UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

ANNUAL REPORT

ON FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended March 31, ~~2011~~2012

Commission File Number 333-128532

CHISEN ELECTRIC CORPORATION

(Exact name of registrant as specified in its charter)

Nevada		20-2190950
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

No. 1188, Taihu Avenue, Changxing Economic Development Zone, Changxing, Zhejiang Province,

The People’s Republic of China

(Address, including zip code, of principal executive offices)

(86) 572-6267666

(Registrants’ telephone number, including area code)

Securities Registered Under Section 12(b) of the Exchange Act: None.

Securities Registered Under Section 12(g) of the Exchange Act: Common Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No ¨ x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x

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 and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

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 (§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). Yes ¨ x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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 “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Aggregate market value of the voting stock held by non-affiliates of the registrant based upon the closing price as of September 30, ~~2010~~2011 was approximately $9420,~~050~~007,000.

The number of outstanding shares of the registrant’s common stock on June 1328, ~~2011~~2012 was 50500,000,000.

CHISEN ELECTRIC CORPORATION

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED MARCH 31, ~~2011~~2012

TABLE OF CONTENTS

PART I		3
ITEM 1.	Business	3
ITEM 1A	Risk Factors	1822
ITEM 1B.	Unresolved Staff Comments	3522
ITEM 2.	Properties	3522
ITEM 3.	Legal Proceedings	3624
ITEM 4.	~~Submission~~Mine ofSafety ~~Matters to a Vote of Security Holders~~Disclosures	3724
PART II		24
ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3724
ITEM 6.	Selected Financial Data	3825
ITEM 7.	Management‘s Discussion and Analysis of Financial Condition and Results of Operations	3826
ITEM 7A.	Quantitative and Qualitative Disclosures about Market Risk.	4542
ITEM 8.	Financial Statements and Supplementary Data	4542
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	4642
ITEM 9A.	Controls and Procedures	4643
ITEM 9B.	Other Information	4643
PART III		44
ITEM 10.	Directors, Executive Officers, and Corporate Governance	4744
ITEM 11.	Executive Compensation	52
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	55
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	5455
ITEM 14.	Principal Accountant Fees and Services	5761
PART IV		63
ITEM 15.	Exhibits, ~~and~~ Financial Statement Schedules	5863
SIGNATURES		6675

- 2 -

PART I

ITEM 1. Business

Forward Looking Statements

As used in this ~~Annual Report~~report, unless otherwise indicated, the terms “we,”, “our,”, “us,”, the “Company,”, the “Registrant” and “Chisen” refer to Chisen Electric Corporation, a Nevada corporation. We conduct our business through our subsidiaries, which include our wholly-owned subsidiary, Fast More Limited, a Hong Kong investment holding company (“Fast More”), its 100% owned and chief operating subsidiary, Zhejiang Chisen Electric Co., Ltd., ~~a wholly foreign owned entity~~ (~~“WFOE”) organized under the laws of the PRC (~~f/k/a Changxing Chisen Electric Co., Ltd. and hereinafter referred to as “CCEC”) a wholly foreign owned entity (“WFOE”) organized under the laws of the PRC and CCEC’s subsidiary, Chisen Electric Jiangsu Co., Ltd. (“CEJC”). “China” or “PRC” refers to the People’s Republic of China. “RMB” or “Renminbi” refers to the legal currency of China and “$”, “US$” or “U.S. Dollars” refers to the legal currency of the United States.

The following discussion of our financial condition and results of operations of the Company is based upon and should be read in conjunction with our consolidated financial statements and their related notes included in this report. This report contains forward-looking statements. Generally, the words “believes”, “anticipates”, “may”, “will”, “should”, “expect”, “intend”, “estimate”, “continue” and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including the matters set forth in this report or other reports or documents we file with the SEC from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

Company Overview

We ~~are~~produce ~~one~~and ofsell ~~the leading producers of~~ sealed lead-acid motive batteries, also known as valve regulated lead-acid motive batteries (“VRLA batteries”), in China's personal transportation device market. Our motive battery products, sold under our own brand name “Chisen”, are predominantly used in electric bicycles and are distributed and sold in China. Among all types of batteries for electric bicycles, the lead-acid motive battery is the preferred choice of electric bicycle manufacturers in China, accounting for 95% of the market share because of its cost efficiency. Currently, we manufacture over 19,800,000 sealed lead-acid motive batteries each year, have more than 2,500 employees and are one of China's largest manufacturers of sealed lead-acid motive batteries for electric-powered bicycles (LABEBs). For each of our fiscal years ended March 31, 2011 and 2010, sales revenues were US$243,814,000 and US$177,192,000, respectively, and our net income during the same periods amounted to US$11,066,000 and US$9,500,000, respectively.

~~Corporate~~During ~~Background~~the year ended March 31, 2012, we manufactured approximately 8,000,000 units of sealed lead-acid motive batteries and ~~Information~~had more than 2,400 employees. We currently produce 13 different models of VRLA batteries for electric bicycles with an aggreate production capacity of 12,000,000 units per year, utilizing roughly 66.67% of our existing capacity, at our production facilities located at Jingyuan Road, Xuyi County, Jiangsu Province in China (Plant D).

~~Prior~~For ~~Operations~~each of ~~World~~our ~~Trophy~~fiscal years ended March 31, 2012 and 2011, sales revenues were US$119,563,000 and US$243,814,000, respectively, and our net (loss) income attributable to CIEC common stockholders during the same periods amounted to US$(15,742,000) and US$11,066,000, respectively. The Company also had negative working capital of US$38,937,000 as of March 31, 2012. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

~~Our~~- ~~predecessor,~~3 World Trophy, was formed as a Nevada corporation on January 13, 2005, and was in the business of selling big game hunting packages to high end clients who sought to hunt with the top tier big game outfitters. During the year ended March 31, 2008, World Trophy sold its entire inventory of big game hunts, was unsuccessful in developing a profitable business and ceased its operations effective April 1, 2008. Prior to the Exchange (as defined and discussed below), World Trophy focused its efforts on seeking a business opportunity and had been in the process of locating and negotiating with business entities for the merger of a target company into World Trophy.-

~~Reverse~~Corporate ~~Merger~~Relocation ~~Transaction~~ and ~~Our~~Investment ~~Subsidiaries~~Agreements (CCEC)

On ~~November~~August 1220, ~~2008~~2010, ~~World~~CCEC ~~Trophy~~ entered into a ~~Share~~Compensation Agreement ~~Exchange~~of ~~Agreement~~Corporate ~~(the~~Relocation ~~“Exchange”)~~Acquisition with ~~Fast~~the ~~More,~~Administrative ~~Cheer~~Committee ~~Gold~~of Changxing Economic Development ~~Limited~~Zone, aZhejiang Province ~~company organized under~~ (the ~~laws~~Committee). ofPursuant ~~Samoa~~to ~~(“Cheer~~the ~~Gold”)~~Relocation ~~and~~Agreement, ~~Floster~~CCEC ~~Investment~~agreed ~~Limited,~~to atransfer ~~company~~to ~~organized~~the ~~under~~Committee the ~~laws~~land-use ofrights ~~Samoa (“Floster”~~ to, and ~~together~~structures ~~with Cheer Gold~~on, the ~~“Stockholders”).~~property ~~Immediately~~previously ~~prior~~used toby ~~the~~CCEC ~~Exchange,~~for ~~World~~its ~~Trophy~~office ~~was~~and amanufacturing ~~shell~~facilities, ~~company~~and ~~with~~agreed ~~US$51,039~~to inrelocate ~~assets~~the office and amanufacturing ~~net~~facilities ~~loss~~to ofa ~~US$27,977~~new ~~for~~location. ~~the~~The ~~three~~Committee ~~months~~requested ~~ended~~the ~~September~~relocation ~~30,~~pursuant ~~2008. Upon~~to ~~the~~a ~~closing~~general policy of the Government ~~Exchange,~~of ~~the~~Changxing ~~Company~~County ~~did~~to ~~not~~relocate ~~have~~“secondary ~~any~~industries” ~~liabilities. As~~from aurban ~~result~~areas ofto the ~~Exchange,~~countryside. ~~World~~All ~~Trophy~~manufacturing entities, ~~acquired~~including ~~all~~our ofplant ~~the~~on ~~issued~~Jingyi ~~and~~Road ~~outstanding~~(Plant ~~securities~~A), ofhave ~~Fast~~been ~~More~~classified ~~from~~to ~~the~~be ~~Stockholders~~a in“secondary ~~exchange~~industry” ~~for~~by ~~35,000,000~~the ~~newly-issued~~National Bureau ~~shares~~ of ~~World~~Statistics ~~Trophy’s~~of ~~common stock~~PRC. ~~Upon~~ ~~the~~Pursuant ~~closing~~to of the ~~Exchange,~~“Withdraw ~~the~~from ~~Stockholders~~Secondary ~~collectively~~Industry ~~beneficially~~and ~~own~~Progressing ~~70%~~to ofTertiary ~~the~~Industry” policy ~~voting capital stock~~ of ~~the~~Changxing ~~Company~~County, ~~65.8%~~all ofentities ~~which~~that isare ~~owned~~classified byas ~~Cheer~~participants ~~Gold~~in ~~and~~“secondary ~~4.2%~~industries” ofshall ~~which~~be isrelocated from ~~owned~~the byWestside ~~Floster.~~of AsJing’er aRoad ~~result~~to of the ~~Exchange,~~Eastside ~~Fast~~of ~~More~~Jing’er ~~became~~Road. aThe ~~wholly-owned~~Government ~~subsidiary~~ of ~~World~~Changxing’s ~~Trophy. Effective~~policy ~~February~~is 2,to negotiate ~~2009,~~with weeach ~~amended~~entity ~~our~~with ~~Articles~~respect ~~of Incorporation~~ to ~~change~~the ~~our~~specific ~~name~~terms ~~from~~of ~~“World~~relocation, ~~Trophy~~including, ~~Outfitters~~without limitation, ~~Inc.”~~relevant compensation to ~~“Chisen~~be ~~Electric~~paid ~~Corporation”~~after assessment.

3Pursuant to an assessment of the property and the compensation of the losses stated as follows, the Committee agreed to pay to CCEC RMB117,202,100 (approximately US$17,265,000) in total for the relocation. In addition to the compensation for the property, this amount also includes compensation for the value of losses associated with removing CCEC’s equipment at RMB6,939,900 (US$1,022,000) and the value of losses to CCEC with respect to the suspension of its operations for two months at RMB11,748,000 (approximately US$1,731,000). CCEC agreed to vacate the site within one year of the signing of the Relocation Agreement. In May 2011, CCEC wrote off the long-term land lease prepayment and buildings with net book value of approximately RMB14,354,000 (US$2,237,000). As of March 31, 2012, we completed relocation and recognized a net extraordinary gain of US$13,117,000.

~~Fast~~On ~~More~~August is20, 2010, CCEC entered into an Investment ~~investment~~Agreement ~~holding~~with ~~company~~the ~~incorporated~~Committee inwhereby ~~Hong~~CCEC ~~Kong~~agreed onto ~~December~~participate 17in “Land Tender, ~~2007~~Auction ~~with~~and ~~limited~~Listing” ~~liability.~~activities organized ~~CCEC~~by ~~was~~the ~~founded~~Changxing inCounty ~~Huzhou,~~Land ~~Zhejiang~~and ~~Province~~Resources inBureau ~~China~~with onrespect ~~February~~to ~~25,~~a ~~2002. On~~pre-identified ~~February~~parcel ~~16,~~of ~~2008,~~land ~~Fast~~to ~~More~~which ~~acquired~~CCEC ~~the~~agreed to ~~51%,~~relocate 9%its ~~and~~business ~~40%~~from ~~equity~~Jingyi ~~interests~~Road into ~~CCEC~~Jingsi ~~from~~Road Mrwithin Changxing County. XuWe ~~Kecheng,~~anticipate ~~Mr.~~that Xuthe ~~Keyong~~size ~~and~~of ~~BEME~~the ~~International~~plant ~~Co.,~~at ~~Ltd.,~~Jingsi Road ~~respectively. Upon~~(Plant ~~the~~C) ~~completion~~will ofbe ~~these~~50% ~~acquisition~~larger ~~transactions,~~than ~~CCEC~~Plant ~~became~~A. ~~the~~Plant ~~wholly-owned~~C ~~and~~is ~~chief~~located ~~operating~~within ~~subsidiary~~three kilometers of ~~Fast~~Plant ~~More~~A.

OnPursuant ~~May~~to ~~18, 2009,~~ the ~~Registrant~~terms ~~incorporated~~of ~~Chisen Technology Holdings Corporation in Nevada as its wholly-owned subsidiary with~~ the ~~intention~~Investment Agreement, ~~of potentially conducting business in~~ the ~~United~~construction ~~States. Chisen~~project ~~Technology~~must ~~Holdings~~be ~~Corporation~~completed iswithin ~~authorized~~two toyears dofrom ~~business in~~ the ~~State~~date of ~~Washington~~execution ~~and as~~ of the ~~date~~Investment Agreement ofand ~~this~~the ~~annual~~project ~~report,~~shall ~~has~~be noput ~~operations.~~into Onproduction ~~May~~in ~~27,~~2012. ~~2011~~However, ~~the~~after ~~Company~~negotiations ~~disposed~~with ~~100%~~the ofCommittee, ~~common~~the ~~stock~~date of completion ~~Chisen~~and ~~Technology~~production ~~Holdings~~was ~~Corporation~~extended to anDecember ~~unrelated Hong Kong company~~31, ~~Anderal Company Limited , for consideration of USD10~~2013.~~00.~~

On August 23, 2010, CCEC, the chief operating subsidiary of the Registrant, formed a subsidiary in the PRC called Chisen Electric Jiangsu Co., Ltd. (CEJC) in Jiangsu Province, China. CEJC’s registered capital is RMB150,000,000, of which CCEC holds 98% (RMB147,000,000) and the Registrant’s CEO, Mr. Xu Kecheng, holds 2% (RMB 3,000,000). CEJC intends to produce and sell VRLA batteries, battery plates, battery assembling systems, lithium-~~ion~~ ~~batteries,~~4 ~~battery chargers, power management systems and related parts.~~-

~~Corporate~~Following ~~Information~~execution of the Investment Agreement, also on August 20, 2010, CCEC and the Committee entered into a supplemental agreement to the Investment Agreement whereby the Committee agreed to compensate CCEC when CCEC’s conditions of payment and tax scale under the Investment Agreement are satisfied.

~~Our~~Project ~~offices~~Investment ~~are~~Contract located in the Changxing Economic Development Zone at the bank of the Taihu Lake in the County of Changxing in Zhejiang Province, in close proximity to major national transportation systems, including National Highways 104 and 318, the Shanghai – Jiangsu – Zhejiang – Anhui – Hangzhou – Nanjing Expressway, the Changxing – Huzhou – Shanghai Channel, the Xuancheng – Hangzhou Railway and the Xinyi – Changxing Railway. Our registered office is located at No. 1188, Taihu Avenue, Economic Development Zone, Changxing County, Zhejiang Province, PRC, where the office building is under construction. The executive office is temporarily moved to No. 559, Jing’er Road, Economic Development Zone, Changxing County, Zhejiang Province, PRC. Our telephone number is (86CEJC) ~~572-6267666 and our corporate website in English is located at www.chisenelectric.com.~~

WeOn September ~~are~~6, 2010, CEJC entered into a ~~reporting~~Project ~~company~~Investment ~~under~~Contract ~~Section~~and 13a ofSupplemental Agreement to the ~~Securities~~Project ~~Exchange~~Investment ~~Act~~Contract with ofthe ~~1934~~Jiangsu Xuyi Economic Development Zone Administrative Committee, pursuant to which CEJC shall invest, in the aggregate, approximately RMB1,200,000,000 (approximately US$177,000,000) in three stages to build the Chisen Circular Economy Industry Park (Plant D) to manufacture VRLA batteries, as ~~amended~~well as our newest product, lithium-ion batteries, and other related products in the Jiangsu Xuyi Economic Development Zone. ~~Our~~In ~~shares~~the first stage, CEJC has satisfied the terms of ~~common~~contract. ~~stock~~It ~~are~~has ~~not~~invested ~~currently~~over ~~listed~~RMB422,000,000 (approximately orUS$62,000,000) ~~quoted~~in assets for ~~trading~~the onproduction ~~any~~of ~~national~~VRLA ~~securities~~batteries ~~exchange~~only. At ~~however~~the ~~our~~date ~~common~~of ~~stock~~this ~~currently~~report, ~~trades~~the ~~under~~Company does not plan to construct lithium-ion battery production facilities in Plant D yet. CEJC has completed all construction related to the ~~symbol~~first ~~“CIEC”~~stage onat the ~~OTCQB~~date of this report.

~~Corporate~~The ~~Structure~~Committee agreed to grant preferential tax policies on Value Add Tax and Enterprise Income Tax to CEJC in accordance with policies as issued by the local government. However these policies will be forfeited if taxes levied from the project are less than RMB30,000 (approximately US$4,400) per mu on average (the Company will initially acquire a total area equal to 277.48 mu in the first stage and an aggregate of 1,000 mu for all three stages). The preferred policies include, but are not limited to, a 50% refund on the portion of value-added taxes which is legally retained by the local government for the first 5 years followed by a 25% refund in the following 5 years, and an exemption of the local portion of enterprise income tax which is legally retained by the local government for the first 6 years followed by a 50% reduction in the following 4 years. The policies shall commence upon the completion of the construction and commencement of production.

~~Our~~In ~~corporate~~exchange ~~structure~~for isCEJC’s ~~illustrated~~investment, CEJC shall enjoy the lowest control standard for the price of land in Jiangsu Province (RMB19,000, or approximately US$2,200, per mu), and the Committee shall assist CEJC in implementing the project, including but not limited to, the acquisition of land use rights, the obtainment of certificates for production plants and buildings, and the provision of infrastructure in the transferred land such as ~~follows:~~water supply, drainage, gas, electricity, cable TV, roads and telecommunications.

4In the event that CEJC fails to commence construction and is delayed more than 7 days, the Committee has the right to terminate the Agreement and reclaim the land. In the event that CEJC fails to follow the construction schedule, the Committee has the right to reclaim the land. If the land remains unused for more than one year, the Committee has the right to levy a penalty equal to 20% of the land transfer amount per mu. If the land remains unused for more than two years, in addition to collection of the aforementioned penalty, then the Committee has the right to terminate the Agreement and reclaim the land. In the event that circumstances beyond our control cause us not to perform (i.e., force majeure), the Committee shall not have the right to bring an action against us for breach of contract. As of March 31, 2012, the Company has obtained a land use right with total size of 74 mu and commenced production activities.

~~Our~~- ~~Competitive~~5 ~~Strengths~~-

WeDisposal ~~believe~~of ~~the~~Chisen ~~following~~Technology ~~strengths contribute to our competitive advantages and differentiate us from our competitors:~~

~~Production~~On ~~Capacity~~May 27, 2011, Chisen fully disposed of its interest in Chisen Technology Holdings Corporation, a Nevada corporation (Chisen Technology) for cash consideration of US$10. Chisen Technology had no operations since its date of incorporation through May 27, 2011. The disposal of Chisen Technology has had no significant impact on the value of the Company’s assets, operating cash flows or earnings per share.

WePRC ~~currently~~Central ~~produce~~Government ~~different~~Environmental models of VRLA batteries for the electric bicycles with a production capacity of 24 million units per year, utilizing roughly 80% of our existing capacity, at our production facilities located at Jing’er Road (“Plant B”) in Changxing County.Protection Policy

OnDuring ~~August~~the ~~20,~~three ~~2010~~months ended June 30, ~~CCEC~~2011 ~~entered~~and ~~into~~without anadvance ~~Investment~~notice ~~Agreement~~to ~~with~~the Company, the ~~Administrative~~PRC ~~Committee~~Central ofGovernment ~~Changxing~~tightened ~~Economic~~its ~~Development~~environmental ~~Zone~~protection policy ~~whereby~~which ~~CCEC~~affects ~~agreed~~all tolead-acid ~~participate~~battery manufacturers in ~~“Land~~China. ~~Tender,~~Pursuant ~~Auction~~to ~~and~~the ~~Listing”~~new ~~activities~~policy, ~~organized~~a by500 ~~the~~meter ~~Changxing~~isolated ~~County~~area ~~Land~~must ~~and~~be maintained ~~Resources~~between ~~Bureau~~production ~~with~~facilities ~~respect~~and toresidential aareas. From ~~pre-identified~~the ~~parcel~~beginning of ~~land~~May to2011, ~~which~~the ~~CCEC~~Zhejiang Environmental ~~agreed~~Protection toBureau ~~relocate~~conducted ~~its~~an ~~business~~environmental ~~from~~sanitation ~~Jingyi~~investigation at Jing'er Road Plant (“Plant A”B). toThe results ~~Jingsi~~showed ~~Road~~that ~~within~~the ~~Changxing~~sewage ~~County.~~and ~~The~~exhaust ~~size~~complied ofwith ~~Jingsi~~national ~~Road’s~~standards ~~plant~~in ~~(“Plant~~China, ~~C”)~~however, ~~will~~the beCompany ~~50%~~is ~~larger~~not ~~than~~maintaining the ~~Plant~~500 Ameter isolated area between production facilities and residential areas.

~~Since~~After ~~our~~discussion ~~production~~with ~~capacity~~the atGovernment, ~~Plant~~our battery Acharging ~~can~~activities beand ~~fully~~packing ~~absorbed~~activities byin Plant B ~~without~~were ~~significant~~permitted ~~investment~~to keep operating until December 31, we2011 doand ~~not~~further extended ~~intend~~to October 31, 2012, however all other production activities were forced to ~~produce~~stop ~~lead~~pursuant ~~acid~~to ~~battery~~the ~~products~~tightened atenvironmental policy ~~Plant~~on C.or ~~Alternatively~~before July 15, we2011. Management ~~plan~~believes tothat ~~develop~~our ~~and~~production ~~produce~~facilities ~~lithium-ion~~could ~~battery~~not ~~products~~fully atcomply with the adjusted environmental policy as the residential area near Plant ~~C. Our~~B ~~target~~showed ~~market~~(and ~~for~~continues ~~lithium-ion~~to ~~batteries~~show) isno ~~manufacturers~~signs of ~~electric~~slowing ~~bicycles~~its inexpansion towards ~~China~~Plant B, which is out of the Company’s control. As Wea ~~estimate~~result, ~~that~~we decided ~~our~~to ~~lithium-ion~~scale ~~battery~~down ~~products~~our ~~will~~operations at bePlant ~~launched~~B and ~~distributed~~relocate ~~into~~such ~~the~~production ~~marketplace~~facilities ~~within~~to ~~two~~Plant ~~years~~D. We ceased all production activities, apart from battery charging activities and packing activities, during the ~~date~~period ofended September 30, 2011. We did not suffer any penalty due to this ~~Annual~~tightened environmental ~~Report~~protection policy. As However, part of ~~March~~our ~~31,~~production ~~2011,~~facilities wein ~~have~~Plant ~~relocated~~B cannot be adequately transferred and implemented into our new production facility ~~from~~at Plant AD, toand we ~~Plant~~incurred Ban impairment loss of such facilities of US$1,848,000 during the year ended March 31, 2012.

OnForward ~~September~~Stock 6, 2010, CEJC entered into a Project Investment Contract and a Supplemental Agreement to the Project Investment Contract with the Jiangsu Xuyi Economic Development Zone Administrative Committee, pursuant to which CEJC shall invest, in the aggregate, approximately RMB1,200,000,000 (approximately US$177,000,000) in three stages to build the Chisen Circular Economy Industry Park (“Plant D”) to manufacture VRLA batteries, as well as our newest product, lithium-ion batteries, and other related products in the Jiangsu Xuyi Economic Development Zone. In the first stage CEJC shall invest approximately RMB422,000,000 (approximately US$62,000,000), including approximately RMB150,000,000 (approximately US$22,000,000) in fixed assets for the production of VRLA batteries only. The Company does not plan to construct lithium-ion battery production facilities in Plant D until 18 months after the date that we commence production of the first stage. CEJC expects to complete all construction related to the first stage on or before December 31, 2011. We believe after the completion of the project our production capacity will be further increased.Split

~~Established~~On ~~Brand~~November ~~Awareness~~22, 2011, Chisen effected a forward split of its common stock and the proportional increase in its authorized shares of common stock at a split ratio of 10-for-1. As a result of this corporate action, the total number of issued and outstanding shares of common stock increased from 50,000,000 to 500,000,000, and the Company’s authorized shares of common stock simultaneously increased from 100,000,000 to 1,000,000,000 shares. Shares of common stock are payable pursuant to the 10-for-1 forward stock split upon surrender of old certificates to the Company’s transfer agent, Interwest Transfer Co., Inc., 1981 East Murray Holladay Road, Suite 100, P.O. Box 17136, Salt Lake City, Utah 84117, telephone (801) 272-9294, facsimile (801) 277-3147.

We have established good brand awareness across China. In 2009, the “Chisen” brand was awarded the Most Trust and Worthy Brand of Consumer Electric Bicycle Batteries from CCTV, a major television station in China. Because of this awareness, CCEC obtained one of the providers contract for a dedicated project, namely “Introducing Electronic Appliance (Lead-~~Acid~~ ~~Motive~~6 ~~Battery Project of Electric Bicycle) into Rural District” in Shandong Province.~~-

WeThere ~~believe~~has ~~CCEC~~been ~~has~~no ~~established~~adjustment ~~for~~to ~~itself~~the par value of the common stock and no changes have been made to the Company’s preferred stock as a ~~positive~~result ~~social~~of ~~image~~this ~~across~~corporate ~~China~~action (as of November 22, 2011, the ~~official~~Company ~~batteries~~had ~~supplier~~no ~~for~~shares ~~electric~~of ~~bicycles~~preferred ~~used~~stock inissued ~~the~~or ~~Beijing~~outstanding). The ~~Olympic~~Company’s ~~and~~Board of ~~Paralympics~~Directors ~~Games~~approved inthis ~~2008~~corporate action however shareholder approval was not required pursuant to Sections 78.207 and 78.209 of the ~~alternative~~Nevada ~~power~~Revised ~~source~~Statutes. In ~~sponsor~~accordance with the Nevada Revised Statutes, the Company filed a “Certificate of Change Pursuant to Section 78.209” with the ~~2010~~Nevada ~~Shanghai~~Secretary ~~World~~of ~~Expo~~State which became effective after the Financial Industry Regulatory Authority announced the effectiveness of the corporate action.

~~Market~~Recent ~~Position~~Developments

~~CCEC~~During ~~positions~~the ~~itself~~year asended March 31, 2012, the Company ~~most~~acquired ~~preferred~~certain ~~supplier~~machinery ofin ~~customers~~order ~~who~~to ~~are~~manufacture ~~manufacturers~~lead ofplates ~~electric~~under ~~bicycles~~the (iexternal formation technique for commercial purposes in Jiangsu Province.e. However, ~~our~~on ~~“factory~~March ~~customers”)~~1, ~~and~~2012, ~~also~~the ~~directly~~PRC togovernment released a ~~growing~~consultation ~~retail~~paper ~~market~~concerning ~~for~~further ~~replacement~~governance and ofrestrictions on the lead acid battery ~~products~~industry. In accordance with the consultation paper, iany new lead plate manufacturing projects for commercial purposes will no longer be approved.~~e.,~~ ~~our~~After ~~(“secondary~~reviewing ~~market”)~~the consultation paper, ~~through~~management ~~our~~believed ~~exclusive~~it ~~distributors~~to be highly likely that the proposed policies will be implemented and enforced by the PRC Government in the near future.

5Management immediately reviewed the recently acquired machinery and identified items which could be directly integrated into our existing production lines of lead acid batteries production operating under the internal formation technique. For those items which could not be integrated directly, after a costs and benefits analysis of modification, management has decided to dispose of them in the near future. As of March 31, 2012, a full impairment, amount to US$2,857,000, was provided for the machinery as management estimated the scrap value of these assets to be minimal.

~~Well-Established~~On ~~Distribution~~May ~~Channels~~31, 2012, the PRC government released a new policy which governs the lead acid battery industry effective July 1, 2012, which confirmed management’s estimation in relation to the final implementation of the tightened policies as initiated in the consultation paper. We were also advised by the local authority that the external battery formation technique will be prohibited after October 31, 2012 in Plant B. Due to the recent industry reform by the PRC Government, we lost market share of our main products, and considering the sluggish market, management has decided that the Company will focus on recovering such lost market share.

WeAs ~~primarily~~of ~~sell~~March ~~our~~31, ~~battery~~2012, ~~products~~we toshifted ~~manufacturers~~a majority of ~~electric bicycles and desire to develop~~ our ~~sales~~production ~~channels~~activities to ~~sell~~Plant ~~our~~D. ~~products~~Since ~~directly~~the toenvironmental ~~distributors~~protection ~~through~~facilities ~~our regional sales teams~~ of ~~the~~Plant ~~Company.~~D Wecomply ~~have established business relationships~~ with ~~Xinri and Aima, both of which rank in~~ the ~~top~~new ~~five electric bicycle manufacturers in terms of popularity in China~~tightened policy, ~~and we have been selected as a most preferred supplier for Xinri and Aima whereby we receive~~ from ~~customers~~this ~~first~~issue, ~~priority~~management onbelieves ~~purchases~~the inCompany’s ~~exchange~~business for our best pricing (between 8-10% lower prices than to our other customers) and preferred sales terms (such customers are entitled to extend payment terms up to 2 months longer than our other customers). We believe such relationships will ~~enable~~not ussuffer toany ~~access~~further ~~such~~material ~~customers’~~adverse ~~distribution channels to expand our sales in the end user customer market and also enable us to shares a significant portion of the factory customer sales market~~effects.

~~Red~~During ~~dots~~the ~~illustrated~~year inended March 31, 2012, the ~~chart~~Government ~~below~~preliminarily ~~represent~~agreed to re-designate the ~~cities~~land ~~where~~in weChangxing ~~have~~County ~~established~~to ~~distribution~~us ~~channels~~for redevelopment. Prior to the new plant in Changxing County being built, ~~with~~we ~~each~~mainly ~~city~~conduct ~~containing~~lead-acid ~~several~~battery ~~distributors~~production activities in Plant D.

~~Our~~- ~~Cooperative~~7 ~~Partnership with Customers and Suppliers~~-

~~The~~Corporate Company’s products have been certified as the preferred brand of top electric bicycle manufacturers in China, including Xinri and Aima. The Company also establishes strategic cooperation partnerships with suppliers and vendors by means of supply chain integration to control procurement cost and quality. Moreover, a supplier’s assessment system is set up for ensuring the stability of the quality of our direct materials.Information

~~Research~~Our offices are located in the Changxing Economic Development Zone at the bank of the Taihu Lake in the County of Changxing in Zhejiang Province, in close proximity to major national transportation systems, including National Highways 104 and 318, the Shanghai – Jiangsu – Zhejiang – Anhui – Hangzhou – Nanjing Expressway, the Changxing – Huzhou – Shanghai Channel, the Xuancheng – Hangzhou Railway and the Xinyi – Changxing Railway. Our registered office is located at No. 1188, Taihu Avenue, Economic Development Zone, Changxing County, Zhejiang Province, PRC, where the office building is under construction. The executive office is temporarily moved to No. 559, Jing’er Road, Economic Development Zone, Changxing County, Zhejiang Province, PRC. Our telephone number is (86) 572-6267666 and our corporate website in English is located at www.chisenelectric.com.

InWe ~~April~~are ~~2008, CCEC entered into~~ a ~~cooperation~~reporting ~~agreement~~company ~~with~~under ~~Xiamen~~Section 13 ~~University~~of ~~to establish~~ the ~~Zhejiang~~Securities ~~Changxing~~Exchange ~~Chisen~~Act ~~Physical-Chemical Power Supply Research and Development Center (“R&D Center”) at the College~~ of ~~Chemistry and Chemical Engineering at Xiamen University for researching and developing new products. Xiamen University is a first-class research university in China with 9 graduate schools~~1934, ~~120~~as ~~research institutions and cooperative inter-university ties to over 100 institutions worldwide~~amended. ~~Pursuant~~ toOur ~~the~~shares ~~terms~~ of ~~the~~common ~~cooperation~~stock ~~agreement,~~are ~~CCEC~~not ~~shall~~currently ~~contribute~~listed ~~RMB300,000~~or ~~(approximately~~quoted ~~US$44,000) annually to fund operating costs~~ for ~~the~~trading on ~~R&D~~any ~~Center~~national ~~and~~securities ~~provide~~exchange ~~additional~~however ~~funds~~our ~~for~~common ~~certain~~stock ~~engaged~~is ~~research~~currently ~~projects.~~quoted ~~Xiamen~~under ~~University shall contribute staff, laboratory usage and relevant equipment to~~ the ~~R&D~~symbol ~~Center. The~~“CIEC” ~~R&D Center provides us with solid support~~ on the ~~research~~ OTCQB and ~~development of new batteries technology. For example, we have developed~~ the ~~technology of producing lithium-ion batteries and lithium-ion iron phosphate anode materials through the cooperation with Xiamen University~~OTCBB. Both parties shall be entitled to share equally in the benefits of any achievements from the R&D Center, and any such benefits or achievements realized shall not be transferrable to any third party without the consent of both parties. For example, CCEC will own jointly and equally with Xianmen University any intellectual property developed at or by individuals employed at the R&D Center.

~~Apart~~Corporate from the Research Center at Xiamen University, the Company is also running an on-site R&D center for the research and development of new manufacturing techniques for its lead acid batteries and new products. The Company has hundreds of automated testing equipment, including high-performance Universal Battery Tester (“UBT”), which is particularly designed for cycle life and capacity testing of automotive batteries. It can also be used for testing other types of batteries. The UBT performs charging and discharging in accordance with the programmed test schedule.Structure

6Our corporate structure is illustrated as follows:

~~Development~~Our ~~Strategy~~Competitive ~~of the Company~~Strengths

We ~~strive~~believe ~~to create an international first-class brand and become~~ the ~~one~~following ofstrengths ~~the leaders in providing “green” energy in the global electric bicycle market. Through our continuous researching and developing of new chemical energy technologies, we intend~~ contribute to ~~provide energy-saving and highly-effective energy solutions to~~ our ~~customers~~competitive ~~for~~advantages ~~improving the quality of life while maintaining a sustainable ecological environment. Our goal is to become the largest battery developer~~ and ~~producer~~differentiate ~~with~~us afrom ~~first-class sales and service network in China. With one of the leading positions in the LABEB battery product market in China,~~ our expansion plans in Changxing County (Zhejiang Province) and Jiangsu Province, our product research and development capability and our cooperative partnerships with clients, we believe that we are well positioned to capture additional business opportunities in China's personal transportation device markets. In light of the prevailing economic trends for developing alternative transportation devices that reduce the reliance on oil and produce lesser emissions, we plan to explore the motive battery market for electric-powered motorcycles and electric cars. Leveraging our experience and expertise in producing lead-acid motive battery products for electric bicycles, our product mix will be expanded to include valve regulated lead-acid back-up batteries, the lithium-ion battery, lead-acid power storage batteries dedicated for solar and wind power and lead-acid motive batteries for electric cars.competitors:

~~Production~~- ~~Capacity~~8 -

OnEstablished ~~August~~Brand 20, 2010, CCEC entered into an Investment Agreement with the Administrative Committee of Changxing Economic Development Zone whereby CCEC agreed to participate in “Land Tender, Auction and Listing” activities organized by the Changxing County Land and Resources Bureau with respect to a pre-identified parcel of land to which CCEC agreed to relocate its business from Jingyi Road to Jingsi Road within Changxing County. The size of Plant C will be approximately the 50% larger than the Plant A in Changxing County (Zhejiang Province), at which we plan to develop and produce what will be our newest product, lithium-ion batteries. Awareness

~~Furthermore,~~We onbelieve ~~September~~we 6,have ~~2010,~~established ~~CEJC~~good ~~entered~~brand awareness ~~into~~across aChina. In ~~Project Investment Contract and a Supplemental Agreement to the Project Investment Contract with the Jiangsu Xuyi Economic Development Zone Administrative Committee~~2009, ~~pursuant to which CEJC shall invest, in~~ the ~~aggregate, approximately RMB1,200,000,000 (approximately US$177,000,000) in three stages to build the Chisen Circular Economy Industry Park (~~“~~Plant D~~Chisen”) tobrand ~~manufacture~~was ~~VRLA~~awarded ~~batteries~~the ,Most asTrust ~~well as our newest product, lithium-ion batteries,~~ and ~~other~~Worthy ~~related~~Brand ~~products in the Jiangsu Xuyi Economic Development Zone. In the first stage, CEJC will invest in the production~~ of ~~VRLA~~Consumer Electric ~~batteries~~Bicycle ~~only~~Batteries ~~and~~from ~~shall invest approximately RMB422~~CCTV,~~000,000~~ ~~(approximately~~a ~~US$62,000,000),~~major ~~including~~television ~~approximately~~station ~~RMB150,000,000 (approximately US$22,000,000)~~ in ~~fixed assets for the production of VRLA batteries only~~China. Because ~~The Company does not plan to construct lithium-ion battery production facilities in Plant D until 18 months after the date that we commence production~~ of ~~the~~this ~~first stage. CEJC expects to complete all construction related to first stage on or before December 31~~awareness, ~~2011.~~CCEC Weobtained ~~believe~~one ~~after the completion~~ of the ~~project~~providers ~~our~~contract ~~production~~for ~~capacity~~a ~~will~~dedicated ~~be further increased. The~~ project, ~~will~~namely be“Introducing ~~operated~~Electronic ~~primarily~~Appliance by(Lead-Acid ~~the~~Motive ~~cash~~Battery ~~generated~~Project of ~~from~~Electric ~~our~~Bicycle) ~~operating~~into ~~profit~~Rural ~~and~~District” ~~short~~in ~~term~~Shandong ~~bank loans~~Province.

~~Expand~~We ~~Offering~~believe CCEC has established for itself a positive social image across China as the official batteries supplier for electric bicycles used in the Beijing Olympic and Paralympics Games in 2008 and the alternative power source sponsor of ~~Highly~~the ~~Efficient~~2010 ~~Battery~~Shanghai ~~Products~~World Expo.

~~For future market development, we intend to focus on the lithium~~Well-~~ion~~Established ~~battery,~~Distribution which is a new product trend in the European, US and Japanese markets, on electric vehicle power batteries and on energy storage batteries dedicated to solar and wind power. We are currently committed to investing in and constructing new production facilities in Changxing County (Zhejiang Province) and in Xuyi County (Jiangsu Province). Since the Company is experienced in producing motive batteries for powering electric bicycles, the Company intends to bring the lithium-ion battery to market by focusing first on the market for lithium-ion batteries in electric bicycles. We estimate that our lithium-ion batteries will be launched and distributed into the marketplace within two years from March 31, 2011. The Company intends to cooperate with manufacturers of electric bicycles and to deliver small lots of pre-launch lithium-ion batteries to them in order to explore the market, as well as to obtain feedback from electric bicycle customers to further improve our production technology of lithium-ion batteries. We are currently monitoring and studying the market development of lithium-ion batteries including, but not limited to, technology development, market demand and relevant supporting facilities. We will continue monitor the development of our lithium-ion project in Changxing County (Zhejiang Province), and to adjust our execution plan accordingly. Until these products are formally launched and distributed into the marketplace, their effects on our business are uncertain. We do not have any specific timetable for this strategy as we consider expanding our offering of highly efficient battery products to be part of our core business, and the amounts we decide to allocate to this strategy will be funded by our operating cash flows.Channels

7We primarily sell our battery products to manufacturers of electric bicycles and desire to develop our sales channels to sell our products directly to distributors through our regional sales teams of the Company.

~~Augment~~- ~~Marketing~~9 ~~and Promotion Efforts to Increase Brand Awareness~~-

~~The~~Our ~~Company~~Cooperative ~~works~~Partnership with leading national brand designing companies to establish a complete plan for scientific branding, which use cartoon image endorsements to promote its corporate image, products and brand awareness, through television and printed advertisements. Furthermore, we believe CCEC has established for us a positive social image across China as the official batteries supplier for electric bicycles used in the Beijing Olympic and Paralympics Games in 2008 and the alternative power source sponsor of the 2010 Shanghai World Expo. We do not have any specific timetable for this strategy as we consider augmenting our marketing and promotional efforts to increase brand awareness to be part of our core business, and the amounts we decide to allocate to this strategy will be funded by our operating cash flows.Suppliers

~~Expand~~The ~~Sales~~Company ~~Network~~establishes strategic cooperation partnerships with suppliers and ~~Distribution~~vendors ~~Channels~~by means of supply chain integration to control procurement cost and quality. Moreover, a supplier’s assessment system is set up for ensuring the stability of the quality of our direct materials.

WeResearch ~~intend to put in more resources to expand our sales~~ and distribution networks by: (1) adding new distributors in key sales regions in China; (2) developing new marketing strategies in different channels; (3) improving communication between sales teams and distributors; and (4) improving our brand awareness and promotion effort. We do not have any specific timetable for this strategy as we consider expanding our sales network and distribution channels to be part of our core business, and the amounts we decide to allocate to this strategy will be funded by our operating cash flows.Development

~~Build~~On ~~Partnerships~~the ~~with~~development ~~New~~of new products lines, the Company’s academic fields include, but are not limited to, ultra lead-acid motive batteries, wind and ~~Existing~~solar ~~Clients~~energy storage batteries, lithium-ion power batteries, anode material for lithium-ion batteries and lithium-ion ultra capacitors.

WeIn ~~continue~~April to2008, ~~build~~CCEC entered into a ~~close,~~cooperation agreement ~~mutually~~with ~~beneficial~~Xiamen ~~and~~University ~~harmonious~~to ~~partnership~~establish ~~with~~the ~~our~~Zhejiang ~~existing~~Changxing ~~factory~~Chisen ~~customers. We~~Physical-Chemical ~~aim~~Power toSupply ~~establish~~Research aand ~~win-win~~Development Center ~~long-term~~(the ~~partnership~~R&D ~~with~~Center) ~~all~~at the College of ~~our~~Chemistry and Chemical Engineering at Xiamen University for researching and developing new ~~customers~~products. We ~~intend~~Xiamen toUniversity ~~continue~~is toa ~~utilize~~first-class ~~our~~research ~~customer~~university ~~relationship~~in ~~management~~China towith ~~provide~~9 ~~tailor~~graduate schools, 120 research institutions and cooperative inter-~~made~~university ~~management~~ties ~~policies~~to ~~that~~over ~~focus~~100 institutions worldwide. Pursuant to the ~~needs~~terms of ~~different~~the ~~customers. We~~cooperation doagreement, both ~~not~~parties ~~have~~shall ~~any~~be ~~specific~~entitled ~~timetable~~to ~~for~~share ~~this~~equally ~~strategy~~in asthe webenefits ~~consider~~of ~~building~~any ~~partnerships~~achievements ~~with~~from ~~new~~the R&D Center, and ~~existing~~any ~~clients~~such tobenefits or achievements realized shall not be ~~part~~transferrable to any third party without the consent of ~~our~~both ~~core~~parties. ~~business~~For example, ~~and~~CCEC ~~the~~will own ~~amounts~~jointly weand ~~decide~~equally towith ~~allocate~~Xianmen toUniversity ~~this~~any ~~strategy~~intellectual ~~will~~property bedeveloped ~~funded~~at or by ~~our~~individuals ~~operating~~employed ~~cash~~at ~~flows~~the R&D Center.

~~Our~~Pursuant ~~Products~~to the terms of the cooperation agreement, CCEC shall contribute RMB300,000 (approximately US$44,000) annually to fund operating costs for the R&D Center and provide additional funds for certain engaged research projects. Xiamen University shall contribute staff, laboratory usage and relevant equipment to the R&D Center. The R&D Center provides us with solid support on the research and development of new batteries technology. For example, we have developed the technology of producing lithium-ion batteries and lithium-ion iron phosphate anode materials through the cooperation with Xiamen University. The products have entered into the alpha test phase.

~~Current~~The ~~Products~~Company accelerates the production technology updates of existing products. Apart from the Research Center at Xiamen University, the Company is also running an on-site R&D center for the research and development of new manufacturing techniques for its lead acid batteries and new products. In the past year, we successfully developed internal battery formation technology and applied it to battery production, which significantly reduced the pollution generated from battery production process. Also, we become pioneer on applying internal formulated technology in the lead acid batteries production process.

~~The key components of a lead~~-~~acid~~ ~~motive~~10 battery include electrode plates and fiberglass dividing plates. The electrode plates are coated with oxidized lead and alloy lead. Pairs of positively charged electrode plates and negatively charged electrode plates each separated by a fiberglass dividing plate are bound together by metal strip and installed into the plastic casing of a lead-acid motive battery. The battery is then filled with sulfuric acid and charged with electricity. The number and the size of electrode plates required to be installed in a lead-acid motive battery will depend on the required level of its storage capacity and the power output.

WeOur ~~mainly produce and offer 13 models of VRLA battery products below for electric bicycles:~~Products

Products	Dimensions (LxWxH)	Weight (kg)		Power Output (w)		Estimated Hours Required Per Charging (1)			Estimated Minutes of Use Per Charging (min)(2)		Estimated Travel Distance Per Charging (km)
6-DZM-10Ah	151×99×98		4.2		60		10	h		135-145		45-50
6-DZM-12Ah	151×99×102		4.3		72		10	h		120-130		45-50
6-DZM-16Ah	151×99×118		5.6		96		10	h		120-130		50-60
6-DZM-17Ah	181×76×166		6.3		102		10	h		120-130		50-60
6-DZM-20Ah	181×76×170		7.0		120		10	h		120-130		60-70
8-DZM-16Ah	200×100×118		7.4		128		10	h		120-130		60-70
8-DZM-18Ah	250×100×128		9.0		144		10	h		120-130		60-70
8-DZM-20Ah	250×100×128		9.05		160		10	h		120-130		60-70
6-DZM-24Ah	175×165×125		9.5		144		10	h		120-130		70-80
6-DZM-25Ah	250×78×118		8.85		150		10	h		120-130		70-80
8-DZM-14Ah	201×112×105		6.6		124		10	h		120-130		60-70
6-DZM-28Ah	320×78×128		11.1		155		10	h		120-130		80-90
6-DZM-32Ah	220×120×140		11.0		160		10	h		120-130		80-90

Current Products

~~(1)~~The ~~Estimated~~key ~~minutes~~components ~~required~~of ~~per~~a ~~charging~~lead-acid ~~refers~~motive battery toinclude electrode plates and fiberglass dividing plates. The electrode plates are coated with oxidized lead and alloy lead. Pairs of positively charged electrode plates and negatively charged electrode plates each separated by a fiberglass dividing plate are bound together by metal strip and installed into the ~~estimated~~plastic casing of a lead-acid motive battery. The battery is then filled with sulfuric acid and charged with electricity. The number and the size of ~~minutes~~electrode plates required ~~for~~to ~~charging~~be ~~the~~installed in a lead-acid motive battery ~~from~~will ~~nil~~depend toon ~~full~~the required level of its storage capacity and the power output.

~~(2)~~We ~~Estimated~~mainly ~~hours~~produce ofand ~~use~~offer ~~per charging refer to~~ the ~~estimated~~following 13 ~~maximum~~models ~~number~~ of ~~hours~~VRLA ~~for which the~~ battery isproducts ~~able~~for toelectric ~~be used on each occasion when it is charged to its full storage capacity.~~bicycles:

Products	Dimensions (LxWxH)	Weight (kg)		Power Output (w)		Estimated Hours Required Per Charging (1)			Estimated Minutes of Use Per Charging (min)(2)		Estimated Travel Distance Per Charging (km)
6-DZM-10Ah	151×99×98		4.2		60		10	h		135-145		45-50

6-DZM-12Ah	151×99×102		4.3		72		10	h		120-130		45-50

6-DZM-16Ah	151×99×118		5.6		96		10	h		120-130		50-60

6-DZM-17Ah	181×76×166		6.3		102		10	h		120-130		50-60

6-DZM-20Ah	181×76×170		7.0		120		10	h		120-130		60-70

8-DZM-16Ah	200×100×118		7.4		128		10	h		120-130		60-70

8-DZM-18Ah	250×100×128		9.0		144		10	h		120-130		60-70

8-DZM-20Ah	250×100×128		9.05		160		10	h		120-130		60-70

6-DZM-24Ah	175×165×125		9.5		144		10	h		120-130		70-80

6-DZM-25Ah	250×78×118		8.85		150		10	h		120-130		70-80

8-DZM-14Ah	201×112×105		6.6		124		10	h		120-130		60-70

6-DZM-28Ah	320×78×128		11.1		155		10	h		120-130		80-90

6-DZM-32Ah	220×120×140		11.0		160		10	h		120-130		80-90

~~Of the 13 models of lead~~-~~acid~~ ~~motive~~11 ~~battery products set forth above, the 6~~-~~DZM-12Ah and 6-DZM-20Ah are our core products, which accounted for 44.37% and 37.10% of our total revenues for the year ended March 31, 2011, respectively.~~

All the lead-acid motive battery products produced by us are re-chargeable and can be recharged approximately 500 times. They are standardized and can be used in electric bicycles produced by different manufacturers.

