expiry date due to default of the
obligor or the guarantor). </LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12"> <B>Scope of Guaranty: </B>The
guaranty shall cover all of the loan principal, interest, penalty interest,
breach of contract compensation, damages, undertaking fee and all the expenses
such as litigation cost, lawyer&#146;s fee, notification cost and public notice cost
etc. which is incurred to the Creditor in realizing its creditor&#146;s right. </LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12"> <B>Guaranty period:</B> The guaranty period is from the effective date of this Contract to two years after the expiry of the term of the Credit Facility Agreement and relevant agreement entered into under the Credit Facility Agreement. </LI>
</UL>
<P align="justify">
<B>Headlines of the articles omitted:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Termination and explanation</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Payment on demand</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Declaration and undertaking of the Guarantor</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Obligations of the Guarantor</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Instances of Breach of Contract and its Liability</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Independence of Guarantor&#146;s obligations</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Continuity of Obligations</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Disputation settlement</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Validity</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Supplement articles</LI>
</UL>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.6
<SEQUENCE>11
<FILENAME>exhibit99-6.htm
<DESCRIPTION>EXHIBIT 99.6
<TEXT>
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<P align=justify><B><U>Comprehensive Credit Facility Agreement of Maximum Amount
(&#147;Credit Facility Agreement&#148;) Entered into by and between BAK International
(Tianjin) Limited (&#147;the Company&#148;) and Tianjin Branch, Bank of Dalian (the
&#147;Creditor&#148;) Dated October 27, 2010</U></B><B> </B></P>
<P align=justify><B>Main articles:<BR></B><BR></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>Contract number: DLQ Jin201010270014;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>Maximum amount of credit facilities to be provided: RMB
      80 million;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>Term: from October 27, 2010 to January 26,
2012;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>Purpose of the loan is to provide working capital for the
      Company;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>If any of the following occurs, the Creditor is entitled
      to demand adjustment of the maximum amount of credit facilities:</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI type="square">&nbsp;</LI></TD>
    <TD>
      <P align=justify>The Company provides unture materials;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI type="square">&nbsp;</LI></TD>
    <TD>
      <P align=justify>The financial condition of the Company is in serious
      difficulty;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI type="square">&nbsp;</LI></TD>
    <TD>
      <P align=justify>The Company does not carry out its obligations;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI type="square">&nbsp;</LI></TD>
    <TD>
      <P align=justify>Occurrence of other instances which endangers or may
      endanger the safety of the loan provided by the Creditor;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>Remedies in the event of breach of contract include
      adjustment of the credit amount, suspension of credit, and cancel the
      credit unprovided.</P></TD></TR></TABLE>
<P align=justify><B>Headlines of the articles omitted</B><BR></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">The procedure on using the comprehensive credit facility
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Guaranty
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">The obligations of the Creditor
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">The obligations of the Company
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Declaration and undertaking of the Company
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Increase to the maximum amount of credit facilities
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Amendment and termination of Contract
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Supplemental Agreement
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Disputation settlement Validity
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Validity </LI></UL>
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<DOCUMENT>
<TYPE>EX-99.7
<SEQUENCE>12
<FILENAME>exhibit99-7.htm
<DESCRIPTION>EXHIBIT 99.7
<TEXT>
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<P align="justify">
<B><U>Summary of Guaranty Contract of Maximum Amount ( the &#147;Contract&#148;)&nbsp;Entered into by and between Shenzhen BAK Battery Co., Ltd, Xiangqian Li
(the &#147;Guarantor&#148;) and Tianjin Branch, Bank of Dalian (the &#147;Creditor&#148;) on
October 27, 2010</U></B><B> </B></P>
<P align="justify">
<B>Main contents:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Guaranty Contract number: DLQ Jin201010270014;</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Shenzhen BAK Battery Co., Ltd and Xiangqian Li undertake to assume joint and</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">several liabilities for BAK International (Tianjin) Limited (the &#147;Obligor&#148;)&#146;s indebtedness towards Bank of Dalian from October 27, 2010 to January 26, 2012, and the maximum amount secured is RMB 50 million. </LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12"> <B>Guaranty Responsibility</B>: The
guaranty under this Contract shall be guaranty with joint and several
liabilities. The guarantor is obligated to pay off the debt in the event the
obligor is unable to pay off the debt (including the creditor declares the debt
becomes mature in advance to its original expiry date due to default of the
obligor or the guarantor). </LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12"> <B>Scope of Guaranty: </B>The guaranty shall cover all of the loan principal, interest, penalty interest,
breach of contract compensation, damages, undertaking fee and all the expenses such as litigation cost, lawyer&#146;s fee, notification cost and public notice cost etc. which is incurred to the Creditor in realizing its creditor&#146;s right. </LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12"> <B>Guaranty period:</B> The guaranty period is from the effective date of this Contract to two years after the expiry of the term of the Credit Facility Agreement and relevant agreement entered into under the Credit Facility Agreement. </LI>
</UL>
<P align="justify">
<B>Headlines of the articles omitted:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Termination and explanation</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Payment on demand</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Declaration and undertaking of the Guarantor</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Obligations of the Guarantor</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Continuity of guaranty</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Amendment and explanation of the Contract</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Disputation settlement</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Validity</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Supplement articles</LI>
</UL>

