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Prepayments and Other Receivables and Recoverable from Loan Guarantee

9 Months Ended

Jun. 30, 2013

Prepayments and Other Receivables and Recoverable from Loan Guarantee [Text Block]

5. Prepayments and Other Receivables and Recoverable from Loan Guarantee

(a) Prepayments and other receivables as of September 30, 2012 and June 30, 2013 consisted of the following:

		September 30,			June 30,
		2012			2013

Prepayments for raw materials and others	$	4,458,058		$	3,037,354
Staff advances		1,014,814			950,126
Prepaid operating expenses		1,176,592			521,964
Advance to an unrelated third party		-			239,604
Advance to a related party		-			250,520
Value added taxes recoverable		1,263,544			4,692,654
Others		1,099,867			1,461,027
		9,012,875			11,153,249

Less: Allowance for doubtful accounts		(1,305,329	)		(2,096,815	)

	$	7,707,546		$	9,056,434

Advance to an unrelated third party was interest-free, unsecured and repayable on demand.

As of June 30, 2013, the Company advanced to Tianjin BAK New Energy Technology Co., Ltd. (note 19) $250,520 which was interest-free, unsecured and repayable on demand.

An analysis of the allowance for staff advances and others is as follows:

Balance at October 1, 2012	$	1,305,329
Provision for the period		759,903
Foreign exchange adjustment		31,583

Balance at June 30, 2013	$	2,096,815

(b) Recovery of loss from loan guarantees

As further mentioned in Note 19(iii), the Company has paid a defaulted payment in respect of the guarantee to Shenzhen Langjin Technology Co., Ltd. (“Shenzhen Langjin”). As of June 30, 2013, the Company has recovered $5.5 million from Shenzhen Langjin, of which $0.8 million was received during this quarter. On July 15, 2013, the Company received a further indemnification amount of $0.8 million.