(1)	Estimated minutes required per charging refers to the estimated number of minutes required for charging the battery from nil to full storage capacity.
(2)	Estimated hours of use per charging refer to the estimated maximum number of hours for which the battery is able to be used on each occasion when it is charged to its full storage capacity.

~~Future~~Of ~~Products~~the 13 models of lead-acid motive battery products set forth above, the 6-DZM-12Ah and 6-DZM-20Ah are our core products, which accounted for 50% and 30% of our total revenues for the year ended March 31, 2012, respectively.

~~For~~All ~~future market development, we intend to focus on~~ the ~~development of (a) the lithium-ion batteries, (b)~~ lead-acid ~~power~~motive ~~storage~~battery ~~batteries~~products produced ~~dedicated~~by ~~for~~us ~~solar~~are ~~and~~re-chargeable ~~wind power~~ and ~~(c)~~can ~~lead-acid~~be ~~electric~~recharged ~~cars~~approximately ~~motive~~500 ~~power batteries~~times. WeThey ~~also~~are ~~intend~~standardized ~~to invest more resources~~ and ~~effort~~can onbe ~~the~~used ~~research and development~~ in ~~these~~electric bicycles ~~areas~~produced ~~in order to expand our market share~~ by ~~offering~~different ~~more efficient battery products~~manufacturers.

~~Lithium-ion~~Products ~~Motive Batteries~~Reserve

~~With~~We ~~respect~~have todeveloped ~~lithium~~non-~~ion~~industrial ~~batteries,~~wind ~~we have designed~~ and solar ~~developed~~energy ~~lithium~~lead-~~ion~~acid ~~battery~~storage ~~products~~batteries ~~for~~and ~~electric~~lead-acid ~~bicycles. Our~~motive ~~intended~~batteries ~~target~~for ~~market is~~ electric ~~bicycle manufacturers in China~~cars. ~~Since~~ ~~September~~These ~~2010,~~products we have ~~commenced~~passed ~~surveying~~beta ~~the land~~ testing and ~~have~~we ~~designed of our Plant C. We~~ are ~~planning~~capable toof ~~launch~~producing ~~and~~these ~~distribute~~products ~~our~~with ~~lithium-ion~~existing ~~batteries~~facilities ~~into~~in ~~the~~a ~~market~~larger ~~within~~scale. ~~two years from March 31~~However, ~~2011.~~because ~~Prior~~of torecent ~~our~~industry reform ~~mass~~by ~~production~~the ofPRC ~~lithium-ion batteries~~government, we ~~intend~~lost tomarket ~~beta~~share ~~test the product by distributing a small lot~~ of ~~lithium-ion~~our ~~battery~~main products, toand ~~our~~considering ~~existing~~the ~~customers~~sluggish ofmarket, ~~electric~~management ~~bicycle~~has ~~manufacturers. The~~decided that ~~purpose~~the ofCompany ~~our~~will ~~beta~~focus ~~testing~~on isrecovering tosuch ~~study the~~ market asshare ~~well~~of ~~as to obtain product feedback from~~ our ~~customers~~main ~~in order to further improve our~~ products ~~and to enhance our production technology~~. ~~Until~~The ~~our~~Company ~~products~~has ~~are~~not ~~formally~~determined ~~launched~~a ~~into~~timeframe tofor launching ~~mass~~our ~~production~~wind and ~~distributed~~solar ~~into~~energy ~~the~~lead-acid ~~market,~~storage ~~their~~batteries ~~effects~~and onlead-acid ~~our~~motive ~~business~~batteries ~~are~~for ~~uncertain. A~~electric ~~detailed timeframe of our product launch is as follows:~~cars.

Product Type		Survey of Land, Plant Design, Construction		Model Selection of Machinery and Equipment, Selection of Suppliers, Purchase of Machinery and Equipment, Installation and Testing		Trial Production, Beta Testing and Marketing Assessment		Launching and Distributing Product into the Market
Lithium-ion Motive Batteries used for Electric Bicycles		From September 2010 through October 2011		From July 2011 through November 2011		*From December 2011 to October 2012		November 2012

Future Products

*For Wefuture ~~understand~~market development, we intend to focus on the ~~market~~development of ~~motive~~the lithium-ion batteries. ~~used~~We have cooperated with Xiamen University to ~~power~~research and develop anode materials for the lithium-ion battery and we have designed and developed lithium-ion battery products for electric bicycles, ~~and~~which have ~~therefore~~entered into the alpha test phase. However, we ~~estimate~~will ~~that~~expect a longer alpha test period, especially after a recently publicized fatal traffic accident in China caused by the ~~trial~~explosion ~~production~~of a lithium-ion battery, which was manufactured by another well-known lithium-ion manufacture in China. Management believes it is extremely important for us to manufacture and ~~market~~sell ~~assessment~~safety ~~period~~products. We ~~will~~plan beto 11extend ~~months~~the alpha test process and pay particular attention to safety and the stability of our lithium-ion battery products and anode materials for the lithium-ion battery. We have not determined the timeframe of this product launch.

~~Lead-Acid~~Distribution ~~Power Storage Batteries Dedicated for Solar and Wind Power~~Methods

~~With~~We ~~respect~~sell ~~to power~~our ~~storage~~sealed ~~batteries dedicated for solar and wind power, we have designed and developed valve regulated~~ lead-acid ~~power~~motive ~~storage~~battery products ~~batteries~~principally ~~for storing power generated from solar and wind energy, and for providing power supply~~ to ~~non-industrial~~manufacturers of electric ~~appliances, such as road lamps, road indicators and in-house lighting systems~~bicycles. ~~We have utilized our existing production facilities and have produced a small lot of storage batteries for feasibility testing~~However, ~~and~~with ~~such~~the ~~testing~~growing ~~has~~retail ~~been completed. Our target~~ market isfor ~~manufacturers~~replacement of ~~non-industrial~~ ~~electrical~~battery products, ~~appliances in China~~i. ~~We are currently beta testing such product and have distributed a small lot of batteries to manufacturers of non-industrial electrical appliances for product assessment~~e. ~~Since~~ ~~this product is a new segment of~~ our ~~business~~secondary market, we ~~do not~~ have ~~specific~~also ~~criteria~~strengthened toour ~~select~~efforts ~~participants for beta testing and we mainly contact as many potential customers as we can and ask them whether they are interested~~ in ~~becoming beta test participants. We are currently evaluating~~ the ~~feedback~~sales ~~from the use~~ of ~~our~~battery products byto ~~these~~exclusive ~~participants. Until~~distributors which ~~these products~~ are ~~formally~~strategically ~~launched~~located ~~into~~in ~~mass~~27 ~~production and distributed into the market~~provinces, ~~their~~autonomous ~~effects~~regions ~~on our business are uncertain. We intend to launch~~ and ~~distribute~~directly-administered municipalities ~~such products~~ in ~~November 2011~~China. ~~A detailed timeframe of our production launch is as follows:~~

9- 12 -

Product Type		Explore the Market and Assess The Product		Preparation of Mass Production and Launching Product into the Market
Lead-Acid Power Storage Batteries Dedicated for Solar and Wind Power		* From January 2010 through June 2011		From July 2011 through November 2011

The Company currently has exclusive sales agreements with distributors at the provincial and county levels. Pursuant to such exclusive sales agreements, distributors shall cooperate with us to establish sales networks in a designated location and to distribute our products exclusively. The Company sells products directly to the distributors, and such distributors have no right to return the unsold products to the Company. Furthermore, the Company provides a discount to such distributors and employs sales teams in each province across China to help distributors further distribute products from counties to towns and villages. The distributor is obligated to develop the end-user market and sales activities and brand promotion activities and maintain the goodwill and product quality of the Company. On the other hand, the Company is obligated to provide technical support to the distributor in order to improve the sales capacity and market share of the distributor, and the Company is also obligated to provide manuals, samples, copies of any relevant information and information with respect to sales-related promotions to the distributor.

* The ~~lead-acid~~Company ~~power~~has ~~storage~~no ~~batteries~~obligation, ~~dedicated~~financial or ~~for~~otherwise, ~~solar~~with ~~and~~respect ~~wind~~to ~~power~~the isestablishment aof ~~new~~the ~~business~~distribution ~~segment~~centers of ~~our~~the ~~Company~~distributors. Such agreements typically have terms of one to two years, and ~~therefore~~provisions ~~the~~which ~~Company~~allow ~~estimates~~for ~~that~~us itto ~~will~~terminate ~~take~~early 18in ~~months~~the event that the distributor fails to meet ~~explore~~its sales targets within the ~~product’s~~prescribed ~~future~~time ~~customer~~limits ~~base~~or if we suffer losses caused by the breach of the agreement by the distributor (for example, breaches of confidentiality and toexclusivity ~~assess~~by the ~~feedback.~~distributor Weor ~~also~~for ~~intend~~activities toof ~~improve~~the ~~our~~distributor ~~production~~which ~~technology~~damage our ~~accordingly~~image).

~~Lead~~Our largest distributors are located in Shanxi Province, Guangdong Province, Jiangsu Province, Tianjin and Beijing. We have established and maintained long-~~Acid~~term relationships ~~Power~~with ~~Motive~~distributors ~~Power~~who ~~Batteries~~we ~~used~~believe ~~for~~have ~~Low~~local ~~Speed~~business ~~Electric~~experience ~~Automobile~~and established regional sales networks.

WeSources ~~have designed~~ and ~~developed~~Availability valve regulated lead-acid motive power batteries for low speed electric automobiles, also known as neighborhood electric cars (“NEC”). We have utilized our existing production facilities and have produced a small lot of ~~these~~Raw ~~motive~~Materials from batteries for feasibility testing, and such testing has been completed. Our target market of valve regulated lead-acid motive power batteries is manufacturers of NECs in China. We had selected our existing customers of electric bicycle manufacturers, such as, Xinri and Aima, as participants of our beta testing since such manufacturers also manufacture NECs. We have distributed a small lot of batteries to such manufacturers and we are assessing their feedback. Until these products are formally launched into mass production and distributed into the market, their effects on our business are uncertain. We intend to launch and distribute them into the marketplace in March 2012. A detailed timeframe of our production launch is as follows:Suppliers

Product Type		Exploring the Market and Assessing Our Product		Preparation of Mass Production and Launching Product into the Market
Lead-Acid Motive Power Batteries used for NECs		* From March 2010 through August 2011		From September 2011 through March 2012

Although we purchase raw materials used in the manufacturing of our products from a small number of sources in order to maintain the stability of the quality of the raw materials, we have the ability to purchase from numerous sources, primarily in Jiangsu and Anhui province in the PRC. We believe that all necessary raw materials for its products are readily available and will continue to be so in the foreseeable future. We have never had, nor do we anticipate experiencing, any shortages of such materials.

* The ~~manufacturing~~raw material for our battery products consist primarily of electrolytic lead. Our success significantly depends on our ability to secure sufficient and ~~sale~~constant supply of ~~NECs~~electrolytic islead anfor ~~emerging~~our ~~market~~production inat ~~China~~acceptable price levels. ~~Uncertain~~Electrolytic ~~conditions~~lead ~~exist~~represents ~~with~~our ~~respect~~largest tocost ~~the~~item ~~development~~in our lead-acid motive battery production. During each of the ~~market,~~two ~~including~~fiscal years ended March 31, ~~but~~2012 ~~not~~and ~~limited~~March to31, 2011, the ~~battery~~average selling ~~type~~price ~~selection~~of toelectrolytic ~~power~~lead ~~such~~by ~~NECs.~~our ~~However,~~suppliers ~~the~~was ~~Company~~approximately ~~estimates~~RMB16,000 ~~that~~(approximately ~~this~~US$2,500) ~~market~~and ~~has~~RMB16,000 ~~potential~~(approximately US$2,400) toper ~~develop~~ton, inrespectively. For ~~light~~each of the ~~Chinese~~two ~~government’s~~years ~~efforts~~ended toMarch ~~promote~~31, ~~such~~2012 ~~market~~and asMarch ~~evidenced~~31, by2011, acosts ~~press~~of ~~release~~lead-related material ~~issued~~accounted byfor ~~the~~approximately ~~PRC~~80% ~~government~~and ~~regarding~~80% ~~the~~of ~~policies~~our ontotal ~~promoting~~cost ~~new~~of ~~energy~~sales, ~~vehicles~~respectively. ~~which~~We ~~may~~do benot ~~found~~have atlong-term ~~http://www.gov.cn/wszb/zhibo413/content_1732001.htm~~contracts with any of our electrolytic lead suppliers, anor ~~copy~~have ofwe ~~which~~entered isinto ~~also~~any ~~filed~~arrangement asto ~~Exhibit~~mitigate ~~99.6~~the ~~hereto. The~~effect ~~Company~~of ~~estimates~~price itfluctuations of ~~will~~electrolytic ~~take~~lead. 18Therefore, ~~months~~any tosignificant ~~explore~~increase in the ~~product’s~~cost ~~future~~of ~~customer~~electrolytic ~~base~~lead asin ~~well~~the asfuture tocould ~~assess~~adversely ~~the~~affect our ~~feedback.~~results Weif ~~also~~we ~~intend~~cannot totransfer ~~improve~~the ~~our~~price ~~production~~increment ~~technology~~to ~~accordingly~~our customers.

~~Distribution~~- ~~Methods~~13 -

We ~~sell~~believe ~~our sealed lead-acid motive battery products principally to manufacturers of electric bicycles. However, with~~ the ~~growing~~Company ~~retail~~generally ~~market~~maintains sufficient ~~for~~quantities ~~replacement~~ of ~~battery~~inventories ~~products, i.e. our secondary market, we have also strengthened our efforts in the sales~~ of ~~battery~~its products to ~~exclusive~~meet ~~distributors~~customer ~~which are strategically located in 27 provinces, autonomous regions and directly-administered municipalities in China~~demand.

The Company ~~currently~~ has ~~exclusive~~entered ~~sales~~into ~~agreements~~written contracts with ~~distributors~~several atsuppliers ~~the provincial~~ and ~~county levels~~vendors. ~~Pursuant to such exclusive sales agreements, distributors shall cooperate with us to establish sales networks in a designated location and to distribute our products exclusively.~~ The Company sells products directly to the distributors, and such distributors have no right to return the unsold products to the Company. Furthermore, the Company provides a discount to such distributors and employs sales teams in each province across China to help distributors further distribute products from counties to towns and villages. The distributor is obligated to develop the end-user market and sales activities and brand promotion activities and maintain the goodwill and product quality of the Company. On the other hand, the Company is obligated to provide technical support to the distributor in order to improve the sales capacity and market share of the distributor, and the Company is also obligated to provide manuals, samples, copies of any relevant information and information with respect to sales-related promotions to the distributor. The Company has nomajor ~~obligation,~~suppliers ~~financial~~who oraccounted ~~otherwise,~~for ~~with respect to~~ the ~~establishment~~following ofpercentage ~~the distribution centers~~ of ~~the~~total ~~distributors. Such agreements typically have terms of one to two years,~~ purchases and ~~provisions~~total ~~which~~trade ~~allow~~payables ~~for us to terminate early~~ in the ~~event~~fiscal ~~that~~years ~~the~~ended ~~distributor~~March ~~fails to meet its sales targets within the prescribed time limits or if we suffer losses caused by the breach of the agreement by the distributor (for example~~31, ~~breaches~~2012 ~~of confidentiality~~ and ~~exclusivity by the distributor or for activities of the distributor which damage our image).~~ 2011:

Purchases

Trade Payables

Major Suppliers

Fiscal year ended
March 31, 2012

Fiscal year ended
March 31, 2011

Fiscal year ended
March 31, 2012

Fiscal year ended
March 31, 2011

US$’000

Jiangsu XiangFa Power Supply Co., Ltd.

27%

31.24%

Nil

4,932

Henan Yuguang Gold and Lead Co., Ltd

13.44%

Nil

726

Anqing Borui Power Supply Co., Ltd.

Nil

12.24%

Nil

~~Our~~Trade ~~largest~~payables ~~distributors~~related ~~are~~to ~~located in~~ the ~~cities~~Company’s major ofsuppliers ~~Yancheng~~for ~~in Jiangsu Province, and in~~ the ~~city~~years ofended ~~Foshan~~March in31, ~~Guangdong~~2012 ~~Province. We have established~~ and ~~maintained~~2011 ~~long-term~~comprise ~~relationships~~Nil ~~with~~and ~~distributors~~36% ~~who~~of weall ~~believe~~trade ~~have~~payables, ~~local business experience and established regional sales networks~~respectively.

~~Sources~~Sales and ~~Availability of Raw Materials from Suppliers~~Marketing

~~Although~~In weorder ~~purchase~~to ~~raw~~promote ~~materials used in~~ the ~~manufacturing~~sales and reputation of our ~~products~~“Chisen” ~~from~~brand, awe ~~small~~launch ~~number~~specific ofpublicity ~~sources~~campaigns inand ~~order~~marketing tobased ~~maintain~~on the ~~stability~~market ofneeds. ~~the~~With ~~quality~~reference to of the ~~raw~~conditions ~~materials,~~of weregional ~~have~~markets ~~the ability to purchase from numerous sources, primarily in Jiangsu~~ and ~~Anhui province in~~ the ~~PRC. We~~local ~~believe~~wholesale ~~that~~market ~~all~~for ~~necessary~~electric ~~raw~~bicycles, ~~materials~~we ~~for~~promote ~~its~~our ~~products~~band ~~are~~through ~~readily~~roadside billboards ~~available~~ and ~~will~~launch ~~continue~~promotional todealer besales so in ~~the foreseeable future. We have never had~~Anhui, ~~nor do we anticipate experiencing~~Henan, ~~any~~Hebei ~~shortages~~and ofJiangsu ~~such~~Provinces ~~materials~~in China.

~~The~~With ~~raw~~reference ~~material for our battery products consist primarily of electrolytic lead. Our success significantly depends on our ability~~ to ~~secure~~the ~~sufficient~~need ~~and constant supply of electrolytic lead~~ for ~~our~~increased sales ~~production at acceptable price levels. Electrolytic lead represents our largest cost item~~ in our ~~lead-acid~~secondary ~~motive battery production. During each of the two fiscal years ended March 31~~market, ~~2011~~we ~~and~~have ~~March~~convened ~~31,~~product ~~2010,~~exhibition ~~the~~meetings ~~average~~in ~~selling~~large ~~price~~metropolitan ofareas ~~electrolytic lead by our suppliers was approximately RMB16,000 (approximately US$2,400)~~ and ~~RMB15,000~~mid-sized ~~(approximately US$2,200) per ton, respectively~~cities. ~~For~~ ~~each~~We have ofshared ~~the~~our ~~two~~image ~~years ended March 31, 2011~~ and ~~March 31~~services, ~~2010,~~which ~~costs~~we ofbelieve ~~lead-related~~will ~~material~~enhance ~~accounted~~confidence ~~for~~with ~~approximately~~our ~~80%~~distributors and ~~80% of our total cost of~~ sales, ~~respectively~~offices. We believe dothis ~~not~~will enhance ~~have~~the ~~long-term~~Company’s ~~contracts~~visibility ~~with~~and ~~any~~reputation of our ~~electrolytic lead suppliers~~products, ~~nor~~which ~~have~~may weultimately ~~entered~~boost ~~into any arrangement to mitigate the effect of price fluctuations of electrolytic lead. Therefore, any significant increase in the cost of electrolytic lead in the future could adversely affect~~ our ~~results if we cannot transfer the price increment to our customers~~sales.

WeA ~~believe~~small ~~the~~number ~~Company~~of ~~generally~~our ~~maintains~~customers ~~sufficient~~account ~~quantities~~for a ofvery ~~inventories~~significant percentage of ~~its~~our ~~products~~revenue. Trade receivables related to ~~meet~~the ~~customer~~Company’s ~~demand~~major customers for the years ended March 31, 2012 and 2011 comprised 73% and 78% of all trade receivables, respectively. The Company’s major customers for the fiscal years ended March 31, 2012 and 2011 accounted for the following percentages of total revenue and trade receivables:

~~The~~- ~~Company~~14 has entered into written contracts with several suppliers and vendors. The Company has major suppliers who accounted for the following percentage of total purchases and total trade payables in the fiscal years ended March 31, 2010 and 2011:-

	Purchases						Trade Payables
	Sales						Trade Receivables
Major Suppliers	Fiscal year ended March 31, 2011			Fiscal year ended March 31, 2010			Fiscal year ended March 31, 2011		Fiscal year ended March 31, 2010
Major Customers	Fiscal year ended March 31, 2012			Fiscal year ended March 31, 2011			Fiscal year ended March 31, 2012		Fiscal year ended March 31, 2011
							$’000		$’000
							US$’000		US$’000
Jiangsu XiangFa Power Supply Co., Ltd.		31.24	%		23.96	%	$	4,932	$	0
COMPANY X		12.76%			18.83%			5,242		29,603
Anhui Zhongneng Power Supply Co., Ltd		13.44	%		5.66	%	$	726	$	2,205
COMPANY Y		10.91%			18.82%			4,748		17,627
Anqing Borui Power Supply Co., Ltd.		12.24	%		12.00	%	$	0	$	0
COMPANY Z		-			12.40%			-		3,757

~~Trade~~The ~~payables~~loss ~~related~~of toany ~~the~~of ~~Company’s~~our major ~~suppliers~~customers ~~for~~could have ~~the~~a ~~years~~material ~~ended~~adverse ~~March~~effect ~~31,~~upon ~~2011~~our ~~and~~revenue ~~2010 comprised 36%~~ and ~~20%~~net ~~of all trade payables, respectively~~income.

~~Sales~~Quality ~~and Marketing~~Control

InWe ~~order~~implement toquality ~~promote~~management ~~the~~control on ~~sales~~our production line and ~~reputation~~producing ofquality ~~our~~products ~~“Chisen”~~through ~~brand~~advanced production technologies and testing methods, wewhich ~~launch~~has passed ~~specific~~the ~~publicity~~ISO9001 ~~campaigns~~Quality Management System Certification (which expired and ~~marketing~~is ~~based~~currently onin the ~~market~~process ~~needs.~~of ~~With~~becoming ~~reference~~renewed) ISO14001 toEnvironmental ~~the~~Management ~~conditions~~System ofCertification, ~~regional~~OHSAS ~~markets~~(GB/T28001:2001) “Occupational Health and ~~local~~Safety ~~wholesale~~Management System” ~~market~~certification, ~~for~~clean ~~electric~~production ~~bicycles,~~certification weand ~~promote~~CE ~~our~~certification. ~~band~~Our ~~through~~measurement ~~roadside~~of ~~billboard~~quality objectives and ~~launch~~processes ~~promotional~~were ~~dealer~~analyzed ~~sales~~through inplanning, ~~Anhui~~process, ~~Henan~~performance, ~~Hebei~~recognition, execution and ~~Jiangsu~~supervision, ~~Provinces~~ in ~~China~~order to produce products to meet requirements of customers and regulators.

~~With~~We ~~reference~~established toand ~~the~~implemented ~~need~~a ~~for~~supplier evaluation ~~increased sales in our secondary market~~system, ~~market-orientated~~which ~~regional~~improve ~~distributor meetings were convened in~~ the ~~Provinces~~quality of ~~Jiangsu,~~raw ~~Henan,~~material ~~Shanxi and Jiangxi~~supplies. We ~~showed~~strengthened ~~them~~the ~~our~~production ~~image~~process ~~and~~by ~~services,~~implementing the ~~thereby~~“3 ~~enhancing~~Ns” ~~the~~principle: ~~confidence~~(1) ~~towards~~No ~~our~~defective ~~distributors~~materials ~~and~~will ~~sales~~be ~~office. We~~accepted; ~~believe~~(2) ~~this~~No ~~will enhance~~defective ~~the~~products ~~Company’s~~will ~~visibility~~be produced and (3) ~~reputation~~No ofdefective ~~our~~ products, ~~whereby~~will ~~ultimately~~be ~~boost our sales~~distributed.

AResearch ~~small number of customers account for a very significant percentage of our revenue. Trade receivables related to the Company’s major customers for the years ended March 31, 2011~~ and 2010 comprised 78% and 80% of all trade receivables, respectively. The Company’s major customers for the fiscal years ended March 31, 2011 and 2010 accounted for the following percentages of total revenue and trade receivables:Development

11During the fiscal year ended March 31, 2012, we significantly increased our Company-sponsored research and development activities expenses to US$2,104,000 from US$1,065,000 for the fiscal year ended March 31, 2011 in order to further enhance the competitiveness of our products through the improvement of our production techniques and the release of new VRLA batteries products. The Company plans to spend approximately US$2,000,000 during fiscal year ending March 31, 2013 and approximately US$2,000,000 during fiscal year ending March 31, 2014 on Company-sponsored research and development activities.

	Sales						Trade Receivables
Major Customers	Fiscal year ended March 31, 2011			Fiscal year ended March 31, 2010			Fiscal year ended March 31, 2011		Fiscal year ended March 31, 2010
							$’000		$’000
COMPANY X		18.83	%		21.08	%	$	29,603	$	26,283
COMPANY Y		18.82	%		19.08	%	$	17,627	$	14,005
COMPANY Z		12.40	%		6.77	%	$	3,757	$	2,747

In order to further enhance the competitiveness of our products and fulfill the tightened environmental protection policy, we have expended resources on R&D and technology innovation. We are one of the pioneer companies in PRC to apply internal batteries formation technique in producing lead acid motive batteries. This technology significantly decreased the pollution during the production process. In addition, we have been able to decrease our cost of production as a result of our R&D efforts focused on improving our manufacturing technology. For example, we now use less lead in the production of our batteries while preserving the same efficiency of such batteries. We desire to increase our competitiveness through continued improvement of valve regulated lead-acid battery production techniques and the development and production of new-model power batteries, including, without limitation, the lithium-ion batteries.

~~The~~- ~~loss~~15 ~~of any of our major customers could have a material adverse effect upon our revenue and net income.~~-

~~Manufacturing~~On the development of new products lines, we have conducted research on ultra lead–acid motive batteries, wind and solar energy storage batteries, VRLA batteries applied for telecommunications and uninterruptible power supply (UPS) equipment, lithium-ion power batteries, lithium-ion ultra capacitors and anode material for lithium-ion batteries, which is a component of lithium-ion batteries.

As of March 31, 2011, we merged Plant A, CCEC’s first production facility, built in 2002, into Plant B, CCEC’s second facility which has been in operation since 2008. Plant B is one and a half times the size of Plant A and is located within 1.5 kilometers of Plant A. Plant B has the capacity to meet the additional production requirements resulting from the closing of Plant A and exceed any increase in market demand for CCEC’s products. We do not expect that CCEC’s production costs or capacity will change as a result of the merger of Plant A into Plant B.Backlog

InWe ~~the~~have ~~next~~historically ~~two~~shipped ~~years~~the wemajority of ~~intend~~our toproducts ~~construct~~within aone ~~third~~month ~~plant~~of inthe ~~Changxing~~time ~~County,~~that ~~Zhejiang~~the ~~Province~~order ~~(“Plant~~confirmation ~~C”),~~occurs. Due ~~which~~to ~~size~~the ~~will~~short-cycle benature ~~50%~~of ~~larger~~our ~~than~~business, we ~~the~~do ~~size~~not ofsustain ~~Plant~~significant Abacklogs and ~~located~~had ~~within~~no ~~three~~backlog ~~kilometers~~ of ~~Plant~~unfilled ~~A’s~~orders ~~current~~as ~~location. Plant~~of CMarch ~~will~~31, ~~develop~~2012 and ~~produce~~March ~~CCEC’s newest products~~31, ~~including, without limitation, lithium-ion batteries~~2011.

~~Furthermore,~~Warranties ~~on September 6, 2010, CEJC entered into a Project Investment Contract~~ and aReturn Supplemental Agreement to the Project Investment Contract with the Jiangsu Xuyi Economic Development Zone Administrative Committee, pursuant to which CEJC shall invest, in the aggregate, approximately RMB1,200,000,000 (approximately US$177,000,000) in three stages to build the Chisen Circular Economy Industry Park (“Plant D”) to manufacture VRLA batteries, as well as the Company’s newest product, lithium-ion batteries and related products, in the Jiangsu Xuyi Economic Development Zone. In the first stage CEJC shall invest approximately RMB422,000,000 (approximately US$62,000,000), including approximately RMB150,000,000 (approximately US$22,000,000) in fixed assets for the production of VRLA only. The Company does not plan to construct lithium-ion battery production facilities in Plant D until 18 months after the date that we commence production of the first stage. CEJC expects to complete all construction related to the first stage on or before December 31, 2011. We believe after the completion of the project our production capacity will be further increased.Policy

~~Quality~~We ~~Control~~provide 15 months of warranties and return policy for products. For any defective batteries sold and returned within the first 8 months of warranty period, the Company will exchange a new battery to the customers. For defective batteries sold and returned from 9 to 15 months of warranty period, the Company will replace a functional battery to the customers.

WeProduct ~~implement~~Liability ~~quality management control on our production line~~ and producing quality products through advanced production technologies and testing methods, which has passed the ISO9001 Quality Management System Certification (which expired and is currently in the process of becoming renewed) ISO14001 Environmental Management System Certification, OHSAS (GB/T28001:2001) “Occupational Health and Safety Management System” certification, clean production certification and CE certification. Our measurement of quality objectives and processes were analyzed through planning, process, performance, recognition, execution and supervision, in order to produce products to meet requirements of customers and regulators.Insurance

We ~~established~~do ~~and~~not ~~implemented~~have aany ~~supplier~~product ~~evaluation~~liability ~~system~~insurance. Because of the nature of our products, ~~which~~we ~~improve~~may ~~the~~be ~~quality~~subject to product liability claims resulting from personal injuries and become involved in lawsuits that incidental to our business. As of ~~raw~~today, ~~material~~we ~~supplies~~have not yet been involved in any products liability litigation. WeProduct ~~strengthened~~liability ~~the~~insurance ~~production~~is ~~process~~expensive, byrestrictive ~~implementing~~and ~~the~~difficult “3to ~~Ns”~~purchase. Accordingly, ~~principle:~~there ~~(1)~~is no Noassurance ~~defective~~that ~~materials~~we will behave ~~accepted;~~sufficient ~~(2)~~capital Noto ~~defective~~pay ~~products~~for ~~will~~any besuccessful ~~produced~~product ~~and~~liability ~~(3)~~claims Nothat ~~defective~~made ~~products~~against ~~will~~us bein ~~distributed~~the future. Such claims could have a material adverse effect on our financial condition and results of operations.

~~Research and Development~~Competition

~~During~~The ~~the~~lead-acid ~~fiscal~~motive ~~year~~battery ~~ended~~has ~~March~~a ~~31,~~dominant position ~~2011~~in China, we ~~significantly~~in ~~increased~~which ~~our~~95% ~~company-sponsored~~of ~~research~~electric ~~and~~bicycles ~~development~~in ~~activities~~China ~~expenses~~are topowered ~~US$1,065,000~~by ~~from~~lead-acid ~~US$244,000~~motive ~~for~~battery. ~~the~~The ~~fiscal~~core ~~year~~product ~~ended~~competitor in ~~March~~the ~~31,~~market ~~2010 in~~is ~~order~~the tolithium-ion ~~further~~battery. ~~enhance~~The ~~the~~major ~~competitiveness~~manufacturers of ~~our~~the ~~products~~lithium-ion ~~through~~motive ~~the~~battery ~~improvement~~in ofthe ~~our~~market ~~production~~are ~~techniques~~BYD ~~and~~Company Limited ~~the~~(1211.HK). ~~release~~As ofcompared ~~new~~to ~~VRLA~~lead-acid motive batteries, ~~products. The~~the ~~Company~~lithium-ion ~~plans~~battery tohas ~~spend~~advantages ~~approximately~~in ~~US$1~~terms of useful life,~~500~~ environmental friendliness,~~000~~ ~~during~~more ~~fiscal~~compact ~~year~~size ~~ending~~and ~~March~~lighter 31weight. However, ~~2012~~lead-acid ~~and~~motive ~~approximately US$2,000,000~~battery ~~during~~still ~~fiscal~~has ~~year~~the ~~ending~~advantage ~~March~~of greater ~~31,~~stability ~~2013~~in onterms ~~company-sponsored~~of ~~research~~performance and ~~development~~reliability, ~~activities~~safety and lower price.

In order to further enhance the competitiveness of our products, we have expended resources on R&D and technology innovation. We have been able to decrease our cost of production as a result of our R&D efforts focused on improving our manufacturing technology. For example, we now use less lead in the production of our batteries while preserving the same efficiency of such batteries. We desire to increase our competitiveness through continued improvement of valve regulated lead-~~acid~~ ~~battery~~16 ~~production techniques and the development and production of new~~-~~model power batteries, including, without limitation, the lithium-ion batteries.~~

12Our chief competitors that produce lead-acid motive batteries in China are Tianneng Power International Ltd. (Tianneng) and Zhejiang Chaowei Power Co., Ltd. (Chaowei). These companies were the first companies to enter the battery industry in China. For example, Chaowei and Tianneng are the leading companies in terms of production and sales volume. Chaowei has a lot of after-sales service stores and takes an advantage in the secondary market by its continued business expansion. Tiannneng and Chaowei’s capital stock are both listed on The Hong Kong Stock Exchange.

OnIn order to maintain our competitive position, the ~~development~~Company intends to (1) increase the scale of ~~new~~production ~~products~~through ~~lines,~~expansion weof ~~have~~production ~~conducted~~capacity; ~~research~~(2) onexpand ~~ultra~~the ~~lead–acid~~distribution networks ~~motive~~in ~~batteries,~~the ~~wind~~end ~~and~~user ~~solar~~customer ~~energy~~market; ~~storage~~(3) ~~batteries,~~invest ~~VRLA~~more ~~batteries~~resources in ~~applied~~the ~~for~~research ~~telecommunications~~and development of new products and ~~uninterruptible~~new ~~power~~manufacturing ~~supply~~technology in order to diversify our product range; (~~UPS~~4) decrease ~~equipment,~~the ~~lithium-ion~~cost ~~power~~of ~~batteries,~~production ~~lithium-ion~~and ~~ultra~~improve ~~capacitors~~quality ~~and~~control; ~~anode~~(5) ~~material~~maintain ~~for~~adequate ~~lithium-ion~~human ~~batteries~~resources, ~~which~~production isresources, aas ~~component~~well as the financing resources to support the growth of ~~lithium-ion~~the ~~batteries~~Company; and (6) implant effective and efficient risk management.

~~With~~Intellectual the release of the plan for the revitalization of China’s new energy and the vigorous promotion of the Chinese government to new energy motors, we believe such products will occupy a significant market share. Lithium-ion ultra capacitors and anode material for lithium-ion batteries have passed the trial production phase and both are deemed to be state-of-the-art techniques. The products have entered into the beta test phase.Property

~~Backlog~~We rely on trademark and patent rights to protect our intellectual property rights and to maintain and enhance our competitiveness in the battery industry. We intend to make strategic investments in intellectual property through self-development and acquisition. These initiatives are designed to enhance our technology, improve existing products, rapidly introduce new products to fill identified needs, and address new applications and markets. We believe our ability to successfully develop and produce new products will allow us to open market opportunities and enhance our market position.

WeOur ~~have~~success ~~historically~~will ~~shipped~~depend in part on our ability to obtain patents and preserve other intellectual property rights covering the ~~majority~~design and operation of our products. ~~within~~We ~~one~~intend to ~~month~~continue to seek patents on our inventions when we deem it commercially appropriate. The process of ~~the~~seeking ~~time~~patent protection can be lengthy and expensive, and there can be no assurance that ~~the~~patents ~~order~~will ~~confirmation~~be ~~occurs. Due~~issued tofor ~~the~~currently ~~short-cycle~~pending ~~nature~~or offuture applications or that our ~~business~~existing patents or any new patents issued will be of sufficient scope or strength or provide meaningful protection or any commercial advantage to us. We may be subject to, weor domay ~~not~~initiate, ~~sustain~~litigation or patent office interference proceedings, which may require significant ~~backlogs~~financial and ~~had~~management noresources. ~~backlog~~The failure to obtain necessary licenses or other rights or the advent of ~~unfilled~~litigation ~~orders~~arising asout of ~~March~~any ~~31,~~such ~~2011~~intellectual ~~and~~property ~~March~~claims ~~31,~~could ~~2010~~have a material adverse effect on our operations.

~~Warranties~~The Company currently holds 32 patents in total, of which 17 expire in 2016, 1 expires in 2017, 4 expire in 2018, 3 expire in 2019, 4 expire in 2020, 2 expire in 2021 and 1 ~~Return~~expire ~~Policy~~in 2029.

WeThe ~~provide~~Company 15currently ~~months~~has oftwo ~~warranties~~domain ~~and return policy for products~~names, http://www.chisenelectric.com ~~For any defective batteries sold~~ and ~~returned within the first 8 months of warranty period, the Company will exchange a new battery to the customers~~http://www. ~~For~~chisenpower.com. ~~defective~~These ~~batteries~~domain ~~sold~~names ~~and~~are ~~returned~~in ~~from~~good ~~9 to 15 months of warranty period, the Company will replace a functional battery to the customers~~standing.

~~Product Liability and Insurance~~Employees

WeAs doof ~~not~~March ~~have~~31, ~~any~~2012, ~~product~~the ~~liability~~Company ~~insurance. Because~~had ofapproximately 2,430 ~~the~~full-time ~~nature~~employees, ofincluding ~~our~~approximately ~~products~~1,837 weemployees ~~may~~in beproduction, ~~subject~~approximately 100 toemployees ~~product~~in ~~liability~~research ~~claims~~and ~~resulting~~development, ~~from~~approximately ~~personal~~115 ~~injuries~~employees ~~and~~in ~~become~~sales ~~involved~~and inmarketing ~~lawsuits~~and ~~that~~approximately ~~incidental~~221 toemployees in ~~our business~~administration. As All of ~~today,~~our weemployees ~~have~~are ~~not~~based ~~yet~~inside ~~been~~China. ~~involved~~Our inemployees ~~any~~are ~~products~~members ~~liability~~of ~~litigation. Product~~our ~~liability~~Company’s ~~insurance~~labor union ~~is expensive, restrictive~~ and ~~difficult~~are toorganized ~~purchase. Accordingly,~~under ~~there~~a iscollective nobargaining ~~assurance~~agreement, ~~that~~but we ~~will~~ have ~~sufficient~~never ~~capital~~experienced ~~to pay for~~ any ~~successful~~work ~~product~~stoppage. ~~liability~~We ~~claims~~believe that our ~~made~~relationships ~~against~~with ~~us in the future. Such claims could have a material adverse effect on~~ our ~~financial~~employees ~~condition~~are ~~and~~generally ~~results of operations~~good.

~~Competition~~- 17 -

~~The~~PRC ~~Lead-acid~~Government motive battery has a dominant position in China, in which 95% of electric bicycles in China are powered by lead-acid motive battery. The core product competitor in the market is the lithium-ion battery. The major manufacturers of the lithium-ion motive battery in the market are BYD Company Limited (1211.HK) and China BAK Battery, Inc. (Nasdaq: CBAK). As compared to lead-acid motive batteries, the lithium-ion battery has advantages in terms of useful life, environmental friendliness, more compact size and lighter weight. However, lead-acid motive battery still has the advantage of greater stability in terms of performance and reliability, safety and lower price.Regulations

~~Our~~Compliance ~~chief~~with ~~competitors~~Environmental ~~that produce lead-acid motive batteries in China are Tianneng Power International Ltd. (Tianneng)~~ Regulations and ~~Zhejiang~~Other Chaowei Power Co., Ltd. (Chaowei). These companies were the first companies to enter the battery industry in China. For example, Chaowei and Tianneng are the leading companies in terms of production and sales volume. Chaowei has a lot of after-sales service stores and takes an advantage in the secondary market by its continued business expansion. Tiannneng and Chaowei’s capital stock are both listed on The Hong Kong Stock Exchange.Laws

~~Although~~We ~~the~~are ~~Company~~subject ~~entered~~to ~~into~~various ~~its~~national ~~battery~~and ~~industry~~local environmental ~~later~~laws ~~than~~and ~~some~~regulations ofin ~~its~~China, ~~competitors~~including those governing the use, discharge and disposal of hazardous substances and the ~~Company’s~~discharge ~~products~~of ~~have~~waste ~~been~~water, ~~certified~~exhaust asfumes and solid waste in the ~~preferred~~ordinary ~~brand~~course of ~~top~~our ~~electric~~manufacturing ~~bicycle~~process. ~~manufacturers~~The inmain ~~China~~pollutants generated by us are lead dust or particles and waste water which contain lead and sulfuric acid. During the operation of our production, we ~~including~~do ~~Xinri~~not release any toxic element other than those that are permitted under the relevant laws and ~~Aima~~regulations.

InLead ~~order~~is tothe ~~maintain~~key ~~our~~raw ~~competitive~~material ~~position,~~used ~~the~~in ~~Company~~our production ~~intends~~of tolead-acid ~~(1)~~motive ~~increase~~battery ~~scale~~products. ofAn ~~production~~excessive ~~through~~intake ~~expansion~~ of ~~production~~lead ~~capacity;~~dust ~~(2)~~or ~~expand~~particles, ~~the~~whether ~~distribution~~through ~~networks~~inhalation inor ~~the~~skin contact, ~~end~~could ~~user~~have ~~customer~~harmful ~~market~~effect ~~and~~on ~~enhancing~~health. ~~the~~Lead ~~business~~poisoning ~~relationship~~may ~~with~~also ~~our~~result ~~factory~~from ~~customers;~~occupations ~~(3)~~that ~~invest~~involve ~~more~~close ~~resources~~and infrequent ~~the~~contact with ~~research~~or ~~and~~exposure ~~development~~to oflead ~~new~~dust ~~products~~or ~~and~~particles. ~~new~~Lead ~~manufacturing~~dust ~~technology~~and inparticles ~~order~~are togenerated ~~diversify~~during our ~~product~~production ~~range;~~process. ~~(4)~~Our ~~decrease~~workers ~~the~~are exposed ~~cost~~to electrode plates during different stages of our production ~~and~~process. ~~improve~~Pursuant ~~quality~~to ~~control;~~the ~~(5)~~applicable ~~maintain~~environmental ~~adequate~~laws ~~human~~and regulations ~~resources~~in China, ~~production~~we ~~resources,~~are asobliged ~~well~~to asinstall ~~the~~environmental ~~financing~~protection ~~resources~~equipment to ~~support~~ensure ~~the~~effective ~~growth~~removal of ~~the~~lead ~~Company;~~dust and particles ~~(6)~~generated ~~implant~~during ~~effective~~our ~~and~~production ~~efficient~~process. ~~risk~~We ~~management~~have installed such equipment at each of our production plants.

13Our production process generates waste water containing lead and sulfuric acid. Such waste water will be neutralized and treated to remove lead contents in accordance with the applicable environmental standards in China. We have installed such waste water treatment facilities at all our production plants. Waste water generated at our production process, after the required treatment, will either be collected and reused for our production requirements or discharged to the municipal waste water collection systems for further treatment and discharge to the environment.

~~Intellectual~~We ~~Property~~are also required by the laws and regulations governing health and safety at work in China to provide our employees exposed to lead dust or particles with protective clothing and accessories, such as gloves, goggles and masks. We also arrange all our employees engaging in the lead-related production process to receive medical checks at least once a year. The medical checks include measurement of blood lead level.

We ~~rely~~believe onthat ~~trademark and patent rights to protect~~ our ~~intellectual~~current ~~property~~manufacturing operations ~~rights~~comply ~~and to maintain and enhance our competitiveness~~ in ~~the~~all ~~battery~~material ~~industry.~~respects Wewith ~~intend~~applicable toenvironmental ~~make~~laws ~~strategic investments in intellectual property through self-development~~ and ~~acquisition~~regulations. ~~These~~Although ~~initiatives~~we ~~are~~believe ~~designed~~that ~~to enhance~~ our ~~technology,~~current manufacturing ~~improve~~operations ~~existing~~comply ~~products,~~in ~~rapidly~~all ~~introduce~~material ~~new~~respects ~~products~~with toapplicable ~~fill~~environmental ~~identified~~laws ~~needs,~~ and ~~address~~regulations, ~~new~~it ~~applications~~is ~~and~~possible ~~markets.~~that future Weenvironmental ~~believe~~legislation ~~our~~may ~~ability~~be toenacted ~~successfully~~or ~~develop~~current ~~and~~environmental ~~produce~~legislation ~~new~~may ~~products~~be ~~will~~interpreted ~~allow us~~ to ~~open~~create ~~market~~environmental liability ~~opportunities~~with ~~and~~respect ~~enhance~~to our ~~market~~other ~~position~~facilities, operations, or products.

~~Our~~- ~~success~~18 will depend in part on our ability to obtain patents and preserve other intellectual property rights covering the design and operation of our products. We intend to continue to seek patents on our inventions when we deem it commercially appropriate. The process of seeking patent protection can be lengthy and expensive, and there can be no assurance that patents will be issued for currently pending or future applications or that our existing patents or any new patents issued will be of sufficient scope or strength or provide meaningful protection or any commercial advantage to us. We may be subject to, or may initiate, litigation or patent office interference proceedings, which may require significant financial and management resources. The failure to obtain necessary licenses or other rights or the advent of litigation arising out of any such intellectual property claims could have a material adverse effect on our operations.-

The ~~Company~~manufacturing ~~currently~~facilities ~~holds~~in 28which ~~patents~~we operate inare ~~total,~~subject to the PRC’s environmental laws and requirements. Our landlord that leases the factory to us is required to and has obtained a Pollution Discharge Certificate issued by the Environment Protection Bureau of ~~which~~Changxing 17County ~~expire~~and inis ~~2016,~~responsible for 1the ~~expires~~disposal of the waste in ~~2017~~accordance with applicable environmental regulations. If our landlord fails to comply with the provisions of the permit and environmental laws, 4our ~~expire~~landlord incould ~~2018~~be subject to sanctions by regulators, 3including ~~expire~~the insuspension or ~~2019~~termination ~~and~~of 3its ~~expire~~Certificate, which would result in ~~2020.~~the ~~Others~~suspension ~~are~~or ~~still~~termination ~~pending~~of our manufacturing operations.

~~The~~Business ~~Company~~Qualification ~~currently has two domain names, http://www.chisenelectric.com~~ and ~~http://www.chisenpower.com. These domain names are in good standing.~~Licenses

~~Relocation~~According to certain corporate laws of the PRC, in order to be a lawfully established company in China, the relevant corporate registration authority shall issue a business license, the date of which shall be the date of the establishment of the company. The company business license shall state the name, domicile, registered capital, actually paid capital, business scope and ~~Expansion~~the name of ~~New~~the ~~Production~~legal ~~Facilities~~representative of such company. If any of the items as stated in the business license is changed, the company shall modify the company’s registration, and the company registration authority shall issue a new business license.

~~On August 20, 2010,~~ CCEC ~~entered~~obtained ~~into~~its abusiness ~~Compensation~~license ~~Agreement~~on ~~of Corporate Relocation Acquisition (the “Relocation Agreement”) with the Administrative Committee of Changxing Economic Development Zone~~February 25, ~~Zhejiang (the “Committee”). Pursuant to the Relocation Agreement~~2002, ~~CCEC~~which ~~agreed~~such tolicense ~~transfer~~was toissued ~~the~~by ~~Committee~~ the ~~land-use~~Huzhou ~~rights~~Administration ~~to, and structures on, the property previously used by CCEC~~ for ~~its~~Industry ~~office~~ and ~~manufacturing~~Commerce. ~~facilities,~~According ~~and agreed~~ to ~~relocate~~ the ~~office~~Industrial ~~and~~Product Production ~~manufacturing~~License ~~facilities~~Control toRegulation ~~a new location. The Committee requested the relocation pursuant to a general policy~~ of the ~~Government of Changxing County to relocate “secondary industries” from urban areas to countryside. All manufacturing entities~~PRC, ~~including~~enterprises ~~our~~which ~~Company,~~manufacture ~~have~~valve ~~been~~regulated ~~classified~~lead-acid tobatteries beare ~~a “secondary industry” by the National Bureau of Statistics of PRC. Pursuant~~ permitted to ~~the~~engage ~~“Withdraw from Secondary Industry and Progressing to Tertiary Industry” policy of Changxing County, all entities that are classified as participants~~ in ~~“secondary~~said ~~industries”~~production ~~shall~~if ~~be relocated from~~ the ~~Westside~~company ofobtains ~~Jing’er~~a ~~Road~~production ~~to the Eastside of Jing’er Road~~license. The Government of Changxing’s policy is to negotiate with each entity with respect to the specific terms of relocation, including, without limitation, relevant compensation to be paid after assessment.