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<DOCUMENT>
<TYPE>EX-99.8
<SEQUENCE>13
<FILENAME>exhibit99-8.htm
<DESCRIPTION>EXHIBIT 99.8
<TEXT>
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<B><U>Comprehensive Credit Facility Agreement of Maximum Amount (&#147;Credit Facility Agreement&#148;)
Entered into by and between Shenzhen BAK Battery Co., Ltd (&#147;the Company&#148;) and Shenzhen Longgang&nbsp;Branch, Shenzhen Development Bank (the
&#147;Creditor&#148;) Dated January 20, 2011</U></B><B> </B></P>
<P align="justify">
<B>Main articles:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Contract number: Shenfa Longgang Zongzi 20110120001;</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Maximum amount of credit facilities to be provided: RMB 200 million;</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Term: from January 26, 2011 to January 18, 2012.</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Purpose of the loan is to provide working capital for the Company;</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Remedies in the event of breach of contract include adjustment of the credit amount, suspension of credit, imposition of punitive interest and overdue interest, an increase of guarantee deposit and the call back of loan principal and interest before
maturity.</LI>
</UL>
<P align="justify">
<B>Headlines of the articles omitted</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">The procedure on using the comprehensive credit facility</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">The declaration and promise of the Company</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Transferring of the credit facility under the maximum amount</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Disputation settlement</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Validity</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Notification</LI>
</UL>

