NOTE 5 - BALANCE SHEET COMPONENTS

Accounts receivable, net

The majority of the Company’s sales are on open credit terms and in accordance with terms specified in the contracts governing the relevant transactions. The Company evaluates the need for an allowance for doubtful accounts based on the aging of accounts receivable that management believes to be reasonable.

	June 30, 2011		December 31, 2010
	(Unaudited)

Accounts receivable, cost	$	10,998,273	$	11,341,103
Less : allowance for doubtful accounts		1,360,967		1,329,916
Accounts receivable, net	$	9,637,306	$	10,011,187

Inventories:

	June 30, 2011		December 31, 2010
	(Unaudited)

Raw materials	$	2,505,554	$	1,992,316
Consumables		19,628		17,804
Work-in-process		2,822,081		867,726
Finished goods		5,038,018		4,930,379
Inventories	$	10,385,281	$	7,808,225

Other receivables and prepayments:

	June 30, 2011		December 31, 2010
	(Unaudited)

Advance to suppliers	$	1,830,648	$	867,018
Other receivables		1,233,311		1,499,852
Other receivables and prepayments	$	3,063,959	$	2,366,870

Other payables and accrued liabilities:

	June 30, 2011		December 31, 2010
	(Unaudited)

Salary payable		352,876		637,996
Accrued expenses and interest payable		209,779		294,009
Other payables		3,187,220		2,577,525
Warranty provision		1,062,236		1,038,001
Totals	$	4,812,111	$	4,547,531