~~Pursuant~~On toJanuary an13, ~~assessment~~2005, the Administration of Quality ~~the~~Supervision, ~~property~~Inspection and ~~the~~Quarantine ~~compensation~~ of the ~~losses~~PRC ~~stated~~issued asa ~~follows,~~Production ~~the~~License ~~Committee agreed~~ to ~~pay to~~ CCEC ~~RMB117,202,100~~ (~~approximately US$17,265,000) in total for~~ the ~~relocation.~~license Innumber ~~addition~~XK06-044-00223) which toexpired ~~the~~on ~~compensation~~January ~~for the property~~12, ~~this~~2010. ~~amount~~On ~~also~~August ~~includes compensation for the value of losses associated with removing CCEC’s equipment at RMB6~~17,~~939,900~~ ~~(US$1~~2007,~~022,000)~~ ~~and~~due ~~the value of losses~~ to ~~CCEC with respect to~~ the ~~suspension~~Company ofadding ~~its~~a ~~operations~~new ~~for~~product ~~two months at RMB11~~line,~~748,000~~ ~~(approximately~~an ~~US$1,731,000).~~updated ~~CCEC~~Production ~~agreed~~License with tothe ~~vacate~~same ~~the~~license ~~site~~number ~~within~~was ~~one~~reissued ~~year~~to ofCCEC, ~~the~~which ~~signing~~expired ofon ~~the~~January ~~Relocation~~12, ~~Agreement~~2010. ~~The~~On ~~RMB117~~February 10,~~202,100~~ ~~(approximately US$17~~2010,~~265,000)~~ ~~will~~a beproduction ~~paid~~license was onissued ~~the following schedule: five percent~~ (5%XK06-006-00627) ofwhich ~~such~~shall ~~amount~~expire toon beFebruary ~~paid~~9, ~~within~~2015. ~~one~~On ~~month~~November ~~after the execution of the Relocation Agreement~~29, ~~twenty percent (20%) to be paid within one month of CCEC delivering appropriate land-use rights certificates and proof of cancellation of encumbrances~~2010, ~~twenty-five~~due ~~percent (25%)~~ to ~~be paid after~~ the ~~commencement~~Company ofadding ~~the~~a ~~removal~~new ofproduct line, ~~CCEC’s~~an ~~operations~~updated ~~from~~Production ~~the~~License ~~site,~~with ~~and~~ the ~~remaining~~same ~~fifty~~license ~~percent~~number (~~50%~~XK06-006-00627) was reissued to beCCEC ~~paid~~which ~~upon~~shall ~~completion~~expire ofon ~~the~~February 9, ~~relocation~~2015.

OnEnvironmental ~~August 20~~Reports, ~~2010, CCEC~~ Certifications and the Committee entered into an investment agreement (the “Investment Agreement”) whereby CCEC agreed to commence the relocation of its manufacturing facilities pursuant to the Relocation Agreement with the administrative and policy support of the Committee. According to the urban planning policies of Changxing County, the Changxing County Land and Resources Bureau pre-identifies, at its discretion, the parcel of land to be reclaimed as well as the affected parties specific to the land reclamation. The specific parties which are affected by such land reclamation are then invited to participate in the “Land Tender, Auction and Listing” activities. The compensation of relocation is determined by the result of the assessment made by the government based on the results provided by a professional valuation firm. The county indentifies the locations to which businesses are to be relocated by following the urban planning policies of Changxing County. CCEC agreed to participate in “Land Tender, Auction and Listing” activities organized by the Changxing County Land and Resources Bureau with respect to a pre-identified parcel of land to which CCEC agreed to relocate its business.Licenses

14According to certain environmental laws and regulations in China, the Department of Environmental Protection Administration under the State Council shall, in accordance with the national standards for environment quality and China’s economic and technological conditions, establish the national standards for the discharge of pollutants. The People’s Governments of Provinces, Autonomous Regions and Municipalities directly under the Central Government may establish their local standards for the discharge of pollutants for items not specified in the national standards. With regard to items already specified in the national standards, they may set local standards, which are more stringent than the national standards, and report the local ones to the Department of Environmental Protection Administration under the State Council for the record. Units that discharge pollutants in areas where the local standards for the discharge of pollutants have been established shall observe such local standards.

~~The delivery of the land~~-~~use~~ ~~rights~~19 to CCEC will be deemed as a public transfer and CCEC agreed to pay the land transfer amount, contract tax and other related fees at market price. The Committee agreed to provide for and maintain public works (sewage, electricity, roads) with respect to the property. CCEC will be subject to certain prepayment fees as set forth in the Investment Agreement, which if not paid, will allow the Committee to terminate the Investment Agreement and receive penalty payments in the amount of 0.3% per day. Pursuant to the terms of the Investment Agreement, the construction project must be completed within two years from the date of execution of the Investment Agreement and the project shall be put into production in 2012. Following execution of the Investment Agreement, also on August 20, 2010, CCEC and the Committee entered into a supplemental agreement to the Investment Agreement whereby the Committee agreed to compensate CCEC when CCEC’s conditions of payment and tax scale under the Investment Agreement are satisfied.-

On ~~September~~October 69, 2010, ~~CEJC~~the ~~entered~~China ~~into~~Quality aMark Certification ~~Project~~Group ~~Investment Contract~~ and aIQNet ~~Supplemental~~Association ~~Agreement to~~ (the ~~Project~~International ~~Investment~~Certification ~~Contract~~Network) ~~with~~jointly ~~the~~issued ~~Jiangsu Xuyi Economic Development Zone Administrative Committee. Pursuant to~~ the ~~agreement,~~ISO9001 ~~CEJC~~Certificate ~~shall invest, in the aggregate, approximately RMB1,200,000,000 (approximately US$177,000,000) in three stages~~ to ~~build~~ the Company ~~Chisen Circular Economy Industry Park~~ (~~“Plant~~number D”00210Q15168R0M) toagreeing ~~manufacture~~that ~~valve regulated lead-acid and lithium-ion batteries and other related products in~~ the ~~Jiangsu~~quality ~~Xuyi~~management ~~Economic~~system ~~Development~~applied ~~Zone. In the first stage CEJC shall invest approximately RMB422,000,000 (approximately US$62,000,000), including approximately RMB150,000,000 (approximately US$22,000,000)~~ in ~~fixed assets for~~ the ~~production of VRLA batteries only. The~~ Company’s ~~does not plan to construct lithium-ion battery~~ production ~~facilities~~and ~~in Plant D until 18 months after the date that we commence production of the first stage~~management activities. ~~CEJC~~The ~~expects~~certificate toshall ~~complete~~expire ~~all construction~~ on orOctober ~~before December 31~~8, ~~2011~~2013.

~~The~~On ~~Committee~~October ~~agreed~~9, to2010, ~~grant~~the ~~preferential~~China ~~tax~~Quality ~~policies~~Mark Certification onGroup ~~Value Add Tax~~ and ~~Enterprise~~IQNet ~~Income~~Association ~~Tax~~(the toInternational ~~CEJC~~Certification inNetwork) ~~accordance~~jointly ~~with policies as~~ issued by the ~~local~~ISO14001 ~~government.~~Certificate ~~However these policies will be forfeited if taxes levied from the project are less than RMB30,000~~ (~~approximately US$4,400~~number 00210E21312R0M) ~~per~~to ~~hectare on average (~~the Company ~~will initially acquire a total area equal to 277.48 hectares in the first stage~~ and ansigned-off ~~aggregate of 1,000 hectares for all three stages). The preferred policies include, but are not limited to, a 50% refund~~ on the ~~portion~~environmental ofmanagement ~~value-added~~system ~~taxes~~applied ~~which is legally retained by the local government for the first 5 years followed by a 25% refund~~ in the ~~following~~Company’s ~~5 years,~~ production and anmanagement ~~exemption of the local portion of enterprise income tax which is legally retained by the local government for the first 6 years followed by a 50% reduction in the following 4 years~~activities. The ~~policies~~certificate shall ~~commence~~expire ~~upon~~on ~~the~~October ~~completion~~8, ~~of the construction and the commencement of production~~2013.

InOn ~~exchange~~September ~~for CEJC’s investment~~5, ~~CEJC shall enjoy the lowest control standard for the price of land in Jiangsu Province (RMB19~~2008,~~000~~ ~~(approximately US$2,200) per hectare), and~~ the ~~Committee~~Changxing ~~shall~~Environmental Protection ~~assist~~Bureau ~~CEJC~~issued ~~in implementing~~ the ~~project,~~Notice ~~including but not limited to, the acquisition~~ of ~~land~~Examination ~~use~~Opinion ~~rights,~~approving the ~~obtainment~~Company’s ofEnvironment ~~certificates~~Effect ~~for~~Report ~~production~~on ~~plants~~its Relocation and ~~buildings,~~Extension ~~and the provision~~ of ~~infrastructure in~~ the ~~transferred~~Company’s ~~land~~1500 ~~such~~unit-per-year asLead-Acid ~~water~~Battery ~~supply,~~Production ~~drainage, gas, electricity, cable TV, roads and telecommunications~~Project.

InOn ~~the~~September ~~event that CEJC fails to commence construction and is delayed more than 7 days~~20, ~~the Committee has the right to terminate the Agreement and reclaim the land. In the event that CEJC fails to follow the construction schedule~~2008, the ~~Committee~~Changxing ~~has~~Environmental Protection ~~the~~Bureau ~~right~~issued ~~to reclaim~~ the ~~land.~~Pollutant IfDischarge ~~the~~License ~~land remains unused for more than one year, the Committee has the right~~ to ~~levy a penalty equal to 20% of~~ the ~~land~~Company transfer amount per hectare. If the land remains unused for more than two years, in addition to collection of the aforementioned penalty, then the Committee has right to terminate the Agreement and reclaim the land. In the event that circumstances beyond our control cause us not to perform (~~i.e.,~~license ~~force~~number ~~majeure~~HuChang080042),. ~~the~~The ~~Committee~~License shall ~~not~~expire on ~~have~~September ~~the~~19, ~~right to bring an action against us for breach of contract~~2012.

~~Employees~~On June 22, 2010, the China Quality Mark Certification Group and IQNet Association (the International Certification Network) jointly issued OHSAS18001 Certificate (# 00210S10501R0M) to the Company after the Company passed its evaluation on Occupational Health and Safety Assessment Series. The Certificate shall expire on June 21, 2013.

AsEmployment of March 31, 2011, the Company had approximately 2,539 full-time employees, including approximately 2,146 employees in production, approximately 80 employees in research and development, approximately 230 employees in sales and marketing and approximately 83 employees in administration. All of our employees are based inside China. Our employees are members of our company’s labor union and are organized under a collective bargaining agreement, but we have never experienced any work stoppage. We believe that our relationships with our employees are generally good.laws

~~PRC~~We ~~Government~~are ~~Regulations~~subject to laws and regulations governing our relationship with our employees, including: wage and hour requirements, working and safety conditions, citizenship requirements, work permits and travel restrictions. These include local labor laws and regulations, which may require substantial resources for compliance. China’s National Labor Law, which became effective on January 1, 1995, and China’s National Labor Contract Law, which became effective on January 1, 2008, permit workers in both state and private enterprises in China to bargain collectively. The National Labor Law and the National Labor Contract Law provide for collective contracts to be developed through collaboration between the labor union (or worker representatives in the absence of a union) and management that specify such matters as working conditions, wage scales, and hours of work. The laws also permit workers and employers in all types of enterprises to sign individual contracts, which are to be drawn up in accordance with the collective contract.

~~Compliance~~Patent ~~with~~Protection ~~Environmental~~in ~~Regulations and Other Laws~~China

WeThe ~~are~~PRC’s ~~subject~~intellectual toproperty ~~various~~protection regime ~~national~~is ~~and~~consistent ~~local~~with ~~environmental laws and regulations in China, including~~ those ~~governing the use, discharge and disposal~~ of ~~hazardous~~other ~~substances~~modern ~~and~~industrialized ~~the discharge of waste water, exhaust fumes and solid waste in the ordinary course of our manufacturing process~~countries. The ~~main~~PRC ~~pollutants~~has ~~generated~~domestic bylaws usfor ~~are lead dust or particles and waste water which contain lead and sulfuric acid. During~~ the ~~operation~~protection of ~~our~~rights in ~~production~~copyrights, wepatents, dotrademarks ~~not release any toxic element other than those that are permitted under the relevant laws~~ and ~~regulations~~trade secrets.

15The PRC is also signatory to most of the world’s major intellectual property conventions, including:

~~Lead~~¨ isConvention establishing the ~~key~~World ~~raw~~Intellectual ~~material~~Property ~~used~~Organization in(WIPO ~~our~~Convention) ~~production~~(June ~~of lead-acid motive battery products. An excessive intake of lead dust or particles~~4, whether through inhalation or skin contact, could have harmful effect on health. Lead poisoning may also result from occupations that involve close and frequent contact with or exposure to lead dust or particles. Lead dust and particles are generated during our production process. Our workers are exposed to electrode plates during different stages of our production process. Pursuant to the applicable environmental laws and regulations in China, we are obliged to install environmental protection equipment to ensure effective removal of lead dust and particles generated during our production process. We have installed such equipment at each of our production plants.1980);

~~Our~~- ~~production~~20 process generates waste water containing lead and sulfuric acid. Such waste water will be neutralized and treated to remove lead contents in accordance with the applicable environmental standards in China. We have installed such waste water treatment facilities at all our production plants. Waste water generated at our production process, after the required treatment, will either be collected and reused for our production requirements or discharged to the municipal waste water collection systems for further treatment and discharge to the environment.-

We¨ ~~are~~Paris ~~also~~Convention ~~required~~for by the ~~laws~~Protection ~~and~~of ~~regulations~~Industrial ~~governing~~Property ~~health~~(March ~~and safety at work in China to provide our employees exposed to lead dust or particles with protective clothing and accessories~~19, such as gloves, goggles and masks. We also arrange all our employees engaging in the lead-related production process to receive medical checks at least once a year. The medical checks include measurement of blood lead level.1985);

We¨ ~~believe~~Patent ~~that~~Cooperation ~~our~~Treaty ~~current~~(January manufacturing operations comply in all material respects with applicable environmental laws and regulations. Although we believe that our current manufacturing operations comply in all material respects with applicable environmental laws and regulations1, it1994); is possible that future environmental legislation may be enacted or current environmental legislation may be interpreted to create environmental liability with respect to our other facilities, operations, or products.and

¨ The ~~manufacturing~~Agreement ~~facilities~~on inTrade-Related ~~which~~Aspects we operate are subject to the PRC’s environmental laws and requirements. Our landlord that leases the factory to us is required to and has obtained a Pollution Discharge Certificate issued by the Environment Protection Bureau of ~~Changxing~~Intellectual ~~County~~Property ~~and~~Rights is(TRIPs) ~~responsible~~(November ~~for the disposal of the waste in accordance with applicable environmental regulations. If our landlord fails to comply with the provisions of the permit and environmental laws~~11, our landlord could be subject to sanctions by regulators, including the suspension or termination of its Certificate, which would result in the suspension or termination of our manufacturing operations2001).

~~Business~~Patents ~~Qualification~~in the PRC are governed by the China Patent Law and ~~Licenses~~its Implementing Regulations, each of which went into effect in 1985. Amended versions of the China Patent Law and its Implementing Regulations came into effect in 2009 and 2010, respectively.

~~According~~The ~~to certain corporate laws of the~~ PRC, inis ~~order~~signatory to bethe aParis ~~lawfully~~Convention for ~~established company in China,~~ the ~~relevant~~Protection ~~corporate~~of ~~registration~~Industrial ~~authority shall issue a business license~~Property, ~~the~~in ~~date~~accordance ofwith which ~~shall~~any beperson ~~the~~who ~~date~~has ofduly ~~the~~filed ~~establishment~~an ofapplication ~~the~~for ~~company.~~a ~~The~~patent ~~company~~in one ~~business~~signatory ~~license~~country shall ~~state the name~~enjoy, ~~domicile,~~for ~~registered~~the ~~capital,~~purposes ~~actually~~of ~~paid~~filing ~~capital,~~in ~~business scope and~~ the ~~name~~other ofcountries, ~~the~~a ~~legal~~right ~~representative~~ of ~~such~~priority ~~company.~~during ~~If any of~~ the ~~items~~period ~~as stated~~ fixed in the ~~business~~convention ~~license~~(12 ismonths ~~changed,~~for ~~the~~inventions ~~company~~and ~~shall~~utility ~~modify the company’s registration~~models, and ~~the~~6 ~~company~~months ~~registration~~for ~~authority~~industrial ~~shall issue a new business license~~designs).

~~CCEC~~The ~~obtained~~Patent ~~its~~Law ~~business~~covers ~~license~~three onkinds ~~February~~of ~~25,~~patents—patents for ~~2002~~inventions, ~~which~~utility ~~such~~models ~~license~~and ~~was~~designs. ~~issued~~The byChinese patent system adopts the ~~Huzhou~~principle ~~Administration~~of first to file; therefore, where more than one person files a patent application for ~~Industry~~the ~~and~~same ~~Commerce.~~invention, ~~According~~a patent can only be granted to the ~~Industrial~~person ~~Product~~who ~~Production~~first ~~License~~filed ~~Control~~the application. ~~Regulation~~Consistent ofwith international practice, the PRC only allows the patenting of inventions or utility models that possess the characteristics of novelty, ~~enterprises~~inventiveness ~~which~~and ~~manufacture~~practical ~~valve~~applicability. ~~regulated~~For ~~lead-acid~~a ~~batteries~~design ~~are~~to ~~permitted~~be patentable, it cannot be identical with or similar to ~~engage~~any design which, before the date of filing, has been publicly disclosed in ~~said~~publications ~~production~~in ifthe country or abroad or has been publicly used in the ~~company~~country, ~~obtains~~and ashould ~~production~~not ~~license~~be in conflict with any prior right of another.

OnPRC ~~January~~law ~~13,~~provides ~~2005,~~that ~~the~~anyone ~~Administration~~wishing ofto ~~Quality~~exploit the ~~Supervision,~~patent ~~Inspection and Quarantine~~ of ~~the~~another ~~PRC~~must ~~issued~~conclude a ~~Production~~written ~~License~~licensing tocontract ~~CCEC~~with (the ~~license~~patent ~~number~~holder ~~XK06-044-00223)~~and ~~which~~pay ~~expired~~the onpatent ~~January~~holder ~~12,~~a ~~2010~~fee. OnOne ~~August~~broad exception 17to this rule, ~~2007~~however, ~~due~~is tothat, ~~the~~where ~~Company~~a ~~adding~~party apossesses ~~new~~the ~~product~~means ~~line,~~to anexploit ~~updated~~a ~~Production~~patent ~~License~~but ~~with~~cannot ~~the~~obtain ~~same~~a license ~~number~~from the ~~was~~patent ~~reissued~~holder toon ~~CCEC,~~reasonable ~~which~~terms ~~expired~~and onin ~~January~~reasonable 12period of time, ~~2010.~~the OnPRC ~~February~~State 10Intellectual Property Office, ~~2010~~or SIPO, is authorized to grant a ~~production~~compulsory license. ~~was~~A ~~issued~~compulsory ~~(XK06-006-00627)~~license ~~which~~can ~~shall~~also ~~expire~~be ongranted ~~February~~where 9,a ~~2015.~~national Onemergency ~~November~~or ~~29,~~any ~~2010,~~extraordinary state ~~due~~of toaffairs occurs or where the ~~Company~~public ~~adding~~interest aso ~~new~~requires. ~~product~~SIPO, ~~line~~however, anhas ~~updated~~not ~~Production~~granted ~~License~~any ~~with~~compulsory ~~the~~license ~~same~~to ~~license~~date. The ~~number~~patent ~~(XK06-006-00627)~~holder ~~was~~may ~~reissued~~appeal tosuch ~~CCEC~~decision ~~which~~within ~~shall~~three ~~expire~~months onfrom ~~February~~receiving 9,notification ~~2015~~by filing a suit in a people’s court.

~~Environmental~~PRC ~~Reports~~law defines patent infringement as the exploitation of a patent without the authorization of the patent holder. Patent holders who believe their patent is being infringed may file a civil suit or file a complaint with a PRC local Intellectual Property Administrative Authority, ~~Certifications~~which ~~and~~may ~~Licenses~~order the infringer to stop the infringing acts. A preliminary injunction may be issued by the People’s Court upon the patentee’s or the interested parties’ request before instituting any legal proceedings or during the proceedings. Damages in the case of patent infringement is calculated as either the loss suffered by the patent holder arising from the infringement or the benefit gained by the infringer from the infringement. If it is difficult to ascertain damages in this manner, damages may be reasonably determined in an amount ranging from one or more times the license fee under a contractual license. If there is no unlawful income so earned, the infringing party may be fined from RMB10,000 to RMB1,000,000, or approximately US$1,000 to US$146,000.

~~According~~- to21 certain environmental laws and regulations in China, the Department of Environmental Protection Administration under the State Council shall, in accordance with the national standards for environment quality and China’s economic and technological conditions, establish the national standards for the discharge of pollutants. The People’s Governments of Provinces, Autonomous Regions and Municipalities directly under the Central Government may establish their local standards for the discharge of pollutants for items not specified in the national standards. With regard to items already specified in the national standards, they may set local standards, which are more stringent than the national standards, and report the local ones to the Department of Environmental Protection Administration under the State Council for the record. Units that discharge pollutants in areas where the local standards for the discharge of pollutants have been established shall observe such local standards.-

16Foreign Currency Exchange

OnUnder ~~October~~the 9PRC foreign currency exchange regulations applicable to us, ~~2010~~the Renminbi is convertible for current account items, including the ~~China~~distribution ~~Quality~~of ~~Mark~~dividends, ~~Certification~~interest ~~Group~~payments, trade and ~~IQNet~~service-related ~~Association~~foreign ~~(the~~exchange ~~International~~transactions. ~~Certification~~Conversion ~~Network)~~of ~~jointly~~Renminbi ~~issued~~for capital account items, such as direct investment, loan, security investment and repatriation of investment, however, is still subject to the ~~ISO9001~~approval ~~Certificate~~of the PRC State Administration of Foreign Exchange, or SAFE. Foreign-invested enterprises may only buy, sell and/or remit foreign currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents and, in the ~~Company~~case ~~(number~~of ~~00210Q15168R0M)~~capital ~~agreeing~~account ~~that~~item transactions, obtaining approval from the ~~quality~~SAFE. ~~management~~Capital ~~system~~investments ~~applied~~by inforeign-invested enterprises outside of China are also subject to limitations, which include approvals by the ~~Company’s~~Ministry ~~production~~of Commerce, the SAFE and ~~management~~the ~~activities~~State Reform and Development Commission. ~~The~~We ~~certificate~~currently ~~shall~~do not ~~expire~~hedge onour ~~October~~exposure 8,to ~~2013~~fluctuations in currency exchange rates.

OnMandatory ~~October~~Statutory 9,Reserve ~~2010, the China Quality Mark Certification Group~~ and IQNet Association (the International Certification Network) jointly issued the ISO14001 Certificate (number 00210E21312R0M) to the Company and signed-off on the environmental management system applied in the Company’s production and management activities. The certificate shall expire on October 8, 2013.Dividend Distributions

OnUnder ~~September~~applicable 5PRC regulations, ~~2008~~foreign-invested enterprises in China may pay dividends only out of their accumulated profits, ~~the~~if ~~Changxing~~any, ~~Environmental~~determined ~~Protection~~in ~~Bureau~~accordance ~~issued~~with ~~the~~PRC ~~Notice~~accounting standards and regulations. In addition, a foreign-invested enterprise in China is required to set aside at least 10.0% of ~~Examination~~its ~~Opinion~~after-tax profit ~~approving~~based on PRC accounting standards each year for its general reserves until the ~~Company’s~~cumulative ~~Environment~~amount ~~Effect~~of ~~Report~~such onreserves reaches 50.0% of its ~~Relocation~~registered ~~and~~capital. ~~Extension~~These reserves are not distributable as cash dividends. The board of ~~the~~directors ~~Company’s~~of ~~1500~~a ~~unit~~foreign-~~per-year~~invested enterprise ~~Lead~~has the discretion to allocate a portion of its after-~~Acid~~tax ~~Battery~~profits ~~Production~~to ~~Project~~staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.

OnITEM ~~September 20, 2008, the Changxing Environmental Protection Bureau issued the Pollutant Discharge License to the Company (license number HuChang080042). The License shall expire on September 19, 2012.~~1A Risk Factors

OnNot ~~June~~required ~~22,~~for ~~2010,~~a ~~the~~“smaller China Quality Mark Certification Group and IQNet Association (the International Certification Network) jointly issued OHSAS18001 Certificate (# 00210S10501R0M) to the Company after the Company passed its evaluation on Occupational Health and Safety Assessment Seriesreporting company”. ~~The Certificate shall expire on June 21, 2013.~~

~~Employment~~ITEM ~~laws~~1B. Unresolved Staff Comments

We are subject to laws and regulations governing our relationship with our employees, including: wage and hour requirements, working and safety conditions, citizenship requirements, work permits and travel restrictionsNone. These include local labor laws and regulations, which may require substantial resources for compliance. China’s National Labor Law, which became effective on January 1, 1995, and China’s National Labor Contract Law, which became effective on January 1, 2008, permit workers in both state and private enterprises in China to bargain collectively. The National Labor Law and the National Labor Contract Law provide for collective contracts to be developed through collaboration between the labor union (or worker representatives in the absence of a union) and management that specify such matters as working conditions, wage scales, and hours of work. The laws also permit workers and employers in all types of enterprises to sign individual contracts, which are to be drawn up in accordance with the collective contract.

~~Patent~~ITEM ~~Protection~~2. ~~in China~~Properties

~~The~~During ~~PRC’s~~the ~~intellectual~~year ~~property~~ended ~~protection~~March ~~regime~~31, is2012, ~~consistent~~the Company ~~with~~purchased ~~those~~a of50-year ~~other~~land ~~modern~~use ~~industrialized~~right ~~countries.~~for ~~The~~US$773,000 ~~PRC~~at ~~has~~Jingyuan ~~domestic~~Road ~~laws~~in ~~for~~Xuyi ~~the~~County, ~~protection~~Jiangsu Province. The total area of the ~~rights~~land inis ~~copyrights~~49,323.00 ~~patents,~~square ~~trademarks~~meters and ~~trade~~we ~~secrets~~have constructed plants and auxiliary buildings on the land.

~~The~~We ~~PRC~~also ismaintain ~~also~~leases ~~signatory~~with toour ~~most~~landlord Changxing Xiangyi Industrial Park Investment Co. for the purpose of the ~~world~~production of our battery products at Plant B, which is located at Xiangyi Industrial Park, Jing’er Road, Changxing Economic Development Zone, Changxing County, Zhejiang Province, the People’s ~~major~~Republic ~~intellectual~~of ~~property~~China. ~~conventions~~Those leases, ~~including~~none of which are affected by our relocation, are described in the table below:

¨- ~~Convention~~22 ~~establishing the World Intellectual Property Organization (WIPO Convention) (June 4, 1980);~~-

¨ Paris Convention for the Protection of Industrial Property (March 19, 1985);

Building

Area

(Square

meters)

Rental Amount

Per year ($)

Commencement

Date

Termination

Date

Notes

Factory Building

No. 1

6,200

70,386

January 1, 2009

December 31, 2013

The annual rent will increase by 5% yearly from January 1, 2010

The North Part of Factory Building No. 2

3,100

35,193

February 8, 2009

February 7, 2014

The annual rent will increase by 5% yearly from February 8, 2010

The South Part of Factory Building No. 2

3,100

35,193

February 1, 2009

January 31, 2014

The annual rent will increase by 5% yearly from February 1, 2010

Factory Building No. 3

6,200

70,950

January 18, 2010

January 17, 2015

The annual rent will increase by 5% yearly from January 18, 2011

Factory Building No. 4

6,200

68,867

August 1, 2008

July 31, 2013

The annual rent will increase by 5% yearly from August 1, 2009

¨- ~~Patent~~23 ~~Cooperation Treaty (January 1, 1994); and~~-

¨During ~~The~~the ~~Agreement~~year onended ~~Trade~~March 31, 2012, the Company also purchased a 50-~~Related~~year ~~Aspects~~land ofuse ~~Intellectual~~right ~~Property~~for US$4,111,000 ~~Rights~~at ~~(TRIPs)~~Jingsi ~~(November~~Road 11in Changxing County, ~~2001)~~Zhejiang Province. The total area of the land is 81,188.00 square meters and the plants and auxiliary building are being constructed in progress.

~~Patents~~ITEM ~~in the PRC are governed by the China Patent Law and its Implementing Regulations, each of which went into effect in 1985~~3. ~~Amended~~Legal ~~versions of the China Patent Law and its Implementing Regulations came into effect in 2009 and 2010, respectively.~~Proceedings

~~The~~In ~~PRC is signatory to~~ the ~~Paris~~normal ~~Convention~~course ~~for~~of ~~the~~business, ~~Protection~~we ofare named ~~Industrial~~as ~~Property,~~defendant in ~~accordance~~lawsuits ~~with~~in which ~~any~~claims ~~person~~are ~~who~~asserted ~~has~~against ~~duly~~us. ~~filed~~In anour ~~application~~opinion, ~~for~~the aliabilities, ~~patent~~if inany, ~~one~~which ~~signatory~~may ~~country~~ultimately result ~~shall~~from ~~enjoy~~such lawsuits, ~~for~~are ~~the~~not ~~purposes~~expected ofto ~~filing~~have ina ~~the~~material ~~other~~adverse ~~countries,~~effect aon ~~right~~our offinancial ~~priority~~position, ~~during~~results ~~the~~of ~~period~~operations or ~~fixed~~cash inflows. ~~the~~As ~~convention~~of ~~(12~~March ~~months~~31, ~~for~~2012, ~~inventions~~there ~~and~~was ~~utility~~no ~~models,~~pending ~~and~~or 6outstanding ~~months~~material ~~for~~litigation ~~industrial~~with ~~designs)~~the Company.

17ITEM 4. Mine Safety Disclosures

~~The Patent Law covers three kinds of patents—patents for inventions, utility models and designs~~None. The Chinese patent system adopts the principle of first to file; therefore, where more than one person files a patent application for the same invention, a patent can only be granted to the person who first filed the application. Consistent with international practice, the PRC only allows the patenting of inventions or utility models that possess the characteristics of novelty, inventiveness and practical applicability. For a design to be patentable, it cannot be identical with or similar to any design which, before the date of filing, has been publicly disclosed in publications in the country or abroad or has been publicly used in the country, and should not be in conflict with any prior right of another.

~~PRC~~PART law provides that anyone wishing to exploit the patent of another must conclude a written licensing contract with the patent holder and pay the patent holder a fee. One broad exception to this rule, however, is that, where a party possesses the means to exploit a patent but cannot obtain a license from the patent holder on reasonable terms and in reasonable period of time, the PRC State Intellectual Property Office, or SIPO, is authorized to grant a compulsory license. A compulsory license can also be granted where a national emergency or any extraordinary state of affairs occurs or where the public interest so requires. SIPO, however, has not granted any compulsory license to date. The patent holder may appeal such decision within three months from receiving notification by filing a suit in a people’s court.II

~~PRC~~ITEM ~~law defines patent infringement as the exploitation of a patent without the authorization of the patent holder~~5. ~~Patent~~Market ~~holders~~for who believe their patent is being infringed may file a civil suit or file a complaint with a PRC local Intellectual Property Administrative Authority, which may order the infringer to stop the infringing acts. A preliminary injunction may be issued by the PeopleRegistrant’s ~~Court~~Common ~~upon~~Equity, ~~the~~Related ~~patentee’s~~Stockholder orMatters ~~the~~and ~~interested~~Issuer ~~parties’~~Purchases ~~request before instituting any legal proceedings or during the proceedings. Damages in the case~~ of ~~patent~~Equity infringement is calculated as either the loss suffered by the patent holder arising from the infringement or the benefit gained by the infringer from the infringement. If it is difficult to ascertain damages in this manner, damages may be reasonably determined in an amount ranging from one or more times the license fee under a contractual license. If there is no unlawful income so earned, the infringing party may be fined from RMB10,000 to RMB1,000,000, or approximately US$1,000 to US$146,000.Securities

~~Foreign~~Market ~~Currency~~for ~~Exchange~~Common Equity

~~Under~~Our ~~the~~common ~~PRC~~stock ~~foreign currency exchange regulations applicable to us, the Renminbi~~ is ~~convertible~~currently ~~for~~quoted ~~current~~on ~~account items, including~~ the OTCBB ~~distribution of dividends, interest payments, trade~~ and ~~service-related~~OTCQB ~~foreign~~under ~~exchange transactions. Conversion of Renminbi for capital account items, such as direct investment, loan, security investment and repatriation of investment, however, is still subject to~~ the ~~approval~~symbol ~~of the PRC State Administration of Foreign Exchange, or SAFE~~“CIEC”. ~~Foreign-invested~~There ~~enterprises~~has ~~may~~been ~~only~~an ~~buy,~~extremely ~~sell~~limited ~~and/or~~public ~~remit~~market ~~foreign~~for currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents and, in the case of capital account item transactions, obtaining approval from the SAFE. Capital investments by foreign-invested enterprises outside of China are also subject to limitations, which include approvals by the Ministry of Commerce, the SAFE and the State Reform and Development Commission. We currently do not hedge our ~~exposure~~common ~~to fluctuations in currency exchange rates~~stock.

~~Mandatory~~When ~~Statutory~~the ~~Reserve~~trading price of our common stock is below US$5.00 per share, it may be considered to be a “penny stock” that may be subject to rules promulgated by the SEC (Rule 15-1 through 15g-9) under the Exchange Act. These rules impose significant requirements on brokers under these circumstances, including: (a) delivering to customers the SEC’s standardized risk disclosure document; (b) providing customers with current bid and ~~Dividend~~ask ~~Distributions~~prices; (c) disclosing to customers the brokers-dealer’s and sales representatives compensation; and (d) providing to customers monthly account statements.

~~Under~~The ~~applicable~~following ~~PRC~~table ~~regulations,~~sets ~~foreign-invested~~forth ~~enterprises~~on ina ~~China~~per ~~may~~share basis ~~pay~~for ~~dividends~~the ~~only~~periods ~~out of their accumulated profits~~shown, ifthe ~~any,~~high ~~determined in accordance with PRC accounting standards~~ and ~~regulations.~~low Inclosing ~~addition,~~bid aprices ~~foreign-invested enterprise in China is required to set aside at least 10.0%~~ of ~~its after-tax profit based on PRC accounting standards each year for its general reserves until~~ the ~~cumulative~~Company’s ~~amount~~common ~~of such reserves reaches 50~~stock.0% ~~of its registered capital. These reserves are not distributable as cash dividends.~~ The ~~board~~quotations ofreflect ~~directors~~inter-dealer prices, ofwithout aretail ~~foreign~~mark-~~invested~~up, ~~enterprise has the discretion to allocate a portion of its after~~mark-~~tax~~down ~~profits~~or tocommission ~~staff welfare~~ and ~~bonus funds, which~~ may not berepresent ~~distributed~~actual ~~to equity owners except in the event of liquidation~~transactions.

~~ITEM~~- ~~1A Risk~~24 ~~Factors~~-

Any investment in our common stock involves a high degree of risk. Investors should carefully consider the risks described below and all of the information contained in this report before deciding whether to purchase our common stock. Our business, financial condition or results of operations could be materially adversely affected by these risks if any of them actually occur. Our shares of common stock are not currently listed or quoted for trading on any national securities exchange, however it is currently traded under the symbol “CIEC” on the OTCQB. If and when our common stock is traded, the trading price could decline due to any of these risks, and an investor may lose all or part of his or her investment. Some of these factors have affected our financial condition and operating results in the past or are currently affecting our company. This report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face as described below and elsewhere in this report.

Closing Bid Prices	High (US$)		Low (US$)

Calendar Year Ending December 31, 2012

1^st Quarter		0.07		0.045

Calendar Year Ended December 31, 2011

4^th Quarter (After a 10-for-1 split)		0.05		0.05

4^rd Quarter (Before a 10-for-1 split)		0.70		0.30

3^rd Quarter		2.82		0.52

2^nd Quarter		3.40		1.02

1^st Quarter		4.90		3.40

Calendar Year Ended December 31, 2010

4^th Quarter		5.30		4.51

3^rd Quarter		5.50		5.10

2^nd Quarter		6.45		6.10

1^st Quarter		7.75		6.24

~~RISKS~~ The ~~RELATED~~high TOand ~~OUR~~low ~~OPERATIONS~~bid quotations for our common stock prior to March 31, 2012 were US$7.75 and US$0.045, respectively. The market quotations represent prices between dealers, do not include retail markup, markdown, or commissions and may not represent actual transactions.

WeHolders ~~have depended on a small number~~ of ~~customers~~Common ~~for the vast majority of our sales. A reduction in business from any of these customers could cause a significant decline in our sales and profitability.~~Equity

~~The~~As ~~vast majority~~ of ~~our~~June ~~sales are generated from a small number of customers. During the years ended March 31~~28, ~~2011 and 2010~~2012, we ~~had~~have issued ~~three~~Five ~~and~~Hundred ~~two~~Million ~~customers that each generated revenues of at least 10% of our total revenues~~(500, ~~respectively~~000,000) ~~with~~shares ~~our largest customer accounting for 19% and 21%~~ of our ~~revenues~~common ~~for~~stock ~~each~~to ~~respective period. A total of~~ approximately 64 ~~50%~~holders ~~and 40%~~ of ~~our revenues for the years ended March 31, 2011 and 2010, respectively, were attributable to customers that each individually accounted for at least 10% of our sales~~record. The WeCompany ~~believe~~believes that weit ~~may~~has ~~depend~~more ~~upon~~stockholders asince ~~small~~many ~~number~~ of ~~customers~~its ~~for~~shares aare ~~significant~~held ~~majority of our sales~~ in "street" the future, and the loss or reduction in business from any of these customers, including, without limitation, any material disruption of slowdown suffered by such customers, could cause a significant decline in our sales and profitabilityname.

18Securities Authorized for Issuance under Equity Compensation Plans

AAs ~~substantial portion~~ of ~~our~~the ~~assets~~date ~~has been comprised of trade receivables representing amounts owed by a small number of customers. If any of these customers fails to timely pay us amounts owed~~hereof, we ~~could~~have ~~suffer~~no acompensation plans ~~significant~~(including ~~decline~~individual incompensation ~~cash~~arrangements) ~~flow~~under ~~and liquidity~~ which, inthe ~~turn,~~Company’s ~~could~~equity ~~cause~~securities usare toauthorized befor ~~unable to pay our liabilities and purchase an adequate amount of inventory to sustain or expand our sales volume~~issuance.

~~Our~~Transfer ~~trade~~Agent ~~receivables represented approximately 41%~~ and 42% of our total current assets as of March 31, 2011 and March 31, 2010, respectively. As of March 31, 2011, 78% of our trade receivables were owed to us by three customers, each of which represented over 10% of the total amount of our trade receivables. As a result of the substantial amount and concentration of our trade receivables, if any of our major customers fails to timely pay us amounts owed, we could suffer a significant decline in cash flow and liquidity which could adversely affect our ability to pay our liabilities and to purchase inventory to sustain or expand our current sales volume.Registrar

~~Furthermore,~~Interwest ~~working~~Transfer ~~capital~~Company, ~~management~~Inc., ~~including~~1981 ~~prompt~~East Murray ~~and~~Holladay ~~diligent~~Road, ~~billing~~Suite ~~and collection~~100, ~~is an important factor in our results of operations and liquidity~~P.O. InBox ~~general~~17136, ~~our~~Salt ~~average~~Lake ~~accounts~~City, ~~settlement~~Utah ~~period~~84117, istelephone ~~110~~(801) ~~days~~272-9294, ~~from~~facsimile ~~the~~(801) time we sell our products to the time we receive payment from our customers. The credit periods for some of our business partners can be longer after an evaluation of the risk of collection. We cannot assure you that system problems277-3147, currently ~~industry~~serves ~~trends~~as ~~or other issues will not extend~~ our ~~collection~~transfer ~~period~~agent and ~~adversely impact our working capital~~registrar.

InITEM ~~addition, we typically need to place certain deposits and advances with our suppliers on a portion of the purchase price in advance and for some suppliers we must maintain a deposit for future orders~~6. ~~Because~~Selected ~~our~~Financial ~~payment cycle is shorter than our receivable cycle, we may experience working capital shortages.~~Data

~~Risk~~ Not ofrequired ~~fluctuations~~for ina ~~the~~“smaller ~~prices of raw materials could adversely affect our business~~reporting company”.

The raw material for our battery products consist primarily of electrolytic lead. Our success significantly depends on our ability to secure sufficient and constant supply of electrolytic lead for our production at acceptable price levels. Electrolytic lead represents our largest cost item in our lead-~~acid~~ ~~motive~~25 battery production. During each of the two fiscal years ended March 31, 2011 and March 31, 2010, the average selling price of electrolytic lead by our suppliers was approximately US$2,400 and approximately US$2,200 per ton, respectively. For the fiscal year ended March 31, 2011 the average selling price of electrolytic lead increased by approximately 9% as compared to the fiscal year ended March 31, 2010. For each of the two financial years ended March 31, 2011 and March 31, 2010, costs of lead-related material accounted for approximately 80% and 80% of our total cost of sales, respectively. We do not have long-term contracts with any of our electrolytic lead suppliers, nor have we entered into any arrangement to mitigate the effect of price fluctuations of electrolytic lead. Therefore, any significant increase in the cost of electrolytic lead in the future could adversely affect our results if we cannot transfer the price increment to our customers.

19ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

WeForward ~~choose~~Looking to rely on a limited number of suppliers for our raw materials and have short term supply agreements with such suppliers, and any unanticipated loss, disruptions or slowdowns by such suppliers, shipping companies and our distribution centers could adversely affect our ability to deliver our products and services to our customers which could materially and adversely affect our relationships with our customers and our revenues.Statements

~~Our~~ The ~~ability~~following tois ~~provide~~management’s ~~high quality customer service, to process~~ discussion and ~~fulfill~~analysis ~~orders and to manage inventory depends on the timely and uninterrupted performance~~ of ~~our~~certain ~~suppliers~~significant ~~and~~factors ~~shipping companies and the efficient and uninterrupted operation of our distribution centers. During the fiscal years ended March 31, 2011 and 2010, we had three and four suppliers each of~~ which ~~accounted~~have ~~for~~affected ~~at least 10% of~~ our ~~total~~financial ~~raw~~position ~~material purchases, respectively, with our largest supplier accounting for approximately 31%~~ and ~~24%~~operating ofresults ~~our~~during ~~raw~~the ~~material~~periods included ~~purchases~~in ~~for each respective period. A total of approximately 57% and 64% of our raw material purchases for~~ the ~~years~~accompanying ~~ended~~consolidated ~~March 31,~~financial ~~2011 and 2010~~statements, ~~respectively,~~as ~~were~~well ~~attributable~~as information relating to ~~suppliers~~the ~~that~~plans ~~each individually accounted for at least 10%~~ of our ~~raw material purchases~~current management. We ~~choose~~This toAnnual ~~rely~~Report onincludes aforward-looking ~~small~~statements. ~~number~~Generally, ~~of suppliers in order to stabilize~~ the ~~quality~~words of“believes ~~the~~”, ~~raw materials we purchase~~“anticipates”, “ ~~and we believe that we~~ may ~~continue~~”, to“ ~~depend~~will ~~upon~~”, a“ ~~small~~should ~~number~~”, of“ ~~suppliers~~expect ~~for~~”, ~~our~~“ ~~raw~~intend ~~materials~~”, ~~in the future~~“estimate”, “continue” and ~~the~~similar ~~loss~~ expressions or ~~reduction~~the innegative ~~business~~thereof ~~from~~or ~~any~~comparable ofterminology ~~these~~are ~~suppliers~~intended ~~could~~to ~~have~~identify forward-looking ~~an adverse effect on our business~~statements. We ~~also~~Such ~~generally~~statements ~~have supply agreements that~~ are nosubject ~~longer~~to ~~than~~certain ~~one~~risks ~~year~~ and weuncertainties, ~~cannot~~including ~~guarantee that such suppliers will continue to do business with us. In~~ the ~~event~~matters ~~that~~set ~~our~~forth ~~suppliers~~in this ~~stop~~Annual ~~doing~~Report ~~business with us,~~ or ifother ~~our~~reports ~~suppliers suffer any material disruption~~ or ~~slowdown~~documents ~~including, without limitation, being forced to shut down operations as a result of a material lead pollution event,~~ we ~~would~~file ~~be forced to find replacement suppliers~~ with ~~comparable~~the ~~quality~~SEC offrom ~~raw materials, which could take~~ time to ~~locate and secure. Any material disruption or slowdown in the operations of our suppliers~~time, orwhich ~~any material disruption or slowdown at our distribution centers, manufacturing facilities or with our management information systems~~ could cause ~~delays~~actual inresults ~~our~~or ~~ability~~ outcomes to ~~receive,~~differ ~~process~~materially ~~and~~from ~~fulfill~~those ~~customer~~projected. ~~orders~~Undue ~~and~~reliance ~~may~~should ~~cause~~not ~~orders to~~ be ~~cancelled,~~place ~~lost~~on orthese ~~delivered~~forward-looking ~~late,~~statements ~~goods~~which tospeak beonly as ~~returned or receipt~~ of ~~goods~~the todate ~~be refused~~hereof. AsWe aundertake ~~result,~~no ~~our~~obligation ~~revenues~~to ~~and~~update ~~operating~~these ~~results~~forward-looking ~~could be materially and adversely affected~~statements.

We The ~~currently~~following ~~rely~~discussion ~~on short term bank loans~~ and ~~non-interest~~analysis should ~~bearing~~be ~~credits~~read ~~granted~~in byconjunction ~~banks~~with ~~for the issuance of notes payable, however we expect that we will need additional capital to implement~~ our ~~current~~consolidated ~~business~~financial ~~strategy~~statements ~~of expansion of our production facilities in Changxing County, Zhejiang Province~~ and inthe ~~Xuyi~~related ~~County,~~notes ~~Jiangsu~~thereto ~~Province,~~ and weother ~~will~~financial ~~need~~information contained toelsewhere ~~find~~in ~~new~~this ~~sources~~Annual ~~of financing, which may not be available to us~~Report.

WeForward ~~will~~Stock need new sources of financing and additional capital in order to implement our current business strategy of expansion of our production facilities in Changxing County, Zhejiang Province and in Xuyi County, Jiangsu Province. Also the Company has short term bank loans and non-interest bearing credits granted by banks for the issuance of notes payable at our disposal, most of such short term loans and notes payable expire in the next six months, and there is no assurance that we will obtain any new loans or notes payable, or that such short term loans and notes payable will be renewed or that the terms of any renewals of such short term loans or notes payable will be on terms that are as favorable as our current instruments. As of March 31, 2011, we had an aggregate of US$113,799,000 of short-term loans outstanding. Furthermore, in January 2010, the Chinese government took steps to tighten the availability of credit including ordering banks to increase the amount of reserves they hold and to reduce or limit their lending. Such governmental actions in the PRC may make it more difficult for us to obtain additional loans from other banking institutions if we need such additional capital, in which case we will be forced to seek other sources of funding.Split

20On November 22, 2011, the Company effected a forward split of its common stock and the proportional increase in its authorized shares of common stock at a split ratio of 10-for-1. As a result of this corporate action, the total number of issued and outstanding shares of common stock increased from 50,000,000 to 500,000,000 shares, and the Company’s authorized shares of common stock simultaneously increased from 100,000,000 to 1,000,000,000 shares. Shares of common stock are payable pursuant to the 10-for-1 forward stock split upon surrender of old certificates to the Company’s transfer agent, Interwest Transfer Co., Inc., 1981 East Murray Holladay Road, Suite 100, P.O. Box 17136, Salt Lake City, Utah 84117, telephone (801) 272-9294, facsimile (801) 277-3147.