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<DOCUMENT>
<TYPE>EX-99.9
<SEQUENCE>14
<FILENAME>exhibit99-9.htm
<DESCRIPTION>EXHIBIT 99.9
<TEXT>
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<B><U>Summary of Loan Agreement Entered into by and between Shenzhen BAK Battery Co., Ltd.&nbsp;(&#147;the Company&#148;) and Longgang Branch, Shenzhen Development Bank Co., Ltd
(the &#147;Creditor&#148;) on August 4, 2010</U></B><B> </B></P>
<P align="justify">
<B>Main contents:</B><BR>
</P>
<TABLE BCLLIST style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0" height="431">
<TR>
	<TD width=5% valign=top height="15">
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2 height="15">
<P align="justify">Contract number: Shenfa Longgang Daizi 20100803001;</P>
	</TD>
</TR>
<TR><TD height="15"></TD><TD height="15"></TD><TD height="15"></TD></TR><TR>
	<TD width=5% valign=top height="15">
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2 height="15">
<P align="justify">Main Contract: Comprehensive Credit Facility Agreement;</P>
	</TD>
</TR>
<TR><TD height="15"></TD><TD height="15"></TD><TD height="15"></TD></TR><TR>
	<TD width=5% valign=top height="15">
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2 height="15">
<P align="justify">Main Contract number: Shenfa Longgang Zongzi 20091221001;</P>
	</TD>
</TR>
<TR><TD height="15"></TD><TD height="15"></TD><TD height="15"></TD></TR><TR>
	<TD width=5% valign=top height="15">
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2 height="15">
<P align="justify">Loan principal: RMB 20 million;</P>
	</TD>
</TR>
<TR><TD height="15"></TD><TD height="15"></TD><TD height="15"></TD></TR><TR>
	<TD width=5% valign=top height="15">
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2 height="15">
<P align="justify">Loan term: from August 4, 2010 to June 14, 2011;</P>
	</TD>
</TR>
<TR><TD height="15"></TD><TD height="15"></TD><TD height="15"></TD></TR><TR>
	<TD width=5% valign=top height="15">
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2 height="15">
<P align="justify">Floating interest rate: Interest rate of loan shall be at 95% of the benchmark rate announced by the People&#146;s Bank of China, and be adjusted every 3 months;</P>
	</TD>
</TR>
<TR><TD height="15"></TD><TD height="15"></TD><TD height="15"></TD></TR><TR>
<TD width=5% height="17"></TD>	<TD width=5% valign=top height="17">
<LI type="square">&nbsp;</LI> 	</TD>
	<TD height="17">
<P align="justify">Interest accrued and settled per month, interest settlement day is the 20<B><SUP>th </SUP></B>day of each month;</P>
	</TD>
</TR>
<TR><TD height="15"></TD><TD height="15"></TD><TD height="15"></TD></TR><TR>
<TD width=5% height="15"></TD>	<TD width=5% valign=top height="15">
<LI type="square">&nbsp;</LI> 	</TD>
	<TD height="15">
<P align="justify">Penalty interest rate for delayed repayment: current interest rate plus 50% * current interest rate;</P>
	</TD>
</TR>
<TR><TD height="15"></TD><TD height="15"></TD><TD height="15"></TD></TR><TR>
<TD width=5% height="15"></TD>	<TD width=5% valign=top height="15">
<LI type="square">&nbsp;</LI> 	</TD>
	<TD height="15">
<P align="justify">Penalty interest rate for embezzlement of loan proceeds: current interest rate *1;</P>
	</TD>
</TR>
<TD height="15"></TD><TD height="15"></TD><TD height="15"></TD><TR>
	<TD width=5% valign=top height="15">
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2 height="15">
<P align="justify">Purpose of the loan is to provide working capital for the Company;</P>
	</TD>
</TR>
<TR><TD height="15"></TD><TD height="15"></TD><TD height="15"></TD></TR><TR>
	<TD width=5% valign=top height="15">
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2 height="15">
<P align="justify">If any of the following occurs, the Creditor is entitled to demand prepayment of loan principal and interest before maturity and cancel all loans unprovided ;</P>
	</TD>
</TR>
<TR><TD height="15"></TD><TD height="15"></TD><TD height="15"></TD></TR><TR>
<TD width=5% height="15"></TD>	<TD width=5% valign=top height="15">
<LI type="square">&nbsp;</LI> 	</TD>
	<TD height="15">
<P align="justify">The Company terminates operation or is stopped from operation;</P>
	</TD>
</TR>
<TR><TD height="15"></TD><TD height="15"></TD><TD height="15"></TD></TR><TR>
<TD width=5% height="15"></TD>	<TD width=5% valign=top height="15">
<LI type="square">&nbsp;</LI> 	</TD>
	<TD height="15">
<P align="justify">The Company provides untrue documents or hide important
financial information about its operation; </P>
	</TD>
</TR>
<TR>
<TD width=5% height="15"></TD>	<TD width=5% valign=top height="15">
</TD>
	<TD height="15">
	</TD>
</TR>
<TR>
<TD width=5% height="15"></TD>	<TD width=5% valign=top height="15">
<LI type="square">&nbsp;</LI> 	</TD>
	<TD height="15">
The Company intentionally evades bank debts by way of related party transaction
or other means;</TD>
</TR>
<TR>
<TD width=5% height="15"></TD>	<TD height="15"></TD>
	<TD height="15">
	</TD>
</TR>
<TR>
<TD width=5% height="1"></TD>	<TD width=5% valign=top height="14">
<LI type="square">&nbsp;</LI> 	</TD>
	<TD height="1">
The Company uses loan proceeds for purposes other than what is agreed without
the consent of the Creditor;</TD>
</TR>
<TR>
<TD width=5% height="15"></TD>	<TD width=5% valign=top height="15">
</TD>
	<TD height="15">
	</TD>
</TR>
<TR>
<TD width=5% height="15"></TD>	<TD width=5% valign=top height="14">
<LI type="square">&nbsp;</LI> 	</TD>
	<TD height="15">
Occurrence of other instances which endangers or may endanger the safety of the
loan provided by the Creditor;
	</TD>
</TR>
</TABLE>
<P align="justify">
<B>Headlines of the articles omitted:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Interest clearing of the loan</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Payment of the loan</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Rights and obligation of the Company</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Rights and obligations of the Creditor</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Disputation settlement and Validity</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Fees</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Breach of contract penalties</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Declaration, guaranty and undertaking of the Company</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Amendment and Termination of Contract</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Others</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Validity</LI>
</UL>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.10
<SEQUENCE>15
<FILENAME>exhibit99-10.htm
<DESCRIPTION>EXHIBIT 99.10
<TEXT>
<!DOCTYPE HTML PUBLIC "9910.pdf">


