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Prepayments and Other Receivables
 3 Months Ended
Dec. 31, 2013
Prepayments and Other Receivables [Text Block]

5. Prepayments and Other Receivables

          September 30,     December 31,  

 

   Note     2013     2013  

Prepayments for raw materials and others

       $ 3,466,177   $ 1,763,403  

Staff advances for the operating purpose

         701,923     1,008,053  

Prepaid operating expenses

         292,049     191,770  

Advances to unrelated third parties

   (a)     1,169,798     495,540  

Advance to a related party

   (b)     885,052     894,861  

Consideration receivable

   (c)     6,483,507     6,555,367  

Net assets of BAK Canada held by trustee

   (d)     1,043,833     1,348,600  

Value added tax recoverable

         4,295,390     4,397,258  

Rental receivable from the Research and Development Test Centre

         37,239     751,781  

Others

         1,371,790     1,241,882  

 

         19,746,758     18,648,515  

Less: Allowance for doubtful accounts

         (1,980,914 )   (2,010,580 )

 

       $ 17,765,844   $ 16,637,935  

(a)

Advances to unrelated third parties were interest-free, unsecured and repayable on demand.
(b)

As of September 30 and December 31, 2013, the Company advanced to Tianjin BAK New Energy Research Institute Co., Ltd (“Tianjin New Energy”), a related party under the common control of Mr. Xiangqian Li (“Mr. Li”), the Company's CEO, an amount of $885,052 and $894,861 respectively which were interest-free, unsecured and repayable on demand.

(c)

On August 27, 2013, the Company completed the equity transfer of Tianjin Meicai to Tianjin Zhantuo International Trading Co., Ltd. (“Tianjin Zhantuo”), an unrelated third party. As of September 30, 2013 and December 31, 2013, the consideration receivable remained at RMB39.7 million, equivalent to $6,483,507 and $6,555,367, respectively. The amount was interest-free, repayable on September 26, 2013 (30 days upon completion) and pledged against advances from Tianjin Zhantuo (Note 10(e)).

(d)

BAK Canada filed for bankruptcy on March 28, 2013. As of September 30, 2013 and December 31, 2013, its net assets were held under the custody of its trustee.

An analysis of the allowance for doubtful accounts is as follows:

    Three months ended  
    December 31, 2013  
Balance at beginning of the period $ 1,980,914  
Provision for the period   7,664  
Foreign exchange adjustment   22,002  
Balance at end of the period $ 2,010,580