WeThere ~~face~~has abeen ~~risk~~no adjustment to the par value of ~~non-compliance~~the ~~with~~common stock and no changes have been made to the ~~terms~~Company’s preferred stock as a result of ~~our~~this ~~notes~~corporate ~~payable,~~action ~~bill~~(as of ~~financing~~November 22, 2011 and ~~short-term~~as ~~bank~~of ~~loans~~the date of this report, ~~which~~the ~~are~~Company ~~secured~~had byno ashares ~~significant~~of ~~amount~~preferred stock issued or outstanding). The Company’s Board of ~~our~~Directors ~~assets~~approved this corporate action however shareholder approval was not required pursuant to Sections 78.207 and ~~could~~78.209 ~~have~~of anthe ~~adverse~~Nevada ~~affect~~Revised onStatutes. In ~~our~~accordance ~~business~~with such statutes, the Company filed a “Certificate of Change Pursuant to Section 78.209” with the Nevada Secretary of State which became effective after the Financial Industry Regulatory Authority announced the effectiveness of the corporate action.

WeDevelopment ~~have~~Strategy ~~notes payable, bill financing and short-term bank loans which are collateralized by a significant amount~~ of our assets, including 100% of our restricted bank balances, amount to US$44,289,000, and trades receivable, amount to US$5,830,000. Specifically, our notes payable and bill financing are secured by US$44,289,000 of our restricted bank balances as of March 31, 2011. Such financial instruments contain customary events of default, and upon the occurrence and during the continuation of an event of default, amounts due under such financial instruments may be accelerated by our creditors. If we are unable to comply with the terms of such financial instruments, events of default could occur. Upon the occurrence and during the continuance of an event of default under such financial instruments, our creditors have available a range of remedies customary in these circumstances, including declaring all outstanding debt, together with any accrued and unpaid interest thereon, to be due and payable, foreclosing on the aforementioned assets securing the financial instruments and/or ceasing to provide additional loans, which could have a material adverse effect on our business.Company

InWe ~~light~~strive to create an international first-class brand and become the one of ~~recent~~the ~~trends~~leaders in ~~Europe~~providing “green” energy in the global electric bicycle market. Through our continuous researching and developing of new chemical energy technologies, we intend to provide energy-saving and highly-effective energy solutions to our customers for improving quality of life while maintaining a sustainable ecological environment. Our goal is to become the Ulargest battery developer and producer with a first-class sales and service network in China.S With one of the leading positions in the LABEB battery product market in China, our expansion plans in Changxing County (Zhejiang Province) and Jiangsu Province, our product research and development capability and our cooperative partnerships with clients, we believe that we are well positioned to capture additional business opportunities in China's personal transportation device markets. In light of the prevailing economic trends for developing alternative transportation devices that reduce the reliance on oil and produce lesser emissions, we plan to explore the motive battery market for electric-powered motorcycles and electric cars. Leveraging our experience and expertise in producing lead-acid motive battery products ~~may~~for beelectric ~~substituted~~bicycles, bywe ~~other~~plan to expand our product mix to include valve regulated lead-acid back-up batteries, the lithium-ion battery, ~~products~~lead-acid ~~which~~power ~~could~~storage ~~have~~batteries andedicated ~~adverse~~for solar ~~effect~~and onwind ~~our~~power ~~business~~and lead-acid motive batteries for electric cars.

It is a general market trend to develop motive battery products which are more environmentally friendly with increased power output and less weight. It is also a new product trend in Europe, the United States and Japan to use primarily a lithium-~~ion~~ ~~battery. There~~26 ~~can be no assurance that manufacturers of electric bicycles will continue to use lead~~-acid motive battery products as the principal source of motive power for electric bicycles. In the event that the market prefers to use other forms of battery product and if we are not able to develop new motive battery products to meet the future demand, our business could be adversely affected.

~~Lead~~Production pollution in China is subject to more attention from the government, which may cause the Chinese government to increase the environmental compliance standards for lead-acid batteries production. As a result, our costs of environmental compliance may increase in order to meet any heightened standards.Capacity

~~Recently~~On ~~one~~September of6, ~~our~~2010, ~~former~~CEJC ~~lead~~entered ~~plate~~into ~~suppliers,~~a Project ~~Anqing~~Investment ~~Borui~~Contract ~~Power~~and ~~Co.,~~a ~~Ltd.,~~Supplemental ~~was~~Agreement ~~found~~ to bethe ~~involved~~Project inInvestment aContract ~~material~~with ~~lead~~the ~~pollution~~Jiangsu ~~event,~~Xuyi ~~where~~Economic ~~more~~Development Zone ~~than~~Administrative 20Committee, ~~children~~pursuant ~~affected~~to bywhich ~~lead~~CEJC ~~pollution~~shall ~~were~~invest, ~~reported~~in ~~having~~the ~~blood~~aggregate, ~~lead~~approximately ~~above~~RMB1,200,000,000 ~~normal standards~~(approximately US$177,000,000) ~~and~~in ~~has~~three ~~been~~stages ~~required~~ to ~~close~~build ~~its~~the ~~operations~~Plant byD ~~the~~to ~~local~~manufacture ~~government.~~VRLA ~~Accordingly~~batteries, ~~blood~~as ~~lead~~well ~~pollution~~as inour ~~China~~newest isproduct, ~~now~~lithium-ion batteries, ~~subject~~and toother ~~greater~~related ~~scrutiny~~products ~~from~~in ~~both~~ the ~~press~~Jiangsu ~~and~~Xuyi ~~the~~Economic ~~government~~Development Zone. InAt the ~~event~~date ~~that~~of ~~the~~this ~~Chinese~~report, ~~government~~CEJC ~~increases~~has ~~the~~completed all ~~environmental~~construction ~~compliance~~related ~~standards~~to ~~for~~the ~~lead-acid~~first ~~batteries~~stage ~~production~~and ashas ainvested ~~result~~approximately ofRMB422,000,000 ~~these~~(approximately ~~events~~US$62,000,000) ~~our costs of environmental compliance may increase~~ in ~~order~~assets for ~~to meet~~ the ~~heightened~~production ~~standards.~~of InVRLA ~~addition,~~batteries ifonly. Currently wethe ~~cannot~~Company ~~comply~~does ~~with standards, we may~~ not beyet ~~permitted~~plan to ~~produce~~construct ~~lead~~lithium-~~acid~~ion battery ~~products~~production facilities in Plant D.

WeAugment ~~may~~Marketing beand ~~affected~~Promotion ~~by changes in the policies adopted by the PRC government in relation~~ Efforts to ~~the~~Increase ~~electric~~Brand ~~bicycle industry and the use of electric bicycles.~~Awareness

~~Our~~The ~~operations~~Company ~~and~~works ~~financial~~with ~~results~~leading ~~could~~national bebrand designing ~~adversely~~companies ~~affected~~to byestablish ~~changes~~a incomplete ~~the~~plan ~~political~~for scientific branding, ~~economic~~which ~~and~~use ~~social~~cartoon ~~conditions~~image inendorsements ~~China~~to orpromote ~~the~~its ~~relevant~~corporate image, ~~policies~~products ofand ~~the~~brand ~~PRC~~awareness, ~~government~~through intelevision ~~respect~~and ofprinted ~~the~~advertisements. Furthermore, ~~use~~we ofbelieve ~~electric~~CCEC ~~bicycles.~~has ~~The~~established for ~~“Law~~us ofa ~~People’s~~positive ~~Republic~~social ofimage across China onas ~~Road~~the ~~Traffic~~official ~~Safety”~~batteries ~~categorizes~~supplier ~~the~~for electric ~~bicycle~~bicycles asused ain ~~non-motor~~the ~~vehicle.~~Beijing ~~However,~~Olympic and ~~certain~~Paralympics ~~local~~Games ~~governments~~ in ~~China~~2008 ~~may~~and ~~prohibit~~ the ~~use~~alternative ofpower ~~electric~~source ~~bicycles.~~sponsor Inof the ~~event~~2010 ~~that~~Shanghai ~~there~~World isExpo. We do not have any ~~unfavorable~~specific timetable ~~policy~~for onthis ~~the~~strategy ~~electric~~as ~~bicycle~~we ~~industry~~consider augmenting our marketing and ~~the~~promotional ~~use~~efforts ofto ~~electric~~increase ~~bicycles,~~brand ~~sales~~awareness to ofbe ~~electric~~part ~~bicycles~~of ~~may~~our ~~decrease~~core business, and ~~this~~the ~~could~~amounts ~~have~~we adecide ~~significant~~to ~~adverse~~allocate ~~impact~~to onthis strategy will be funded by our ~~business~~operating cash flows.

~~Competition~~Expand inSales ~~the~~Network ~~motive~~and ~~battery industry in China could have an adverse effect on our business.~~Distribution Channels

AsWe ofintend ~~March~~to ~~31,~~put ~~2011,~~in wemore ~~only~~resources ~~conduct~~to expand our ~~business~~sales inand ~~one~~distribution ~~segment~~networks ofby: ~~the~~(1) ~~battery~~adding ~~industry,~~new ~~the~~distributors ~~manufacture~~in ~~and~~key ~~sale~~sales ofregions ~~lead-acid~~in ~~motive~~China; ~~batteries.~~(2) Wedeveloping ~~face~~new ~~competition~~marketing strategies ~~from~~in ~~the~~different ~~domestic~~channels; ~~and~~(3) ~~foreign~~improving ~~producers~~communication inbetween ~~China,~~sales ~~which~~teams ~~move~~and ~~into~~distributors; ~~the~~and ~~motive~~(4) ~~battery~~improving ~~industry~~our inbrand awareness ~~view~~and ofpromotion ~~the growth potential~~effort. We ~~New~~do ~~entrants~~not ~~will~~have ~~continue~~any tospecific ~~emerge.~~timetable ~~Any~~for ~~intensification~~this instrategy ~~competition~~as ~~could~~we ~~dilute~~consider expanding our ~~market~~sales network ~~share~~ and ~~may~~distribution ~~lead~~channels to ~~price~~be ~~reductions~~part ~~and~~of ~~increased~~our ~~expenses~~core inbusiness, ~~marketing~~ and ~~product~~the ~~development.~~amounts ~~Any~~we ofdecide ~~these~~to ~~events~~allocate ~~could~~to ~~have~~this anstrategy ~~adverse~~will be ~~impact~~funded onby our ~~profitability~~operating cash flows.

21- 27 -

~~Our~~Build ~~sales~~Partnerships ~~are~~with ~~dominated~~New byand ~~sales in China, which could have an adverse effect on our business.~~Existing Clients

~~For~~We ~~each~~continue ofto ~~the~~build ~~two~~a ~~financial years ended March 31~~close, ~~2011~~mutually beneficial and ~~2010,~~harmonious ~~all~~partnership ofwith our ~~sales~~existing ~~were~~factory ~~derived from~~ customers ~~in China~~. We ~~expect~~aim ~~that~~to ~~the~~establish ~~domestic~~a ~~market~~win-win inlong-term ~~China~~partnership ~~will~~with all ~~continue~~of ~~to be~~ our ~~major~~new ~~market~~customers. We ~~Our~~intend ~~business~~to iscontinue ~~therefore~~to ~~heavily~~utilize ~~dependent~~our oncustomer ~~the~~relationship ~~demand~~management ~~for~~to ~~motive~~provide ~~battery~~tailor-made ~~products~~management policies inthat ~~China~~focus ~~and~~ the ~~domestic~~needs ~~market prices~~ of ~~these~~different ~~products~~customers. We Indo ~~the~~not ~~event~~have ~~that~~any ~~there~~specific istimetable ~~any~~for ~~material~~this ~~adverse~~strategy ~~change~~as inwe ~~the~~consider building ~~level~~partnerships ofwith ~~the~~new ~~demand~~and ~~for~~existing ~~motive~~clients ~~battery~~to ~~products~~be inpart ~~China~~of orour ifcore ~~there~~business, ~~are~~and athe ~~significant~~amounts ~~price~~we ~~fluctuations~~decide into ~~China,~~allocate ~~our~~to ~~performance~~this strategy ~~could~~will be ~~adversely~~funded ~~affected~~by our operating cash flows.

WeVertical doIntegration not carry any business interruption insurance, products liability insurance or any other insurance policy except for property insurance. As a result, we may incur uninsured losses, increasing the possibility that you would lose your entire investment in our company.Strategy

WeDuring ~~could~~the beyear ~~exposed~~ended toMarch ~~liabilities~~31, or2012, ~~other claims for which~~ we ~~would~~ have noimplemented ~~insurance~~a ~~protection.~~vertical Weintegration dostrategy ~~not~~of ~~currently~~producing ~~maintain~~lead ~~any~~plates ~~business~~at ~~interruption~~Plant ~~insurance,~~D ~~products~~which ~~liability~~has ~~insurance,~~enabled orus ~~any~~to ~~other~~reduce ~~comprehensive insurance policy except for property insurance policies with limited coverage~~processing costs. ~~As a result~~ Additionally, wedue ~~may~~to ~~incur~~the ~~uninsured~~implementation ~~liabilities~~of ~~and~~a ~~losses~~recent asPRC aCentral ~~result~~Governmental ofenvironmental ~~the~~policy, ~~conduct~~hundreds of our ~~business.~~competitors ~~There can be no guarantee~~ that weare ~~will~~small beand ~~able~~medium tosize ~~obtain~~battery ~~additional~~manufacturers ~~insurance~~have ~~coverage~~been inforced ~~the~~to ~~future,~~shut ~~and~~down ~~even~~or ~~if we are able~~ to ~~obtain~~stop ~~additional~~operations. As a ~~coverage~~result, wethe ~~may~~shortage ~~not~~of ~~carry~~supply ~~sufficient~~of ~~insurance~~lead ~~coverage~~acid tobatteries ~~satisfy~~has ~~potential~~armed ~~claims.~~us ~~Should~~with ~~uninsured~~strategic ~~losses~~bargaining ~~occur,~~power ~~any~~when ~~purchasers~~negotiating the sales price of our ~~common~~products ~~stock~~with ~~could lose their entire investment~~customers.

~~Because~~Summary ~~we do not carry products liability insurance, a failure~~ of ~~any~~Significant ofAccounting the products marketed by us may subject us to the risk of product liability claims and litigation arising from injuries allegedly caused by the improper functioning or design of our products. We cannot assure that we will have enough funds to defend or pay for liabilities arising out of a products liability claim. To the extent we incur any product liability or other litigation losses, our expenses could materially increase substantially. There can be no assurance that we will have sufficient funds to pay for such expenses, which could end our operations and you would lose your entire investment.Policies

~~Our~~Accounting ~~future performance is dependent on researching and developing new products, the inability to do so could have an adverse effect on our business.~~principles

~~Our~~The ~~performance~~consolidated infinancial ~~the~~statements ~~future is dependent on our ability to develop~~ and accompanying ~~launch~~notes ~~new~~are ~~products.~~prepared ~~Changes~~ in ~~technologies~~accordance ~~may~~with ~~render~~generally ~~our~~accepted ~~products~~accounting ~~obsolete~~principles ~~and our performance~~ in the ~~future~~United isStates thus significantly dependent on our ability to develop and launch new products. There can be no assurance that our research and development efforts will be successful or completed within the anticipated timeframe and results. Moreover, there can be no assurance that any research and development project undertaken by us will result in commercially viable products. Unsuccessful development and release of ~~new~~America ~~products could adversely affect our performance and our ability to compete.~~(“USGAAP”)

WePreparation ~~intend~~of tofinancial ~~make significant investments in research and development and new products that may not be profitable.~~statements

~~Companies~~The inCompany ~~our~~had ~~industry~~negative ~~are~~working ~~under~~capital of pressure to develop new designs and product innovations to support changing consumer tastes and regulatory requirements. We have engaged in research and development activities and we believe that substantial additional research and development activities are necessary to allow us to offer technologically-advanced products. We expect that our research and development budget will increase significantly as we attempt to create new products. HoweverUS$38, ~~research and development and investments in new technology are inherently speculative and commercial success depends on many factors including technological innovation~~937,000 ~~novelty,~~as ~~service~~of ~~and~~March ~~support~~31, ~~and~~2012 ~~effective sales~~ and ~~marketing. We~~incurred ~~may~~loss ~~not achieve significant revenue from new product investments for a number~~ of ~~years~~US$15, ~~if at all. Moreover~~742,000 ~~new~~for ~~products~~the ~~and~~year ~~services~~ended ~~may~~March ~~not be profitable~~31, ~~and~~2012. ~~even~~These ifconditions ~~they~~raised substantial ~~are~~doubt ~~profitable,~~about ~~operating~~the ~~margins~~Company’s ~~for~~ability ~~new~~to ~~products~~continue ~~and~~as ~~businesses~~going ~~may be minimal~~concern.

22Continuation of the Company as a going concern is dependent upon attaining profitable operations in the future, exercising tight cost and cash flow controls measures, and the financial support from a controlling stockholder of Chisen Electric. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~Our~~The ~~failure~~controlling stockholder had undertaken to ~~effectively~~make ~~manage~~available ~~growth~~adequate ~~could~~funds ~~harm~~to ~~our~~the ~~business~~Company as and when required to maintain the Company as a going concern. Having taken into consideration the undertaking provided by the controlling stockholder, management believes that the Company will be able to settle its liabilities when they become due. However, there can be no assurance that any financing from the controlling stockholder will continue in the future.

WeBasis ~~have expanded the number and types~~ of products we sell, and we will endeavor to further expand our product portfolio. We must continually introduce new products and technologies, enhance existing products, and effectively stimulate customer demand for new products and upgraded versions of our existing products in order to remain competitive.consolidation

~~This~~The ~~expansion~~consolidated offinancial ~~our~~statements ~~products~~include the ~~places~~financial ainformation ~~significant~~of ~~strain~~Chisen ~~on our management, operations~~ and ~~engineering~~its ~~resources~~subsidiaries. ~~Specifically,~~All ~~the~~significant ~~areas~~intercompany ~~that~~accounts ~~are~~and ~~strained~~transactions ~~most~~have bybeen ~~our~~eliminated upon ~~growth include the following:~~consolidation.

~~• New~~- ~~Battery~~28 Product Launch: With the growth of our product portfolio, we experience increased complexity in coordinating product development, manufacturing and shipping. As this complexity increases, it places a strain on our ability to accurately coordinate the commercial launch of our products for distribution into the marketplace with adequate supply to meet anticipated customer demand and effective marketing to stimulate demand and market acceptance. If we are unable to scale and improve our product launch coordination, we could frustrate our customers and lose retail shelf space and product sales;-

~~• Forecasting,~~Revenue Planning and Supply Chain Logistics: With the growth of our product portfolio, we also experience increased complexity in forecasting customer demand, planning for production, and transportation and logistics management. If we are unable to scale and improve our forecasting, planning and logistics management, we could frustrate our customers, lose product sales or accumulate excess inventory; andrecognition

~~• Support~~Operating ~~Processes:~~revenue Torepresents ~~manage~~sale ~~the growth~~ of ~~our~~goods at ~~operations,~~invoiced wevalue ~~will need~~ to ~~continue~~customers, tonet ~~improve~~of ~~our~~returns, ~~transaction processing~~discounts, ~~operational~~rebates and ~~financial~~value-added ~~systems~~tax (“VAT”), and ~~procedures~~is ~~and~~recognized ~~controls to effectively manage~~ when the ~~increased~~significant ~~complexity.~~risks ~~If we are unable to scale~~ and ~~improve~~rewards ~~these~~of ~~areas,~~ownership ~~the consequences could include delays in shipment~~ of ~~products,~~goods ~~degradation~~have inbeen ~~levels~~transferred ofto ~~customer support~~customers, ~~lost~~the sales, ~~decreased~~price ~~cash~~to ~~flows,~~the ~~and~~customers ~~increased~~is fixed ~~inventory.~~or ~~These~~determinable ~~difficulties~~and ~~could~~the ~~harm~~collectability orof ~~limit~~consideration ~~our~~is ~~ability~~reasonably ~~to expand~~assured.

~~Our~~The ~~products~~Company ~~could~~recognizes ~~contain~~revenue ~~defects~~when goods are delivered to customers. The Company assesses whether the selling price is fixed or ~~they~~determinable ~~may~~based beon ~~installed~~the contract and/or customer ~~operated~~purchase ~~incorrectly,~~order ~~which~~and ~~could~~payment ~~result~~terms inassociated ~~claims~~with ~~against~~the ustransaction and whether the sale price is subject to refund or ~~reduce~~adjustment. The ~~sales~~Company assesses collectability based primarily on the creditworthiness of ~~those~~the ~~products~~customer as determined by the credit analysis, as well as the customer’s payment history.

~~Despite~~Volume-based ~~quality~~rebates ~~control~~are ~~testing~~made byat ~~us, errors have been found and may be found in~~ the ~~future in our existing or future products. This could result in, among other things, a delay in the recognition or loss~~ time of ~~revenue,~~sales ~~loss~~ of ~~market~~goods ~~share or failure to achieve market acceptance. These defects could cause us to incur significant warranty, support~~ and ~~repair~~are ~~costs,~~recognized ~~divert~~as ~~the~~a ~~attention~~reduction of ~~our personnel from our product development efforts and harm our relationship with our customers~~sales. The occurrence of these problems could result in the delay or loss of market acceptance of our battery products and would likely harm our business. Defects, integration issues or other performance problems in our battery products could result in personal injury or financial or other damages to end-users or could damage market acceptance of our products. Our customers and end-users could also seek damages from us for their losses. A product liability claim brought against us, even if unsuccessful, would likely be time-consuming and costly to defend.

~~Environmental~~Costs ~~claims~~related ~~brought~~to ~~against~~shipping usand inhandling ~~connection~~are included ~~with~~in ~~the~~selling, ~~production~~marketing ofand ~~battery~~distribution ~~products could adversely affect our business~~expenses.

~~Solid~~Segmental waste, sewage and fumes are generated during the production process of battery products. We are required to comply with the environmental laws, rules and regulations promulgated by the PRC government. These laws, rules and regulations govern, among other things, the level of fees payable to the government entities providing environmental services and setting out the requirements in relation to the installation of ventilation equipment to ensure the appropriate treatment of lead dust and particles generated during production of lead-acid motive battery products. They also prescribe the standards for the discharge of solid waste, sewage and fumes. In addition, these laws, rules, and regulations empower the local PRC governments to impose sanctions on enterprises failing to comply with such laws, rules and regulations. We are also required by the laws and regulations governing health and safety at work in China to provide our employees exposed to lead dust or particles with protective clothing and accessories, such as gloves, goggles and masks. We also arrange all our employees engaging in the lead-related production process to receive medical checks at least twice a year.information

23During the years ended March 31, 2012 and 2011, all revenue of the Company represented income from sales of sealed lead-acid batteries and related components, and therefore no financial information by business segment is presented. Furthermore, as all revenue is derived from the PRC, no geographical segment information is presented.

~~Although~~Retirement we have adopted these preventive measures, inherent risks involved in our production activities cannot be completely eliminated. As our production may cause pollution to the environment and may affect the health of our employees and the residents nearby, we may be subject to civil claims for compensation or administrative sanctions such as fines or discontinuation of production activities. If there is any legal action initiated against us on any alleged violation of environmental protection laws and regulations, or that our production discharge results in any harmful impact on any person, our business could be materially and adversely affected. There can be no assurance that the relevant governmental authorities and other people would not take actions against us for our past, present and future business operations. We have not maintained any insurance coverage for these possible claims due to environmental related matters, as our Directors are not aware of such type of insurance to be available in China. Any environmental actions taken against us could adversely affect our business. plan costs

IfContributions weto defined contribution retirement schemes are ~~unable~~charged to ~~maintain~~cost ~~our~~of ~~Zhejiang~~sales, ~~Province~~sales, ~~Pollution~~marketing ~~Discharge~~and ~~Certificate,~~distribution wecosts ~~may~~and ~~lose~~general ~~our~~and ~~ability~~administrative toexpenses ~~continue~~in ~~conducting~~the ~~our~~consolidated statements ~~manufacturing~~of operations and other comprehensive income as and when the related employee services are provided.

WeIncome are subject to various federal, state, local and foreign environmental laws and regulations, including those governing the use, discharge and disposal of hazardous substances in the ordinary course of our manufacturing process. The manufacturing facilities in which we operate are subject to the PRC’s environmental laws and requirements. We are required to have and do have a valid Zhejiang Province Pollution Discharge Certificate issued by the Environment Protection Bureau of Changxing County and we are responsible for the disposal of the waste in accordance with applicable environmental regulations. If we fail to comply with the provisions of the permit and environmental laws, we could be subject to sanctions by regulators, including the suspension or termination of our Certificate, which would result in the suspension or termination of our manufacturing operations, which would have a material adverse effect on our results of operations.taxes

WeThe ~~believe~~Company ~~that~~provides ~~mandatory~~for ~~and~~income ~~voluntary~~taxes ~~certification~~using the ~~and~~liability ~~compliance~~method. ~~issues~~Under ~~are~~the ~~critical~~liability tomethod, ~~adoption~~current ofincome ~~our~~tax ~~battery~~expense ~~product~~or ~~systems~~benefit ~~and~~is ~~for~~ the ~~retention~~amount of ~~our~~income ~~customers,~~taxes ~~and failure~~ expected to ~~obtain~~be ~~such~~payable ~~certification~~ or ~~compliance~~refundable ~~would~~for ~~harm~~the ~~our~~current ~~business~~period.

WeA ~~are~~deferred ~~required~~income totax ~~comply~~asset ~~with~~or ~~certain~~liability is ~~legal~~computed ~~requirements~~for ~~governing~~ the ~~materials~~expected infuture ~~our~~impact ~~products.~~of ~~Although~~differences webetween ~~are~~the ~~not~~financial ~~aware~~reporting and tax bases of ~~any~~assets ~~efforts~~and liabilities and for the expected future tax benefit to ~~amend~~be ~~any~~derived ~~existing~~from ~~legal~~tax ~~requirements~~credits. orDeferred ~~implement~~tax ~~new~~assets ~~legal~~are ~~requirements~~reduced inby a ~~manner~~valuation ~~with~~allowance when, ~~which~~in wethe ~~cannot~~opinion ~~comply~~of management, ~~our~~it ~~revenue~~is ~~might~~more belikely ~~materially~~than ~~harmed~~not ifthat ~~such~~some anportion ~~amendment~~ or ~~implementation~~all ~~were~~of tothe ~~occur~~deferred tax assets will not be realized.

~~Moreover,~~Tax ~~although~~rate wechanges are ~~not~~reflected ~~legally~~in ~~required to do so, we strive to obtain a broad range of certifications (such as ISO 9001, ISO 14001 and ISO 18001) for substantially all our products which~~ the ~~Company believes helps make our products more saleable and which contributes to the retention~~ computation of ~~existing customers and~~ the ~~obtainment~~income oftax ~~future~~provision ~~customers.~~during ~~The failure to obtain voluntary certifications for our products could result in a loss of current customers or could impair~~ the ~~marketability~~period ofsuch ~~our~~changes ~~products~~are ~~which could result in the failure for us to obtain new customers, which could have a materially adverse effect on our business~~enacted.

~~We may adopt an equity incentive plan under which we may grant securities to compensate employees and other services providers, which would result in increased share~~-~~based~~ ~~compensation~~29 ~~expenses and, therefore, reduce net income.~~-

~~We may adopt an equity incentive plan under which we may grant shares or options to qualified employees.~~ Under ~~current accounting rules, we would be required to recognize share-based compensation as compensation expense in our statement of income, based on~~ the ~~fair~~provision ~~value~~ of ~~equity~~ASC ~~awards~~740 onIncome ~~the date of the grant~~Taxes, tax ~~and~~position ~~recognize~~is ~~the~~recognized ~~compensation~~as ~~expense~~a ~~over~~benefit ~~the~~only ~~period~~if init ~~which the recipient~~ is ~~required~~“more tolikely ~~provide~~than ~~service~~not” inthat ~~exchange for~~ the ~~equity~~tax ~~award.~~position Wewould ~~have~~be ~~not made any such grants~~ sustained in ~~the~~a ~~past~~tax examination, ~~and~~with ~~accordingly~~a ~~our~~tax ~~results~~examination ofbeing ~~operations~~presumed ~~have~~to ~~not contained any share-based compensation charges~~occur. The ~~additional~~amount ~~expenses~~recognized ~~associated~~is ~~with share-based compensation may reduce~~ the ~~attractiveness~~largest amount of ~~issuing~~tax ~~stock options under an equity incentive plan~~ benefit that weis ~~may~~greater ~~adopt~~than in50% ~~the~~of ~~future.~~being Ifrealized weon ~~grant~~examination ~~equity~~by ~~compensation to attract and retain key personnel,~~ the ~~expenses~~tax ~~associated with share-based compensation may adversely affect our net income~~authority. ~~However,~~For iftax wepositions do not ~~grant~~meeting ~~equity~~the ~~compensation,~~“more welikely than ~~may~~ not” ~~be able to attract and retain key personnel or be forced to expend cash or other compensation instead. Furthermore~~test, ~~the~~no ~~issuance~~tax ofbenefit ~~equity~~is ~~awards would dilute the shareholders’ ownership interests in our company~~recorded.

24Comprehensive income

~~Our~~ASC ~~business~~Topic ~~may~~220, be"Reporting ~~adversely~~Comprehensive Income", ~~affected~~requires by the ~~global~~presentation ~~economic~~of ~~downturn~~comprehensive income, in addition to the ~~continuing~~existing ~~uncertainties~~statements inof operations. Comprehensive income is defined as the ~~financial~~change ~~markets~~in ~~which~~equity ~~could~~during ~~impair~~the ~~our~~year ~~ability~~from transactions and other events, excluding the ~~ability~~changes ofresulting ~~our~~from investments ~~customers~~by owners and distributions to ~~access~~owners, ~~capital~~and is not included in the ~~current~~computation ~~economic~~of ~~climate~~income ~~and~~tax ~~therefore~~expense ~~could~~or ~~have~~benefit. anAccumulated comprehensive ~~adverse~~income ~~effect~~consists of changes in unrealized gains and losses on ~~our~~foreign ~~business~~currency translation.

~~The global economy is currently in a pronounced economic downturn. Global~~ Available-for-sale financial markets are continuing to experience disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability. Given these uncertainties, there is no assurance that there will not be further deterioration in the global economy, the global financial markets and consumer confidence. If economic conditions deteriorate further, our business and results of operations could be materially and adversely affected.assets

Additionally, the inability of our customers and suppliers to access capital efficiently, or at all, may have other adverse effects on our financial condition. For example, financial difficulties experienced by our customers or suppliers could result in product delays; increase trade receivables defaults; and increase our inventory exposure. The ~~impact of tightening credit conditions may impair our customers~~Company’s ~~ability~~available-for-sale tofinancial assets ~~effectively~~consist ~~access capital markets. The inability~~ of ~~our~~investment ~~customers~~in tounlisted ~~borrow~~equity ~~money~~securities ~~to fund construction of electric bicycles reduces the demand for our products~~ and ~~services~~are ~~and~~recorded ~~may~~at ~~adversely affect our results from operations and cash flow~~cost. ~~These risks may increase if our customers and suppliers do not adequately manage their business or do not properly disclose their financial condition to us.~~

~~Although~~The weCompany ~~believe~~periodically weassesses ~~have~~whether its ~~adequate~~investment ~~liquidity~~in non-marketable equity securities are impaired and ~~capital~~if ~~resources~~any toimpairment ~~fund~~is ~~our~~other ~~operations~~than ~~internally,~~temporary. Factors considered in ~~light~~assessing ofwhether ~~current~~an ~~market~~impairment ~~conditions,~~is ~~our~~other ~~inability~~than totemporary ~~access~~include the ~~capital~~credit ~~markets~~quality onof ~~favorable~~the ~~terms~~investment, orthe atduration ~~all~~of the impairment, the ~~may~~Company’s ~~adversely~~ability ~~affect~~and ~~our~~intent ~~financial~~to ~~performance~~hold the investment until recovery and overall economic conditions. ~~The~~A ~~inability~~decline toin ~~obtain~~value of ~~adequate~~these ~~financing~~securities ~~from~~below ~~debt~~cost orthat ~~capital~~is ~~sources~~deemed ~~could~~to ~~force~~be usother than temporary results in an impairment charge to ~~self-fund~~earnings ~~strategic~~that ~~initiatives~~reduces the orcarrying ~~even~~amount ~~forego~~of ~~certain~~the ~~opportunities,~~securities ~~which~~to infair ~~turn~~value ~~could~~establishing ~~potentially~~a ~~harm~~new ~~our~~cost ~~performance~~basis.

WeThe ~~may~~Company ~~not~~principally betakes ~~able~~into toaccount the ~~effectively~~financial ~~recruit~~information of the investee and ~~retain~~investment ~~skilled~~returns ~~employees,~~for ~~particularly~~the ~~scientific,~~purpose ~~technical~~of ~~and~~identifying ~~management~~potential ~~professionals~~impairments.

~~Our ability to compete effectively depends largely on our ability to attract and retain certain key personnel~~Property, ~~including scientific, technical~~ plant and ~~management~~equipment ~~professionals.~~(“PPE”) ~~We anticipate that we will need to hire additional skilled personnel in all areas of our business. Industry demand for such employees, however, exceeds the number of personnel available,~~ and ~~the~~long-term ~~competition~~land ~~for~~lease attracting and retaining these employees is intense. Because of this intense competition for skilled employees, we may be unable to retain our existing personnel or attract additional qualified employees to keep up with future business needs. If this should happen, our business, operating results and financial condition could be adversely affected.prepayments

~~Our~~PPE ~~labor~~are ~~costs~~stated ~~are~~at ~~likely~~cost toless ~~increase~~accumulated asdepreciation, and ainclude ~~result~~expenditure ofthat ~~changes~~substantially inincreases ~~Chinese~~the ~~labor~~useful ~~laws~~lives of existing assets.

WeThe ~~expect to experience an increase in our~~ cost of ~~labor~~an ~~due~~asset tocomprises ~~recent~~its ~~changes~~purchase price inand ~~Chinese~~any ~~labor~~directly ~~laws~~attributable ~~which are likely to increase~~ costs ~~further~~of ~~and~~bringing ~~impose restrictions on our relationship with our employees. In June 2007,~~ the ~~National~~asset ~~People’s~~to ~~Congress~~its ofpresent ~~the~~working ~~PRC~~condition ~~enacted new labor law legislation called the Labor Contract Law~~ and ~~more~~location ~~strictly~~for ~~enforced~~its ~~existing labor laws~~intended use. ~~The~~Expenditures ~~new~~incurred ~~law,~~after ~~which~~the ~~became~~assets ~~effective~~have onbeen ~~January~~put 1,into ~~2008~~operation, ~~amended~~such ~~and~~as ~~formalized~~repairs ~~workers’~~and ~~rights concerning overtime hours~~maintenance, ~~pensions,~~overhaul ~~layoffs,~~and ~~employment~~minor ~~contracts~~ renewals and ~~the role of labor unions. As a result of the new law~~betterments, weare ~~have~~normally ~~had~~charged to ~~increase~~operating ~~the~~expenses ~~salaries~~in ofthe ~~our~~period ~~employees, provide additional benefits to our employees, and revise certain other of our labor practices. The increase~~ in ~~labor costs has increased our operating costs,~~ which ~~increase~~they weare ~~have not always been able to pass through to our customers~~incurred. In ~~addition,~~situations where ~~under~~it ~~the~~can ~~new law, employees who either have worked for us for 10 years or more or who have had two consecutive fixed-term contracts must~~ be ~~given~~clearly andemonstrated ~~“open-ended employment contract”~~ that, ~~in effect, constitutes a lifetime, permanent contract, which is terminable only in~~ the ~~event~~expenditure ~~the~~has ~~employee~~resulted ~~materially breaches our rules and regulations or is~~ in ~~serious~~an ~~dereliction of his or her duties. Such non-cancelable employment contracts will substantially~~ increase ~~our employment related risks and limit our ability to downsize our workforce~~ in the ~~event~~future ~~of an~~ economic ~~downturn.~~benefits Noexpected to ~~assurance can~~ be ~~given~~obtained ~~that~~from ~~we will not in~~ the ~~future~~use beof ~~subject to labor strikes or that we will not have to make other payments to resolve future labor issues caused by~~ the ~~new laws. Furthermore~~assets, ~~there can be no assurance that~~ the ~~labor~~expenditure ~~laws~~is ~~will not change further or that their interpretation and implementation will vary, which may have a negative effect upon our business and results of operations~~capitalized.

25Depreciation is provided, on a straight-line basis, to write off the cost less accumulated depreciation of each PPE item at rates based on their estimated useful lives from the date on which they become fully operational and after taking into account their estimated residual values as follows:

~~Our~~- ~~business~~30 ~~could be materially adversely affected if we cannot protect our intellectual property rights or if we infringe on the intellectual property rights of others.~~-

Our ability to compete effectively will depend on our ability to maintain and protect our proprietary rights, including patents that we use in our business and our brand name. Third parties may seek to challenge, invalidate, circumvent or render unenforceable any proprietary rights owned by or licensed to us. Our inability to protect our proprietary rights could materially adversely affect the ability to sell our products. Litigation may be necessary to:

Buildings	20 years
Leasehold improvements	Over the unexpired term of lease
Furniture, fixtures and office equipment	10 years
Motor vehicles	5 years
Plant and machinery	10 years

•When ~~enforce~~assets ~~our~~are ~~intellectual~~sold ~~property~~or ~~rights;~~retired, their costs and accumulated depreciation are eliminated from the consolidated financial statements and any gain or loss resulting from their disposal is recognized in the period of disposition as an element of other income.

•Construction-in-progress ~~protect~~consists ~~our~~of ~~trade~~factories and ~~secrets;~~office buildings under construction and machinery pending installation and includes the costs of construction, machinery and equipment, and any interest charges arising from borrowings used to finance these assets during the period of construction or installation. No provision for depreciation is made on construction-in-progress until such time the relevant assets are completed and ready for their intended use.

•Long-term ~~determine~~land ~~the~~lease ~~scope~~prepayments ~~and~~are ~~validity~~amortized on ofa ~~such~~straight-line ~~intellectual~~basis ~~property~~over ~~rights~~the term of lease.

~~Any~~Impairment ~~such litigation, whether or not successful, could result in substantial costs and diversion~~ of long-lived ~~resources and management’s attention from the operation of our business.~~assets

WeLong-lived ~~may~~assets ~~receive~~are ~~notice~~reviewed ofat ~~claims~~least ofannually for ~~infringement~~impairment ofwhenever ~~other~~events ~~parties’~~or ~~proprietary~~changes ~~rights. Such actions could result~~ in ~~litigation~~circumstances ~~and~~indicate wethat ~~could~~the ~~incur~~carrying ~~significant~~amount ~~costs and diversion~~ of ~~resources~~assets inmay ~~defending~~not ~~such~~be ~~claims~~recoverable. It ~~The~~is ~~party~~reasonably ~~making~~possible ~~such~~that ~~claims~~these assets could ~~secure~~become aimpaired ~~judgment awarding substantial damages,~~ as ~~well~~a asresult ~~injunctive~~of technology or other ~~equitable~~industry ~~relief~~changes. ~~Such~~Determination of ~~relief~~recoverability ~~could~~of ~~effectively~~assets ~~block~~to ~~our~~be ~~ability~~held toand ~~make,~~used ~~use,~~is ~~sell,~~by ~~distribute~~comparing orthe ~~market~~carrying ~~our~~amount ~~products~~of ~~and~~an ~~services~~asset into ~~certain~~future ~~jurisdictions.~~net Weundiscounted ~~may~~cash flows ~~also~~to be ~~required~~generated toby ~~seek~~the ~~licenses~~assets. toIf such ~~intellectual~~assets ~~property.~~are Weconsidered ~~cannot~~to ~~predict,~~be ~~however~~impaired, ~~whether~~impairment ~~such~~is ~~licenses~~measured ~~would~~by bethe ~~available~~amount ~~or,~~by ifwhich the ~~available,~~carrying ~~could~~amount beof ~~obtained~~the onassets ~~terms~~exceeds ~~that~~the ~~are~~fair ~~commercially~~value ~~reasonable~~of ~~and~~the ~~acceptable~~assets toand ~~us.~~recorded ~~The~~as ~~failure~~a toreduction ~~obtain~~of ~~the~~original ~~necessary~~costs. ~~licenses~~Assets orto be ~~other~~disposed ~~rights~~of ~~could~~are ~~delay~~reported orat ~~preclude~~ the ~~sale,~~lower ~~manufacture or distribution~~ of ~~our~~the ~~products~~carrying ~~and~~amount ~~could~~or ~~result~~fair invalue ~~increased~~less costs to ussell.

We may pursue future growth through strategic acquisitions and alliances which may not yield anticipated benefits and may adversely affect our operating results, financial condition and existing business.Inventories

WeInventories ~~may~~are ~~seek~~stated toat ~~grow in~~ the ~~future~~lower ~~through~~of ~~strategic~~cost or ~~acquisitions~~market. inManagement ~~order~~compares tothe ~~complement~~cost ~~and~~of ~~expand~~inventories ~~our~~with ~~business.~~the ~~The~~market ~~success~~value, ofand ~~our~~allowance ~~acquisition~~is ~~strategy~~made ~~will~~for ~~depend~~writing ~~on,~~down ~~among~~the ~~other~~inventories to ~~things:~~market value.

·Trade ~~the~~receivables and ~~availability~~allowance offor ~~suitable~~doubtful ~~candidates;~~accounts

·The ~~competition~~allowance ~~from~~for ~~other~~the ~~companies~~risk ~~for~~of non-collection of trade receivables takes into account credit-risk concentration. Collective debt risk is assessed based on average historical losses and specific circumstances such as serious adverse economic conditions. The Company’s estimate is based on a variety of factors, including historical collection experience, existing economic conditions and a review of the ~~purchase~~current status of ~~available~~the receivables. ~~candidates;~~Trade receivables are presented net of an allowance for doubtful accounts of US$6,000 and US$6,000 as of March 31, 2012 and 2011, respectively.

·- ~~our~~31 ~~ability to value those candidates accurately and negotiate favorable terms for those acquisitions;~~-

·Cash ~~the~~and ~~availability of funds to finance acquisitions;~~cash equivalents

·Cash ~~the~~represents ~~ability~~cash toon ~~establish~~hand ~~new~~and ~~informational~~deposits with financial institutions which are repayable on demand. Cash equivalents represent short-term, ~~operational~~highly liquid investments purchased with an original maturity of three months or less, which are readily convertible into known amounts of cash and ~~financial~~which ~~systems~~are subject to ~~meet~~an ~~the~~insignificant ~~needs~~risk of ~~our~~changes ~~business;~~in value.

·Foreign ~~the ability to achieve anticipated synergies, including with respect to complementary products or services; and~~currency translation

·Items included in the ~~availability~~financial statements of ~~management~~the ~~resources~~Company’s tomajor ~~oversee~~subsidiaries operating in the ~~integration~~PRC ~~and~~are ~~operation~~measured using Renminbi (RMB), the currency of the ~~acquired~~primary ~~businesses~~economic environment in which the entity operates (“functional currency”). The consolidated financial statements are presented in United States Dollars (US$), which is the Company’s presentation currency.

26Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement.

IfOn weconsolidation, ~~are not successful in integrating acquired businesses and completing acquisitions in~~ the ~~future,~~results ~~we may be required to reevaluate our acquisition strategy. We also may incur substantial expenses~~ and ~~devote~~financial position ~~significant~~of ~~management~~all ~~time and resources in seeking to complete acquisitions. Acquired businesses may fail to meet our performance expectations. If we do not achieve~~ the ~~anticipated~~group ~~benefits~~entities ofthat anhave ~~acquisition~~a asfunctional ~~rapidly~~currency asdifferent ~~expected,~~from ~~or at all, investors or analysts may not perceive~~ the ~~same~~presentation ~~benefits~~currency ofare ~~the~~translated ~~acquisition~~ as ~~we do. If these risks materialize, our stock price could be materially adversely affected.~~follows:

~~RISKS~~a. ~~RELATED~~assets TOand USliabilities ~~DOING~~for ~~BUSINESS~~each INbalance ~~CHINA~~sheet presented are translated at the closing rate at the date of that balance sheet;

Ifb. ~~the~~income ~~land~~and ~~use~~expenses ~~rights~~for ofeach ~~our~~statement ~~landlord~~of ~~are revoked, we would be forced to relocate~~ operations, ~~which~~are ~~could~~translated ~~have~~at anaverage ~~adverse~~exchange ~~affect on our financial condition and results of operations.~~rates;

~~Under Chinese law land is owned by the state or rural collective economic organizations~~c. ~~The~~all ~~state~~resulting ~~issues~~exchange todifferences ~~the~~are ~~land~~recognized ~~users~~as a ~~land~~separate ~~use~~component ~~right certificate. Land use rights shall not be revoked before the expiration~~ of ~~the period thereof~~equity. However, under special circumstances, land use rights can be revoked and land users forced to vacate when redevelopment of the land is in the public interest, provided that corresponding compensation is given to the land users. The public interest rationale is interpreted quite broadly and the process of land appropriation may be less than transparent. With the exception of our property at Jingyi Road, we do not have any land use rights and our manufacturing facilities rely on land use rights of our landlord, and the loss of such rights would require us to identify and relocate new manufacturing and other facilities, which could be time consuming have a material adverse effect on our financial condition and results of operations.

~~Substantially~~Fair ~~all~~value of our assets are located in the PRC and a substantial portion of our revenues are derived from our operations in China, and changes in the political and economic policies of the PRC government could have a significant impact upon the business we may be able to conduct in the PRC and accordingly on the results of our operations and financial ~~condition.~~instruments

~~Our business operations may be adversely affected by the current and future political environment in the PRC.~~ The ~~Chinese~~ASC ~~government~~Topic exerts substantial influence and control over the manner in which we must conduct our business activities. Our ability to operate in China may be adversely affected by changes in Chinese laws and regulations825, ~~including~~“Disclosures ~~those~~about Fair ~~relating~~Value toof ~~taxation,~~Financial ~~import and export tariffs~~Instruments”, ~~raw~~requires ~~materials,~~that ~~environmental~~the ~~regulations,~~Company ~~land~~discloses ~~use~~estimated ~~rights,~~fair ~~property~~value ~~and~~of ~~other~~financial ~~matters~~instruments. ~~Under~~ The ~~the~~carrying ~~current~~amounts ~~government~~reported ~~leadership,~~in the ~~government~~balance ofsheets ~~the~~for ~~PRC~~current ~~has~~assets ~~been pursuing economic reform policies that encourage private economic activity~~ and ~~greater~~current ~~economic~~liabilities ~~decentralization. There~~qualifying isas nofinancial ~~assurance,~~instruments are ~~however,~~a ~~that~~reasonable ~~the~~estimate ~~government~~ of ~~the~~fair ~~PRC will continue to pursue these policies, or that it will not significantly alter these policies from time to time without notice~~value.

~~Our~~Fair ~~operations~~value are subject to PRC laws and regulations that are sometimes vague and uncertain. Any changes in such PRC laws and regulations, or the interpretations thereof, may have a material and adverse effect on our business.measurements

~~The~~ASC ~~PRC’s~~820 ~~legal~~establishes ~~system is~~ a ~~civil~~three-tier ~~law~~fair ~~system~~value hierarchy ~~based~~to onprioritize ~~written statutes. Unlike~~ the ~~common~~inputs ~~law~~used ~~system prevalent~~ in ~~the~~measuring ~~United~~fair ~~States, decided legal cases have little~~ value ~~as precedent in China~~. ~~There~~ ~~are~~The ~~substantial~~hierarchy ~~uncertainties~~gives ~~regarding~~ the ~~interpretation~~highest ~~and~~priority ~~application of PRC laws and regulations, including but not limited~~ to, ~~governmental~~quoted ~~approvals~~prices ~~required~~in ~~for~~active markets ~~conducting~~(Level ~~business~~1) and ~~investments, laws and regulations governing~~ the ~~battery~~lowest ~~industry~~priority ~~and~~to ~~battery~~unobservable ~~product~~inputs ~~safety,~~(Level ~~national~~3). ~~security-related~~The ~~laws~~three ~~and~~levels ~~regulations,~~are asdefined ~~well~~ as ~~commercial, antitrust, patent, product liability, environmental laws and regulations, consumer protection, and financial and business taxation laws and regulations.~~follows:

~~The~~Level ~~Chinese~~1: Observable ~~government has been developing a comprehensive system of commercial laws~~inputs, such ~~and~~as ~~considerable~~unadjusted ~~progress~~quoted ~~has~~market ~~been~~prices ~~made~~ in ~~introducing~~active ~~laws~~markets ~~and~~for ~~regulations dealing with economic matters. However, because these laws and regulations are relatively new, and because of~~ the ~~limited~~identical ~~volume~~asset ofor ~~published cases and judicial interpretation and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties~~liabilities.