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<HEAD>
   <TITLE>China BAK Battery Co., Ltd.: Exhibit 99.10 - Filed by newsfilecorp.com</TITLE>
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<HR noshade align="center" width=100% size=3 color="black">
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<P align=justify><B><U>Summary of Loan Agreement Entered into by and between
Shenzhen BAK</U></B><B> <U>Battery Co., Ltd. (&#147;the Company&#148;) and Longgang
Branch, Shenzhen</U></B><B> <U>Development Bank Co., Ltd (the &#147;Creditor&#148;)
on January 25, 2011</U></B><B> </B></P>
<P align=justify><B>Main contents: </B></P>
<ul>
  <li>
  <p style="margin-top: 0; margin-bottom: 12">Contract number: Shenfa
      Longgang Daizi 20110125001; </li>
  <li>
  <p style="margin-top: 0; margin-bottom: 12">Main Contract: Comprehensive
      Credit Facility Agreement; </li>
  <li>
  <p style="margin-top: 0; margin-bottom: 12">Main Contract number: Shenfa
      Longgang Zongzi 20110120001; </li>
  <li>
  <p style="margin-top: 0; margin-bottom: 12">Loan principal: RMB 70
      million; </li>
  <li>
  <p style="margin-top: 0; margin-bottom: 12">Loan term: from January 25,
      2011 to January 24, 2012; </li>
  <li>
  <p style="margin-top: 0; margin-bottom: 12">Floating interest rate: Interest rate
      of loan shall be equal to the benchmark rate announced by the People&#146;s
      Bank of China, and be adjusted every 3 months; </li>
</ul>
<blockquote>
  <ul type="square">
    <li>
    <p style="margin-top: 0; margin-bottom: 12">Interest accrued and settled per month,
      interest settlement day is the 20<B><SUP>th </SUP></B>day of each
      month; </li>
    <li>
    <p style="margin-top: 0; margin-bottom: 12">Penalty interest rate for delayed
      repayment: current interest rate plus 50% * current interest rate; </li>
    <li>
    <p style="margin-top: 0; margin-bottom: 12">Penalty interest rate for embezzlement
      of loan proceeds: current interest rate *1; </li>
  </ul>
</blockquote>
<ul>
  <li>
  <p style="margin-top: 0; margin-bottom: 12">Purpose of the loan is to
      provide working capital for the Company; </li>
  <li>
  <p style="margin-top: 0; margin-bottom: 12">If any of the following occurs, the
      Creditor is entitled to demand prepayment of loan principal and interest
      before maturity and cancel all loans unprovided ; </li>
</ul>
<blockquote>
  <ul type="square">
    <li>
<P align=justify style="margin-top: 0; margin-bottom: 12">The Company terminates operation or is
      stopped from operation; </P>
    </li>
    <li>
<P align=justify style="margin-top: 0; margin-bottom: 12">The Company provides untrue documents or
      hide important financial information
      about its operation; </P>
    </li>
    <li>
<P align=justify style="margin-top: 0; margin-bottom: 12">The Company intentionally evades bank
      debts by way of related party transaction or other
      means; </P>
    </li>
    <li>
<P align=justify style="margin-top: 0; margin-bottom: 12">The Company uses loan proceeds for
      purposes other than what is agreed without the consent
      of the Creditor; </P>
    </li>
    <li>
<P align=justify style="margin-top: 0; margin-bottom: 12">Occurrence of other instances which
      endangers or may endanger the safety of the loan
      provided by the Creditor; </P>
    </li>
  </ul>
</blockquote>
<P align=justify style="margin-top: 0; margin-bottom: 12"><B>Headlines of the articles omitted: </B></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Interest clearing of the loan
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Payment of the loan
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Rights and obligation of the Company
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Rights and obligations of the Creditor
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Disputation settlement and Validity
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Fees
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Breach of contract penalties
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Declaration, guaranty and undertaking of the Company
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Amendment and Termination of Contract
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Others
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Validity </LI></UL>
<HR align=center width="100%" color=black noShade SIZE=5>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.11
<SEQUENCE>16
<FILENAME>exhibit99-11.htm
<DESCRIPTION>EXHIBIT 99.11
<TEXT>



<HTML>
<HEAD>
   <TITLE>China BAK Battery Co., Ltd.: Exhibit 99.11 - Filed by newsfilecorp.com</TITLE>

</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
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<P align=justify><B><U>Summary of Loan Agreement Entered into by and between
Shenzhen BAK Battery Co., Ltd. (&#147;the Company&#148;) and Longgang Branch, Shenzhen Development Bank Co., Ltd (the &#147;Creditor&#148;) on January 30, 2011</U></B><B>
</B></P>
<P align=justify><B>Main contents:</B></P>
<ul>
  <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">Contract number:
      Shenfa Longgang Daizi 20110130001;</P></li>
  <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">Main Contract:
      Comprehensive Credit Facility Agreement;</P></li>
  <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">Main Contract
      number: Shenfa Longgang Zongzi 20110120001;</P></li>
  <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">Loan principal:
      RMB 60 million;</P></li>
  <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">Loan term: from
      January 30, 2011 to January 29, 2012;</P></li>
  <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">Floating
      interest rate: Interest rate of loan shall be equal to the benchmark rate
      announced by the People&#146;s Bank of China, and be adjusted every 3 months;</P>
  </li>
</ul>
<blockquote>
  <ul type="square">
    <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">Interest accrued
      and settled per month, interest settlement day is the 20<B><SUP>th </SUP></B>
      day of each month;</P></li>
    <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">Penalty interest
      rate for delayed repayment: current interest rate plus 50% * current
      interest rate;</P></li>
    <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">Penalty interest
      rate for embezzlement of loan proceeds: current interest rate *1;</P></li>
  </ul>
</blockquote>
<ul>
  <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">Purpose of the
      loan is to provide working capital for the Company;</P></li>
  <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">If any of the
      following occurs, the Creditor is entitled to demand prepayment of loan
      principal and interest before maturity and cancel all loans unprovided ;</P>
  </li>
</ul>
<blockquote>
  <ul type="square">
    <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">The Company
      terminates operation or is stopped from operation;</P></li>
    <li>
      <P align=justify style="margin-top: 0; margin-bottom: 12">The Company
      provides untrue documents or hide important financial information about
      its operation; </P></li>
    <li>
    <p style="margin-top: 0; margin-bottom: 12">The Company intentionally evades
    bank debts by way of related party transaction or other means; </li>
    <li>
    <p style="margin-top: 0; margin-bottom: 12">The Company uses loan proceeds
    for purposes other than what is agreed without the consent of the Creditor;
    </li>
    <li>
    <p style="margin-top: 0; margin-bottom: 12">Occurrence of other instances
    which endangers or may endanger the safety of the loan provided by the
    Creditor; </li>
  </ul>
</blockquote>
<P align=justify><B>Headlines of the articles omitted:</B></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Interest clearing of the loan
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Payment of the loan
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Rights and obligation of the Company
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Rights and obligations of the Creditor
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Disputation settlement and Validity
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Fees
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Breach of contract penalties
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Declaration, guaranty and undertaking of the Company
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Amendment and Termination of Contract
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Others
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Validity </LI></UL>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.12
<SEQUENCE>17
<FILENAME>exhibit99-12.htm
<DESCRIPTION>EXHIBIT 99.12
<TEXT>
<!DOCTYPE HTML PUBLIC "9912.pdf">


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<HEAD>
   <TITLE>China BAK Battery Co., Ltd.: Exhibit 99.12 - Filed by newsfilecorp.com</TITLE>
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<HR noshade align="center" width=100% size=3 color="black">
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<P align=justify><B><U>Summary of Mortgage Contract of Maximum Amount ( the
&#147;Contract&#148;) Entered into by and between Shenzhen BAK Battery, Co., Ltd (the
&#147;Mortgager&#148;) and Longgang Branch, Shenzhen Development Bank Co., Ltd (the
&#147;Creditor&#148;) on January 20, 2011</U></B><B> </B></P>
<P align=justify><B>Main contents:</B><BR></P>
<UL style="TEXT-ALIGN: justify">
  <LI><B>Contract number</B>: Shenfa Longgang Edizi 20110120001-1;
  <LI>In order to guarantee the indebtedness of Shenzhen BAK Battery Co., Ltd.
  (the &#147;Obligor&#148;) towards the Creditor under the Comprehensive Credit Facility
  Agreement of Maximum Amount (reference no.: Shenfa Longgang Zongzi
  20110120001) from January 26, 2011 to January 18, 2012, the Mortgager agrees
  to pledge its property to the Creditor.
  <LI><B>Scope of Guaranty: </B>The guaranty shall cover all of the loan
  principal, interest, penalty interest, breach of contract compensation,
  damages, undertaking fee and all the expenses such as litigation cost,
  lawyer&#146;s fee, notification cost and public notice cost etc. which is incurred
  to the Creditor in realizing its creditor&#146;s right.
  <LI><B>Collaterals: </B>The Mortgager agrees to pledge its inventory of cells
  with an aggregate value of RMB 150 million to the Creditor. </LI></UL>
<P align=justify><B>Headlines of the articles omitted:</B><BR></P>
<UL style="TEXT-ALIGN: justify">
  <LI>Payment on demand
  <LI>Undertakings of the Mortgager
  <LI>Validity of the Creditor&#146;s Right
  <LI>Occupancy of Collaterals
  <LI>Insurance of Collaterals
  <LI>Mortgage Registration
  <LI>Instances of Breach of Contract and its Liabilities
  <LI>Declaration and guaranty of the Mortgager
  <LI>Amendment of the Contract
  <LI>Effectiveness and Disputation settlement </LI></UL>
<P align=center>1</P>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.13
<SEQUENCE>18
<FILENAME>exhibit99-13.htm
<DESCRIPTION>EXHIBIT 99.13
<TEXT>
<!DOCTYPE HTML PUBLIC "9913.pdf">


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<HEAD>
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<HR noshade align="center" width=100% size=3 color="black">
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<P align=justify><B><U>Summary of Guaranty Contract of Maximum Amount ( the
&#147;Contract&#148;) Entered into by and between BAK International Limited (the
&#147;Guarantor&#148; </U></B><U>)</U><B><U>and Longgang Branch, Shenzhen Development
Bank (the &#147;Creditor&#148;) on January 21, 2011</U></B><B> </B></P>
<P align=justify><B>Main contents:</B><BR></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Guaranty Contract number: Shenfa Longgang Ebaozi 20110120001-1;
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Bak International Limited undertakes to assume joint and several
  liabilities for Shenzhen BAK Battery Co., Ltd (the &#147;Obligor&#148;)&#146;s indebtedness
  towards Shenzhen Development Bank under the Comprehensive Credit Facility
  Agreement of Maximum Amount (reference no.: Shenfa Longgang Zongzi
  20110120001) from January 26, 2011 to January 18, 2012, and the maximum amount
  secured is RMB200 million.
  <LI>
  <p style="margin-top: 0; margin-bottom: 12"><B>Guaranty Responsibility</B>: The guaranty under this Contract shall be
  guaranty with joint and several liabilities. The guarantor is obligated to pay
  off the debt in the event the obligor is unable to pay off the debt (including
  the creditor declares the debt becomes mature in advance to its original
  expiry date due to default of the obligor or the guarantor).
  <LI>
  <p style="margin-top: 0; margin-bottom: 12"><B>Scope of Guaranty: </B>The guaranty shall cover all of the loan
  principal, interest, penalty interest, breach of contract compensation,
  damages, undertaking fee and all the expenses such as litigation cost,
  lawyer&#146;s fee, notification cost and public notice cost etc. which is incurred
  to the Creditor in realizing its creditor&#146;s right.
  <LI>
  <p style="margin-top: 0; margin-bottom: 12"><B>Guaranty period:</B> The guaranty period is from the effective date of
  this Contract to two years after the expiry of the term of the Credit Facility
  Agreement and relevant agreement entered into under the Credit Facility
  Agreement. </LI></UL>
<P align=justify style="margin-top: 0; margin-bottom: 12"><B>Headlines of the articles omitted:</B><BR></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Payment on demand
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Guarantee period
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Guarantee Responsibility
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Instances of Breach of Contract and its Liabilities
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Declaration, guaranty and undertaking of the Guarantor
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Amendment of the Contract
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Effectiveness and Disputation settlement </LI></UL>
<HR align=center width="100%" color=black noShade SIZE=5>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.14
<SEQUENCE>19
<FILENAME>exhibit99-14.htm
<DESCRIPTION>EXHIBIT 99.14
<TEXT>
<!DOCTYPE HTML PUBLIC "9914.pdf">