27Level 2: Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

~~Our~~- ~~principal~~32 operating subsidiary, CCEC, is considered a foreign invested enterprise under PRC laws, and as a result is required to comply with PRC laws and regulations, including laws and regulations specifically governing the activities and conduct of foreign invested enterprises. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our businesses. If the relevant authorities find us in violation of PRC laws or regulations, they would deal with such a violation in accordance with PRC laws and regulations, including, without limitation:-

·Level ~~levying~~3: Unobservable ~~fines;~~inputs reflecting the entity’s own assumptions in measuring the asset or liability at fair value.

·The ~~revoking~~Company’s ~~our~~financial ~~business~~instruments consist ~~license~~principally of cash and cash equivalents, orrestricted bank balances, other ~~licenses;~~financial assets, trade receivables and payables, deposits, prepayment and other receivables, notes payable, accrued expenses and other liabilities, amount due from/to related parties and short-term borrowings which are carried at amounts that generally approximate their fair values because of the short-term maturity of these instruments.

·The ~~requiring~~Company’s ~~that~~trading wesecurities ~~restructure~~are measured ~~our~~at ~~operations;~~fair ~~and~~value on recurring basis. The trading securities are listed on a stock exchange in the PRC with quoted price in active market (Level 1 inputs).

~~· requiring that we discontinue any portion or all of our business.~~Warranty

~~Investors~~Estimated ~~may~~warranty ~~experience~~costs ~~difficulties~~are inrecognized ~~effecting~~at the ~~service~~time ofwhen ~~legal~~the ~~process~~Company sells its products and are included in sales, ~~enforcing~~marketing ~~foreign~~and ~~judgments~~distribution orexpenses. ~~bringing~~The ~~original~~Company ~~actions~~uses historical failure rates and costs to repair product defects during the warranty period to estimate warranty costs, which are reviewed periodically in ~~China~~light ~~based~~of ~~upon~~actual Uexperience.S. ~~laws,~~The ~~including~~carrying ~~the~~amounts ~~federal~~of ~~securities~~estimated ~~laws~~warranty orcosts were included in accrued expenses and other ~~foreign~~accrued liabilities ~~laws~~as ~~against~~of usMarch or31, ~~our~~2012 ~~management~~and 2011.

~~Most~~Use of our current operations, including the manufacturing and distribution of our products, are conducted in China. Moreover, all of our directors and officers are nationals and residents of China. All or substantially all of the assets of these persons are located outside the United States and in the PRC. As a result, it may not be possible to effect service of process within the United States or elsewhere outside China upon these persons. In addition, uncertainty exists as to whether the courts of China would recognize or enforce judgments of U.S. courts obtained against us or such officers and/or directors predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in China against us or such persons predicated upon the securities laws of the United States or any state thereof.estimates

The ~~scope~~preparation of ~~our~~the ~~business~~consolidated ~~license~~financial statements in ~~China~~conformity iswith ~~limited,~~US GAAP requires the management to make estimates and weassumptions ~~may~~that ~~not~~affect ~~expand~~the orreported ~~continue~~amounts of ~~our~~assets ~~business~~and ~~without~~liabilities ~~government~~and ~~approval~~disclosure of contingent assets and ~~renewal~~liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reported periods. The management evaluates these estimates and judgments on an ongoing basis and bases their estimates on experience, ~~respectively~~current and expected future conditions, third-party evaluations and various other assumptions that they believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies.

~~Our~~Actual ~~principal~~amounts ~~operating~~could ~~subsidiary,~~differ ~~CCEC,~~from isthose ~~a wholly foreign-owned enterprise, commonly known as a WFOE~~estimates. A Estimates ~~WFOE~~are ~~can~~used ~~only conduct business within its approved business scope~~for, ~~which~~but ~~ultimately~~not ~~appears~~limited ~~on its business license. Our license permits us~~ to ~~produce lighting appliances~~, ~~glass~~the ~~products~~accounting for ~~daily~~certain ~~use,~~items ~~sanitary glass bath equipment, valve regulated lead-acid batteries and to sell~~ such ~~products,~~as ~~and~~allowance ~~other~~for ~~than~~doubtful ~~production and sales of valve regulated lead-acid batteries~~accounts, ~~we have not engaged in any other business activity since the date of CCEC’s incorporation. Any amendment to the scope of our business requires further application~~ depreciation and ~~government approval. In order for us to expand our business beyond the scope of our license~~amortization, weinventory will be required to enter into a negotiation with the PRC authorities for the approval to expand the scope of our business. We cannot assure investors that CCEC will be able to obtain the necessary government approval for any change or expansion of its business. If we are unable to obtain the approval from the government to amend our business license to include lithium-ion batteriesallowance, ~~this~~taxes ~~could~~and ~~have a materially adverse effect on our business~~contingencies.

WeRecent are subject to a variety of environmental laws and regulations related to our manufacturing operations. Our failure to comply with environmental laws and regulations may have a material adverse effect on our business and results of operations.accounting pronouncements

WeIn ~~are~~May ~~subject~~2011, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-04, "Fair Value Measurement (Topic 820): Amendments to ~~various~~Achieve ~~environmental~~Common ~~laws~~Fair Value Measurement and Disclosure ~~regulations~~Requirements in ~~China~~U. WeS. ~~cannot~~GAAP ~~assure~~and ~~you~~International ~~that~~Financial atReporting ~~all~~Standards ~~times~~("IFRSs")." weUnder ~~will~~ASU be2011-04, the inguidance ~~compliance~~amends ~~with~~certain ~~the~~accounting ~~environmental~~and ~~laws~~disclosure ~~and~~requirements ~~regulations~~related orto ~~that~~fair wevalue ~~will~~measurements ~~not~~to beensure ~~required~~that tofair ~~expend~~value has ~~significant~~the ~~funds~~same tomeaning ~~comply~~in ~~with,~~U.S. orGAAP ~~discharge~~and ~~liabilities~~in ~~arising~~IFRSs ~~under,~~and ~~environmental~~that ~~laws~~their respective fair value measurement and ~~regulations. Additionally,~~disclosure ~~these~~requirements ~~regulations~~are the ~~may~~same. ~~change~~ASU in2011-04 ais ~~manner~~effective ~~that~~for ~~could~~public ~~have~~companies aduring ~~material~~interim ~~adverse~~and ~~effect~~annual onperiods ~~our~~beginning ~~business~~after December 15, ~~results~~2011. ofEarly adoption ~~operations~~by ~~and~~public ~~financial~~entities ~~condition~~is not permitted. We ~~have~~The ~~made~~Company ~~and~~does not believe that the adoption of ASU 2011-04 will ~~continue~~have toa ~~make~~material impact ~~capital~~on ~~and~~the ~~other~~Company's ~~expenditures~~consolidated toresults ~~comply~~of ~~with~~operation ~~environmental~~and ~~requirements~~financial condition.

28- 33 -

~~Furthermore~~In June 2011, ~~our~~the ~~failure~~FASB toissued ~~comply~~ASU ~~with~~No. ~~applicable~~2011-05, "Comprehensive ~~environmental~~Income ~~laws~~(ASC ~~and~~Topic ~~regulations~~220): ~~worldwide~~Presentation ~~could~~of ~~harm~~Comprehensive ~~our~~Income," ~~business~~("ASU ~~and~~2011-05") ~~results~~which ofamends current ~~operations~~comprehensive income guidance. ~~The~~This ~~manufacturing,~~accounting ~~assembling~~update ~~and~~eliminates ~~testing~~the option to present the components of ~~our~~other ~~products~~comprehensive income ~~require~~as part of the ~~use~~statement of ~~hazardous~~shareholders' ~~materials~~equity. ~~that~~Instead, ~~are~~the ~~subject~~reporting toentity must report comprehensive income in either a ~~broad~~single ~~array~~continuous statement of ~~environmental~~comprehensive income which contains two sections, ~~health~~net income and ~~safety~~other ~~laws~~comprehensive ~~and~~income, ~~regulations~~or in two separate but consecutive statements. ~~Our~~ASU ~~failure~~2011-05 towill ~~comply~~be effective for public companies during the interim and annual periods beginning after December 15, 2011 with ~~any~~early adoption permitted. The Company does not believe that the adoption of ~~these~~ASU ~~applicable~~2011-05 will ~~laws~~have ora ~~regulations~~material ~~could~~impact ~~result~~on ~~in:~~the Company's consolidated results of operation and financial condition.

·In ~~regulatory~~September ~~penalties~~2011, ~~fines~~the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-08, “Intangibles – Goodwill and ~~legal~~Other ~~liabilities;~~(Topic 350): Testing goodwill for impairment”. This ASU permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. Under ASU 2011-08, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. ASU 2011-08 is effective for annual periods beginning after December 15, 2011. The Company believes that the adoption of ASU 2011-08 will not have any impact on the Company's consolidated results of operation and financial condition.

·In ~~suspension~~December 2011, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (ASU) 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities”. The amendments in this ASU require an entity to disclose information about offsetting and related arrangements on its financial position. This includes the effect or potential effect of ~~production;~~rights of offset associated with an entity’s recognized assets and recognized liabilities and require improved information about financial instruments and derivative instruments that are either (1) offset in accordance with Section 210-20-45 or Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with Section 210-20-45 or Section 915-10-45. The amendments are effective for annual reporting periods beginning on or after January 1, 2013 and retrospective disclosure is required for all comparative periods presented. No early adoption is permitted. The Company believes that the adoption of ASU 2011-11 will not have any impact on the Company's consolidated results of operation and financial condition.

·Results ~~alteration~~ of ~~our~~Operations ~~fabrication~~for the Fiscal Year Ended March 31, ~~assembly~~2012 ~~and~~Compared ~~test~~To ~~processes;~~the ~~and~~Fiscal Year Ended March 31, 2011

·The ~~curtailment~~following table sets forth a summary of certain key components of our results of operations orfor ~~sales~~years indicated, in dollars and as a percentage of revenues.

In- ~~addition,~~34 our failure to manage the use, transportation, emission, discharge, storage, recycling or disposal of hazardous materials could subject us to increased costs or future liabilities. Existing and future environmental laws and regulations could also require us to acquire pollution abatement or remediation equipment, modify our product designs or incur other expenses associated with such laws and regulations. Many new materials that we are evaluating for use in our operations may be subject to regulation under existing or future environmental laws and regulations that may restrict our use of one or more of such materials in our manufacturing, assembly and test processes or products. Any of these restrictions could harm our business and results of operations by increasing our expenses or requiring us to alter our manufacturing processes.-

Contract drafting, interpretation and enforcement in China involve significant uncertainty.

	For The Years Ended March 31,
	2012			2011			2012			2011
	$ ’000			$’000
Revenues		119,563			243,814			100.00	%		100.00	%
Cost of sales		(101,716	)		(214,456	)		85.07	%		87.96	%
Gross income		17,847			29,358			14.93	%		12.04	%
Sales, marketing and distribution expenses		(11,629	)		(10,882	)		9.73	%		4.46	%
General and administrative expenses		(9,295	)		(4,138	)		7.77	%		1.70	%
Operating (loss) income		(3,077	)		14,338			2.57	%		5.88	%
Other income, net		860			1,782			0.72	%		0.73	%
Impairment loss on property, plant and equipment		(2,857	)		-			2.39	%		- %
Loss on disposal of scrap inventories		(13,896	)		(2,328	)		11.62	%		0.95	%
Interest Income		1,766			483			1.48	%		0.20	%
(Loss) income before interest and income tax expenses		(17,204	)		14,275			14.39	%		5.85	%
Interest expenses		(8,812	)		(3,359	)		7.37	%		1.38	%
(Loss) income before income tax expenses		(26,016	)		10,916			21.76	%		4.48	%
Income tax expenses		(1,047	)		(2,447	)		0.88	%		1.00	%
(Loss) income before extraordinary item (less applicable income taxes of US$0)		(27,063	)		8,469			22.63	%		3.47	%
Extraordinary item		11,269			2,605			9.43	%		1.07	%
Net (loss) income including non-controlling interest		(15,794	)		11,074			13.21	%		4.54	%
Net loss (income) attributable to non-controlling interest		52			(8	)		0.04	%		- %
Other comprehensive income		1,465			1,437			1.23	%		0.59	%
Comprehensive (loss) income		(14,277	)		12,503			11.94	%		5.13	%

WeRevenues ~~have entered into numerous contracts governed by PRC law, which are material to our business. As compared with contracts in the United States, contracts governed by PRC law tend to contain less detail~~ and ~~are~~cost not as comprehensive in defining contracting parties’ rights and obligations. As a result, contracts in China are more vulnerable to disputes and legal challenges. In addition, contract interpretation and enforcement in China is not as developed as in the United States, and the result of any contract dispute is subject to significant uncertainties. Therefore, we cannot assure you that we will not be subject to disputes under our material contracts, and if such disputes arise, we cannot assure you that we will prevail.sales

WeRevenue ~~could~~decreased beby ~~liable~~US$124,251,000 or 50.96%, to US$119,563,000 for ~~damages~~the year ended March 31, 2012 compared with US$243,814,000 for ~~defects~~the inyear ~~our~~ended ~~products~~March ~~pursuant~~31, 2011. This decrease was mainly attributable to the ~~Tort~~decrease ~~Liability~~in ~~Law~~production activities resulting from an unexpected tightening of an environmental protection policy implemented by the PRC Central Government enforced on all lead-acid battery manufacturers whereby a 500 meter isolated area must be maintained between production facilities and residential areas. All production facilities must have complied with this policy on or before July 15, 2011. Our production facilities at Plant B (Jing’er Road) are not capable of being in full compliance with the tightened environmental policy and the residential area near Plant B shows no signs of slowing its expansion towards Plant B, which is out of the Company’s control. Our management decided to gradually scale down the operations of Plant B and to relocate such production facilities to Plant D, apart from recharging and packing activities, before December 31, 2011. At the date of this report we have completed our relocation from Plant B to Plant D.

~~The~~- ~~Tort~~35 Liability Law of the People’s Republic of China, which was passed during the 12th Session of the Standing Committee of the 11th National People’s Congress on December 26, 2009, states that manufacturers are liable for damages caused by defects in their products and sellers are liable for damages attributable to their fault. If the defects are caused by the fault of third parties such as the transporter or storekeeper, manufacturers and sellers are entitled to claim for compensation from these third parties after paying the compensation amount.-

WeAlthough ~~face~~our ~~uncertainty~~production ~~from~~capacities ~~China’s~~gradually recovered, ~~Circular on Strengthening~~ the ~~Administration~~Company oflost ~~Enterprise~~its ~~Income~~market ~~Tax~~share onand ~~Non-Resident~~it ~~Enterprises’~~has ~~Share~~taken ~~Transfer~~time ~~(“Circular~~to ~~698”)~~recover. ~~that~~As ~~was~~such, ~~released~~our inrevenue ~~December~~decreased ~~2009 with retroactive effect from January 1, 2008~~significantly.

~~The~~Cost ~~Chinese State Administration~~ of ~~Taxation~~sales ~~(“SAT”)~~for ~~released a circular (Guoshuihan No. 698 – Circular 698) on December 10, 2009 that addresses~~ the ~~transfer~~year ofended ~~shares~~March ~~by nonresident companies. Circular 698~~31, 2012 ~~which~~and is2011 ~~effective~~were ~~retroactively to January 1~~US$101, ~~2008~~716,000 ~~may~~and ~~have a significant impact on many companies that use offshore holding companies to invest in China. Circular 698~~US$214, ~~which provides parties with a short period of time to comply its requirements~~456,000, ~~indirectly taxes foreign companies on gains derived from the indirect sale of a Chinese company~~respectively. ~~Where~~ aThe ~~foreign~~decrease ~~investor indirectly transfers equity interests~~ in acost ~~Chinese~~of ~~resident~~sales ~~enterprise~~of ~~by selling the shares in an offshore holding company~~US$112,740,000 ~~and the latter is located in a country~~ or ~~jurisdiction where the effective tax burden is less than 12~~52.557% orwas mainly ~~where~~attributable ~~the offshore income of his, her, or its residents is not taxable, the foreign investor is required~~ to ~~provide~~ the ~~tax~~decrease ~~authority~~ in ~~charge~~sales ofvolume ~~that~~resulting ~~Chinese~~from ~~resident enterprise with~~ the ~~relevant~~unexpected ~~information~~tightening ~~within 30 days~~ of the ~~execution~~environmental ofprotection ~~the~~policy as ~~transfer~~stated ~~contract~~above. Moreover, where a foreign investor indirectly transfers equity interests in a Chinese resident enterprise through an abuse of form of organization and there are no reasonable commercial purposes such that the corporate income tax liability is avoided, the PRC tax authority will have the power to re-assess the nature of the equity transfer in accordance with PRC’s “substance-over-form” principle and deny the existence of the offshore holding company that is used for tax planning purposes.

29The decrease in cost of sales was also attributable to a significant decrease of processing charges on lead plates, one of the major components of our battery products, resulting from our vertical integration of producing lead plates at Plant D commencing in August 2011.

~~There~~We ishave ~~uncertainty~~improved asour togross ~~the~~profit ~~application~~margin during ~~of Circular 698. For example, while~~ the ~~term~~year ~~“indirectly~~ended ~~transfer”~~March ~~is not defined~~31, it2012. isThe ~~understood~~gross ~~that~~profit ~~the~~ratio ~~relevant~~increased ~~PRC~~by ~~tax~~2.89% ~~authorities~~to ~~have~~14.93% ~~jurisdiction regarding requests~~ for ~~information~~the ~~over~~year aended ~~wide~~March ~~range~~31, of2012 ~~foreign~~as compared ~~entities having no direct contact~~ with ~~China~~12.04% ~~Moreover,~~for the ~~relevant~~corresponding ~~authority~~year ~~has~~in ~~not~~2011. ~~yet~~The ~~promulgated~~improvement ~~any~~was ~~formal~~mainly ~~provisions~~attributable ~~or formally declared or stated how~~ to ~~calculate~~ the ~~effective~~decrease ~~tax~~ in ~~the~~cost ~~country or jurisdiction and to what extent and the process~~ of ~~the~~production by ~~disclosure~~implementing to the ~~tax~~vertical ~~authority~~integration instrategy ~~charge~~as ofdiscussed ~~that~~above ~~Chinese~~as ~~resident~~well ~~enterprise. In~~as ~~addition,~~an ~~there~~increase ~~are~~in ~~not~~the ~~any~~selling ~~formal~~price ~~declarations~~due ~~with regard~~ to ~~how~~the ~~to decide “abuse~~ shortage of ~~form~~battery ofsupplies ~~organization”~~as ~~and “reasonable commercial purpose,” which can be utilized by us to balance if our company complies with the Circular 698. As~~ a result, ~~we may become at risk~~ of ~~being~~the ~~taxed~~environmental ~~under~~protection ~~Circular~~policy ~~698~~discussed ~~and~~above, wewhich ~~may~~has beforced ~~required~~hundreds toof ~~expend~~our ~~valuable resources~~ competitors to ~~comply~~shut ~~with~~down ~~Circular 698~~ or to ~~establish~~stop ~~that we should not be taxed under Circular 698, which could have a material adverse effect on our financial condition and results of~~ operations.

~~The~~Depreciation ~~foreign currency exchange rate between the U.S. Dollar~~ and ~~Renminbi~~Amortization ~~could adversely affect our financial condition.~~

ToDepreciation and amortization expense for the ~~extent~~years ~~that~~ended weMarch ~~need~~31, to2012 ~~convert~~and ~~U.S.~~2011 ~~Dollars~~were ~~into~~US$1,994,000 ~~Renminbi~~and ~~for~~US$1,093,000, ~~our~~respectively. ~~operational~~The ~~needs~~increase of US$901,000 ~~our~~or ~~financial~~82.43% was ~~position~~mainly ~~and~~attributable to the ~~price~~additional ofdepreciation ~~our~~charges ~~common~~of ~~stock~~US$558,000 ~~may~~incurred beas ~~adversely~~a ~~affected~~result ~~should~~of the ~~Renminbi~~change ~~appreciate~~of ~~against~~estimated ~~the~~useful life ~~U.S.~~on ~~Dollar~~certain machinery at ~~that~~Plant ~~time~~B. ~~Conversely~~ During the year ended March 31, if2012, we ~~decide~~were toadvised ~~convert~~by ~~our~~the ~~Renminbi~~local ~~into~~authority ~~U.S.~~that ~~Dollars~~the ~~for~~external battery ~~our~~formation ~~operational~~technique, ~~needs~~which orwas ~~paying~~used ~~dividends~~in onPlant ~~our~~B ~~common~~to ~~stock~~produce battery products, ~~the~~will ~~dollar~~be ~~equivalent~~prohibited ofafter ~~our~~October ~~earnings~~31, ~~from~~2012. Our ~~our~~management ~~subsidiaries~~reviewed inthe ~~China~~machinery ~~would~~in bePlant ~~reduced~~B ~~should~~and ~~the~~identified ~~dollar~~that ~~appreciate~~certain ~~against~~machinery ~~the~~cannot ~~Renminbi. We~~be ~~currently~~used doafter ~~not~~that ~~hedge~~date ~~our~~and ~~exposure~~therefore, their toestimated ~~fluctuations~~useful inlife ~~currency~~was ~~exchange~~adjusted ~~rates~~accordingly.

~~Until~~In ~~1994~~addition, ~~the Renminbi experienced a gradual but significant devaluation against most major currencies, including dollars, and there was a significant devaluation of the Renminbi on January 1, 1994~~ in ~~connection~~order ~~with the replacement of the dual exchange rate system with a unified managed floating rate foreign exchange system. Since 1994, the value of the Renminbi relative~~ to ~~the~~expand ~~U.S.~~our ~~Dollar has remained stable and has appreciated slightly against the U.S. Dollar. Countries~~production capacity, ~~including~~we ~~the United States,~~ have ~~argued~~invested ~~that~~significantly ~~the~~in ~~Renminbi~~plant ~~is artificially undervalued due to China’s current monetary policies~~ and ~~have~~machinery ~~pressured~~at ~~China~~Plant toD ~~allow~~during the ~~Renminbi~~year toended ~~float~~March ~~freely in world markets. In July 2005~~31, ~~the PRC government changed its policy of pegging the value of the Renminbi to the dollar~~2012. ~~Under~~ ~~the~~As new policy the Renminbi is permitted to fluctuate within a narrow and managed band against a basket of designated foreign currencies. While the international reaction to the Renminbi revaluation has generally been positivesuch, ~~there remains significant international pressure on~~ the ~~PRC~~depreciation increased ~~government to adopt an even more flexible currency policy, which could result in further and more significant appreciation of the Renminbi against the dollar~~accordingly.

~~Inflation~~Sales, inmarketing ~~the PRC could negatively affect our profitability~~ and ~~growth.~~Distribution

~~While the PRC economy has experienced rapid growth~~Sales, ~~such~~marketing ~~growth has been uneven among various sectors of the economy~~ and indistribution ~~different~~expense increased ~~geographical~~by ~~areas~~US$747,000 ofor ~~the country~~6.86% ~~Rapid economic growth can lead~~ to ~~growth~~US$11,629,000 infor the ~~money~~year ~~supply~~ended ~~and~~March ~~rising~~31, ~~inflation.~~2012 ~~According~~as tocomparing ~~the~~with ~~National Bureau of Statistics of China~~US$10,882,000 ~~the change in China’s Consumer Price Index increased to 5.50% in May 2011. If prices~~ for ~~our products and services rise at a rate that is insufficient to compensate for~~ the ~~rise~~year ended inMarch ~~the costs of supplies such as raw materials~~31, ~~it may have an adverse effect on our profitability~~2011.

~~Furthermore,~~During ~~in order to control inflation in~~ the ~~past,~~year ~~the~~ended ~~PRC~~March ~~government has imposed controls on bank credits~~31, ~~limits on loans for fixed assets and restrictions on state bank lending. In January 2010~~2012, ~~the~~we suffered ~~Chinese~~significantly ~~government~~as ~~took~~a ~~steps~~result toof ~~tighten~~ the ~~availability~~tightening of ~~credit~~the ~~including~~environmental ~~ordering~~policy ~~banks~~implemented toby ~~increase~~ the ~~amount~~PRC ofCentral ~~reserves~~Government ~~they~~as ~~hold~~discussed above. ~~and~~Our tosales ~~reduce~~activities orand ~~limit~~associated ~~their~~expenses ~~lending. The~~decreased ~~implementation~~significantly, of such ~~policies~~as ~~may~~transportation ~~impede~~expenses ~~economic~~and ~~growth. For~~commission ~~the period from October 2010 to April 2011~~expenses, which ~~the~~decreased ~~People’s Bank of China raised the interest rate 4 times. Repeated rises in interest rates~~ by ~~the~~US$1,723,000 ~~central~~and ~~bank would likely slow economic activity in China which could~~US$387,000, ~~in turn~~respectively, ~~materially~~as ~~increase~~comparing ~~our~~with ~~costs~~the ~~and~~corresponding ~~also~~year ~~reduce~~in ~~demand for our products and services~~2011.

30- 36 -

~~Because~~In ~~our~~order ~~funds~~to ~~are~~recover ~~held~~market share, the Company increased its participation in ~~banks~~exhibition ~~which~~events doand ~~not~~engaged ~~provide~~in ~~insurance,~~more ~~the~~advertising ~~failure~~activities ofduring ~~any~~the ~~bank~~year inended ~~which~~March we31, ~~deposit~~2012. The ~~our~~relevant ~~funds~~expenses ~~could~~were ~~affect~~increased ~~our~~by ~~ability~~US$437,000 as compared to ~~continue~~the corresponding year in ~~business~~2011.

~~Banks~~For ~~and~~the ~~other~~purpose ~~financial~~of ~~institutions~~complying inwith the ~~PRC~~tightened environmental doprotection ~~not~~policy, ~~provide~~during ~~insurance~~the ~~for~~year ~~funds~~ended ~~held~~March on31, ~~deposit. A~~2012, ~~significant~~we ~~portion~~introduced ofthe ~~our~~internal ~~assets~~battery ~~are~~formation intechnique ~~the~~into our ~~form~~production. ofHowever, ~~cash~~this ~~deposited~~technique ~~with~~is ~~banks~~relatively innew to the ~~PRC,~~Company. ~~including,~~We ~~without~~are ~~limitation,~~unable ~~our~~to ~~restricted~~handle ~~bank~~it ~~balances~~as ~~which~~well ~~secure~~as ~~certain~~the ~~notes~~external ~~payable~~battery formation ~~and~~technique ~~bill~~which ~~financing~~we ~~and~~used inbefore. Under the ~~event~~internal offormation atechnique ~~bank~~we ~~failure,~~were weunable ~~may~~to ~~not~~repair ~~have~~all ~~access~~returned tomalfunctioning batteries. ~~our~~Also, ~~funds~~as ona ~~deposit. Depending~~result ~~upon~~of the ~~amount~~Company ofgradually ~~money~~closing wedown ~~maintain~~the repair facilities in aPlant ~~bank~~B ~~that~~by ~~fails~~October 2012, ~~our~~part ~~inability~~of tothe returned ~~have~~batteries ~~access~~could tonot ~~our~~be ~~cash~~repaired. ~~could~~The ~~impair~~Company ~~our~~temporarily ~~operations,~~used ~~and,~~more ifnew webatteries ~~are~~for ~~not~~providing ~~able~~warranty toservices. ~~access~~As ~~funds~~the cost toof ~~pay~~new ~~our~~batteries ~~suppliers~~is higher than the cost of repaired batteries, ~~employees~~the ~~and~~cost ~~other~~of ~~creditors~~warranty for the year ended March 31, we2012 ~~may~~increased significantly beby ~~unable~~US$2,145,000 to ~~continue~~US$3,093,000 as compared with the corresponding year in ~~business~~2011.

~~Failure~~General ~~to comply with the United States Foreign Corrupt Practices Act could subject us to penalties~~ and ~~other~~Administrative ~~adverse consequences.~~Expenses

AsGeneral ~~our~~and ~~ultimate~~administrative ~~holding~~expenses ~~company is a Nevada corporation~~were US$9,295,000 weand ~~are subject to the United States Foreign Corrupt Practices Act~~US$4,138,000 ~~which generally prohibits United States companies from engaging in bribery or other prohibited payments to foreign officials~~ for the ~~purpose~~years ofended ~~obtaining~~March or31, ~~retaining~~2012 ~~business. Foreign~~and ~~companies~~2011, ~~including some that may compete with us~~respectively, ~~are~~and ~~not~~mainly ~~subject~~consisted toof ~~these~~staff ~~prohibitions. Corruption,~~salaries and ~~extortion~~benefits, ~~bribery,~~research ~~pay-offs, theft~~ and ~~other fraudulent practices may occur from time-to-time in the PRC. We can make no assurance~~development, ~~however,~~depreciation ~~that our employees or other agents will not engage in such conduct for which we might be held responsible. If our employees or other agents are found to have engaged in such practices~~expenses, ~~we could suffer severe penalties and other consequences that may have a~~ material ~~adverse~~consumption ~~effect on our business, financial condition~~ and ~~results~~startup ~~of operations~~costs.

IfThe weincrease ~~make~~in ~~equity~~general ~~compensation~~and ~~grants~~administrative expenses toof ~~persons~~US$5,157,000 ~~who~~or ~~are~~124.63% ~~PRC~~for ~~citizens~~the year ended March 31, ~~they~~2012 ~~may~~as becompared ~~required~~to the corresponding year in 2011 was mainly attributable to ~~register~~(a) ~~with~~an increase of US$1,868,000 for staff salaries and benefits, such as staff cafeteria expenses and social insurance, due to the ~~State~~new ~~Administration~~operation of ~~Foreign~~Plant ~~Exchange~~D where we employed more administrative staff; (b) an increase in research and development expenses of US$986,000, which were mainly attributable to the ~~PRC~~resources invested in improving the quality of existing products, ordeveloping new ~~SAFE. We~~production ~~may~~technique, ~~also~~developing ~~face~~new ~~regulatory~~products ~~uncertainties~~as ~~that~~well ~~could~~as ~~restrict~~the increase in number of staff in our ~~ability~~R&D todepartment; ~~adopt~~(c) an increase ~~equity~~in ~~compensation~~audit ~~plan~~fees ~~for~~and ~~our~~consultancy ~~directors~~expenses of US$158,000 and ~~employees~~US$158,000, respectively; (d) an increase in office consumables of US$881,000 following the setup of a new office in Plant D; and ~~other~~(e) ~~parties~~an ~~under~~increase ~~PRC~~in ~~law~~depreciation expense of US$209,000, which were mainly attributable to the operation of Plant D.

OnImpairment ~~April~~loss 6,on ~~2007~~property, ~~SAFE~~plant issued the “Operating Procedures for Administration of Domestic Individuals Participating in the Employee Stock Ownership Plan or Stock Option Plan of An Overseas Listed Company, also known as “Circular 78.” It is not clear whether Circular 78 covers all forms of equity compensation plans or only those which provide for the granting of stock options. For any plans which are so covered and are adopted by a non-PRC listed company after April 6, 2007, Circular 78 requires all participants who are PRC citizens to register with and obtain approvals from SAFE prior to their participation in the plan. In addition, Circular 78 also requires PRC citizens to register with SAFE and make the necessary applications and filings if they participated in an overseas listed company’s covered equity compensation plan prior to April 6, 2007. We intend to adopt an equity compensation plan in the future and make option grants to our officers and directors, most of whom are PRC citizens. Circular 78 may require our officers and directors who receive option grants and are PRC citizens to register with SAFE. We believe that the registration and approval requirements contemplated in Circular 78 will be burdensome and time consuming. If it is determined that any of our equity compensation plans are subject to Circular 78, failure to comply with such provisions may subject us and participants of our equity incentive plan who are PRC citizens to fines and legal sanctions and prevent us from being able to grant equity compensation to our PRC employees. In that case, our ability to compensate our employees and directors through equity compensation would be hindered and our business operations may be adversely affected. equipment

~~Our~~During ~~operating~~the ~~subsidiary~~year ended March 31, ~~CCEC~~2012, ~~has~~the Company ~~enjoyed~~acquired certain ~~preferential~~machinery ~~tax~~in ~~concessions~~order ~~and~~to manufacture lead plates under the ~~loss~~external offormation ~~these~~technique ~~preferential~~for ~~tax~~commercial ~~concessions~~purposes in ~~may~~Jiangsu ~~cause~~Province. ~~our~~However, ~~tax~~on ~~liabilities~~March to1, ~~increase~~2012, the PRC government released a consultation paper concerning further governance and ~~our~~restrictions ~~profitability~~on tothe ~~decline~~lead acid battery industry. In accordance with the consultation paper, any new projects for the manufacturing of lead plates for commercial purposes in the PRC will not be approved.

~~Under~~After ~~the~~reviewing ~~tax laws of~~ the ~~PRC,~~consultation CCEC has had tax advantages granted by local government for enterprise income taxes commencing from 2006. CCEC has been entitled to be exempt from enterprise income tax for two years commencing from the first profitable year in 2006paper, ~~followed~~management believes bythat ait ~~50%~~is ~~reduction~~highly ~~for~~likely ~~the~~that ~~next 3 years. On March 16, 2007,~~ the ~~National~~proposed ~~People’s~~policies ~~Congress~~not ofgranting ~~China~~approval ~~enacted~~to aany new ~~PRC~~project ~~Enterprise Income Tax Law, under which foreign invested enterprises and domestic companies will be subject to enterprise income tax at a uniform rate~~ of ~~25%.~~manufacturing ~~The~~lead ~~new law became effective on January 1, 2008. CCEC’s income tax rate~~ plates for ~~the~~commercial ~~taxable~~purposes ~~years~~would ~~ended December 31, 2008 and 2009 was 12.5%, and CCEC’s income tax rate for the taxable year ended December 31, 2010 was 12.5%. CCEC was deemed to~~ be aimplemented ~~“High-Tehnology Enterprise” commencing on January 1, 2011~~ and asenforced aby ~~result,~~ the ~~Company~~PRC ~~enjoys~~government ~~preferential~~in ~~income tax rate at 15%. If CCEC cannot maintain its status as a “High-Technology Enterprise”, then~~ the ~~expiration~~near ~~of the preferential tax treatment will increase our tax liabilities and reduce our profitability~~future.

31- 37 -

~~Under~~Management reviewed the ~~New~~recently ~~Enterprise~~acquired machinery ~~Income~~immediately ~~Tax~~and ~~Law~~identified items which could be directly integrated into our existing lead acid battery production lines operating under the internal formation technique. For those items which could not be integrated directly, weafter a costs and ~~Fast~~benefits analysis ~~More~~of ~~may~~modification, bemanagement ~~classified~~decided asto ~~“resident~~dispose ~~enterprises”~~of them in the near future. As of ~~China~~March ~~for~~31, ~~tax~~2012, ~~purposes~~a full impairment, ~~which~~amounting to ~~may~~US$2,857,000, ~~subject~~was usprovided ~~and~~for ~~Fast~~the ~~More~~machinery toas ~~PRC~~management ~~income~~estimated ~~tax~~that onthe ~~taxable~~scrap ~~global~~value ~~income~~of the assets are minimal.

~~Under~~On ~~the~~May ~~new PRC Enterprise Income Tax Law (the “New EIT Law”) and its implementing rules~~31, ~~both of which became effective on January 1~~2012, ~~2008. Under~~ the ~~New~~PRC ~~EIT~~government Law, enterprises are classified as resident enterprises and non-resident enterprises. An enterprise established outside of China with its “de facto management bodies” located within China is considered released a ~~“resident~~new ~~enterprise,”~~policy ~~meaning that it can be treated in a manner similar~~ to agovern ~~Chinese domestic enterprise for enterprise income tax purposes. The implementing rules of~~ the ~~New~~lead ~~EIT~~acid ~~Law~~battery ~~define~~industry, deeffective ~~facto~~July ~~management body as a managing body that in practice exercises “substantial and overall management and control over the production and operations~~1, ~~personnel~~2012, ~~accounting,~~which ~~and~~confirmed properties” of the enterprise. Due to the short history of the New EIT law and lack of applicable legal precedents, it remains unclear how the PRC tax authorities will determine the PRC tax resident treatment of a foreign company such as us and Fast More. Both our and Fast Moremanagement’s ~~members~~estimation of ~~management are located in China. If~~ the ~~PRC~~final ~~tax~~implementation ~~authorities determine that we or Fast More is a “resident enterprise” for PRC enterprise income tax purposes, a number~~ of ~~PRC tax consequences could follow. First, we may be subject to~~ the ~~enterprise~~tightened ~~income~~policies ~~tax at a rate of 25% on our worldwide taxable income,~~ as ~~well~~initiated asin ~~PRC enterprise income tax reporting obligations. Second,~~ the ~~New~~consultation ~~EIT~~paper ~~Law~~referenced ~~provides that dividend paid between “qualified resident enterprises” is exempted from enterprise income tax~~above. A recent circular issued by the State Administration of Taxation regarding the standards used to classify certain Chinese-invested enterprises controlled by Chinese enterprises or Chinese group enterprises and established outside of China as “resident enterprises” clarified that dividends and other income paid by such “resident enterprises” will be considered to be PRC source income, subject to PRC withholding tax, currently at a rate of 10%, when recognized by non-PRC shareholders. It is unclear whether the dividends that we or Fast More receives from CCEC will constitute dividends between “qualified resident enterprises” and would therefore qualify for tax exemption, because the definition of qualified resident enterprises is unclear and the relevant PRC government authorities have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. We are actively monitoring the possibility of “resident enterprise” treatment for the applicable tax years and are evaluating appropriate organizational changes to avoid this treatment, to the extent possible. As a result of the New EIT Law, our historical operating results will not be indicative of our operating results for future periods and the value of our common stock may be adversely affected.

~~Downturn~~Loss inon ~~the~~disposal ~~economy~~ of ~~the~~scrap ~~PRC may slow our growth and profitability.~~inventories

~~All~~During ofthe ~~our~~year ~~revenues~~ended ~~are~~March ~~generated~~31, ~~from~~2012, ~~sales~~the Company inwas ~~China. The~~advised ~~growth~~by of the ~~Chinese~~local ~~economy~~authority ~~has~~of ~~been~~Changxing ~~uneven~~County ~~across~~that ~~geographic~~its ~~regions~~current ~~and~~production ~~economic sectors~~technique, inexternal ~~large~~battery ~~part~~formation, in ~~due~~Plant toB ~~the~~can ~~recent~~no ~~downturn~~longer inbe ~~the~~used ~~global~~after ~~economy~~October 31, ~~which~~2012. ~~resulted~~Plant inB ~~slow~~is ~~growth~~the only facility of the ~~China~~Company ~~economy. While~~for ~~the~~repairing ~~Chinese~~returned ~~economy~~batteries which ~~has~~were ~~recently~~produced ~~begun~~under tothe ~~show~~external ~~signs~~battery offormation ~~improvement,~~technique. ~~there~~After ~~can~~analyzing bethe nofuture ~~assurance~~return ~~that~~rate ~~growth~~ of the ~~Chinese~~batteries ~~economy~~and our ~~will~~current beinventory ~~steady~~level, ormanagement considered that ~~there~~the ~~will~~Company’s ~~not~~current beproduction ~~further~~capacity ~~deterioration~~ in ~~the~~Plant ~~global~~B ~~economy~~was asnot aadequate to ~~whole~~repair orall ~~the~~future ~~Chinese~~returned ~~economy~~batteries inand ~~particular~~existing inventories. If ~~economic~~Management ~~conditions~~decided ~~deteriorate~~to ~~further,~~dispose ~~our business and results~~ of ~~operations~~the ~~could~~obsolete beinventories ~~materially~~ and the ~~adversely~~Company ~~affected,~~recognized ~~especially~~a ifloss ~~such~~on ~~conditions~~disposal ~~result~~of inscrap ainventories ~~decreased use~~ of ~~our~~US$13,896,000 ~~products~~for orthe inyear ~~pressure~~ended onMarch us31, ~~to lower our prices~~2012.

~~Because~~Interest our business is located in the PRC, we currently lack sufficient in-house expertise in U.S. GAAP reporting and we may have difficulty establishing adequate management, legal and financial controls, which we are required to do in order to comply with U.S. GAAP and securities laws, and which could cause a materially adverse impact on our financial statements, the trading of our common stock and our business.Income

~~PRC~~Interest ~~companies~~income ~~have~~was ~~historically not adopted a Western style of management and financial reporting concepts and practices~~US$1, ~~which includes strong corporate governance~~766,000 ~~internal controls~~ and, ~~computer~~US$483,000 for ~~financial and other control systems. Currently, we do not have sufficient in-house expertise in U.S. GAAP reporting. Instead, we rely on~~ the ~~expertise~~year ~~and~~ended ~~knowledge~~March ~~of external consultants and advisors in U.S. GAAP conversion. These external consultants assist us in the preparation and review of our consolidated financial statements. In fact~~31, ~~most~~2012 ~~of our middle~~ and ~~top management staff are not educated and trained in the Western system~~2011, ~~and we may continue to have difficulty hiring and retaining qualified employees in the PRC with experience and expertise relating to U~~respectively.S. ~~GAAP~~The ~~and~~increase ~~U.S. public-company reporting requirements. As a result~~ of ~~these factors~~US$1, ~~we may experience difficulty in establishing management~~283,000 ~~legal~~or ~~and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western standards~~265.63% ~~Therefore,~~was wemainly ~~may,~~attributable into ~~turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of~~ the increase ~~Sarbanes-Oxley Act of 2002. This may result~~ in ~~significant deficiencies or material weaknesses in our internal controls which could impact~~ the ~~reliability~~average ofdeposit ~~our~~interest ~~financial~~rate ~~statements~~as ~~and~~well ~~prevent~~as us from complying with SEC rules and regulations and the requirements of the Sarbanes-Oxley Act of 2002. Any such deficiencies, material weaknesses or lack of compliance could result in restatements of our historical financial information, cause investors to lose confidence in our reported financial information, have an ~~adverse~~increase impact on the trading price of our common stock, adversely affect our ability to access the capital markets and our ability to recruit personnel, lead to the delisting of our securities from the stock exchange on which they are traded, lead to litigation claims, thereby diverting management’s attention and resources, and which may lead to the payment of damages to the extent such claims are not resolved in ~~our~~restricted ~~favor,~~cash ~~lead~~pledged tofor ~~regulatory~~facilities ~~proceedings,~~granted ~~which~~by ~~may result in sanctions, monetary or otherwise, and have a materially adverse effect on our reputation and business~~banks.

32(Loss) Income before Interest and Income Tax Expenses

~~RISKS~~Loss ~~RELATED~~before TOinterest ~~YOUR~~and ~~OWNERSHIP~~income OFtax ~~OUR~~expenses was ~~COMMON~~US$17,204,000 ~~STOCK~~for the year ended March 31, 2012 as compared with income of approximately US$14,275,000 for the corresponding year in 2011. The decrease of US$31,479,000 or 220.52% was mainly attributable to a decrease in gross income of US$11,511,000 and an increase in general and administrative expense of US$5,157,000, the impairment loss on property, plant and equipment of US$2,857,000 and the loss on the disposal of scrap inventories of US$11,568,000.

~~Because~~Interest weexpense ~~became public by means of a “reverse merger,” we may not be able to attract the attention of major brokerage firms.~~

~~Additional~~Interest ~~risks~~expense ~~may~~for ~~exist~~the ~~because~~year weended ~~became~~March 31, ~~public~~2012 ~~through~~and a2011 ~~“reverse~~was ~~merger”.~~US$8,812,000 ~~Security~~and ~~analysts~~US$3,359,000, ofrespectively. ~~major~~The ~~brokerage~~increase ~~firms~~in ~~may~~interest ~~not~~expense ~~cover~~of usUS$5,453,000 ~~since~~or ~~there~~162.34% was ismainly noattributable ~~incentive~~ to ~~brokerage firms to recommend~~ the ~~purchase~~increase ofin ~~our~~banking ~~common~~facilities ~~stock.~~utilized Noby ~~assurance~~the ~~can~~Company beas ~~given~~well ~~that~~as ~~brokerage~~an ~~firms~~increase ~~will want to conduct any secondary offerings on our behalf~~ in ~~the~~interest ~~future~~rate.

~~The~~- ~~market~~38 ~~price and trading volume of shares of our common stock may be volatile.~~-

~~When~~Income ~~and~~Taxes if a market develops for our securities, the market price of our common stock could fluctuate significantly for many reasons, including for reasons unrelated to our specific performance, such as reports by industry analysts, investor perceptions, or negative announcements by customers, competitors or suppliers regarding their own performance, as well as general economic and industry conditions. For example, to the extent that other large companies within our industry experience declines in their share price, our share price may decline as well. In addition, when the market price of a company’s shares drops significantly, shareholders could institute securities class action lawsuits against the company. A lawsuit against us could cause us to incur substantial costs and could divert the time and attention of our management and other resources.expense

~~One~~Income oftax ~~our~~was ~~Stockholders~~US$1,047,000 ~~Which~~and isUS$2,447,000 for ~~100%~~the ~~Controlled~~year Byended ~~our~~March ~~President~~31, ~~Chief~~2012 ~~Executive~~and ~~Officer~~2011, ~~and~~respectively. ~~Chairman~~The decrease in income tax expense of US$1,400,000 or 57.21% was mainly attributable to the ~~Board,~~decrease ~~Exercises~~in ~~Significant~~the ~~Control~~Company’s ~~Over~~operating ~~Matters~~profit ~~Requiring~~during ~~Stockholder~~the ~~Approval~~year.

~~One~~Extraordinary of our stockholders (Cheer Gold) has voting power equal to 65.8% of our voting securities. Moreover, such stockholder is 100% controlled by Xu Kecheng, our President, Chief Executive Officer and Chairman of the Board. As a result, Xu Kecheng, through such stock ownership, can exercise control over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership in Cheer Gold may also have the effect of delaying or preventing a change in control of us that may be otherwise viewed as beneficial by our other stockholders.Gain

~~With~~During the ~~exception~~year ended March 31, 2012, we completed the relocation of ~~our~~Plant ~~Chairman/CEO~~A at Jingyi Road. Pursuant to the Compensation Agreement on Relocation and Acquisition entered into by CCEC and the Administrative Committee of Changxing Economic Development Zone (ACC), XuACC ~~Kecheng~~shall pay us compensation in the amount of RMB98,514,000 (US$15,354,000) for the ~~members~~loss on long-term land lease prepayment and buildings located at Jingyi Road. In May 2011, the Company wrote off the long-term land lease prepayment and buildings at Jingyi Road with a net book value of ~~our~~approximately RMB14,354,000 ~~senior~~(US$2,237,000) ~~management~~and dotherefore, ~~not~~net ~~directly~~compensation orincome ~~indirectly~~of ~~own~~approximately ~~shares~~RMB84,160,000 (US$13,117,000) was recognized for the year. The transaction of ~~Common~~relocation ~~Stock~~was considered an involuntary conversion of a non-monetary asset into a monetary asset. According to ASC605-40-25, to the extent the cost of a nonmonetary asset differs from the amount of monetary assets received, the result of the realization of a gain from the transaction is recognized. The relocation activity is abnormal and ~~thus~~significantly ~~their~~different from ~~interests~~the ~~may~~ordinary and typical activities of the Company and is not beexpected ~~aligned~~to ~~with~~recur in the ~~interests~~foreseeable offuture. In accordance with ASC225-20, the Company's ~~stockholders~~classified the gain as an extraordinary item. Pursuant to the Implementation Regulations to the EIT law of the PRC, ~~which~~only ~~could~~the beportion aof ~~detriment~~compensation income exceeding the reinvestment amount related to the relocation was taxable. All compensation income received by the Company's ~~stockholders~~would be reinvested into the fixed assets and long-term land lease prepayment of Plant C at Jingsi Road and therefore, no income tax was applicable.