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<HEAD>
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<P align=justify><B><U>Summary of Guaranty Contract of Maximum Amount ( the
&#147;Contract&#148;) Entered into by and between BAK International (Tianjin) Limited
(the &#147;Guarantor&#148;</U></B><U>)</U><B><U>and Longgang Branch, Shenzhen
Development Bank (the &#147;Creditor&#148;) on January 21, 2011</U></B><B> </B></P>
<P align=justify><B>Main contents:</B><BR></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Guaranty Contract number: Shenfa Longgang Ebaozi 20110120001-3;
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Bak International (Tianjin) Limited undertakes to assume joint and several
  liabilities for Shenzhen BAK Battery Co., Ltd (the &#147;Obligor&#148;)&#146;s indebtedness
  towards Shenzhen Development Bank under the Comprehensive Credit Facility
  Agreement of Maximum Amount (reference no.: Shenfa Longgang Zongzi
  20110120001) from January 26, 2011 to January 18, 2012, and the maximum amount
  secured is RMB200 million.
  <LI>
  <p style="margin-top: 0; margin-bottom: 12"><B>Guaranty Responsibility</B>: The guaranty under this Contract shall be
  guaranty with joint and several liabilities. The guarantor is obligated to pay
  off the debt in the event the obligor is unable to pay off the debt (including
  the creditor declares the debt becomes mature in advance to its original
  expiry date due to default of the obligor or the guarantor).
  <LI>
  <p style="margin-top: 0; margin-bottom: 12"><B>Scope of Guaranty: </B>The guaranty shall cover all of the loan
  principal, interest, penalty interest, breach of contract compensation,
  damages, undertaking fee and all the expenses such as litigation cost,
  lawyer&#146;s fee, notification cost and public notice cost etc. which is incurred
  to the Creditor in realizing its creditor&#146;s right.
  <LI>
  <p style="margin-top: 0; margin-bottom: 12"><B>Guaranty period:</B> The guaranty period is from the effective date of
  this Contract to two years after the expiry of the term of the Credit Facility
  Agreement and relevant agreement entered into under the Credit Facility
  Agreement. </LI></UL>
<P align=justify><B>Headlines of the articles omitted:</B><BR></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Payment on demand
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Guarantee period
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Guarantee Responsibility
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Instances of Breach of Contract and its Liabilities
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Declaration, guaranty and undertaking of the Guarantor
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Amendment of the Contract
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Effectiveness and Disputation settlement </LI></UL>
<HR align=center width="100%" color=black noShade SIZE=5>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.15
<SEQUENCE>20
<FILENAME>exhibit99-15.htm
<DESCRIPTION>EXHIBIT 99.15
<TEXT>
<!DOCTYPE HTML PUBLIC "9915.pdf">