~~While~~Extraordinary the members of our senior management have significant influence over our business, including decisions regarding operations, pursuing mergers and acquisitions, the disposition of the Company's assets, and other significant corporate actions, none of them, with the exception of Xu Kecheng, directly or indirectly own shares of Common Stock. Since they are not personally exposed to the same risk of investment loss with respect to ownership of Common Stock that the Company's shareholders face, these individuals may not share a common perspective with our shareholders regarding the benefits (or detriments) of contemplated corporate actions and they may not analyze potential corporate actions and opportunities in the same manner that they would if they were shareholders. To the extent that the Company's senior management may lack "shareholder perspective" in its decision making process, management may make decisions that ultimately do not benefit the Company's shareholders.Loss

33During the year ended March 31, 2012 and without advance notice to the Company, the PRC Central Government tightened its environmental protection policy which applies to all lead-acid battery manufacturers. Pursuant to the new policy, a 500 meter isolated area must be maintained between production facilities and residential areas. From the beginning of May 2011, the Zhejiang Environmental Protection Bureau (ZEPB) conducted an environmental sanitation investigation at Plant B. The results showed that the sewage and exhaust complied with national standards in China, however, the Company is not maintaining the 500 meter isolated area between production facilities and residential areas. The ZEPB requires all production facilities at Plant B to have complied with and meet the adjusted environmental policy prior to July 15, 2011. However, the Company was permitted by the government to continue to conduct our battery charging activities and packing activities until October 31, 2012. We did not suffer any penalty due to this tightened environmental protection policy.

IfAs wesuch, ~~fail~~the toimpairment ~~maintain~~loss ~~effective~~of ~~internal~~some ~~controls~~fixed assets, ~~over~~including ~~financial~~plant ~~reporting,~~and ~~the~~machinery ~~price~~together with a leasehold improvement of ~~our~~approximately ~~common~~US$1,848,000, ~~stock~~were ~~may~~recognized beas ~~adversely~~an extraordinary ~~affected~~loss. Management considers that this Government behavior is very unusual and therefore the impairment loss was classified as an extraordinary item.

We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. Any failure of these controls could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds. Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-~~Oxley~~ ~~Act~~39 of 2002 require annual assessment of our internal control over financial reporting, and the standards that must be met for management to assess the internal control over financial reporting as effective are new and complex, and require significant documentation, testing and possible remediation to meet the detailed standards. We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial reporting. If we cannot assess our internal control over financial reporting as effective, investor confidence and share value may be negatively impacted.-

InPursuant ~~addition,~~to ~~management’s~~the ~~assessment~~Implementation ofRegulations to ~~internal~~the ~~controls~~EIT ~~over~~law ~~financial~~of ~~reporting~~the ~~may~~PRC, ~~identify~~the ~~weaknesses~~impairment ~~and~~loss ~~conditions~~can ~~that~~only ~~need to~~ be ~~addressed~~recognized inwhen ~~our~~the ~~internal~~relevant ~~controls~~assets ~~over~~were ~~financial~~disposed. ~~reporting~~Since orthe ~~other matters that may raise concerns for investors. Any~~ actual amount orof ~~perceived~~loss ~~weaknesses~~in ~~and~~the ~~conditions~~future ~~that~~cannot ~~need to~~ be ~~addressed~~assessed ~~in our internal control over financial reporting~~accurately, ~~disclosure~~no oftax ~~management’s~~benefit ~~assessment~~was of our internal controls over financial reporting, or disclosure of our public accounting firm’s report on management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stockrecognized.

~~Compliance~~As ~~with~~of ~~changing~~the ~~regulation~~date of ~~corporate~~this ~~governance~~report, ~~and~~the ~~public~~Government preliminarily ~~disclosure~~agreed ~~will~~to ~~result~~re-designate the land in ~~additional~~Changxing ~~expenses~~County ~~and~~to ~~will~~us ~~divert~~for ~~time~~redevelopment. ~~and~~Prior ~~attention~~to ~~away~~the ~~from~~new ~~revenue~~plant ~~generating~~in ~~activities~~Changxing County being built, our lead-acid battery production was relocated to Plant D.

~~Changing~~Net ~~laws,~~(Loss) ~~regulations~~Income ~~and~~Including ~~standards relating to corporate governance and public disclosure, including the Sarbanes~~Non-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting. For example, on January 30, 2009, the SEC adopted rules requiring companies to provide their financial statements in interactive data format using the eXtensible Business Reporting Language, or XBRL. We will have to comply with these rules by June 15, 2011. Our management team will need to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities which could have an adverse effect on our business.Controlling Interest

~~Our~~Net ~~common~~loss ~~stock~~including ~~may~~non-controlling beinterest was ~~considered~~US$15,794,000 for the year ended March 31, 2012 as compared with a ~~“penny~~net ~~stock~~income of US$11,”074,000 ~~and~~at ~~thereby~~the becorresponding ~~subject~~year in 2011. The decrease of US$26,868,000 or 242.62% was mainly attributable to ~~additional~~an ~~sale~~increase in general and ~~trading~~administrative ~~regulations~~expense ~~that~~of US$5,157,000, ~~may~~impairment ~~make~~loss iton ~~more~~property, ~~difficult~~plant toand ~~sell~~equipment of US$2,857,000, loss on disposal of scrap inventories of US$11,568,000, interest expense of US$5,453,000 and a decrease in gross income of US$11,511,000, offset by increase in net gain on extraordinary items of US$8,664,000.

~~Our~~Liquidity ~~common~~and ~~stock,~~Capital which currently trades on the OTCQB, may be considered to be a “penny stock” if it does not qualify for one of the exemptions from the definition of “penny stock” under Section 3a51-1 of the Securities Exchange Act for 1934, as amended (the “Exchange Act”). Our common stock may be a “penny stock” if it meets one or more of the following conditions (i) the stock trades at a price less than US$5.00 per share; (ii) it is NOT traded on a “recognized” national exchange; (iii) it is NOT quoted on the NYSE Amex, or even if so, has a price less than US$5.00 per share; or (iv) is issued by a company that has been in business less than three years with net tangible assets less than US$5 million.Resources

The ~~principal~~Company ~~result~~generally orfinances ~~effect~~its ~~of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock will be subject to the “penny stock” regulations set forth in Rules 15-2~~ operations through ~~15g-9~~profits ~~promulgated~~generated under the Exchange Act. For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor’s account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from ~~the~~its ~~investor~~operations ~~information concerning his or her financial situation, investment experience~~ and ~~investment~~through ~~objectives;~~borrowings (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from ~~the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives~~banks. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

34During the reporting periods, the Company entered into a number of short-term bank loans to satisfy its financing needs. As of the date of this report, we have not experienced any difficulty in raising funds by bank loans, and we have not experienced any liquidity problems in settling our payables in the normal course of business and repaying our bank loans when they fall due.

IfThe ~~securities~~following ortable ~~industry~~sets ~~analysts~~forth dothe ~~not~~summary of ~~publish~~our ~~research~~cash orflows, ~~reports~~in orU.S. ~~publish unfavorable research about our business~~dollars, for the ~~price~~periods ~~and trading volume of our common stock could decline.~~indicated:

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of us the trading price for our common stock and other securities would be negatively affected. In the event we obtain securities or industry analyst coverage, if one or more of the analysts who covers us downgrades our securities, the price of our securities would likely decline. If one or more of these analysts ceases to cover us or fails to publish regular reports on us, interest in the purchase of our securities could decrease, which could cause the price of our common stock and other securities and their trading volume to decline.

	Fiscal Years Ended March 31
	2012			2011
		US$’000			US$’000
Net cash provided by operating activities		10,833			21,566
Net cash used in investing activities		(106,185	)		(37,423	)
Net cash provided by financing activities		101,283			17,233
Net increase in cash and cash equivalents		5,931			1,376
Effect of exchange rate changes on cash		243			235
Cash and cash equivalents at beginning of year		7,630			6,019
Cash and cash equivalents at end of year		13,804			7,630

WeOperating ~~do not foresee paying cash dividends in the foreseeable future and, as a result, our investors’ sole source of gain, if any, will depend on capital appreciation, if any.~~Activities

WeDuring dothe ~~not~~year ~~plan~~ended March to31, ~~declare~~2012, orour ~~pay~~operations ~~any~~were ~~cash~~significantly ~~dividends~~impaired onas ~~our~~a ~~shares~~result of ~~common~~an ~~stock~~unpredictable intightening ~~the~~of ~~foreseeable~~an ~~future~~environmental ~~and~~policy implemented ~~currently~~by ~~intend~~the toPRC ~~retain~~Central ~~any~~Government ~~future~~as ~~earnings~~discussed ~~for funding growth~~above. As aOur ~~result,~~net ~~investors~~cash ~~should~~provided ~~not~~by ~~rely~~operating onactivities andecreased ~~investment~~significantly from inUS$21,566,000 ~~our~~for ~~securities~~the ifyear ~~they~~ended ~~require~~March ~~the~~31, ~~investment~~2011 to ~~produce~~US$10,833,000 ~~dividend~~for ~~income. Capital~~the ~~appreciation,~~year ifended ~~any~~March 31, of2012. ~~our~~The ~~shares~~decrease ~~may~~in becash ~~investors’~~inflow of ~~sole~~US$10,733,000 ~~source~~or of49.77% ~~gain~~was ~~for~~mainly ~~the~~attributable ~~foreseeable~~to ~~future. Moreover,~~the ~~investors~~decrease ~~may~~in ~~not~~operating beresult ~~able~~of toUS$26,816,000, ~~resell~~increase ~~their~~in ~~shares~~other receivable of ~~our~~US$6,341,000 ~~common~~and ~~stock~~decrease atin orbills ~~above~~payable ~~the~~of ~~price~~US$43,870,000, ~~they~~offset ~~paid~~by ~~for~~decrease ~~them~~in trade receivables of US$67,090,000.

~~ITEM~~- ~~1B. Unresolved~~40 ~~Staff Comments~~-

~~None.~~Investing Activities

~~ITEM~~Our 2net cash used in investing activities increased by US$68,762,000 or 183. ~~Properties~~74% to US$106,185,000 for the year ended March 31, 2012 as comparing with US$37,423,000 for the year ended March 31, 2011.

WeDuring dothe ~~not~~year ~~own~~ended ~~any~~March ~~real~~31, ~~property. However~~2012, we invested ~~maintain~~significantly ~~leases~~in ~~with~~Plant ~~our~~D ~~landlord~~in ~~Changxing~~order ~~Xiangyi~~to ~~Industrial~~comply ~~Park~~with ~~Investment~~the ~~Co.~~environment ~~for~~protection ~~the~~policy ~~purpose~~discussed ofabove ~~the~~and ~~production~~shifted ofall our production ~~battery~~capacity ~~products~~from at Plant B, ~~which~~to isPlant ~~located~~D. atFor ~~Xiangyi~~these ~~Industrial~~reasons ~~Park,~~our ~~Jing’er~~cash ~~Road,~~used ~~Changxing~~in ~~Economic~~investment ~~Development~~of ~~Zone,~~property ~~Changxing~~plant ~~County,~~and ~~Zhejiang~~equipment ~~Province,~~and a ~~the~~deposit ~~People’s~~paid ~~Republic~~for acquisition of ~~China.~~land ~~Those~~and ~~leases~~property, ~~none~~plant ofand ~~which~~equipment ~~are~~for ~~affected~~the byyear ~~our~~ended ~~relocation~~March 31, ~~are~~2012 ~~described~~increased inUS$28,546,000 and US$4,228,000, respectively as compared with the ~~table~~corresponding ~~below:~~year of 2011.

35Apart from the issues discussed above, the increase of US$68,762,000 net cash outflow was also attributable to the increase in deposits paid for land auctions and investment in restricted bank balance of US$30,898,000 and US$22,149,000 offset by an increase in compensation income received for loss of plant and machinery and leasehold improvement of US$11,980,000 and a decrease in investment in long-term land lease prepayment of US$3,354,000.

Building

Area (Square meters)

Rental Amount Per year ($)

Commencement Date

Termination Date

Notes

Factory Building No. 1

6,200

70,386

January 1, 2009

December 31, 2013

The annual rent will increase by 5% yearly from January 1, 2010

The North Part of Factory Building No. 2

3,100

35,193

February 8, 2009

February 7, 2014

The annual rent will increase by 5% yearly from February 8, 2010

The South Part of Factory Building No. 2

3,100

35,193

February 1, 2009

January 31, 2014

The annual rent will increase by 5% yearly from February 1, 2010

Factory Building No. 3

6,200

70,950

January 18, 2010

January 17, 2015

The annual rent will increase by 5% yearly from January 18, 2011

Factory Building No. 4

6,200

68,867

August 1, 2008

July 31, 2013

The annual rent will increase by 5% yearly from August 1, 2009

The North Part of Factory Building No. 5

3,100

35,475

October 16, 2009

October 15, 2014

The annual rent will increase by 5% yearly from October 16, 2010

The South Part of Factory Building No. 5

3,100

35,193

February 16, 2009

February 15, 2014

The annual rent will increase by 5% yearly from February 16, 2010

The North Part of Factory Building No. 6

3,100

34,434

August 1, 2008

July 31, 2013

The annual rent will increase by 5% yearly from August 1, 2009

The South Part of Factory Building No. 6

3,100

35,475

October 16, 2009

October 15, 2014

The annual rent will increase by 5% yearly from October 16, 2010

Factory Building No. 7

6,200

70,386

February 16, 2009

February 15, 2014

The annual rent will increase by 5% yearly from February 16, 2010

Factory Building No. 8

6,200

68,867

August 1, 2008

July 31, 2013

The annual rent will increase by 5% yearly from August 1, 2009

Financing Activities

InNet ~~2011,~~cash ~~the~~provided ~~Company~~by ~~purchased~~financing aactivities was ~~50-year~~US$101,283,000 ~~land~~and ~~use right for RMB25~~US$17,~~950~~233,000 atfor ~~Jingsi~~the ~~Road~~years inended ~~Changxing~~March ~~County~~31,~~Zhejiang~~ ~~Province,~~2012 ~~The~~and ~~People’s~~2011 ~~Republic~~respectively. The increase of ~~China~~US$84,050,000 or 487.73% ~~The~~was ~~total~~mainly ~~area~~attributable ofto the ~~land~~increase isin ~~81,188.00~~net ~~square~~proceeds ~~meters~~from ~~and~~bills ~~the~~financing ~~plants~~ and ~~auxiliary~~short-term ~~building~~bank ~~are~~loans ~~being~~of ~~constructed~~US$59,673,000 and inUS$23,223,000, ~~progress~~respectively.

~~ITEM~~Working ~~3. Legal Proceedings~~Capital

InDuring the ~~normal~~year ~~course~~ended ofMarch ~~business~~31, 2012 we ~~are~~had ~~named~~negative asworking ~~defendant~~capital inof ~~lawsuits~~US$38,937,000 in which, ~~claims~~together ~~are~~with ~~asserted~~our ~~against~~decrease ~~us.~~in Insales ~~our~~revenues ~~opinion,~~of ~~the liabilities~~US$124, ~~if any~~251,000 ~~which~~or 50.96% ~~may~~and ~~ultimately~~our ~~result~~net ~~from~~(loss) ~~such~~attributable ~~lawsuits, are not expected~~ to ~~have~~CIEC acommon ~~material~~stockholders ~~adverse effect on our financial position, results~~ of ~~operations or cash flows. As of March 31~~US$(15, ~~2011~~742,000) ~~there~~raises ~~was~~substantial nodoubt ~~pending~~about orour ability ~~outstanding~~to ~~material~~continue ~~litigation~~as ~~with~~a ~~the~~going ~~Company~~concern.

36The negative working capital was mainly attributable to the significant increase in loss from operation and the increase in long term capital investment.

~~ITEM~~During 4.the ~~Submission~~year ended March 31, 2012, the Company suffered significantly from the result of ~~Matters~~the totightening aof ~~Vote~~an environmental protection policy implemented by the PRC Central Government as discussed above. The Company shut down most of ~~Security~~its ~~Holders~~production activities. We lost our market share and our revenues decreased significantly.

OnIn ~~September~~order 9,to ~~2010,~~rebuild ~~the~~and ~~Company~~shift production ~~held~~capacity ~~its~~from ~~annual~~Plant ~~meeting~~B ofto ~~the~~Plant ~~stockholders for the fiscal year ended March 31~~D, ~~2010. At~~we ~~the~~invested ~~annual~~significantly ~~meeting~~in ~~the~~land ~~stockholders~~lease ofprepayment ~~the~~and ~~Company of record as of the close of business on August 11~~property, ~~2010~~plant ~~voted~~and equipment in ~~favor~~Plant ofD. ~~electing~~Accompanying Xuwith ~~Kecheng,~~the ~~Liu~~decrease ~~Chuanjie,~~of ~~Gong~~cash ~~Xiaoyan,~~generated ~~Dong~~from ~~Quanfeng~~operations, ~~Yun~~it ~~Hon~~was ~~Man,~~necessary ~~Lou~~for ~~Shourong~~us ~~and Jiang Yanfu~~ to ~~serve~~increase bank asborrowings ~~the Company’s directors and reappointed Mazars CPA Limited~~ to ~~serve~~fund asthis ~~the Company’s independent registered public accounting firm for the fiscal year ended March 31, 2011~~project.

~~PART~~- II41 -

~~ITEM~~For 5.these ~~Market~~reasons, ~~for~~our ~~Registrant’s~~working ~~Common~~capital ~~Equity~~decreased by US$52,877,000 ~~Related~~or ~~Stockholder~~364.97% ~~Matters~~as ~~and~~compared ~~Issuer~~with ~~Purchases~~the ofcorresponding ~~Equity~~period ~~Securities~~of 2011.

~~Market~~In order to improve working capital flow, management decided to defer and/or decrease long term investment so as to maintain sufficient short term funds. Also, the Company’s principal stockholder may provide financial support as may be required to maintain the Company as a going concern at least for the ~~Common~~next ~~Equity~~twelve months from the date of this report. Notwithstanding the above, the Company has regular cash flow control measures over the liquidity of its working capital as stated in the financial statements to strictly monitor the condition of the working capital. Apart from the above, management is confident that business is recovering and will continue to do so, which may also help improve working capital flow.

~~Prior~~Capital to the Exchange, the Company’s common stock traded on the OTCBB under the symbol “WTRY” from October 15, 2007 to April 29, 2009 and subsequent to the Exchange, our common stock has traded on the OTCBB and then recently on the OTCQB under the symbol “CIEC”. There has been an extremely limited public market for our common stock. Commitment

~~When~~As ~~the trading price~~ of ~~our~~March ~~common~~31, ~~stock~~2012 isand ~~below US$5.00 per share~~2011, itthe ~~may~~Company had beoutstanding ~~considered~~capital toexpenditure becommitments aof ~~“penny~~approximately ~~stock”~~US$122,845,000 ~~that~~and ~~may~~US$150,448,000, berespectively. ~~subject~~The tooutstanding capital ~~rules~~expenditure ~~promulgated~~mainly byrelates ~~the~~to ~~SEC~~various ~~(Rule~~construction ~~15-1~~projects ~~through~~and ~~15g-9) under~~ the ~~Exchange~~purchase ~~Act.~~of ~~These~~land ~~rules~~and ~~impose~~machinery ~~significant~~pursuant ~~requirements~~to onthe ~~brokers~~Project Investment ~~under~~Contract ~~these~~entered ~~circumstances,~~with ~~including:~~Jiangsu ~~(a) delivering~~Xuyi toEconomic ~~customers~~Development ~~the~~Zone ~~SEC’s~~Administration ~~standardized~~Committee ~~risk~~on ~~disclosure~~September ~~document;~~6, ~~(b) providing~~2010 ~~customers with current bid~~ and ~~ask~~the ~~prices;~~Investment Agreement ~~(c) disclosing~~entered towith ~~customers~~ the ~~brokers-dealer’s~~Administrative ~~and~~Committee ~~sales~~of ~~representatives~~Changxing ~~compensation;~~Economic ~~and~~Development ~~(d) providing~~Zone toon ~~customers~~August ~~monthly~~20, ~~account~~2010 ~~statements~~as discussed above.

~~The~~On ~~following~~April ~~table~~26, ~~sets~~2012 ~~forth~~and onJune a20, ~~per~~2012, the ~~share~~Company ~~basis~~had ~~for~~successfully ~~the~~obtained ~~periods shown,~~ the ~~high~~land ~~and~~use ~~low~~rights ~~closing~~of ~~bid~~two ~~prices~~pieces of ~~the~~land ~~Company’s~~in ~~common~~Xuyi ~~stock.~~Country, ~~The~~Jiangsu ~~quotations~~province, ~~reflect~~PRC respectively. ~~inter-dealer~~Total ~~prices,~~land ~~without~~size ~~retail~~was ~~mark-up~~83,658 ~~mark-down~~m2 orwith ~~commission~~a ~~and~~total ~~may~~price ~~not~~of ~~represent~~approximately ~~actual transactions~~US$31,262,000.

Closing Bid Prices	High (US$)		Low (US$)
Calendar Year Ending December 31, 2011
1st Quarter	4.90		3.40
Calendar Year Ended December 31, 2010
4 th Quarter		5.30		4.51
3 rd Quarter		5.50		5.10
2 nd Quarter		6.45		6.10
1 st Quarter		7.75		6.24
Calendar Year Ended December 31, 2009
4 th Quarter		7.51		4.10
3 rd Quarter		4.15		1.50
2 nd Quarter		4.00		1.50
1 st Quarter		1.70		0.93
Calendar Year Ended December 31, 2008
4 th Quarter		3.30		1.05
4 th Quarter (prior to 3 for 1 split)		0.10		0.10
3 rd Quarter:		0.10		0.10
2 nd Quarter:		0.10		0.10
1 st Quarter:		0.10		0.10

In order to enhance cash flow management, the Company decided to sell this land in the next twelve months. The land will be classified as assets held for sales and measured at the lower of its carrying amount and fair value less costs to sell.

37At the date of this report, the Company has fully settled the cost of purchases and the Company has no current or future plans for a material capital commitment regarding these transactions.

~~The~~Off-Balance ~~high~~Sheet and low bid quotations for our common stock prior to March 31, 2011 were US$7.75 and US$0.10, respectively. The market quotations represent prices between dealers, do not include retail markup, markdown, or commissions and may not represent actual transactions.Arrangements

~~Holders~~We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions of ~~Common~~foreign ~~Equity~~currency forward contracts. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us.

AsITEM ~~of June 10, 2011, we have issued Fifty Million (50,000,000) shares of our common stock to approximately 71 holders of record~~7A. ~~The~~ ~~Company~~Quantitative ~~believes~~and ~~that~~Qualitative itDisclosures ~~has~~about ~~more~~Market ~~stockholders since many of its shares are held in "street" name~~Risk.

~~Securities~~Not ~~Authorized~~required for ~~Issuance~~a ~~under~~“smaller ~~Equity Compensation Plans~~reporting company”.

AsITEM of8. ~~the~~Financial ~~date~~Statements ~~hereof,~~and weSupplementary ~~have no compensation plans (including individual compensation arrangements) under which the Company’s equity securities are authorized for issuance.~~Data

~~Transfer~~Reference ~~Agent~~is ~~and~~made ~~Registrar~~to the “F” pages herein comprising a portion of this report.

~~Interwest~~ITEM ~~Transfer Company, Inc~~9., ~~1981~~Changes ~~East~~in ~~Murray~~and ~~Holladay~~Disagreements ~~Road,~~with ~~Suite~~Accountants ~~100,~~on ~~P.O.~~Accounting ~~Box 17136, Salt Lake City, Utah 84117, telephone (801) 272-9294, facsimile (801) 277-3147, currently serves as our transfer agent~~ and ~~registrar.~~Financial Disclosures

~~ITEM~~There ~~6. Selected~~were ~~Financial~~no ~~Data~~changes in and disagreements with our independent accountants on accounting and financial disclosure for the fiscal year ended March 31, 2012.

~~Not~~- ~~required~~42 ~~for a “smaller reporting company”.~~-

ITEM 79A. ~~Management’s~~Controls ~~Discussion~~ and ~~Analysis of Financial Condition and Results of Operations~~Procedures

~~Forward~~Evaluation ~~Looking~~of ~~Statements~~Disclosure Controls and Procedures

~~The~~Under ~~following~~the issupervision ~~management’s discussion~~ and ~~analysis~~with the participation of ~~certain~~our ~~significant~~management, ~~factors~~including ~~which have affected~~ our ~~financial~~principal ~~position~~executive officer and ~~operating~~principal ~~results during the periods included in the accompanying consolidated~~ financial ~~statements~~officer, aswe ~~well~~conducted asan ~~information relating~~evaluation toof the effectiveness ~~plans~~ of ~~our~~the ~~current~~design ~~management.~~and ~~This~~operation ~~Annual~~of ~~Report~~our ~~includes~~disclosure ~~forward-looking~~controls ~~statements.~~and ~~Generally~~procedures, ~~the~~as ~~words~~defined ~~“believes~~in ”,Rule 13a-15(e) ~~“anticipates”,~~under “the Exchange ~~may~~Act. ”,Based “on ~~will~~this ”evaluation, “our ~~should ”~~management, “including ~~expect~~our ”,principal “executive ~~intend~~officer ”,and ~~“estimate”,~~our ~~“continue”~~principal ~~and~~financial ~~similar~~officer, concluded ~~expressions or~~that ~~the~~our ~~negative~~disclosure ~~thereof~~controls orand ~~comparable~~procedures ~~terminology~~were ~~are~~effective ~~intended~~as toof ~~identify~~the ~~forward-looking~~fiscal ~~statements.~~quarter ~~Such~~covered ~~statements~~by ~~are~~this ~~subject~~report, to ensure ~~certain~~that ~~risks~~information ~~and~~required ~~uncertainties,~~to ~~including~~be ~~the~~disclosed ~~matters~~by ~~set~~us ~~forth~~ in ~~this~~the ~~Annual~~reports ~~Report~~filed or ~~other~~submitted ~~reports~~by orus ~~documents~~under wethe ~~file~~Exchange ~~with~~Act ~~the~~(i) is recorded, ~~SEC~~processed, ~~from~~summarized ~~time~~and toreported ~~time,~~within ~~which~~the ~~could~~time ~~cause~~period ~~actual~~specified ~~results~~in orSEC ~~outcomes~~rules toand ~~differ~~forms, ~~materially~~and ~~from~~(ii) is ~~those~~accumulated and ~~projected.~~communicated ~~Undue~~to ~~reliance~~our ~~should~~management, ~~not~~including beour ~~place~~principal onexecutive ~~these~~officer ~~forward-looking~~and ~~statements~~our ~~which~~principal ~~speak~~financial ~~only~~officer, as ofappropriate to ~~the~~allow ~~date~~appropriate ~~hereof.~~decisions Weon ~~undertake~~a notimely ~~obligation~~basis toregarding ~~update~~required ~~these forward-looking statements~~disclosure.

~~The~~Management’s ~~following~~Annual ~~discussion~~Report ~~and~~on ~~analysis~~Internal Control ~~should~~over beFinancial ~~read in conjunction with our consolidated financial statements and the related notes thereto and other financial information contained elsewhere in this Annual Report.~~Reporting

~~Overview~~Management is responsible for establishing and maintaining adequate internal control structure and procedures over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)) under the Exchange Act. Our management conducted an assessment of the effectiveness of our internal control over financial reporting as of March 31, 2012 based on the framework set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

WeInternal ~~are~~control ~~one~~over financial reporting cannot provide absolute assurance of ~~the~~achieving ~~leading~~financial ~~producers~~reporting objectives because of ~~sealed~~its ~~lead-acid~~inherent ~~motive~~limitations. ~~batteries,~~Internal ~~also~~control over ~~known~~financial asreporting ~~valve~~is ~~regulated~~a ~~lead-acid~~process ~~motive~~that ~~batteries~~involves ~~(“VRLA~~human ~~batteries”),~~diligence inand ~~China's~~compliance ~~personal~~and ~~transportation~~is ~~device~~subject ~~market.~~to ~~Currently,~~lapses wein ~~manufacture~~judgment ~~over~~and ~~19,800,000~~breakdowns resulting ~~sealed~~from ~~lead~~human ~~acid~~failures. ~~motive~~Because ~~batteries~~of ~~each~~such ~~year~~limitations, ~~have~~there ~~more~~is ~~than~~a ~~2,500~~risk ~~employees~~that ~~and~~material ~~are~~misstatements ~~one~~may ofnot ~~China's~~be ~~largest~~prevented ~~manufacturers~~or detected ofon ~~sealed~~a ~~lead-acid~~timely ~~motive~~basis ~~batteries~~by ~~for~~internal ~~electric~~control ~~powered~~over ~~bicycles~~financial ~~(LABEBs)~~reporting. ~~For~~Also, ~~each~~projections of ~~our~~any ~~fiscal~~evaluation ~~years~~of ~~ended~~effectiveness ~~March~~to future ~~31,~~periods ~~2011~~are ~~and~~subject ~~2010,~~to ~~sales~~the ~~revenues~~risk ~~were~~that ~~US$243,814,000~~controls ~~and~~may ~~US$177,192,000,~~become ~~respectively,~~inadequate ~~and~~because ~~our~~of ~~net~~changes ~~income~~in ~~during~~conditions, or that the ~~same~~degree of ~~periods~~compliance ~~amounted~~with tothe ~~US$11,066,000~~policies ~~and~~or ~~US$9,500,000,~~procedures ~~respectively~~may deteriorate.

~~Summary~~Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting as of ~~Significant~~March ~~Accounting~~31, ~~Policies~~2012 was effective.

~~Accounting~~This ~~Principles~~report contains an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.

~~The~~Changes ~~consolidated financial statements and accompanying notes are prepared~~ in ~~accordance~~Internal ~~with~~Control ~~generally~~over ~~accepted accounting principles in the United States of America (“US GAAP”).~~Financial Reporting

~~Basis~~There ofwere ~~Consolidation~~no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~The~~ITEM ~~consolidated financial statements include the financial information of the Registrant and its subsidiaries~~9B. ~~All~~Other ~~significant inter-company accounts and transactions have been eliminated upon consolidation.~~Information

38None.

~~Revenue~~- ~~Recognition~~43 -

~~Operating~~PART revenue represents sale of goods at invoiced value to customers, net of returns, discounts and value-added tax (“VAT”), and is recognized when goods are delivered to customers, the significant risks and rewards of ownership of goods have been transferred to customers, the sales price to the customers is fixed or determinable and the collectability of consideration is reasonably assured.III

~~The~~ITEM ~~Company recognizes revenue when goods are delivered to customers~~10. ~~The~~Directors, ~~Company~~Executive ~~assesses~~Officers, ~~whether the selling price is fixed or determinable based on the contract~~ and~~/or~~ ~~customer~~Corporate purchase order and payment terms associated with transaction and whether the sale price is subject to refund or adjustment. The Company assesses collectability based primarily on the creditworthiness of the customer as determined by the credit analysis, as well as the customer’s payment history.Governance

~~Volume-based~~Executive ~~rebates~~Officers, ~~are~~Directors ~~made at the time of sales of goods~~ and ~~are~~Key ~~recognized as a reduction of sales.~~Employees

~~Costs~~The ~~related~~following toindividuals ~~shipping~~constitute our board of directors and ~~handling~~executive ~~are~~management ~~included~~as inof ~~selling~~June 28, ~~marketing~~2012. Our last annual meeting was held on September 9, 2010 at the Changxing International Hotel, No. 1 Taihu Rd., Changxing, Zhejiang Province, PRC, whereby stockholders of record on August 11, 2010 approved the appointment of Xu Kecheng, Liu Chuanjie, Lou Shourong, Dong Quanfeng, Jiang Yanfu, Gong Xiaoyan and ~~distribution~~Yun ~~expenses~~Hon Man, to our Board.

Retirement plan costs

Name	Age	Position(s)
Xu Kecheng	50	Chairman of the Board, Chief Executive Officer & President
Liu Chuanjie	35	Chief Financial Officer, Treasurer, Director
Lou Shourong	48	Vice-President, Director
Fei Wenmei	50	Corporate Secretary
Zhu Zhongli	49	Vice-President of Sales
Dong Quanfeng	48	Independent Director
Jiang Yanfu	69	Independent Director
Gong Xiaoyan	66	Independent Director
Yun Hon Man	44	Independent Director
Gui Changqing	74	Significant Employee

~~Contributions~~Term ~~to defined contribution retirement schemes are charged to cost~~ of sales, sales, marketing and distribution costs and general and administrative expenses in the consolidated statements of operations and other comprehensive income as and when the related employee services are provided.Office

~~Income~~Our ~~taxes~~directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our Bylaws. Our officers are appointed by the Board and hold office until removed by the Board.

~~The~~Biographies ~~Company provides for income taxes using the liability method. Under the liability method, current income tax expense or benefit is the amount~~ of ~~income~~Officers ~~taxes~~and ~~expected to be payable or refundable for the current period.~~Directors

AXu ~~deferred~~Kecheng. ~~income~~Mr. ~~tax~~Xu ~~asset~~has orserved as ~~liability~~President, isChief ~~computed~~Executive ~~for~~Officer and a Director of the ~~expected~~Company ~~future~~since ~~impact~~November of12, ~~differences~~2008. ~~between~~Mr. ~~the~~Xu ~~financial~~founded ~~reporting~~CCEC in 2002 and ~~tax~~has served ~~bases~~as CCEC’s President and Chairman of ~~assets~~the Board since its inception. Besides successfully establishing and ~~liabilities~~running CCEC, Mr. Xu also acquired Ai Ge Organism Products Co., Ltd., a biological & pharmaceutical company in China in November 2006 where he serves as Chairman of the Board and Executive Director. In 2002, Mr. Xu was involved in the formulation of coated tempered glass panel standards used for home gas kitchen ranges, which was put on the ~~expected~~list ~~future~~of ~~tax~~the ~~benefit~~National toBuilding beMaterials ~~derived~~Industry Standard. Mr. Xu graduated from ~~tax~~Hangzhou ~~credits~~University in 1997 with the major in economic management. ~~Deferred~~In ~~tax~~addition ~~assets~~to ~~are~~serving ~~reduced~~as bysenior economist to the Company, Mr. Xu is a ~~valuation~~member ~~allowance~~of ~~when~~China Battery Industry Association, ina member of Huzhou CPPCC, a member of the ~~opinion~~Standing Committee of ~~management,~~Changxing itPeople’s isCongress ~~more~~and ~~likely~~he ~~than~~has ~~not~~been ~~that~~honored ~~some~~with ~~portion~~the ortitle ~~all~~of “Integrity Entrepreneur” by the Changxing Government. Mr. Xu also finished a course of study at the ~~deferred~~class ~~tax~~of ~~assets~~advanced ~~will~~training ~~not~~at bethe ~~realized~~Party School of the CPC Central Committee.

~~Tax~~- ~~rate~~44 ~~changes are reflected in the computation of the income tax provision during the period such changes are enacted.~~-

~~Under~~Liu ~~the~~Chuanjie. ~~provision~~Mr. Liu has served as Chief Financial Officer of ~~ASC~~the ~~740~~Company ~~Income~~since ~~Taxes~~June 15, ~~tax~~2010, ~~position~~as isTreasurer ~~recognized~~of asthe aCompany ~~benefit~~since ~~only~~November if12, it2008 isand ~~“more~~has ~~likely~~served as ~~than~~a ~~not”~~Director ~~that~~of the ~~tax~~Company ~~position~~since ~~would~~November be24, ~~sustained~~2008. inMr. aLiu ~~tax~~also ~~examination~~serves as Controller, ~~with~~Director of Finance and as a ~~tax~~Director of ~~examination~~CCEC ~~being~~since ~~presumed~~May 2004. Mr. Liu has expertise in accounting systems and national accounting policies, fund raising and investing. Prior to ~~occur~~joining CCEC, Mr. ~~The~~Liu ~~amount~~served ~~recognized~~as isthe head of the ~~largest~~financial ~~amount~~department of ~~tax~~Changxing ~~benefit~~Chisen ~~that~~Xinguangyuan isCo., ~~greater~~Ltd., ~~than~~a ~~50%~~manufacturing company ofin ~~being~~China, ~~realized~~from onOctober ~~examination~~2000 byto ~~the~~April ~~tax~~2004. ~~authority~~Mr. ~~For~~Liu ~~tax~~received ~~positions~~his ~~not~~Degree ~~meeting~~in ~~the~~Economic ~~“more~~and ~~likely~~Administration ~~than~~Management ~~not”~~at ~~test,~~the Nanjing noInstitute ~~tax~~of ~~benefit~~Political isStudies ~~recorded~~in 2009.

~~Property~~Lou Shourong. Mr. Lou has served as a Vice President of the Company since November 12, ~~plant~~2008 and ~~equipment~~as ~~(“PPE”)~~a Director since September 9, 2010. From October 2007 to present, Mr. Lou has served as a Deputy General Manager of CCEC, a manufacturing company in China. From April 2006 to September 2007, Mr. Lou served as Executive Deputy General Manager for Changxing Nuo Wan Te Ke Co., Ltd., a manufacturing company in China. Prior to that, Mr. Lou served as the factory director and ~~long-term~~marketing ~~land~~manager ~~lease~~in ~~prepayments~~Changxing Chisen Glass Co., Ltd., a manufacturing company in China from June 1996 to March 2006. Mr. Lou has extensive experience in materials supply, procurement and production plan management.

~~PPE~~Fei ~~are~~Wenmei. ~~stated~~Ms. atFei ~~cost~~has ~~less~~served as ~~accumulated~~Corporate ~~depreciation~~Secretary of the Company since November 12, 2008. In March 2005, Ms. Fei joined CCEC as Chief Administrative Manager in charge of corporate brand building, intellectual property and ~~include~~project ~~expenditure~~application. ~~that~~Ms. ~~substantially~~Fei ~~increases~~currently serves CCEC as an assistant economist and clean production management controller. From March 1991 to February 2005, Ms. Fei served as Chief Administrative Manager of the ~~useful~~Huaneng ~~lives~~Changxing Power Plant Industry & Trading Company and prior to that she served as Chief of ~~existing~~Staff ~~assets~~at the Changxing Land Administration Bureau from March 1987 to February 1991. Ms. Fei has been engaged in administrative management for many years and has vast experience in corporate administrative management. Ms. Fei graduated from Zhejiang Radio and Television University with a degree in Chinese Language.

~~The~~Zhu ~~cost~~Zhongli. ofMr. anZhu ~~asset~~has ~~comprises~~served as ~~its~~Vice-President ~~purchase~~of ~~price~~Sales ~~and~~of ~~any~~the ~~directly~~Company ~~attributable~~since ~~costs~~June of3, ~~bringing~~2009. ~~the~~Mr. ~~asset~~Zhu tois ~~its~~in ~~present~~charge ~~working~~of ~~condition~~overall sales and ~~location~~marketing ~~for~~management. ~~its intended use~~Mr. Zhu ~~Expenditures~~previously ~~incurred~~served ~~after~~as the ~~assets~~Assistant ~~have~~General ~~been~~Manager ~~put~~of ~~into~~the ~~operation,~~Company ~~such~~since asAugust ~~repairs~~2006. ~~and~~Prior ~~maintenance,~~to ~~overhaul~~joining ~~and~~the ~~minor renewals and betterments~~Company, ~~are~~Mr. ~~normally~~Zhu served ~~charged~~as tothe ~~operating~~General ~~expenses~~Manager inof ~~the~~Changxing ~~period~~Lida inWear-Resisting ~~which~~Material ~~they~~Co., ~~are incurred~~Ltd. In, ~~situations~~a ~~where~~manufacturing itcompany ~~can~~in beChina, ~~clearly~~since ~~demonstrated~~March 1999. ~~that~~Mr. ~~the~~Zhu ~~expenditure~~ has ~~resulted~~extensive inexperience ~~an increase~~ in the ~~future~~local ~~economic~~Chinese ~~benefits~~market ~~expected~~and tohas beachieved ~~obtained~~outstanding ~~from~~success ~~the~~in ~~use~~sales of ~~the~~storage ~~assets,~~batteries in ~~the expenditure is capitalized~~China.

~~Depreciation~~Dong Quanfeng. Professor Dong has served as a Director of the Company since November 24, 2008. Professor Dong has served as a Chemistry professor and doctorial tutor at the Department of Chemistry of Xiamen University since March 2006. Professor Dong concurrently acts as a visiting research fellow at the National Hi-Tech Green Material Development Center, is ~~provided~~a Member of the Editorial Board of the industry magazine “Battery” is a Member of the Chinese Institute of Electrics Chemical and Physical Power Committee, ona Member of ISE, a ~~straight~~Member of the American ECS and is the Vice Director of the Changxing Chisen Physical Chemistry Battery Research Center. Professor Dong is engaged in the research of new chemical electric power sources and related energy storage material and has finished several national and provincial-~~line~~municipal scientific ~~basis~~research projects. In 1997, toProfessor ~~write~~Dong ~~off~~won the ~~cost~~provincial ~~less~~second ~~accumulated~~prize ~~depreciation~~of the Development of ~~each~~Science ~~PPE~~and ~~item~~Technology. In at1999, ~~rates~~Professor ~~based~~Dong onwon ~~their~~the ~~estimated~~technology ~~useful~~innovation ~~lives~~prize ~~from~~of Hubei province. In 2004, Professor Dong won third prize of the ~~date~~Development of onScience ~~which~~and ~~they~~Technology ~~become~~of ~~fully~~Xiamen. ~~operational~~In 2006, he won the title of “Technology Innovation Advanced Individual” by the National Information Industry. Professor Dong has issued over 80 papers on internationally significant academic journals and ~~after~~has applied ~~taking~~for ~~into~~several ~~account~~patents. ~~their~~Prior ~~estimated~~to ~~residual~~his ~~values~~employment as ~~follows:~~a full time professor at Xiamen University, Professor Dong served as an associate professor at Xiamen University since January 2001. Mr. Dong graduated from Wuhan University with a Ph D degree in Chemistry and performed postdoctoral research at Israel Technical Institute.

Buildings	20 years
Leasehold improvements	Over the unexpired term of lease
Furniture, fixtures and office equipment	10 years
Motor vehicles	5 years
Plant and machinery	10 years

- 45 -

39Jiang Yanfu. Professor Jiang has served as a Director of the Company since November 24, 2008. Professor Jiang has served as a professor and doctorial tutor of business administration at Tsinghua University since December 1993. Professor Jiang has served as Dean of the Entrepreneurial Research Center since April 2000 and has served as academic director-general and co-founded of Trinity Innovation since December 2003, a consulting company in China. Professor Jiang has expertise in entrepreneurial management, corporate governance and institutional economics. He has undertaken many important research programs such as the “Theoretical Study on Chinese Technology Innovation.” He served as a director of and as an advisor to many companies. Professor Jiang’s main research fields include risk investment and entrepreneurial management, corporate governance and cyber economy. The major courses he has instructed include Entrepreneurial Management, Technology and Institution Innovation, and Analysis of Institutional Economics.

~~When~~Gong ~~assets~~Xiaoyan. ~~are~~Ms. ~~sold~~Gong orhas ~~retired~~served as a Director of the Company since November 24, ~~their~~2008. ~~costs~~Ms. ~~and~~Gong ~~accumulated~~currently ~~depreciation~~serves ~~are~~as ~~eliminated~~Chairman ~~from~~of ~~the~~Tianjin ~~consolidated~~Bicycle ~~financial~~Industrial ~~statements~~Association, a ~~and~~non-governmental ~~any~~organization ~~gain~~in orChina ~~loss~~since ~~resulting~~June ~~from~~2006. ~~their~~Prior ~~disposal~~to isthat, ~~recognized~~Ms. Gong served as Secretary-general of Tianjin Bicycle Industrial Association, a non-govermental organization in China since September 1998. She has been honored with the ~~period~~titles of“China Top-Hundred ~~disposition~~Female asEntrepreneurs,” an“Most ~~element~~Influential Enterprises Leader of ~~other~~China” ~~income~~and “Tianjin Female Entrepreneur” issued by Tianjin Municipal Government.

~~Construction-in-progress~~Yun ~~consists~~Hon Man. Mr. Yun has served as a director of ~~factories~~the ~~and~~Company ~~office~~since ~~buildings~~November ~~under~~24, ~~construction~~2008. ~~and~~Mr. ~~machinery~~Yun ~~pending~~has ~~installation~~served and ~~includes~~continues to serve as a Corporate Consultant with Smart Pine Investment Limited since September 2007, a consulting firm organized under the ~~costs~~laws of ~~construction,~~Hong ~~machinery~~Kong. ~~and~~Mr. ~~equipment~~Yun also serves as a Director of CH Lighting International Corporation (OTCBB: CHHN) since July 28, 2008 and ~~any~~as ~~interest~~a ~~charges~~Director ~~arising~~of Xinde Technology Company (OTCBB: WTFS) since January 2010. Mr. Yun also served as Chief Operating Officer of China INSOnline Corp. (NASDAQ: CHIO) from ~~borrowings~~January ~~used~~2008 through April 2010. Prior to ~~finance~~that, ~~these~~Mr. ~~assets~~Yun ~~during~~served ~~the~~as ~~period~~Corporate Controller of ~~construction~~Hi-Tech orWealth ~~installation~~Inc. No(n/k/a ~~provision~~China Mobile ~~for~~Media ~~depreciation~~Technology, Inc.)(OTCBB: CHMO) from January 2007 through August 2007. From January 2003 through December 2006, Mr Yun served as Corporate Controller of General Components, Inc. (n/k/a China Mobile Media Technology, Inc.)(OTCBB: CHMO). Mr. Yun is ~~made~~a onChartered ~~construction-~~Accountant having memberships with the Institute of Chartered Accountants in~~-progress~~ ~~until~~England ~~such~~and ~~time~~Wales. He is also a Fellow Member of the ~~relevant~~Chartered ~~assets~~Association ~~are~~of ~~completed~~Certified Accountants and ~~ready~~a ~~for~~member ~~their~~of ~~intended~~the ~~use~~Hong Kong Institute of Certified Public Accountants. He was a member of Association of International Accountants, the Society of Registered Financial Planners, the Institute of Financial Accountants and the Institute of Crisis and Risk Management. Mr. Yun received his MBA at the University of Western Sydney in 2007.

~~Long~~-~~term~~ ~~land~~46 ~~lease prepayments are amortized on a straight~~-~~line basis over the term of lease.~~

~~Inventories~~Biographies of Significant Employees

~~Inventories~~Gui ~~are~~Changqing. ~~stated~~Mr. Gui has served and continues to serve as Chief Scientist at the ~~lower~~Zhejiang ofChangxing ~~cost~~Chisen ~~and~~Physical-Chemical ~~net~~Power ~~realizable~~Supply ~~value.~~Research ~~Cost,~~and ~~which~~Development Center ~~comprises~~since ~~all~~June ~~costs~~2007 and as counselor of ~~purchase~~the ~~and,~~712 ~~where~~Institute ~~applicable~~since January 2005. Prior to that, ~~costs~~Mr. Gui served as expert team member of ~~conversion~~the ~~and~~712 ~~other~~Institute ~~costs~~from ~~that~~January ~~have~~2001 ~~been~~to ~~incurred~~December 2004. Early in ~~bringing~~his ~~the~~career ~~inventories~~Mr. toGui ~~their~~was ~~present~~engaged ~~location~~in ~~and~~the ~~condition,~~R&D isof ~~calculated~~the ~~using~~powered lead-acid battery for the ~~weighted~~national ~~average~~military ~~costing~~in ~~method~~China serving as General Engineer and Researcher. The ~~Company~~product ~~estimates~~won a scientific and technical award from the ~~market~~State ~~price~~Commission of ~~its~~Science ~~inventories~~and ~~with~~Technology. ~~reference~~Mr. toGui ~~the~~has ~~net~~published ~~realizable~~more ~~value~~than ~~based~~100 ~~upon~~papers ~~current~~of ~~market~~international significance ~~conditions~~ and ~~historical~~has ~~experience~~trained 24 postgraduates. ~~Estimated~~Mr. ~~losses~~Gui onis ~~inventories~~extremely ~~represent~~well ~~reserves~~respected ~~for~~by ~~obsolescence,~~his ~~excess~~peers ~~quantities~~in the storage battery industry. In 1992, ~~irregulars~~he ~~and~~won ~~slow~~the ~~moving~~special ~~inventory~~government allowance from the State Council, ~~and~~has ~~which~~served ~~are~~as ~~charged~~Director toof ~~cost~~the Association of ~~sales~~Chinese Chemical Physics Power Industry and as a Director of the Wuhan Power Supply Society. Mr. Gui earned his doctorate degree in electrochemistry from Shanghai Fudan University.