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<P align=justify><B><U>Summary of Guaranty Contract of Maximum Amount ( the
&#147;Contract&#148;) Entered into by and between Mr. Li Xiangqian (the
&#147;Guarantor&#148;</U></B><U>)</U><B><U>and Longgang Branch, Shenzhen Development Bank (the &#147;Creditor&#148;) on January 21, 2011</U></B><B> </B></P>
<P align=justify><B>Main contents:</B><BR></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Guaranty Contract number: Shenfa Longgang Ebaozi 20110120001-2;
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">As guarantor, Mr. Li Xiangqian undertakes to assume joint and several
  liabilities for Shenzhen BAK Battery Co., Ltd (the &#147;Obligor&#148;)&#146;s indebtedness
  towards Shenzhen Development Bank under the Comprehensive Credit Facility
  Agreement of Maximum Amount (reference no.: Shenfa Longgang Zongzi
  20110120001) from January 26, 2011 to January 18, 2012, and the maximum amount
  secured is RMB200 million.&nbsp;
  <LI>
  <p style="margin-top: 0; margin-bottom: 12"><B>Guaranty Responsibility</B>: The guaranty under this Contract shall be
  guaranty with joint and several liabilities. The guarantor is obligated to pay
  off the debt in the event the Obligor is unable to pay off the debt (including
  the creditor declares the debt becomes mature in advance to its original
  expiry date due to default of the Obligor or the guarantor).&nbsp;
  <LI>
  <p style="margin-top: 0; margin-bottom: 12"><B>Scope of Guaranty:</B> The guaranty shall cover all of the loan
  principal, interest, penalty interest, breach of contract compensation,
  damages, undertaking fee and all the expenses such as litigation cost,
  lawyer&#146;s fee, notification cost and public notice cost etc. which is incurred
  to the Creditor in realizing its creditor&#146;s right.&nbsp;
  <LI>
  <p style="margin-top: 0; margin-bottom: 12"><B>Guaranty period:</B> The guaranty period is from the effective date of
  this Contract to two years after the expiry of the term of the Credit Facility
  Agreement and relevant agreement entered into under the Credit Facility
  Agreement. </LI></UL>
<P align=justify><B>Headlines of the articles omitted:</B><BR></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Payment on demand
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Guarantee period
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Guarantee Responsibility
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Instances of Breach of Contract and its Liabilities
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Declaration, guaranty and undertaking of the Guarantor
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Amendment of the Contract
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Effectiveness and Disputation settlement </LI></UL>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.16
<SEQUENCE>21
<FILENAME>exhibit99-16.htm
<DESCRIPTION>EXHIBIT 99.16
<TEXT>
<!DOCTYPE HTML PUBLIC "9916.pdf">


<HTML>
<HEAD>
   <TITLE>China BAK Battery Co., Ltd.: Exhibit 99.16 - Filed by newsfilecorp.com</TITLE>
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<HR noshade align="center" width=100% size=3 color="black">
<!--$$/page=--><A name=page_1></A>
<P align=left dir="rtl"><B><U>Summary of Guaranty Contract of Maximum Amount ( the
&#147;Contract&#148;) Entered into by and between Shenzhen BAK Battery Co., Ltd,
(the &#147;Guarantor&#148;) and Tianjin Branch
Shanghai Pudong Development Bank (the
&#147;Creditor&#148;) on November 30, 2010</U></B></P>
<P align=justify><B>Main contents:</B><BR></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Guaranty Contract number: ZB7703201088020401;
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Maximum amount of loan to be provided: RMB 30 million;
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Term: from November 30, 2010 to October 25, 2011;
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Shenzhen BAK Battery Co., Ltd undertakes to assume joint and several
  liabilities for BAK International (Tianjin) Limited (the &#147;Obligor&#148;)&#146;s
      indebtedness towards Shanghai Pudong Development Bank under this Contract
      from November 30, 2010 to October 25, 2011. </LI>
  <li>
  <p style="margin-top: 0; margin-bottom: 12"><B>Guaranty Responsibility</B>: The guaranty under this
      Contract shall be guaranty with joint and several liabilities. The
      guarantor is obligated to pay off the debt in the event the obligor is
      unable to pay off the debt (including the creditor declares the debt
      becomes mature in advance to its original expiry date due to default of
      the obligor or the guarantor). </li>
  <li>
  <p style="margin-top: 0; margin-bottom: 12"><B>Scope of Guaranty: </B>The guaranty shall cover all of
      the loan principal, interest, penalty interest, breach of contract
      compensation, damages, undertaking fee and all the expenses such as
      litigation cost, lawyer&#146;s fee, notification cost and public notice cost
      etc. which is incurred to the Creditor in realizing its creditor&#146;s right.
  </li>
  <li>
  <p style="margin-top: 0; margin-bottom: 12"><B>Guaranty period: </B>The guaranty period is from the
      effective date of this Contract to two years after the expiry of the term
      of relevant agreements entered into under the Contract. </li>
</UL>
<P align=justify><B>Headlines of the articles omitted:</B><BR></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Termination and explanation
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Payment on demand
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Declaration and undertaking of the Guarantor
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Obligations of the Guarantor
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Amendment and termination of the Contract
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Disputation settlement
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Validity </LI></UL>
<HR align=center width="100%" color=black noShade SIZE=5>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.17
<SEQUENCE>22
<FILENAME>exhibit99-17.htm
<DESCRIPTION>EXHIBIT 99.17
<TEXT>
<!DOCTYPE HTML PUBLIC "9917.pdf">


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<HEAD>
   <TITLE>China BAK Battery Co., Ltd.: Exhibit 99.17 - Filed by newsfilecorp.com</TITLE>
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<!--$$/page=-->
<A name="page_1"></A>