~~Trade~~Code ~~Receivables~~of ~~and~~Business ~~Allowance~~Conduct ~~for~~and ~~Doubtful Accounts~~Ethics

The ~~allowance~~Company’s ~~for~~Board ~~the~~of ~~risk~~Directors ofadopted a ~~non-collection~~Code of ~~trade~~Business ~~receivables~~Conduct ~~takes~~and ~~into~~Ethics ~~account~~to ~~credit-risk~~help ~~concentration.~~ensure ~~Collective~~compliance ~~debt~~with ~~risk~~legal isrequirements ~~assessed~~and ~~based~~our onstandards ~~average~~of ~~historical~~business ~~losses~~conduct. The Code of Business Conduct and ~~specific~~Ethics ~~circumstances~~applies ~~such~~to asdirectors, ~~serious~~officers ~~adverse~~and ~~economic~~employees ~~conditions~~of Chisen. ~~The~~A ~~Company’s~~copy ~~estimate~~of our Code of Business Conduct and Ethics is ~~based~~attached as Exhibit 14.1 to our Current Report on aForm ~~variety~~8-K ofas ~~factors,~~filed ~~including~~with ~~historical~~the ~~collection~~SEC ~~experience~~on February 4, ~~existing~~2009 ~~economic~~which is ~~conditions~~accessible ~~and~~at athe ~~review~~SEC’s ofwebsite ~~the~~at ~~current~~www.sec.gov. ~~status~~The Code of ~~the~~Business ~~receivables.~~Conduct ~~Trade~~and ~~receivables~~Ethics, ~~are~~and ~~presented~~any ~~net~~amendments ofor waivers antherefrom ~~allowance~~is ~~for~~also ~~doubtful~~available ~~accounts~~in ofprint, ~~US$6~~at no charge,~~000~~ ~~and~~to ~~US$6~~any stockholder who makes a written request to: Chief Financial Officer,~~000~~ asChisen ofElectric ~~March~~Corporation, 31Jingyi Road, ~~2011~~Changxing ~~and~~Economic ~~2010~~Development Zone, ~~respectively~~Changxing, Zhejiang Province, The People’s Republic of China.

~~Cash~~Director ~~and cash equivalents~~Independence

~~Cash~~Our ~~represents~~Board ~~cash~~of onDirectors ~~hand~~has ~~and~~determined ~~deposits~~that 4 ~~with~~out ~~financial~~of ~~institutions~~the ~~which~~7 members of our Board of Directors are ~~repayable~~independent based on ~~demand.~~the ~~Cash~~criteria ~~equivalents~~for ~~represent~~independence ~~short-term,~~set ~~highly~~forth ~~liquid~~in ~~investments~~Rule ~~purchased~~10A-3(b)(1) under ~~with~~the anSecurities ~~original~~Exchange ~~maturity~~Act of ~~three~~1934, ~~months~~as oramended ~~less,~~(the ~~which~~“Exchange ~~are~~Act”). ~~readily~~The ~~convertible~~following ~~into~~directors ~~known~~are ~~amounts~~independent: Dong ofQuanfeng, ~~cash~~Jiang Yanfu, Gong Xiaoyan and ~~which~~Yun ~~are~~Hon ~~subject~~Man. toThe anfollowing ~~insignificant~~directors ~~risk~~are ofnot ~~changes~~independent: inXu ~~value~~Kecheng, Liu Chuanjie and Lou Shourong.

~~Foreign~~Family ~~currency translation~~Relationships

~~Items~~There ~~included~~are inno ~~the~~family ~~financial~~relationships ~~statements~~by ofand between ~~the~~or ~~Company’s~~among ~~subsidiary~~the ~~are~~members ~~measured~~of ~~using~~the ~~Renminbi~~Board ~~(“RMB”),~~or ~~the~~other ~~currency~~executives. None of ~~the~~our ~~primary~~directors ~~economic~~and ~~environment~~officers inare ~~which~~directors ~~the~~or ~~entity~~executive ~~operates~~officers of ~~(“functional~~any ~~currency”).~~company ~~The~~that ~~consolidated~~files ~~financial~~reports ~~statements~~with ~~are~~the ~~presented~~SEC inexcept ~~United~~as ~~States~~set ~~Dollars~~forth ~~(“US$”),~~in ~~which is~~ the ~~Company’s~~biographies ~~presentation~~section ~~currency~~above.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-~~end~~ ~~exchange~~47 ~~rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement.~~-

OnLegal ~~consolidation,~~Proceedings ~~the~~Involving ~~results~~Officers and ~~financial position of all the group entities that have a functional currency different from the presentation currency are translated as follows:~~ Directors

Unless otherwise indicated, to the knowledge of the Company after reasonable inquiry, no current director or executive officer of the Company during the past ten years, has (i) been convicted in a criminal proceeding (excluding traffic violations or other minor offenses) ~~assets~~, ~~and~~(ii) ~~liabilities~~been a party to any judicial or administrative proceeding (except for ~~each~~any ~~balance~~matters ~~sheet~~that ~~presented~~were ~~are~~dismissed ~~translated~~without atsanction or settlement) that resulted in a judgment, decree or final order enjoining the ~~closing~~person ~~rate~~from atfuture violations of, or prohibiting activities subject to, U.S. federal or state securities laws, or a finding of any violation of U.S. federal or state securities laws, (iii) filed a petition under federal bankruptcy laws or any state insolvency laws or has had a receiver appointed for the ~~date~~person’s property or (iv) been subject to any judgment, decree or final order enjoining, suspending or otherwise limiting for more than 60 days, the person from engaging in any type of business practice , acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity or engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws, (v) been found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated, (vi) been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated, (vii) been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (a) any Federal or State securities or commodities law or regulation, (b) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or (c) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity, or (viii) been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that ~~balance~~has ~~sheet;~~disciplinary authority over its members or persons associated with a member.

~~(b) income~~There ~~and~~are ~~expenses~~no ~~for~~material ~~each~~pending ~~statement~~legal proceedings to which any of ~~operations~~the individuals listed above is party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries. There are ~~translated~~no atfamily ~~average~~relationships ~~exchange~~between ~~rates;~~directors and executive officers of the Company.

~~(c) all~~Committees ~~resulting~~of ~~exchange~~our ~~differences~~Board ~~are recognized as a separate component~~ of ~~equity.~~Directors

~~Fair~~As ~~value~~of January 15, 2009, our Board of ~~financial~~Directors has ~~instruments~~an Audit Committee, a Compensation Committee and a Corporate Governance and Nominating Committee established in accordance with the Exchange Act and NASDAQ rules. Prior to January 15, 2009, we did not have an Audit Committee, a Compensation Committee or a Corporate Governance and Nominating Committee. During the fiscal year ended March 31, 2012, the Audit Committee met 4 times, the Compensation Committee met 1 time and the Corporate Governance and Nominating Committee met 1 time. A brief description of each committee is set forth below.

~~The~~- ~~ASC~~48 Topic 825, “Disclosures about Fair Value of Financial Instruments”, requires that the Company discloses estimated fair value of financial instruments. The carrying amounts reported in the balance sheets for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value. -

40¨ Audit Committee – The purpose of the Audit Committee is to provide assistance to our Board of Directors in fulfilling their oversight responsibilities relating to our consolidated financial statements and financial reporting process and internal controls in consultation with our independent registered public accountants. The Audit Committee is also responsible for ensuring that the independent registered public accountants submit a formal written statement to us regarding relationships and services which may affect the auditor’s objectivity and independence. The Board appointed Yun Hon Man, Gong Xiaoyan, Dong Quanfeng and Jiang Yanfu to serve as members of the Audit Committee, with Yun Hon Man serving as Chairman, commencing on January 15, 2009. Our Audit Committee financial expert is Yun Hon Man, an independent director.

~~The~~¨ ~~Company’s~~Compensation ~~financial~~Committee ~~instruments~~– ~~consist~~The ~~principally~~purpose of ~~cash~~the Compensation Committee is to review and ~~cash~~make ~~equivalents,~~recommendations ~~restricted~~to ~~bank~~our ~~balances,~~Board ~~other~~of ~~financial~~Directors ~~assets,~~regarding ~~trade~~all ~~receivables~~forms of compensation to be provided to our executive officers and ~~payables~~directors, ~~deposits~~including stock compensation and loans, ~~prepayment~~and all bonus and ~~other~~stock ~~receivables,~~compensation ~~notes~~to ~~payable,~~all ~~accrued~~employees. ~~expenses~~The ~~and~~Board ~~other~~appointed ~~liabilities~~Jiang Yanfu, ~~amount~~Dong ~~due~~Quanfeng, ~~from/to~~Yun ~~related~~Hon ~~parties~~Man and ~~short-term~~Gong ~~borrowings~~Xiaoyan ~~which~~to ~~are~~serve ~~carried~~as atmembers ~~amounts~~of ~~that~~the ~~generally~~Compensation ~~approximate~~Committee, ~~their~~with ~~fair~~Jiang ~~values~~Yanfu ~~because~~serving ofas ~~the~~Chairman, ~~short-term~~commencing ~~maturity~~on ofJanuary ~~these~~15, ~~instruments~~2009.

~~Warranty~~¨ Corporate Governance and Nominating Committee – The purpose of the Nominating Committee is to review the composition and evaluate the performance of the Board, recommend persons for election to the Board and evaluate director compensation. The Nominating Committee is also responsible for reviewing the composition of committees of the Board and recommending persons to be members of such committees, and maintaining compliance of committee membership with applicable regulatory requirements. The Company does not have a formal diversity policy. Although the Board does not currently have formal specific minimum criteria for nominees, substantial relevant and diverse business and industry experience would generally be considered important qualifying criteria, as would the ability to attend and prepare for Board and shareholder meetings. We have not adopted procedures by which security holders may recommend nominees to our Board of Directors. The Board appointed Gong Xiaoyan, Dong Quanfeng, Yun Hon Man and Jiang Yanfu to serve as members of the Corporate Governance and Nominating Committee, with Gong Xiaoyan serving as Chairman, commencing on January 15, 2009.

~~Estimated~~¨ ~~warranty~~Strategy ~~costs~~and ~~are~~Steering ~~recognized~~Committee at– ~~the~~Xu ~~time~~Kecheng ~~when~~and ~~the~~Wang ~~Company~~Chunyan ~~sells~~served ~~its~~as ~~products~~members ~~and~~of ~~are~~the ~~included~~Strategy ~~in sale, marketing~~ and ~~distribution~~Steering ~~expenses.~~Committee, ~~The~~with ~~Company~~Xu ~~uses~~Kecheng ~~historical~~serving ~~failure~~as ~~rates~~Chairman, ~~and costs to repair product defects~~ during the ~~warranty~~fiscal ~~period~~year toended ~~estimate~~March ~~warranty costs~~31, ~~which~~ ~~are reviewed periodically in light of actual experience~~2012.

~~Government~~Committee ~~subsidies~~Charters

~~Government~~On ~~subsidies~~January ~~are~~15, ~~recognized~~2009, ~~as income over~~ the ~~periods~~Board ~~necessary~~approved toCharters for ~~match~~each ~~them~~of ~~with~~ the ~~related~~Audit ~~costs.~~Committee, ~~Subsidies~~Compensation ~~related~~Committee toand ~~expense items are recognized in~~ the ~~same~~Corporate ~~period~~Governance ~~as those expenses are charged in the consolidated statements of operations~~ and ~~other~~Nominating ~~comprehensive income and are reported separately as other income~~Committee.

~~Use~~- of49 ~~Estimates~~-

~~The~~Director ~~preparation~~Qualifications ~~of the consolidated financial statements in conformity with US GAAP requires the management to make estimates~~ and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reported periods. The management evaluates these estimates and judgments on an ongoing basis and bases their estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that they believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual amounts could differ from those estimates. Estimates are used for, but not limited to, the accounting for certain items such as allowance for doubtful accounts, depreciation and amortization, inventory allowance, taxes and contingencies.Experience

~~Recent~~The ~~accounting~~following ~~pronouncements~~discussion sets forth the specific experience, qualifications, attributes and skills that the Company considered in making its decision to appoint and nominate directors to the Board.

InMr. ~~January~~Xu ~~2010,~~Kecheng ~~FASB~~was ~~issued~~selected ~~ASU~~to ~~No.~~serve ~~2010-02~~on ~~regarding~~the Board ~~accounting~~based ~~and~~on ~~reporting~~his ~~for~~management ~~decreases~~and incorporate ~~ownership~~governance ofexperience ahaving ~~subsidiary. Under~~founded ~~this~~CCEC ~~guidance,~~in an2002 ~~entity~~and ishaving ~~required~~served toas ~~deconsolidate~~Chairman aof the ~~subsidiary~~Board ~~when~~and ~~the~~President ~~entity~~of ~~ceases~~that tocompany, ~~have~~President aand ~~controlling~~Chief ~~financial~~Executive ~~interest~~Officer inof the ~~subsidiary. Upon~~Registrant ~~deconsolidation~~as well as serving as Chairman of athe ~~subsidiary,~~Board anand ~~entity~~Executive ~~recognizes~~Director aof ~~gain~~Ai orGe ~~loss~~Organism onProducts ~~the~~Co., ~~transaction~~Ltd., ~~and~~a ~~measures~~biological ~~any~~and ~~retained~~pharmaceutical ~~investment~~company in ~~the~~China. ~~subsidiary~~Mr. Xu atwas ~~fair~~also ~~value. In~~chosen ~~contrast,~~to anserve ~~entity~~on isthe ~~required~~Board tobased ~~account~~on ~~for~~his aprofessional ~~decrease~~standing in ~~its~~the ~~ownership~~industry ~~interest~~as of a ~~subsidiary~~member ~~that~~of ~~does~~the ~~not~~China ~~result~~Battery inIndustry Association, a ~~change~~member of ~~control~~Huzhou CPPCC, a member of the ~~subsidiary~~Standing asCommittee anof ~~equity~~Changxing ~~transaction. This~~People’s ~~ASU~~Congress ~~clarifies~~and ~~the~~having ~~scope~~been honored ofwith the ~~decrease~~title inof ~~ownership~~“Integrity ~~provisions,~~Entrepreneur” ~~and~~by ~~expands~~ the ~~disclosures~~Changxing ~~about~~Government. ~~the~~Lastly, ~~deconsolidation~~Mr. ofXu awas ~~subsidiary~~selected orbased ~~de-recognition~~on his ofexpertise ain ~~group~~the ofindustry ~~assets. This~~and ~~ASU~~in ismanagement, ~~effective~~having ~~for~~been involved in the ~~first~~formulation ~~interim~~of orcoated ~~annual~~tempered ~~reporting~~glass ~~period~~panel ~~ending~~standing used onfor orhome ~~after~~gas ~~December~~kitchen 31ranges, ~~2010. The~~which ~~adoption~~was put on the list of ~~ASU~~National ~~No.~~Building ~~2010-02~~Materials ~~did~~Industry ~~not~~Standard ~~have~~and ~~any~~having ~~affect~~graduated from onHangzhou ~~the~~University ~~Company’s~~with ~~consolidated~~a ~~financial~~major ~~statements~~in economic management.

~~In January 2010, FASB issued ASU No~~Mr. ~~2010-06~~Liu –Chuanjie ~~Improving~~was ~~Disclosures~~selected ~~about~~to ~~Fair~~serve ~~Value~~on the ~~Measurements.~~Board ~~This~~based ~~ASU~~on ~~amends~~his ~~FASB~~financial ~~ASC~~management ~~820~~experience tohaving ~~require~~served aas ~~number of additional disclosures regarding fair value measurements. Specifically~~Controller, ~~this~~Director ~~ASU~~of ~~requires~~Finance ~~entities~~and toas ~~disclose:~~a ~~(1)~~Director ~~the amount~~ of ~~significant~~CCEC since ~~transfers~~2004 ~~between Level 1~~ and ~~Level~~as 2head of the ~~fair~~financial ~~value~~department ~~hierarchy~~of ~~and~~Changxing ~~the~~Chisen ~~reasons~~Xinguanyuan ~~for~~Co., ~~these~~Ltd., ~~transfers;~~a ~~(2)~~manufacturing ~~the~~company ~~reasons for any transfers~~ in orChina from ~~out~~October of2000 ~~Level~~to 3;April ~~and~~2004. ~~(3)~~Mr. ~~information~~Liu inwas ~~the~~also ~~reconciliation~~selected ofto ~~recurring~~serve ~~Level~~on 3the ~~measurements~~Board ~~about~~based ~~purchases, sales, issuances and settlements~~ on ahis ~~gross~~expertise ~~basis.~~in ~~The~~accounting ~~requirement~~systems toand national ~~provide~~accounting ~~the level 3 activity of purchases~~policies, ~~sales,~~fund ~~insurances~~raising and ~~settlements on a gross basis~~investing, ~~will be effective for fiscal year’s beginning after December 15, 2010,~~ and ~~for~~having ~~interim~~graduated ~~period~~from ~~within those~~Nanjing ~~fiscal~~PLA ~~years.~~Polytechnic ~~The~~University ~~Company~~with ~~does not expect the adoption of this ASU will have~~ a ~~material~~degree in ~~impact~~economics onand ~~the Company’s consolidated financial statements~~management.

InMr. ~~July~~Lou ~~2010,~~Shourong ~~FASB~~was ~~issued~~selected ~~ASU~~to ~~No.~~serve ~~2010-20~~on the ~~“Disclosures~~Board ~~about~~based ~~the~~on ~~credit~~his ~~quality~~management ofexperience ~~financing~~having ~~receivables~~served ~~and~~as ~~the~~Deputy ~~allowance~~General ~~for~~Manager ~~credit~~of ~~losses”,~~CCEC ~~which~~since ~~requires~~October ~~expanded~~2007 ~~disclosures~~and ~~about~~Executive ~~the~~Deputy General ~~credit~~Manager ~~quality~~ of anChangxing ~~entity’s~~Nuo ~~financing~~Wan ~~receivables~~Te ~~and~~Ke ~~its~~Co., ~~allowance~~Ltd., ~~for~~a ~~credit~~manufacturing ~~loss~~company onin aChina. ~~disaggregated basis~~Mr. ~~This~~Lou ~~ASU~~was isalso ~~effective~~selected ~~for~~based ~~annual~~on ~~reporting~~his extensive ~~periods~~experience ~~ending~~in onmaterials orsupply, ~~after~~procurement ~~December~~and 15production plan management, ~~2011.~~having ~~The~~served ~~Company~~as ~~does~~the ~~not~~factory ~~expect~~director ~~the~~and marketing ~~adoption~~manager ofin ~~this~~Changxing ~~ASU~~Chisen ~~will~~Glass ~~have~~Co., Ltd., a ~~material~~manufacturing ~~impact~~company onin ~~the~~China ~~Company’s~~from ~~consolidated~~June ~~financial~~1996 ~~statements~~to March 2006.

41Professor Dong Quanfeng was selected to serve on the Board based on his professional standing and expertise in the industry, having served as a Chemistry professor and doctorial tutor at the Department of Chemistry of Xiamen University since March 2006, as a visiting research fellow at the National Hi-Tech Green Material Development Center in China, as a Member of the Editorial Board of the industry magazine “Battery”, as a Member of the Chinese Institute of Electrics Chemical and Physical Power Committee, as a Member of ISE, as a Member of the American ECS and as the Vice Director of the Changxing Chisen Physical Chemistry Battery Research Center. Professor Dong is engaged in the research of new chemical electric power sources and related energy storage material and has finished several national and provincial-municipal scientific research projects. In 1997, Professor Dong won the provincial second prize of the Development of Science and Technology. In 1999, Professor Dong won the technology innovation prize of Hubei province. In 2004, Professor Dong won third prize of the Development of Science and Technology of Xiamen. In 2006, he won the title of “Technology Innovation Advanced Individual” by the National Information Industry. Professor Dong has issued over 80 papers on internationally significant academic journals and has applied for several patents.

~~In December 2010, FASB issued ASU No. 2010~~-~~29,~~ ~~Business~~50 Combinations (Topic 805) “Disclosure of supplementary Pro Forma Information for business combinations”, which specify that if a public entity presents comparative financial statements, the entity should disclosure revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year has occurred as of the beginning of the comparable prior annual reporting period. The amendments in this update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, non-recurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. These amendments are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The Company does not expect the adoption of this ASU will have a material impact on the Company’s consolidated financial statements.

~~Results~~Professor Jiang Yanfu was selected to serve on the Board based on his professional standing and expertise in entrepreneurial management, corporate governance and institutional economics, having served as a professor and doctorial tutor of ~~Operations~~business administration at Tsinghua University since December 1993, as Dean of the Entrepreneurial Research Center since April 2000 and as academic director-general and co-founded of Trinity Innovation since December 2003, a consulting company in China. He has undertaken many important research programs such as the “Theoretical Study on Chinese Technology Innovation.” He served as a director of and as an advisor to many companies. Professor Jiang’s main research fields include risk investment and entrepreneurial management, corporate governance and cyber economy. The major courses he has instructed include Entrepreneurial Management, Technology and Institution Innovation, and Analysis of Institutional Economics.

~~Results~~Ms. ofGong ~~Operations~~Xiaoyan ~~for~~was selected to serve on the ~~Fiscal~~Board ~~Year~~based ~~Ended~~on ~~March~~her 31professional standing in the industry and her civic and community involvement, ~~2011~~having ~~Compared~~served Toas Chairman of Tianjin Bicycle Industrial Association, a non-governmental organization in China since June 2006 and having been honored with the ~~Fiscal~~titles ~~Year~~“China ~~Ended~~Top-Hundred ~~March~~Female 31Entrepreneurs,” ~~2010~~“Most Influential Enterprises Leader of China” and “Tianjin Female Entrepreneur” issued by Tianjin Municipal Government.

~~The~~Mr. ~~following~~Yun ~~table~~Hon ~~sets~~Man ~~forth~~was selected to serve on the Board based on his experience in finance and accounting as a ~~summary~~“financial ofexpert” ~~certain~~as ~~key~~defined ~~components~~under the rules of ~~our~~the SEC ~~results~~and for his US public company experience as an officer, director and audit committee chairman, having served as a director of ~~operations~~CH ~~for~~Lighting ~~years~~International ~~indicated~~Corporation (OTCBB: CHHN) since July 28, in2008, ~~dollars~~as a Director of Xinde Technology Company (OTCBB: WTFS) since January 2010 and having previously served as Chief Operating Officer of China INSOnline Corp. (NASDAQ: CHIO) from January 2008 through April 2010. Mr. Yun is a ~~percentage~~Chartered Accountant having memberships with the Institute of ~~revenues~~Chartered Accountants in England and Wales. He is also a Fellow Member of the Chartered Association of Certified Accountants and a member of the Hong Kong Institute of Certified Public Accountants. He was a member of Association of International Accountants, the Society of Registered Financial Planners, the Institute of Financial Accountants and the Institute of Crisis and Risk Management. Mr. Yun received his MBA at the University of Western Sydney in 2007.

	For The Years Ended March 31,
	2011			2010			2011			2010
	$ ’000			$’000
Revenues		243,814			177,192			100.00	%		100.00	%
Cost of sales		(214,456	)		(154,322	)		87.96	%		87.09	%
Gross profit		29,358			22,870			12.04	%		12.91	%
Sales, marketing and distribution expenses		(10,882	)		(8,696	)		4.46	%		4.91	%
General and administrative expenses		(4,138	)		(3,033	)		1.70	%		1.71	%
Operating incomes		14,338			11,141			5.88	%		6.29	%
Other incomes, net		1,782			1,671			0.73	%		0.94	%
Loss on disposal of scrap inventories		(2,328	)		-			0.95	%		-	%
Interest Income		483			343			0.20	%		0.19	%
Incomes before interest and income tax expenses		14,275			13,155			5.85	%		7.42	%
Interest expenses		(3,359	)		(2,068	)		1.38	%		1.17	%
Income before income tax expenses		10,916			11,087			4.48	%		6.26	%
Income tax expenses		(2,447	)		(1,587	)		1.00	%		0.90	%
Income before extraordinary item (less applicable income taxes of US$0)		8,469			9,500			3.47	%		5.36	%
Extraordinary item		2,605			-			1.07	%		-	%
Net income including non-controlling interest		11,074			9,500			4.54	%		5.36	%
Net income attributable to non-controlling interest		(8	)		-			-	%		-	%
Other comprehensive income		1,437			106			0.59	%		0.06	%
Comprehensive income		12,503			9,606			5.13	%		5.42	%

Board Leadership Structure

~~Revenues~~The Board believes that the Company’s Chief Executive Officer is best situated to serve as Chairman of the Board because he is ultimately responsible for the day-to-day operation of the Company and ~~Cost~~is the director most familiar with the Company’s business and industry and most capable of ~~Sales~~effectively identifying strategic priorities and leading the discussion and execution of strategy. Independent directors and management have different perspectives and roles in strategy development. Our independent directors bring experience, oversight and expertise from outside the Company and industry, while the Chief Executive Officer brings company-specific experience and expertise. The Board believes that the combined role of Chairman and Chief Executive Officer promotes strategy development and execution, and facilitates information flow between management and the Board, which are essential to effective governance.

Revenues increased by US$66,622,000, or 37.60%, to US$243,814,000 for the year ended March 31, 2011 compared with US$177,192,000 for the year ended March 31, 2010. This increase was mainly driven by the increase in sales volume by 3,242,000 units, or 22.39%, to 17,722,000 units for the year ended March 31, 2011 compared with 14,480,000 units for the year ended March 31, 2010. This increase is also attributable to the favorable program “Introducing Electronic Appliance (Lead-~~Acid~~ ~~Motive~~51 Battery Project of Electric Bicycle) into Rural District”, introduced by the Ministries of Finance, Commerce, and Industry and Information that on March 23, 2010. In accordance with the measured data of the electric bicycle market demand in China as reported in a recent online article at www.chinanews.com.cn/cj/cjcyzh/news/2010/03-31/2201616.shtml, a copy of which was also filed as Exhibit 99.5 to the Registration Statement of which this annual report is made a part, it was estimated that this policy will stimulate more than 20% of sales of electric bicycle. As the market of electric bicycles continues to expand, we believe that the demand for new electric bike batteries and demand for replacing old batteries will maintain a significant growth. The increase of revenues was attributable to the increase in average selling price of 9% for our products as a result of the continued increase in major raw material cost per unit of production.

42One of the key responsibilities of the Board is to develop strategic direction and hold management accountable for the execution of strategy once it is developed. The Board believes the combined role of Chairman and Chief Executive Officer, together with the presence of four independent directors on the Board, is in the best interest of shareholders because it provides the appropriate balance between strategy development and independent oversight of management. The Board retains the authority to modify this structure to best address the Company’s unique circumstances, and so advance the best interests of all shareholders, as and when appropriate.

~~Cost of sales for the year ended March 31, 2011 and 2010 were US$214,456,000 and US$154,322,000, respectively.~~ The ~~increase~~Board’s inRole ~~cost of sales of US$60,134,000, or 38.97%, was mainly due to an increase~~ in ~~sales~~Risk volume by 22.93% and an increase in the cost of lead, a major raw material of VRLA batteries, which occupied 80% of our total production cost. During the year ended March 31, 2011, the average cost of lead increased US$200 /ton or 9.09% to US$2,400/ton compared with US$2,200/ton for the year ended March 31, 2010.Oversight

~~During~~The ~~the~~Board ~~year~~oversees ~~ended~~our ~~March~~shareholders’ interest ~~31,~~in ~~2011,~~the welong-term ~~increased~~health and the ~~selling~~overall ~~price~~success of ~~our~~the ~~products~~Company inand ~~order~~its tofinancial ~~cover~~strengths. ~~the~~The ~~increase~~full inBoard ~~cost~~is ofactively involved ~~our~~in ~~raw~~overseeing ~~materials.~~risk ~~The~~management ~~rate~~for ofthe ~~increase~~Company. inIt ~~the~~does ~~average~~so ~~selling~~in ~~price~~part ~~was~~through ~~lower~~discussion ~~than~~and ~~the~~review ~~rate~~ of ~~increase~~our inbusiness, ~~raw~~financial and ~~materials~~corporate ingovernance ~~order~~practices toand ~~maintain~~procedures. ~~the~~The ~~competitiveness of our products~~Board,. Asas a ~~result~~whole, reviews the ~~cost~~risks ~~rate~~confronted ~~for~~by the ~~year~~Company ~~ended~~with ~~March~~respect to ~~31,~~its ~~2011~~operations ~~increased~~and byfinancial ~~approximately~~condition, ~~0.87%~~establishes ~~from~~limits ~~87.09%~~of ~~for~~risk ~~the~~tolerance ~~year~~with ~~ended~~respect ~~March~~to ~~31,~~the ~~2010~~Company’s toactivities and ~~87.96%~~ensures ~~for~~adequate ~~the~~property ~~year~~and ~~ended~~liability ~~March~~insurance ~~31, 2011~~coverage.

~~Depreciation~~Because of the role of the Board in the risk oversight of the Company, the Board believes that any leadership structure that it adopts must allow it to effectively oversee the management of the risks relating to the Company’s operations. The Board recognizes that there are different leadership structures that could allow it to effectively oversee the management of the risks relating to the Company’s operations, and while ~~Amortization~~the Board believes its current leadership structure enables it to effectively manage such risks, it was not the primary reason the Board selected its current leadership structure over other potential alternatives. See the discussion under the heading “Board Leadership Structure” above for a discussion of why the Board has determined that its current leadership structure is appropriate.

InITEM order to expand our production capacity in Plant B to deal with the shutdown of Plant A pursuant to the relocation agreement entered with Administrative Committee of Changxing Economic Development Zone (“ACC”) and the demand of batteries from the market, we increased our investment in plant and equipment by US$2,247,00011. AsExecutive a result, the related depreciation increased from US$646,000 for the fiscal year ended March 31, 2010, to US$1,093,000 for the fiscal year ended March 31, 2011, representing increase of 69.2% or US$447,000.Compensation

~~General~~Compensation Discussion and ~~Administrative Expenses~~Analysis

~~General~~Not ~~and~~required ~~administrative expense were US$4,138,000 and US$3,033,000~~ for the years ended March 31, 2011 and 2010, respectively, and mainly consisted of research and development, staff salaries and benefits, consultancy, taxes and depreciation expenses. The increase of general and administrative expense by US$1,105,000, or 36.43%, was mainly attributable to the increase in research and development expenses incurred in order to improve our production technique as well as to develop new products. In addition, CCEC was entitled as a “~~High~~smaller ~~Technology Company~~reporting company” ~~by the State Taxation Bureau of Zhejiang Province and as a result, enjoyed a preferable tax rate during the year ended March 31, 2011~~. In order to maintain of its status as a High Technology Company, it is necessary for us to maintain an appropriate input of the research and development. As a result, we have employed more employees engaged in research and development activities. As of March 31, 2011, our research and development employees increased from 20 to 80 employees. Our expenses used in the research and development increased from US$244,000 as of March 31, 2010 to US$1,605,000 for the year ended March 31, 2011 in response to the significant expansion on our research and development department.

~~Sales,~~Summary ~~Marketing~~Compensation ~~and Distribution~~Table

~~Sales,~~The ~~marketing~~following ~~and~~table ~~distribution~~sets ~~expenses~~forth ~~were~~compensation information ~~US$10,882,000~~for ~~and~~services ~~US$8,696,000~~rendered ~~for~~by our named executive officers in all capacities during the last 3 completed fiscal years (ended March 31, 2012, 2011 and 2010~~, respectively~~). ~~This~~The ~~increase~~following ofinformation ~~US$2,186,000,~~includes orthe 25U.~~14%,~~S. ~~was~~dollar ~~mainly~~value ~~due~~of tobase salaries, bonus awards, the ~~increase~~number of instock ~~freight~~options ~~charges~~granted ofand ~~US$1,732,000~~certain inother ~~response~~compensation, toif ~~our~~any, ~~increase~~whether inpaid ~~sales~~or deferred.

Loss on disposal of scrap inventories

Name And Principal Function	Year		Salary		Bonus		Stock Awards		Option Awards		Non- Equity Incentive Plan Compensation		Non- qualified Deferred Compensation Earnings		All Other Compensation		Total
			($)		($)		($)		($)		($)		($)		($)		($)
(a)		(b)		I		(d)		(e)		(f)		(g)		(h)		(i)		(j)

Xu Kecheng, President &		2012		15,128		-0-		-0-		-0-		-0-		-0-		-0-		15,128
CEO (1)		2011		11,266		-0-		-0-		-0-		-0-		-0-		-0-		11,266
		2010		11,728		-0-		-0-		-0-		-0-		-0-		-0-		11,728

Liu Chuanjie, Chief Financial		2012		11,556		-0-		-0-		-0-		-0-		-0-		-0-		11,556
Officer and Treasurer (2)		2011		11,209		-0-		-0-		-0-		-0-		-0-		-0-		11,209
		2010		10,861		-0-		-0-		-0-		-0-		-0-		-0-		10,861

He Zhiwei, Former		2012		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-
Chief Financial Officer (3)		2011		2,252		-0-		-0-		-0-		-0-		-0-		-0-		2,252
		2010		117,369		-0-		-0-		-0-		-0-		-0-		-0-		117,369

The loss on disposal of scrap inventories for the year ended March 31, 2011 was US$2,328,000 and there was no such item in the previous years as the disposal of scrap inventories was attributable to the write-~~off~~ of52 damaged batteries as a result of our relocation. Prior to our relocation, we arranged for a specific area in Plant B for the storage of machinery and equipment to be relocated from Plant A. During the relocation process, we tidied up the warehouse by stacking the batteries. However, due to the weight of the batteries, the top layer of batteries damaged the bottom layer of batteries. Management engaged a qualified entity to handle the scrap inventories immediately in order to avoid any leakages of battery acid and to avoid any negative effects on the environment. Therefore, the scrap inventories were written off accordingly.-

~~Other~~(1) ~~Income~~Xu Kecheng has served as the Company’s Chief Executive Officer and President effective as of November 12, ~~Net~~2008. Mr. Xu also served (and continues to serve) as President of CCEC during the fiscal years ended March 31, 2012, 2010 and 2009. Mr. Xu’s compensation for the years ended March 31, 2012, 2011 and 2010 reflects his services as CEO and President of the Company and President of CCEC, combined.

~~Net~~(2) ~~other~~Liu ~~income~~Chuanjie ~~was~~has ~~US$1,782,000~~served ~~and~~as ~~US$1,671,000~~the ~~for~~Company’s ~~the~~Treasurer ~~years~~effective ~~ended~~as ~~March~~of 31November 12, ~~2011~~2008. Mr. Liu also served (and ~~2010,~~continues ~~respectively.~~to ~~The~~serve) ~~increase~~as ofController ~~net~~and ~~other~~Director ~~income~~of Finance of ~~US$111~~CCEC during the fiscal years ended March 31,~~000~~ or2012, 62010 and 2009.~~64%~~ ~~was~~Mr. ~~mainly~~Liu’s ~~attributable~~compensation tofor the ~~addition~~years ofended ~~dividend~~March ~~income~~31, ~~from~~2012, ~~available-for-sale~~2011 ~~financial~~and ~~assets~~2010 ~~and~~reflects anhis ~~increase~~services as Treasurer of ~~government~~the ~~subsidies~~Company inand anController ~~aggregate~~and Director of ~~US$859~~ CCEC,~~000~~ ~~offset~~combined. byMr. ~~the decrease~~Liu inhas ~~net~~served ~~sales~~as ofChief ~~lead~~Financial toOfficer ~~electric~~of ~~plates~~the ~~suppliers~~Company bysince ~~US$716~~June 15,~~000~~ 2010.

43(3) He Zhiwei served as the Company’s Chief Financial Officer effective as of November 12, 2008 until June 15, 2010. Mr. He’s compensation for the years ended March 31, 2011 and 2010 reflects his services as CFO of the Company during such time periods.

~~Incomes~~As ~~before~~of ~~Interest~~March 31, 2012, the Company did not have any “Grants of Plan-Based Awards,” “Outstanding Equity Awards,” “Option Exercises and ~~Income~~Stock Vested,” ~~Tax~~“Pension ~~Expenses~~Benefits,” “Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans” or “Potential Payments Upon Termination or Change in Control” to report.

~~Income before interest and income tax expenses increased from US$13~~Furthermore,~~155,000~~ ~~for~~ the ~~year~~Company ~~ended~~does ~~March~~not 31have any bonuses, ~~2010~~stock ~~to US$14~~awards,~~275,000~~ ~~for~~option ~~the year ended March 31~~awards, ~~2011,~~non-executive ~~representing~~incentive anplan ~~increase~~compensation ~~of US$1,120,000~~ or ~~8.51%.~~non-qualified ~~The~~deferred ~~increase~~compensation ~~of income was mainly attributable~~ earnings to ~~the increase in sales~~report.

~~Interest~~Narrative ~~Expense~~Disclosure to Summary Compensation Table

~~Interest~~The ~~expense~~Company ~~was~~has ~~US$3,359,000~~no ~~and~~other ~~US$2,068,000 for~~compensation ~~the~~plans other ~~years~~than ~~ended~~basic ~~March~~salary ~~31, 2011~~ and ~~2010, respectively~~benefits. Interest expense increased by US$1,291,000, or 62.43%, due to the increase in average short-term bank borrowing balances for the year ended March 31, 2011 as compared with the year ended March 31, 2010. This is due to the fact that we have bank borrowings as our main source of funding to finance the construction of a new plant which we believe will further expand our production capacity.

~~Extraordinary~~- ~~item~~53 -

~~During~~Additional ~~the~~Narrative year ended March 31, 2011, we ceased our production activities and relocated our production facility at Plant A at Jingyi Road to Plant B at Jing’er Road. Pursuant to the Compensation Agreement of Corporate Relocation Acquisition, ACC shall compensate the loss, amounting to US$2,605,000, when CCEC ceased its production and relocated its production facilities.Disclosure

~~The~~Employment transaction of relocation was considered an involuntary conversion of a non-monetary asset into a monetary asset. According to ASC605-40-25, to the extent the cost of a nonmonetary asset differs from the amount of monetary assets received, the result of the realization of a gain from the transaction is recognized.Agreements

~~The~~There ~~relocation~~are ~~activity~~currently isno ~~abnormal~~employment agreements by and ~~significantly~~between ~~different~~the ~~from~~Registrant ~~the~~and ~~ordinary~~its officers and ~~typical~~employees. ~~activities~~CCEC ofhas ~~the~~a ~~Company~~labor ~~and~~contract iswith ~~not~~each ~~expected~~employee toas ~~recur~~required inby law in the ~~foreseeable future~~PRC. ~~According~~The tolabor ~~ASC225-20,~~contract ~~the~~mainly ~~Company~~includes ~~classified~~working ~~the~~content, ~~gain~~contract asperiod, anworking ~~extraordinary~~time, ~~item~~payment and other terms.

~~The~~ Benefit Company considers the cost related to cessation of production of Plant A to be immaterial since the production capacity of Plant A at Jingyi Road (plant related to relocation) could be fully absorbed by Plant B at Jing’er Road without significant investment. For the year ended March 31, 2011, the Company recorded an extraordinary gain of US$2,605,000 in its consolidated statements of operations and other comprehensive income.Plans

~~Pursuant~~The toCompany ~~the~~has ~~Implementation~~no ~~Regulations~~stock tooption, ~~the~~retirement, pension ~~EIT~~or ~~law~~profit-sharing ofprograms ~~the~~for ~~PRC, only~~ the ~~portion~~benefit of ~~compensation~~its ~~income~~directors, ~~exceeding~~officers ~~the~~or ~~reinvestment~~other ~~amount~~employees; ~~related~~however toour Board may recommend the ~~relocation~~adoption ~~was~~of ~~taxable.~~one ~~All~~or ~~compensation~~more ~~income~~such ~~received~~programs byin the ~~Company~~future.In ~~would~~accordance bewith ~~reinvested~~Chinese ~~into~~law, ~~the~~CCEC ~~fixed~~offers ~~assets~~a ~~and~~welfare ~~long-term~~program ~~land~~pursuant to ~~lease~~which ~~prepayment~~it ofpays ~~Plant~~pension, Caccident, atmedical, ~~Jingsi~~birth, ~~Road~~job and ~~therefore~~house noallowance ~~income~~payments ~~tax~~for ~~was~~all ~~applicable~~contract employees of CCEC.

~~Net~~Director ~~Income~~Compensation

~~The~~We ~~net~~did ~~income~~not ~~was~~provide ~~US$11,074,000~~any ~~and~~compensation ~~US$9,500,000~~to ~~for~~our Directors during the fiscal years ended March 31, ~~2011~~2012 and ~~2010,~~2011. ~~respectively,~~We ~~representing~~may anestablish ~~increase~~certain ofcompensation ~~US$1,574,000~~plans ~~or 16~~(e.~~57%~~g. ~~The~~ ~~net income was mainly derived from an increase in gross profit of US$6~~options,~~488,000~~ ~~and~~cash for ~~income~~attending ~~from extraordinary items of US$2~~meetings,~~605,000,~~ ~~offset~~etc.) ~~by increase in freight charges of US$1,732,000, research and development cost of US$821,000 and interest expense of US$1,291,000, together~~ with ~~some~~respect ~~unusual~~to ~~items~~Directors ~~which occurred during the year, including the loss on disposal of scrap inventories of US$2,328,000 and withholding tax expense of US$946,000~~ in ~~connection with~~ the ~~declaration of a dividend by CCEC, amount to US$94,600,000, on October 16, 2010~~future.

~~Liquidity~~Indemnification of Directors and ~~Capital~~Executive Officers ~~Resources~~and Limitations of Liability

~~The~~Nevada ~~Company~~law ~~generally~~authorizes, ~~finances~~and ~~its~~our ~~operations~~Bylaws ~~through~~and Articles ~~profits~~of ~~generated~~Incorporation ~~from~~provide ~~its~~for, ~~operations~~indemnification of our directors and ~~through~~officers ~~borrowings~~against ~~from~~claims, ~~banks~~liabilities, amounts paid in settlement and expenses in a variety of circumstances. Insofar as indemnification for liabilities arising under the Securities Act may be permitted for directors, officers and controlling persons pursuant to the foregoing, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

~~During~~We ~~the~~may ~~reporting~~enter ~~periods~~into indemnification agreements with each of our directors and officers that are, ~~the~~in ~~Company~~some ~~entered~~cases, ~~into~~broader athan ~~number~~the ofspecific ~~short-term~~indemnification ~~bank~~provisions ~~loans~~permitted by toNevada ~~satisfy~~law, ~~its~~and ~~financing~~that ~~needs~~may provide additional procedural protection. As of the date of this ~~Annual~~annual ~~Report~~report, we have not ~~experienced~~entered into any ~~difficulty~~indemnification inagreements ~~raising~~with ~~funds~~our bydirectors ~~bank~~or ~~loans~~officers, ~~and~~but wemay ~~have~~choose ~~not~~to ~~experienced~~do ~~any~~so ~~liquidity problems~~ in ~~settling our payables in~~ the ~~normal~~future. ~~course~~Such ofindemnification agreements ~~business~~may ~~and~~require ~~repaying~~us, ~~our~~among ~~bank~~other ~~loans~~things, ~~when they fall due.~~to:

44¨ indemnify officers and directors against certain liabilities that may arise because of their status as officers or directors;

~~The~~¨ ~~following~~advance ~~table~~expenses, ~~sets~~as ~~forth~~incurred, ~~the~~to ~~summary~~officers ofand ~~our~~directors ~~cash~~in ~~flows,~~connection inwith ~~U.S.~~a ~~dollars~~legal proceeding, ~~for~~subject ~~the~~to ~~periods~~limited ~~indicated:~~exceptions; or

	Fiscal Years Ended March 31
	2011			2010
	US$’000			US$’000
Net cash provided by (used in) operating activities		21,566			(9,163)
Net cash used in investing activities		(37,423	)		(13,050	)
Net cash provided by financing activities		17,233			25,601
Net increase in cash and cash equivalents		1,376			3,388
Effect of exchange rate changes on cash		235			11
Cash and cash equivalents at beginning of year		6,019			2,620
Cash and cash equivalents at end of year		7,630			6,019

obtain directors’ and officers’ insurance.

~~Operating~~At ~~Activities~~present, there is no pending litigation or proceeding involving any of our directors, officers or employees in which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

~~Net~~- ~~cash~~54 provided by operating activities was approximately US$21,566,000 for the year ended March 31, 2011, as compared to net cash used in operating activities of US$9,163,000 for the year ended March 31, 2010. This increase of cash flow of US$30,729,000 was mainly attributable to the increase of operating income of US$1,574,000 as well as cash generated from the decrease in inventory of US$18,727,000 and other financial assets of US$9,196,000.-

~~Investing~~ITEM ~~Activities~~12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

~~Net~~The ~~cash~~following ~~used~~table insets ~~investing~~forth ~~activities~~each ~~was~~person known ~~approximately~~by ~~US$37,423,000~~us ~~for the year ended March 31, 2011, as compared~~ to ~~approximately~~be ~~US$13,050,000 for~~ the ~~year~~beneficial ~~ended~~owner ~~March~~of ~~31,~~five ~~2010.~~(5%) ~~This~~percent ~~increase of~~or ~~net~~more ~~cash outflow~~ of ~~US$24,373,000,~~our orCommon ~~186.77%~~Stock, ~~was~~all ~~mainly~~directors ~~due~~individually toand ~~the~~all ~~increase~~directors and ofofficers ~~investment~~as ina ~~restricted~~group ~~bank~~as ~~balance~~ of ~~US$14,518,000,~~June ~~long term land lease prepayments of US$3~~28,~~944,000,~~ a2012. ~~deposit~~Each ~~paid~~person ~~for~~named ~~the~~below ~~acquisition~~has ofsole ~~land~~voting and ~~buildings~~investment ofpower ~~US$3,838,000~~with ~~and~~respect anto ~~acquisition~~the ofshares shown ~~available~~unless ~~for~~otherwise ~~sale financial assets of US$1,844,000~~indicated.

Financing Activities

Name and Address of Beneficial Owner(1)	Amount of Direct Ownership		Amount of Indirect Ownership			Total Beneficial Ownership			Percentage of Class(2)
Xu Kecheng, Chairman of the Board, Chief Executive Officer & President		0		329,000,000	(3)		329,000,000	(3)		65.8	%
Liu Chuanjie, Chief Financial Officer, Treasurer and Director		0		0			0			0	%
Fei Wenmei, Corporate Secretary		0		0			0			0	%
Zhu Zhongli, Vice-President of Sales		0		0			0			0	%
Lou Shourong, Vice President, Director		0		0			0			0	%
Dong Quanfeng, Director		0		0			0			0	%
Jiang Yanfu, Director		0		0			0			0	%
Gong Xiaoyan, Director		0		0			0			0	%
Yun Hon Man, Director		0		0			0			0	%
ALL DIRECTORS AND OFFICERS AS A GROUP (9 PERSONS):		0		329,000,000			329,000,000			65.8	%
Cheer Gold Development Limited Level 5 Development Bank of Samoa Building Beach Road, Apia, Samoa		329,000,000		0			329,000,000			65.8	%

Net cash provided by financing activities was approximately US$17,233,000 for the year ended March 31, 2011, as compared to net cash provided by financing activities of approximately US$25,601,000 for the year ended March 31, 2010. The decrease of cash flow of US$8,368,000 or 32.69% was mainly due to an increase of repayment of short term bank loans of US$35,869,000, offset by the increase of proceeds from bills financing of US$25,721,000 or 32.69%.

(1)	Unless otherwise noted, each beneficial owner has the same address as the Registrant.

(2)	Applicable percentage of ownership is based on 500,000,000 shares of our Common Stock outstanding as of June 13, 2011, together with securities exercisable or convertible into shares of Common Stock within sixty (60) days of June 28, 2012 for each stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of Common Stock are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Note that affiliates are subject to Rule 144 and Insider trading regulations - percentage computation is for form purposes only.

~~Working~~(3) ~~Capital~~Xu Kecheng may be considered to beneficially own 329,000,000 shares by virtue of his 100% ownership in Wisejoin Group Limited, which owns and controls 100% of Cheer Gold, which directly beneficially owns 329,000,000 shares of Common Stock.