<P align="justify">
<B><U>Summary of Loan Agreement Entered into by and between Shenzhen BAK Battery Co., Ltd.
&nbsp;(&#147;the Company&#148;) and Shenzhen Eastern Branch, Agricultural Bank of China (&#147;the Creditor&#148;)
&nbsp;dated January 11, 2011</U></B><B> </B></P>
<P align="justify">
<B>Main contents</B><BR>
</P>
<TABLE BCLLIST style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
<TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Contract number: 81010120110000034;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Loan principal: RMB 50 million;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Loan term: from January 11, 2011 to January 11, 2012;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Floating interest rate: Interest rate of loan shall be equal to the benchmark rate announced by the People&#146;s Bank of China, and be adjusted every 3 months;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<LI type="square">&nbsp;</LI> 	</TD>
	<TD>
<P align="justify">Interest accrued and settled per month, interest settlement day is the 20th day of each month;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<LI type="square">&nbsp;</LI> 	</TD>
	<TD>
<P align="justify">Penalty interest rate for delayed repayment: current interest rate plus 50% * current interest rate;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<LI type="square">&nbsp;</LI> 	</TD>
	<TD>
<P align="justify">Penalty interest rate for embezzlement of loan proceeds: current interest rate *1;</P>
	</TD>
</TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Purpose of the loan is to provide working capital for loan payment of the Company;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Advanced repayment of loan needs to be approved by the Creditor;</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD colspan=2>
<P align="justify">Breach of contract penalties: correct the breach of contract in time limit; suspension of loan unprovided; release loan agreement, demand prepayment of loan principal and interest before maturity; imposition of punitive interest
incurred due to delayed loan; imposition of punitive interest for embezzlement of loan; imposition of plural interest for unpaid interest; withdraw from any accounts of the Company the loan principal, interest and other fees; compensation for the
Creditor&#146;s expenses incurred due to demanding the loan principal and interest in case of litigation, etc.</P>
	</TD>
</TR>
</TABLE>
<P align="justify" style="margin-top: 0; margin-bottom: 12">
&nbsp;</P>
<P align="justify" style="margin-top: 0; margin-bottom: 12">
<B>Headlines of the articles omitted:</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Termination and explanation</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Undertaking of the Company</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Loan arrangement</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Interest clearing of the loan</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Payment of the loan</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Rights and obligation</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Interest penalty of loan</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Guarantee of the loan agreement</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Disputation settlement</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Validity</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Text</LI>
</UL>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.18
<SEQUENCE>23
<FILENAME>exhibit99-18.htm
<DESCRIPTION>EXHIBIT 99.18
<TEXT>
<!DOCTYPE HTML PUBLIC "9918.pdf">


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<P align=justify><B><U>Summary of Loan Agreement Entered into by and between
Shenzhen BAK Battery Co., Ltd. (&#147;the Company&#148;) and Shenzhen Eastern Branch,
Agricultural Bank of China (&#147;the Creditor&#148;) dated January 18,
2011</U></B><B> </B></P>
<P align=justify><B>Main contents<BR></B><BR></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>Contract number: 81010120110000067;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>Loan principal: RMB 50 million;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>Loan term: from January 18, 2011 to January 18,
    2012;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>Floating interest rate: Interest rate of loan shall be
      equal to the benchmark rate announced by the People&#146;s Bank of China, and
      be adjusted every 3 months;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI type="square">&nbsp;</LI></TD>
    <TD>
      <P align=justify>Interest accrued and settled per month, interest
      settlement day is the 20th day of each month;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI type="square">&nbsp;</LI></TD>
    <TD>
      <P align=justify>Penalty interest rate for delayed repayment: current
      interest rate plus 50% * current interest rate;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI type="square">&nbsp;</LI></TD>
    <TD>
      <P align=justify>Penalty interest rate for embezzlement of loan proceeds:
      current interest rate *1;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>Purpose of the loan is to provide working capital for
      loan payment of the Company;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>Advanced repayment of loan needs to be approved by the
      Creditor;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <LI>&nbsp;</LI></TD>
    <TD colSpan=2>
      <P align=justify>Breach of contract penalties: correct the breach of
      contract in time limit; suspension of loan unprovided; release loan
      agreement, demand prepayment of loan principal and interest before
      maturity; imposition of punitive interest incurred due to delayed loan;
      imposition of punitive interest for embezzlement of loan; imposition of
      plural interest for unpaid interest; withdraw from any accounts of the
      Company the loan principal, interest and other fees; compensation for the
      Creditor&#146;s expenses incurred due to demanding the loan principal and
      interest in case of litigation, etc.</P></TD></TR></TABLE>
<P align=left style="margin-top: 0; margin-bottom: 12" dir="rtl">&nbsp;</P>
<P align=left style="margin-top: 0; margin-bottom: 12" dir="rtl"><B>:Headlines
of the articles omitted</B><BR></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Termination and explanation
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Undertaking of the Company
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Loan arrangement
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Interest clearing of the loan
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Payment of the loan
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Rights and obligation
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Interest penalty of loan
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Guarantee of the loan agreement
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Disputation settlement
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Validity
  <LI>
  <p style="margin-top: 0; margin-bottom: 12">Text </LI></UL>
<HR align=center width="100%" color=black noShade SIZE=5>

</BODY>

</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>24
<FILENAME>cbaklogo.jpg
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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