~~Capital~~Related ~~Commitment~~Party Transactions

AsDuring ofthe ~~March~~fiscal ~~31,~~year ~~2011~~ended ~~and~~March ~~2010~~31, 2012, the Company ~~had~~purchased ~~outstanding~~raw ~~capital~~materials, ~~expenditure~~amounting ~~commitments~~to ~~of approximately~~ US$~~150~~4,~~448~~058,000 ~~and US$84~~,~~000~~ ~~respectively.~~from Zhejiang ~~The~~Changxing ~~significant~~Ruilang ~~increase~~Electronic inCompany ~~capital~~Limited (“Ruilang ~~commitments~~Electronic”), ~~was~~a ~~mainly~~company ~~attributable~~which tois ~~the~~controlled ~~outstanding~~by ~~capital~~a ~~expenditure~~close ~~relating~~family tomember ~~various~~of ~~construction~~Mr. ~~projects~~Xu ~~and~~Kecheng. ~~purchase~~As of ~~land~~March ~~and machineries pursuant to the Project Investment Contract entered with the Jiangsu Xuyi Economic Development Zone Administrative Committee on September 6~~31, ~~2010~~ 2012 and ~~Investment~~May ~~Agreement~~31, ~~entered~~2012, ~~with~~ the ~~Administrative~~outstanding ~~Committee~~balance ofdue ~~Changxing~~to ~~Economic~~Ruilang ~~Development~~Electronic ~~Zone~~was ~~on August 20, 2010, amount to~~ US$~~115~~1,~~399~~387,000 and US$341,~~961~~854,000, respectively.

~~Off~~-~~Balance~~ ~~Sheet~~55 ~~Arrangements~~-

WeDuring dothe ~~not~~fiscal ~~have~~year ~~any~~ended ~~outstanding~~March ~~derivative financial instruments~~31, ~~off-balance sheet guarantees~~2012, the ~~interest~~Company ~~rate~~purchased ~~swap~~raw ~~transactions~~materials, ofamounting ~~foreign~~to ~~currency forward contracts. Furthermore~~US$2,123,000, wefrom doZhejiang ~~not~~Chisen ~~have~~Glass ~~any~~Company ~~retained~~Limited or(“Chisen ~~contingent~~Glass”), a ~~interest~~company inwhich ~~assets~~is ~~transferred~~controlled toby ana ~~unconsolidated~~close ~~entity~~family ~~that~~member ~~serves~~of asMr. ~~credit,~~Xu ~~liquidity or market risk support to such entity~~Kecheng. WeAs doof ~~not~~March ~~have~~31, ~~any~~2012 ~~variable~~and ~~interest~~May ~~in an unconsolidated entity that provides financing~~31, ~~liquidity~~2012, ~~market~~the ~~risk~~outstanding balance ordue ~~credit support~~ to usChisen orGlass ~~that~~was ~~engages in leasing~~US$1,219,000 ~~hedging or research~~ and ~~development~~US$1,358,000, ~~services with us~~respectively.

~~ITEM~~During 7Athe fiscal year ended March 31, 2012, the Company borrowed US$Nil from Zhejiang Ai Ge Organism Products Company Limited (“AGO”), a company controlled by Mr. ~~Quantitative~~ Xu Kecheng, to help the Company settle liquidity shortages. As of March 31, 2012 and ~~Qualitative~~May ~~Disclosures~~31, ~~about~~2012, ~~Market~~the ~~Risk~~outstanding balance due to AGO was US$316,000 and US$316,000, respectively. This oral, unsecured advance is interest-free and repayable on demand.

~~Not~~During ~~required~~the fiscal year ended March 31, 2012, the Company borrowed US$824,000 from Ms. Zhou Fangqin, the spouse of Mr. Xu Kecheng, for athe ~~“smaller~~purpose ~~reporting~~of ~~company”~~funding the Company’s business operations. As of March 31, 2012 and May 31, 2012, the outstanding balance due to Ms. Zhou Fangqin was US$824,000 and US$349,000, respectively. This oral, unsecured advance is interest-free and repayable on demand.

~~ITEM~~On 8August 23, 2010, CCEC and Mr. ~~Financial~~ ~~Statements~~Xu Kecheng formed Chisen Electric Jiangsu Co. Ltd. (CEJC) in Jiangsu Province, China. CEJC’s registered capital is RMB150,000,000, of which CCEC holds 98% (RMB147,000,000) and ~~Supplementary~~Mr. ~~Data~~Xu Kecheng holds 2% (RMB 3,000,000). At the date of this annual report, CCEC has paid in RMB147,000,000 and Mr. Xu Kecheng has paid in RMB3,000,000.

~~Reference~~Related isParties ~~made~~as ~~to the “F” pages herein comprising a portion of this Annual Report on Form 10-K.~~Guarantors

45Mr. Xu Kecheng was the guarantor under Contract of Guarantee No. 032 (“Agreement 10.35”) whereby he agreed to guarantee the payment by CCEC of up to RMB90,000,000 (US$14,258,000) to the Bank of China (Changxing Branch) under various credit business contracts by and between CCEC and the Bank of China (Changxing Branch) which could be entered into from July 1, 2008 through May 20, 2012. Agreement 10.35 was replaced by Contract of Guarantee No. 130 (“Agreement 10.41”) on October 25, 2010.

~~ITEM~~On 9October 25, 2010, Mr. ~~Changes~~ inXu Kecheng and Ms. ~~Disagreements~~Zho ~~with~~Fangqin, ~~Accountants~~the onspouse ~~Accounting~~of Mr. Xu Kecheng, became guarantors under Agreement 10.41 whereby they agreed to guarantee the payment by CCEC to the Bank of China Ltd. (Changxing Sub-Branch) for debt incurred by CCEC from October 25, 2010 to October 25, 2011, in a maximum guarantee amount up to RMB250,000,000 (US$38,167,000). Mr. Xu Kecheng and ~~Financial~~Ms. ~~Disclosures~~Zho Fangqin did not receive any consideration for entering into Agreement 10.41. Agreement 10.41 was replaced by Contract of Guarantee No. CX2012RB006 (“Agreement 10.61”) on January 12, 2012.

On ~~September~~January 911, ~~2010~~2012, ~~the~~Mr. ~~Company~~Xu ~~held~~Kecheng ~~its~~and Ms. ~~annual~~Zho ~~meeting~~Fangqin, of the ~~stockholders~~spouse ~~for~~of ~~the~~Mr. ~~fiscal~~Xu ~~year~~Kecheng, ~~ended~~became ~~March~~guarantors ~~31,~~under ~~2010~~Agreement 10. At61 ~~the~~whereby ~~annual~~they ~~meeting~~agreed to guarantee the ~~stockholders~~payment by ofCCEC to the ~~Company~~Bank of ~~record~~China asLtd. of(Changxing ~~the~~Sub-Branch) ~~close~~for ofdebt ~~business~~incurred onby ~~August~~CCEC from January 11, ~~2010~~2012 ~~reappointed~~to ~~Mazars~~January ~~CPA~~11, ~~Limited~~2013, in a maximum guarantee amount up to ~~serve~~RMB250,000,000 as(US$38,167,000). ~~the~~Mr. ~~Company’s~~Xu ~~independent~~Kecheng ~~registered~~and ~~public~~Ms. ~~accounting~~Zho ~~firm~~Fangqin ~~for~~did ~~the~~not ~~fiscal~~receive ~~year~~any ~~ended~~consideration for ~~March~~entering ~~31,~~into ~~2011~~Agreement 10.61.

~~There~~Mr. ~~were~~Xu noKecheng ~~changes~~and inMs. Zhou Fangqin are also the guarantor under Contract of Guarantee No. 3350012010AM00077301 (“Agreement 10.43”) whereby he agreed to guarantee the payment by CCEC of up to RMB69,000,000 (US$10,931,000) to the Bank of Communication (Huzhou Branch) under a series of credit extension contracts which have been or may be entered into by and ~~disagreements~~between ~~with~~CCEC ~~our~~and ~~independent~~such ~~accountants~~bank onfor ~~accounting~~one year commencing November 16, 2010. Mr. Xu Kecheng and ~~financial~~Ms. ~~disclosure~~Zhou Fangqin did not receive any consideration for ~~the~~entering ~~fiscal~~into ~~year~~Agreement ~~ended~~10.43. ~~March~~Agreement 3110.43 was replaced by Contract of Guarantee No. 3350012011AM10031900 (“Agreement 10.62”) on November 29, 2011.

~~ITEM~~- ~~9A. Controls~~56 ~~and Procedures~~-

~~Evaluation~~On November 24, 2011, Mr. Xu Kecheng and Ms. Zho Fangqin, the spouse of ~~Disclosure~~Mr. ~~Controls~~Xu Kecheng, became guarantors under Agreement 10.62 whereby they agreed to guarantee the payment by CCEC to the Bank of Communication (Huzhou Branch) for debt incurred by CCEC from November 24, 2011 to November 24, 2012, in a maximum guarantee amount up to RMB69,000,000 (US$10.931,000). Mr. Xu Kecheng and ~~Procedures~~Ms. Zho Fangqin did not receive any consideration for entering into Agreement 10.62.

~~Under~~On ~~the~~April ~~supervision and with the participation of our management~~19, ~~including our principal executive officer and principal financial officer~~2010, weMr. ~~conducted~~Xu anKecheng ~~evaluation of the effectiveness of the design~~ and ~~operation~~Ms. Zho ofFangqin ~~our~~became ~~disclosure~~guarantors ~~controls~~under ~~and~~Guarantee ~~procedures,~~Contract asNo. ~~defined~~64720012302010012 ~~in Rule 13a-15~~(e)“Agreement ~~under the Exchange Act~~10.45”) ~~Based~~whereby onthey ~~this~~agreed to ~~evaluation,~~guarantee ~~our management, including our principal executive officer and our principal financial officer, concluded that our disclosure controls and procedures were effective as of~~ the ~~fiscal~~payment ~~quarter covered~~ by ~~this~~CCEC ~~Annual Report,~~ to ~~ensure~~the ~~that~~China ~~information~~Construction ~~required~~Bank toCorporation be(Changxing ~~disclosed~~Sub-Branch) byfor usdebt inincurred ~~the reports filed or submitted~~ by usCCEC under RMB ~~the~~Loan ~~Exchange~~Contract ~~Act~~No. ~~(i) is~~64720012302010012. ~~recorded,~~Such ~~processed,~~debt ~~summarized~~was ~~and~~settled ~~reported~~on ~~within~~April ~~the time period specified in SEC rules and forms~~1, ~~and~~2011. ~~(ii) is~~Mr. ~~accumulated~~Xu ~~and~~Kecheng ~~communicated to our management, including our principal executive officer~~ and ~~our~~Ms. ~~principal~~Zho ~~financial~~Fangqin ~~officer,~~did asnot ~~appropriate~~receive any toconsideration ~~allow~~for ~~appropriate~~entering ~~decisions~~into onAgreement ~~a timely basis regarding required disclosure~~10.45.

~~Management’s~~On ~~Annual~~October ~~Report~~9, 2010, Mr. Xu Kecheng and Ms. Zho Fangqin became guarantors under Guarantee Contract No. 647200123020100201 (“Agreement 10.46”) whereby they agreed to guarantee the payment by CCEC to the China Construction Bank Corporation (Changxing Sub-Branch) for debt incurred by CCEC under RMB Loan Contract No. 64720012302010020. Such debt was settled on ~~Internal~~June ~~Control~~30, ~~over~~2011. ~~Financial~~Mr. ~~Reporting~~Xu Kecheng and Ms. Zho Fangqin did not receive any consideration for entering into Agreement 10.46.

~~Management~~On isOctober ~~responsible~~18, ~~for~~2010, ~~establishing~~Mr. ~~and~~Xu ~~maintaining~~Kecheng ~~adequate~~and Ms. ~~internal~~Zho ~~control~~Fangqin ~~structure~~became ~~and~~guarantors ~~procedures~~under ~~over~~Guarantee ~~financial~~Contract ~~reporting~~No. ~~(as~~64720092302010036 ~~defined in Rules 13a-15~~(f“Agreement 10.47”) ~~and~~whereby ~~15d-15(f))~~they ~~under~~agreed to guarantee the ~~Exchange~~payment ~~Act.~~by ~~Our~~CCEC ~~management~~to ~~conducted~~the anChina ~~assessment~~Construction ofBank ~~the~~Corporation ~~effectiveness~~(Changxing ofSub-Branch) ~~our~~for ~~internal~~debt ~~control~~incurred ~~over~~by ~~financial~~CCEC ~~reporting~~under Bank asAcceptance ofAgreement ~~March~~No. ~~31,~~64720092302010036. ~~2011~~Such ~~based~~debt onwas ~~the~~settled ~~framework~~on ~~set~~April ~~forth~~18, in2011. ~~Internal~~Mr. ~~Control —~~Xu ~~Integrated~~Kecheng ~~Framework~~and ~~issued~~Ms. byZho ~~the~~Fangqin ~~Committee~~did not ofreceive ~~Sponsoring~~any ~~Organizations~~consideration offor ~~the~~entering ~~Treadway~~into ~~Commission~~Agreement 10.47.

~~Internal~~On ~~control~~November ~~over~~10, ~~financial~~2010, ~~reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations~~Mr. ~~Internal~~Xu ~~control~~Kecheng ~~over financial reporting is a process that involves human diligence~~ and Ms. ~~compliance~~Zho ~~and~~Fangqin isbecame ~~subject~~guarantors tounder ~~lapses~~Guarantee inContract ~~judgment~~No. ~~and~~647200923020100381 ~~breakdowns~~(“Agreement ~~resulting from human failures~~10.48”) ~~Because~~whereby ofthey agreed ~~such~~to ~~limitations,~~guarantee ~~there~~the ispayment aby ~~risk~~CCEC ~~that~~to ~~material~~the ~~misstatements~~China ~~may~~Construction ~~not~~Bank beCorporation ~~prevented~~(Changxing orSub-Branch) ~~detected~~for ondebt aincurred ~~timely basis~~ by CCEC ~~internal~~under ~~control~~Bank ~~over~~Acceptance ~~financial~~Agreement ~~reporting~~No.647200923002010038. ~~Also,~~Such ~~projections~~debt ofwas ~~any~~settled ~~evaluation~~on ofMay ~~effectiveness~~10, to2011. ~~future~~Mr. ~~periods~~Xu ~~are~~Kecheng ~~subject~~and toMs. ~~the~~Zho ~~risk~~Fangqin did ~~that~~not ~~controls~~receive ~~may~~any ~~become~~consideration ~~inadequate~~for ~~because~~entering ofinto ~~changes~~Agreement ~~in conditions, or that the degree of compliance with the policies or procedures may deteriorate~~10.48.

~~Based~~On onMarch ~~that~~31, ~~evaluation~~2011, ~~our~~Mr. ~~Chief~~Xu ~~Executive~~Kecheng ~~Officer~~ and ~~Chief~~Ms. Zho ~~Financial~~Fangqin ~~Officer~~became ~~concluded~~guarantors ~~that~~under ~~our~~Guarantee ~~internal~~Contract ~~control~~No. ~~over~~672009992011036 ~~financial~~(“Agreement ~~reporting~~10.58”) aswhereby ofthey agreed to guarantee the payment by CCEC to the China Construction Bank Corporation (Changxing Sub-Branch) for debt incurred by CCEC from March 31, 2011 ~~was~~to ~~effective~~March 30, 2014, in a maximum guarantee amount up to RMB170,000,000 (US$25,954,000). Mr. Xu Kecheng and Ms. Zho Fangqin did not receive any consideration for entering into Agreement 10.58.

~~The~~On ~~effectiveness~~February of16, ~~the~~2012 ~~Company’s~~, ~~internal~~Mr. ~~control~~Xu ~~over~~Kecheng ~~financial~~and Ms. ~~reporting~~Zho asFangqin became guarantors under Guarantee Contract No. 2DBSX1781202002102 (“Agreement 10.63”) whereby they agreed to guarantee the payment by CCEC to the Bank of ~~March 31,~~Shanghai ~~2011~~(Hangzhou ~~has~~Branch) ~~been~~for ~~audited~~debt incurred by ~~Mazars~~CCEC ~~CPA~~from ~~Limited~~February 16, an2012 to ~~independent~~February ~~registered~~16, ~~public~~2013, ~~accounting~~in ~~firm~~a maximum guarantee amount up to RMB60,000,000 as(US$9,505,000). ~~stated~~Mr. inXu ~~their~~Kecheng ~~report~~and ~~which~~Ms. ~~appears~~Zho inFangqin ~~Item 8~~did not receive any consideration for entering into Agreement 10.63.

~~Changes~~Chisen inGlass ~~Internal~~was ~~Control~~the ~~over~~guarantor ~~Financial~~under ~~Reporting~~a guarantee contract (“Agreement 10.31”) whereby it agreed to guarantee the payment by CCEC of up to RMB76,000,000 (US$12,040,000) to the Agricultural Bank of China (Changxing County Branch) under a series of business contracts by and between CCEC and such bank for a period of two years commencing on February 10, 2010. Agreement 10.31 was replaced by Contract of Guarantee No. 33905201000030826 (“Agreement 10.40”) on August 27, 2010.

~~There~~- ~~were~~57 no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.-

~~ITEM~~Chisen 9BGlass is the guarantor under Agreement 10. ~~Other~~40 ~~Information~~whereby it agreed to guarantee the payment by CCEC of up to RMB110,000,000 (US$17,426,000) to the Agricultural Bank of China (Changxing County Sub-Branch) under a series of business contracts by and between CCEC and such bank for a period of two years commencing on August 27, 2010. Chisen Glass has joint and several liabilities under Agreement 10.40, and neither Chisen Glass nor Mr. Xu Kecheng’s family member who controls Chisen Glass have received any consideration for entering into Agreement 10.40.

~~None~~Also, on April 2, 2010, Chisen Glass entered into Guarantee Contract No. 6472009992010011 (“Agreement 10.32”) whereby it agreed to guarantee the payment by CCEC of up to RMB65,000,000 (US$10,298,000) to China Construction Bank Corporation (Changxing Branch) under various loan contracts which may be entered into by and between CCEC and such bank for a period of two years. Chisen Glass has joint and several liabilities under Agreement 10.32, and neither Chisen Glass nor Mr. Xu Kecheng’s family member who controls Chisen Glass have received any consideration for entering into Agreement 10.32.

46Chisen Glass is the guarantor under Contract of Guarantee No. ZB5202201100000010 (“Agreement 10.60”) whereby it agreed to guarantee the payment by CCEC of up to RMB40,000,000 ($6,337,000) to Shanghai Pudong Development Bank (Huzhou Branch) under a series of credit extension contracts which have been or may be entered into by and between CCEC and such bank for three years commencing March 31, 2011. The term of Agreement 10.60 is three years. Chisen Glass has joint and several liability under Agreement 10.60 and neither it nor the close family member of Mr. Xu Kecheng who controls Chisen Glass received any consideration for entering into Agreement 10.60.

~~PART~~Chisen ~~III~~Glass is also the guarantor under Contract of Guarantee No. HZ07GB20110054 (“Agreement 10.64”) whereby it agreed to guarantee the payment by CCEC of up to RMB60,000,000 ($9,505,000) to Huaxia Bank (Huzhou Branch) for debt incurred by CCEC from November 14, 2011 to November 14, 2012. Neither it nor the close family member of Mr. Xu Kecheng who controls Chisen Glass received any consideration for entering into Agreement 10.64.

~~ITEM~~On January 12, 2010, Ruilang Electronic entered into Guarantee Contract No. 64720092502010004 (“Agreement 10. ~~Directors,~~34”) ~~Executive~~whereby ~~Officers~~it pledged certain land use rights owned by Ruilang Electronic to secure the obligations of CCEC up to RMB44,000,000 (US$6,972,000) to China Construction Bank (Changxing Branch) under various loan contracts by and ~~Corporate~~between ~~Governance~~CCEC and such bank, for a period of three years. Neither Ruilang Electric nor Mr. Xu Kecheng’s family member who controls Ruilang Electronic have received any consideration for entering into Agreement 10.34.

~~Executive~~ Xinguangyuan ~~Officers~~is also the guarantor under Contract of Guarantee No. ZB5201200900000013 (“Agreement 10.33”) whereby it agreed to guarantee the payment by CCEC of up to RMB26,000,000 ~~Directors~~($4,119,000) to Shanghai Pudong Development Bank (Huzhou Branch) under a series of credit extension contracts which have been or may be entered into by and ~~Key~~between ~~Employees~~CCEC and such bank for three years commencing April 14, 2009. The term of Agreement 10.33 is two years. Xinguangyuan has joint and several liability under Agreement 10.33 and neither it nor the close family member of Mr. Xu Kecheng who controls Xinguangyuan received any consideration for entering into Agreement 10.33.

~~The~~Xinguangyuan ~~following~~is ~~individuals~~also ~~constitute~~the ~~our~~guarantor ~~board~~under Contract of ~~directors~~Guarantee ~~and~~No. ~~executive~~3350012010AM00077300 ~~management~~(“Agreement as10.42”) whereby it agreed to guarantee the payment by CCEC of ~~June~~up 13to RMB69,000,000 ~~2011.~~(US$10,931,000) ~~Our~~to ~~last~~the ~~annual~~Bank ~~meeting~~of ~~was~~Communication ~~held~~(Huzhou onBranch) ~~September~~under 9,a ~~2010~~series atof ~~the~~credit ~~Changxing~~extension ~~International~~contracts which ~~Hotel,~~have ~~No.~~been 1or ~~Taihu~~may ~~Rd.,~~be ~~Changxing,~~entered ~~Zhejiang~~into ~~Province,~~by ~~PRC,~~and ~~whereby~~between ~~stockholders~~CCEC ofand ~~record~~such onbank ~~August~~for 11one year commencing November 16, 2010. ~~approved~~On ~~the~~November 16, ~~appointment~~2011, ofsuch Xuagreement ~~Kecheng,~~expired. ~~Liu~~Neither ~~Chuanjie,~~Xinguangyuan ~~Lou~~nor ~~Shourong,~~the ~~Dong~~close ~~Quanfeng,~~family ~~Jiang~~member ~~Yanfu,~~of ~~Gong~~Mr. ~~Xiaoyan~~Xu ~~and~~Kecheng ~~Yun~~who ~~Hon~~controls ~~Man,~~Xinguangyuan received toany ~~our~~consideration ~~Board~~for entering into Agreement 10.42.

Name	Age	Position(s)
Xu Kecheng	49	Chairman of the Board, Chief Executive Officer & President
Liu Chuanjie	34	Chief Financial Officer, Treasurer, Director
Lou Shourong	47	Vice-President, Director
Fei Wenmei	49	Corporate Secretary
Zhu Zhongli	48	Vice-President of Sales
Dong Quanfeng	47	Independent Director
Jiang Yanfu	68	Independent Director
Gong Xiaoyan	65	Independent Director
Yun Hon Man	43	Independent Director
Gui Changqing	73	Significant Employee
Wang Huanxiang	35	Significant Employee

Xinguangyuan is also the guarantor under Contract of Guarantee No. 003 (“Agreement 10.51”) whereby it agreed to guarantee the payment by CCEC of up to RMB100,000,000 (US$15,842,000) to the Bank of China (Changxing County Sub-branch) under a series of credit extension contracts which have been or may be entered into by and between CCEC and such bank for one year commencing January 6, 2011. On January 6, 2012, such agreement expired. Neither Xinguangyuan nor the close family member of Mr. Xu Kecheng who controls Xinguangyuan received any consideration for entering into Agreement 10.51.

~~Term~~- of58 ~~Office~~-

~~Our~~Xinguangyuan ~~directors~~is ~~are~~also ~~appointed~~the ~~for~~guarantor aunder Contract ~~one-year~~of ~~term~~Guarantee toNo. ~~hold~~ZB5202201100000013 ~~office~~(“Agreement ~~until~~10.59”) whereby it agreed to guarantee the ~~next~~payment ~~annual~~by ~~general~~CCEC of ~~meeting~~up to RMB40,000,000 ($6,337,000) to Shanghai Pudong Development Bank (Huzhou Branch) under a series of ~~our~~credit ~~stockholders~~extension contracts which have been or ~~until~~may ~~removed~~be ~~from~~entered ~~office~~into inby ~~accordance~~and ~~with~~between ~~our~~CCEC ~~Bylaws~~and such bank for three years commencing March 31, 2011. ~~Our~~The ~~officers~~term ~~are~~of Agreement ~~appointed~~10.59 byis ~~the~~three ~~Board~~years. Xinguangyuan has joint and ~~hold~~several ~~office~~liability ~~until~~under ~~removed~~Agreement by10.59 and neither it nor the ~~Board~~close family member of Mr. Xu Kecheng who controls Xinguangyuan received any consideration for entering into Agreement 10.59.

~~Biographies~~Xinguangyuan is also the guarantor under Contract of ~~Officers~~Guarantee ~~and~~No. ~~Directors~~3390012011AM00031901 (“Agreement 10.65”) whereby it agreed to guarantee the payment by CCEC of up to RMB69,000,000 ($10,931,000) to Bank of Communication (Huzhou Branch) for debt incurred by CCEC from November 29, 2011 to November 29, 2012. Neither it nor the close family member of Mr. Xu Kecheng who controls Xinguangyuan received any consideration for entering into Agreement 10.65.

XuXinguangyuan ~~Kecheng.~~is ~~Mr.~~also Xuthe ~~has~~guarantor ~~served~~under asContract ~~President, Chief Executive Officer and a Director~~ of ~~the~~Guarantee No. ~~Company~~CX2012RB007 ~~since~~(“Agreement ~~November 12, 2008~~10.66”) ~~Mr.~~whereby Xuit ~~founded~~agreed ~~CCEC~~to inguarantee ~~2002~~the ~~and~~payment ~~has~~by ~~served as~~ CCEC’s ~~President and Chairman~~ of ~~the~~up ~~Board~~to ~~since its inception. Besides successfully establishing and running CCEC~~RMB100, ~~Mr. Xu also acquired Ai Ge Organism Products Co.~~000,000 ~~Ltd.~~($15, ~~a biological & pharmaceutical company in China in November 2006 where he serves as Chairman of the Board and Executive Director. In 2002~~842,000) to ~~Mr.~~Bank ~~Xu was involved in the formulation~~ of ~~coated~~Communication ~~tempered~~(Huzhou ~~glass~~Branch) ~~panel standards used~~ for ~~home~~debt ~~gas~~incurred ~~kitchen~~by ~~ranges,~~CCEC ~~which was put on the list of the National Building Materials Industry Standard. Mr. Xu graduated~~ from ~~Hangzhou~~January ~~University~~11, in2012 ~~1997 with the major in economic management. In addition~~ to ~~serving~~January ~~as senior economist to the Company~~11, Mr2013. XuNeither isit anor ~~member~~the close offamily ~~China Battery Industry Association, a~~ member of ~~Huzhou CPPCC, a member of the Standing Committee of Changxing People’s Congress and he has been honored with the title of “Integrity Entrepreneur” by the Changxing Government.~~ Mr. Xu ~~also~~Kecheng ~~finished~~who acontrols ~~course~~Xinguangyuan ofreceived ~~study~~any atconsideration ~~the~~for ~~class~~entering ofinto ~~advanced~~Agreement ~~training at the Party School of the CPC Central Committee~~10.66.

~~Liu~~In ~~Chuanjie.~~connection ~~Mr.~~with ~~Liu~~Agreement ~~has served as Chief Financial Officer of the Company since June 15~~10.41, ~~2010~~Agreement 10.51, asAgreement ~~Treasurer~~10.61, ofAgreement ~~the Company since November 12~~10.62, ~~2008~~ and ~~has~~Agreement ~~served~~10.65 asdescribed aabove ~~Director~~(collectively, of the ~~Company~~“XXZ ~~since November 24~~Guarantees”), ~~2008.~~ Mr. ~~Liu~~Xu ~~also~~Kecheng, ~~serves~~Zhou asFangqin ~~Controller,~~and ~~Director~~Xinguangyuan ofhave ~~Finance~~provided ~~and~~guarantees assecuring aindebtedness ~~Director~~ of CCEC ~~since May 2004. Mr. Liu has expertise~~ in ~~accounting~~an ~~systems~~aggregate ~~and~~amount ~~national accounting policies, fund raising and investing. Prior~~ up to ~~joining CCEC~~US$22,940,000, ~~Mr. Liu served~~ as ~~the head~~ of ~~the~~March ~~financial department of Changxing Chisen Xinguangyuan Co.~~31, ~~Ltd~~2012.~~, a manufacturing company in China, from October 2000 to April 2004. Mr. Liu received his Degree in Economic and Administration Management at the Nanjing Institute of Political Studies in 2009.~~

~~Lou~~In ~~Shourong.~~connection ~~Mr.~~with ~~Lou~~Agreement ~~has~~10.32, and Agreement ~~served~~10.58 asdescribed aabove ~~Vice~~(collectively, ~~President of~~ the ~~Company~~“XZG ~~since November 12~~Guarantees”), ~~2008 and as a Director since September 9, 2010~~Mr. ~~From~~Xu ~~October 2007 to present~~Kecheng, MrMs. ~~Lou~~Zhou ~~has~~Fangqin ~~served~~and asChisen aGlass have ~~Deputy~~provided ~~General~~guarantees ~~Manager~~securing indebtedness of CCEC, ~~a manufacturing company~~ in ~~China.~~an ~~From~~aggregate ~~April~~amount ~~2006~~up to ~~September 2007~~US$3, ~~Mr. Lou served as Executive Deputy General Manager for Changxing Nuo Wan Te Ke Co.~~961, ~~Ltd.~~000, ~~a manufacturing company in China. Prior to that, Mr. Lou served~~ as ~~the~~of ~~factory director and marketing manager in Changxing Chisen Glass Co., Ltd., a manufacturing company in China from June 1996 to~~ March ~~2006. Mr. Lou has extensive experience in materials supply~~31, ~~procurement and production plan management~~2012.

~~Fei~~In ~~Wenmei.~~connection ~~Ms.~~with ~~Fei~~Agreement ~~has~~10.40 ~~served~~described above ~~as Corporate Secretary of~~ (the ~~Company~~“Glass ~~since November 12~~Guarantees”), ~~2008.~~Chisen InGlass ~~March~~has ~~2005,~~provided ~~Ms.~~guarantees ~~Fei~~securing ~~joined~~indebtedness ~~CCEC as Chief Administrative Manager in charge~~ of ~~corporate brand building, intellectual property and project application. Ms. Fei currently serves~~ CCEC asin an ~~assistant~~aggregate amount ~~economist~~up ~~and clean production management controller. From March 1991~~ to ~~February 2005~~US$11,089,000, ~~Ms. Fei served~~ as ~~Chief Administrative Manager~~ of ~~the Huaneng Changxing Power Plant Industry & Trading Company and prior to that she served as Chief of Staff at the Changxing Land Administration Bureau from~~ March ~~1987~~31, ~~to February 1991~~2012. Ms. Fei has been engaged in administrative management for many years and has vast experience in corporate administrative management. Ms. Fei graduated from Zhejiang Radio and Television University with a degree in Chinese Language.

47In connection with Agreement 10.51 and 10.59 described above (the “Xing Guarantees”), Xinguangyuan has provided guarantees securing indebtedness of CCEC in an aggregate amount up to US$2,945,000, as of March 31, 2012.

~~Zhu~~In ~~Zhongli.~~connection ~~Mr.~~with ~~Zhu~~Agreement ~~has~~10.34 and Agreement ~~served~~10.58 asdescribed ~~Vice-President~~above of(collectively, ~~Sales of~~ the ~~Company~~“XZR ~~since June 3~~Guarantees”), ~~2009.~~ Mr. ~~Zhu~~Xu isKecheng, inMs. ~~charge~~Zhou ofFangqin ~~overall sales~~ and ~~marketing~~Ruilang Electronic ~~management.~~have ~~Mr.~~provided ~~Zhu~~guarantees ~~previously~~securing ~~served~~indebtedness ~~as the Assistant General Manager~~ of ~~the~~CCEC ~~Company~~in ~~since~~an ~~August~~aggregate ~~2006.~~amount ~~Prior~~up to ~~joining the Company~~US$1,109,000 ~~Mr. Zhu served~~ as ~~the General Manager~~ of ~~Changxing~~March ~~Lida Wear-Resisting Material Co.~~31, ~~Ltd~~2012.~~, a manufacturing company in China, since March 1999. Mr. Zhu has extensive experience in the local Chinese market and has achieved outstanding success in sales of storage batteries in China.~~

~~Dong~~In ~~Quanfeng.~~connection ~~Professor~~with ~~Dong~~Agreement ~~has served as a Director of the Company since November 24~~10.32, ~~2008.~~Agreement ~~Professor Dong has served as a Chemistry professor~~ 10.34 and Agreement ~~doctorial tutor at the Department of Chemistry of Xiamen University since March 2006~~10.58 ~~Professor~~described ~~Dong~~above ~~concurrently acts as a visiting research fellow at the National Hi-Tech Green Material Development Center~~(collectively, ~~is a Member of~~ the ~~Editorial Board of the industry magazine~~ “~~Battery”~~XZRG ~~is a Member of the Chinese Institute of Electrics Chemical and Physical Power Committee~~Guarantees”), aMr. ~~Member~~Xu ~~of ISE~~Kecheng, ~~a Member of the American ECS and is the Vice Director of the Changxing Chisen Physical Chemistry Battery Research Center~~Ms. ~~Professor~~Zhou ~~Dong~~Fangqin ~~is engaged in the research of new chemical electric power sources~~ and ~~related~~Ruilang Electronic ~~energy~~have ~~storage~~provided ~~material~~guarantees ~~and~~securing ~~has~~indebtedness ~~finished several national and provincial-municipal scientific research projects. In 1997, Professor Dong won the provincial second prize~~ of ~~the~~CCEC ~~Development~~in ofan ~~Science~~aggregate ~~and~~amount ~~Technology.~~up Into ~~1999~~US$7, ~~Professor Dong won the technology innovation prize of Hubei province. In 2004~~129,000 ~~Professor~~as ~~Dong won third prize~~ of ~~the~~March ~~Development of Science and Technology of Xiamen. In 2006~~31, ~~he won the title of “Technology Innovation Advanced Individual” by the National Information Industry~~2012. Professor Dong has issued over 80 papers on internationally significant academic journals and has applied for several patents. Prior to his employment as a full time professor at Xiamen University, Professor Dong served as an associate professor at Xiamen University since January 2001. Mr. Dong graduated from Wuhan University with a Ph D degree in Chemistry and performed postdoctoral research at Israel Technical Institute.

~~Jiang~~In ~~Yanfu.~~connection ~~Professor~~with ~~Jiang~~Agreement ~~has served as a Director of the Company since November 24~~10.41, ~~2008~~Agreement 10.61 ~~Professor Jiang has served as a professor~~ and ~~doctorial~~Agreement ~~tutor of business administration at Tsinghua University since December 1993~~10.63 ~~Professor~~described ~~Jiang~~above ~~has served as Dean of~~ (the ~~Entrepreneurial~~“XZT ~~Research Center since April 2000 and has served as academic director-general and co-founded of Trinity Innovation since December 2003~~Guarantee”), ~~a consulting company in China~~Mr. ~~Professor~~Xu ~~Jiang has expertise in entrepreneurial management~~Kecheng, ~~corporate governance and institutional economics~~Ms. HeZhou ~~has~~Fangqin ~~undertaken~~and ~~many~~third ~~important~~parties have ~~research~~provided ~~programs~~guarantee ~~such~~securing asindebtedness ~~the “Theoretical Study on Chinese Technology Innovation.” He served as a director~~ of ~~and~~CCEC asin an ~~advisor~~aggregate toamount ~~many~~up ~~companies.~~to ~~Professor Jiang’s main research fields include risk investment and entrepreneurial management~~US$19, ~~corporate governance and cyber economy. The major courses he has instructed include Entrepreneurial Management~~801,000 ~~Technology~~as ~~and~~of ~~Institution~~March ~~Innovation~~31, ~~and Analysis of Institutional Economics~~2012.

~~Gong~~In ~~Xiaoyan.~~connection ~~Ms.~~with ~~Gong~~Agreement ~~has~~10.60, ~~served~~Agreement 10.61 asand aAgreement ~~Director~~10.64 ofdescribed above (the ~~Company~~“GT ~~since~~Guarantee”), ~~November~~Chisen ~~24,~~Glass ~~2008.~~and ~~Ms.~~third ~~Gong~~parties ~~currently~~have ~~serves~~provided asguarantee securing ~~Chairman~~indebtedness of ~~Tianjin~~CCEC ~~Bicycle Industrial Association, a non-governmental organization~~ in ~~China~~an ~~since~~aggregate ~~June~~amount ~~2006.~~up ~~Prior~~ to ~~that~~US$7,129,000 ~~Ms. Gong served~~ as ~~Secretary-general~~ of ~~Tianjin~~March ~~Bicycle Industrial Association~~31, ~~a non-govermental organization in China since September 1998~~2012. She has been honored with the titles “China Top-Hundred Female Entrepreneurs,” “Most Influential Enterprises Leader of China” and “Tianjin Female Entrepreneur” issued by Tianjin Municipal Government.

~~Yun~~In ~~Hon~~connection ~~Man.~~with ~~Mr.~~Agreement ~~Yun has served as a director of the Company since November 24, 2008~~10.59 ~~Mr. Yun has served~~ and ~~continues~~Agreement ~~to serve as a Corporate Consultant with Smart Pine Investment Limited since September 2007, a consulting firm organized under the laws of Hong Kong~~10.60 ~~Mr.~~described above ~~Yun also serves as a Director of CH Lighting International Corporation~~ (~~OTCBB:~~the ~~CHHN)~~“YG ~~since July 28, 2008~~ and asthird ~~a Director of Xinde Technology Company (OTCBB: WTFS~~Guarantee”), ~~since~~Xinguangyuan, ~~January~~Chisen ~~2010.~~Glass ~~Mr.~~and ~~Yun~~third ~~also~~parties ~~served~~have asprovided ~~Chief~~guarantee ~~Operating~~securing indebtedness ~~Officer~~ of ~~China~~CCEC ~~INSOnline~~in ~~Corp.~~an ~~(NASDAQ:~~aggregate ~~CHIO)~~amount ~~from~~up ~~January 2008 through April 2010. Prior~~ to ~~that~~US$3, ~~Mr. Yun served as Corporate Controller of Hi-Tech Wealth Inc. (n/k/a China Mobile Media Technology~~485,000 ~~Inc.)(OTCBB: CHMO) from January 2007 through August 2007. From January 2003 through December 2006, Mr Yun served~~ as ~~Corporate Controller~~ of ~~General~~March ~~Components~~31, ~~Inc~~2012. (n/k/a China Mobile Media Technology, Inc.)(OTCBB: CHMO). Mr. Yun is a Chartered Accountant having memberships with the Institute of Chartered Accountants in England and Wales. He is also a Fellow Member of the Chartered Association of Certified Accountants and a member of the Hong Kong Institute of Certified Public Accountants. He was a member of Association of International Accountants, the Society of Registered Financial Planners, the Institute of Financial Accountants and the Institute of Crisis and Risk Management. Mr. Yun received his MBA at the University of Western Sydney in 2007.

~~Biographies~~In connection with Agreement 10.41 and Agreement 10.59 described above (the “XZY and third Guarantee”), Xinguangyuan, Mr. Xu Kecheng, Ms. Zhou Fangqin and third parties have provided guarantee securing indebtedness of ~~Significant~~CCEC ~~Employees~~in an aggregate amount up to US$3,168,000 as of March 31, 2012.

~~Gui Changqing. Mr. Gui has served and continues to serve as Chief Scientist at the Zhejiang Changxing Chisen Physical~~-~~Chemical~~ ~~Power~~59 Supply Research and Development Center since June 2007 and as counselor of the 712 Institute since January 2005. Prior to that, Mr. Gui served as expert team member of the 712 Institute from January 2001 to December 2004. Early in his career Mr. Gui was engaged in the R&D of the powered lead-acid battery for the national military in China serving as General Engineer and Researcher. The product won a scientific and technical award from the State Commission of Science and Technology. Mr. Gui has published more than 100 papers of international significance and has trained 24 postgraduates. Mr. Gui is extremely well respected by his peers in the storage battery industry. In 1992, he won the special government allowance from the State Council, has served as Director of the Association of Chinese Chemical Physics Power Industry and as a Director of the Wuhan Power Supply Society. Mr. Gui earned his doctorate degree in electrochemistry from Shanghai Fudan University.

Agreement 10.31, Agreement 10.33, Agreement 10.35, Agreement 10.42, Agreement 10.43, Agreement 10.45, Agreement 10.46, Agreement 10.47, Agreement 10.48, Agreement 10.60, Agreement 10.65 and Agreement 10.66 were not utilized as of March 31, 2012.

~~Wang~~In ~~Huanxiang.~~connection ~~Mr.~~with, ~~Wang~~Agreement ~~has served as Technical Controller of CCEC since May 2008~~10. ~~Prior to that~~32, MrAgreement 10.34, ~~Wang~~Agreement ~~was~~10.40, aAgreement ~~career~~10.41, ~~researcher~~Agreement of10.51, ~~the~~Agreement ~~storage~~10.58, ~~battery~~Agreement ~~and~~10.59, ~~served~~Agreement as10.61, ~~Deputy~~Agreement ~~General Manager of Zhejiang Chaowei Power Co~~10.62, ~~Ltd~~Agreement 10.63 ~~from~~and ~~May~~Agreement ~~2004 to March 2008~~10.64 ~~Prior~~described toabove, ~~that~~Xinguangyuan, ~~Mr.~~Ruilang ~~Wang~~Electronic, ~~served~~Chisen asGlass, ~~Chief of Technical Department of Zhejiang Wolong Technology Corp~~Mr. ~~from~~Xu ~~March~~Kecheng, ~~2001 to May 2004~~Ms. HeZhou ~~has~~Fangqin ~~several patents~~ and third ~~has~~parties ~~issued~~have ~~several~~provided ~~papers,~~guarantees ~~including~~securing ~~“Research~~indebtedness of SCCEC nin SOan 4aggregate ~~Applied~~amount up to ~~Electric Bicycles” and “Drying and Changing Technical Research for Long Cycle Life Lead-Acid Electrical Bicycle Battery” in various academic journals~~US$86,961,000 ~~including~~at the ~~International~~date ~~Battery. Mr. Wang is a graduate~~ of this ~~Zhengzhou University with a degree in electrochemistry~~report.

~~Code~~An aggregate of ~~Business~~US$83,476,000 ~~Conduct~~was ~~and~~paid ~~Ethics~~by CCEC towards the principal amount of the indebtedness secured by the Related Parties Guarantees as of March 31, 2012. An aggregate of US$7,468,000 was paid by CCEC towards the interest on the loans secured by the Related Parties Guarantees as of March 31, 2012.

~~The~~As ~~Company’s Board~~ of ~~Directors~~March ~~adopted~~31, ~~a Code of Business Conduct and Ethics to help ensure compliance with legal requirements and our standards of business conduct. The Code of Business Conduct and Ethics applies to directors~~2012, ~~officers and employees of~~ Chisen. AGlass ~~copy~~provided guarantees, ofin ~~our~~aggregate, ~~Code~~amounting ~~of Business Conduct and Ethics is attached as Exhibit 14.1~~ to ~~our Current Report on Form 8-K as filed with the SEC on February 4~~US$6,337,000, ~~2009 which is accessible at the SEC’s website at www.sec.gov. The Code of Business Conduct and Ethics~~US$2,376,000 and ~~any amendments or waivers therefrom is also available in print~~US$2, ~~at no charge~~376,000 to ~~any~~secure ~~stockholder~~the ~~who~~short-term ~~makes~~bank ~~a written request to: Chief Financial Officer~~loans, ~~Chisen~~bills ~~Electric~~financing and ~~Corporation,~~notes ~~Jingyi~~payable ~~Road,~~of ~~Changxing~~the ~~Economic Development Zone~~Company, ~~Changxing, Zhejiang Province, The People’s Republic of China~~respectively.

~~Director~~As ~~Independence~~of March 31, 2012, Chisen Glass provided guarantees, in aggregate, amounting to US$6,337,000, US$2,376,000 and US$2,376,000 to secure the short-term bank loans, bills financing and notes payable of the Company, respectively.

~~Our~~As ~~Board~~ of ~~Directors~~March ~~has~~31, ~~determined~~2012, ~~that~~Ruiling 4Electronic, ~~out~~Chisen ofGlass, ~~the~~Mr. Xu 7Kecheng ~~members~~and ofMs. ~~our~~Zhou ~~Board~~Fang ofQin ~~Directors~~provided ~~are~~guarantees, ~~independent based on the criteria for independence set forth~~ in ~~Rule 10A-3(b)(1) under the Securities Exchange Act of 1934~~aggregate, asamounting ~~amended~~to ~~(the “Exchange Act”). The following directors are independent: Dong Quanfeng~~US$7, ~~Jiang Yanfu~~129,000 ~~Gong~~to ~~Xiaoyan~~secure ~~and~~the ~~Yun~~bills ~~Hon~~financing ~~Man.~~of the ~~The following directors are not independent: Xu Kecheng, Liu Chuanjie and Lou Shourong~~Company.

~~Family~~As ~~Relationships~~of March 31, 2012, Mr. Xu Kecheng, Ms. Zhou Fang Qin and a third party provided guarantees, in aggregate, amounting to US$7,920,000 and US$11,881,000 to secure the short term bank loans and bills financing of the Company, respectively.

~~There~~As ~~are~~of noMarch ~~family~~31, ~~relationships~~2012, byXinguangyuan, ~~and~~Mr. ~~between~~Xu orKecheng ~~among~~and ~~the~~Ms. ~~members~~Zhou Fang ofQin, ~~the~~provided ~~Board~~guarantees, orin ~~other~~aggregate, ~~executives.~~amounting ~~None~~to ofUS$792,000, ~~our~~US$5,545,000 ~~directors~~ and ~~officers~~US$16,603,000 ~~are~~to ~~directors~~secure orthe ~~executive~~notes ~~officers~~payable, bills offinancing ~~any~~and ~~company~~short ~~that~~term ~~files~~bank ~~reports~~loans ~~with~~of the ~~SEC~~Company, ~~except as set forth in the Biographies section above~~respectively.

~~Legal~~As ~~Proceedings~~of ~~Involving~~March ~~Officers~~31, 2012, Chisen Glass and ~~Directors~~a third party provided guarantees, in aggregate, amounting to US$3,961,000, US$2,376,000 and US$792,000 to secure the short term bank loans, bills financing and notes payable of the Company, respectively.

~~Unless~~As ~~otherwise indicated, to the knowledge~~ of ~~the~~March ~~Company after reasonable inquiry~~31, ~~no current director or executive officer of the Company during the past ten years~~2012, ~~has~~Xinguangyuan ~~(i)~~provided ~~been convicted in a criminal proceeding (excluding traffic violations or other minor offenses)~~guarantees, ~~(ii) been a party to any judicial or administrative proceeding (except for any matters that were dismissed without sanction or settlement) that resulted~~ in ~~a judgment~~aggregate, amounting ~~decree or final order enjoining the person from future violations of, or prohibiting activities subject~~ to, ~~U.S. federal or state securities laws~~US$1, ~~or a finding of any violation of U.S. federal or state securities laws~~361,000 (iii) filed a petition under federal bankruptcy laws or any state insolvency laws or has had a receiver appointed for the person’s property or (iv) been subject to any judgment, decree or final order enjoining, suspending or otherwise limiting for more than 60 days, the person from engaging in any type of business practice , acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and ~~loan association or insurance company~~US$1, or engaging in or continuing any conduct or practice in connection with such activity or engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws584,000 ~~(v) been found by a court of competent jurisdiction in a civil action or by the Commission~~ to ~~have~~secure ~~violated any Federal or State securities law, and~~ the ~~judgment~~bills infinancing such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated, (vi) been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and ~~the~~short ~~judgment~~term inbank ~~such~~loan ~~civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated, (vii) been the subject~~ of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (a) any Federal or State securities or commodities law or regulation, (b) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or (c) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity, or (viii) been the ~~subject of~~Company, ~~or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U~~respectively.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

49As of March 31, 2012, Xinguangyuan, Chisen Glass and a third party provided guarantees, in aggregate, amounting to US$3,485,000 to secure the bills financing of the Company.

~~There~~As ~~are~~of noMarch ~~material~~31, ~~pending~~2012, ~~legal~~Mr. ~~proceedings~~Xu toKecheng, ~~which~~Ms. ~~any~~Zhou ofFang ~~the~~Qin, ~~individuals~~Xinguangyuan and ~~listed~~a ~~above~~third is party ~~adverse~~provided toguarantees, ~~the~~in ~~Company~~aggregate, oramounting ~~any~~to ofUS$3,168,000 ~~its subsidiaries or has a material interest adverse~~ to secure the ~~Company~~notes orpayable ~~any~~ of ~~its subsidiaries. There are no family relationships between directors and executive officers of~~ the Company.

~~Committees~~As of ~~our~~March ~~Board~~31, 2012, Chisen Glass, Mr. Xu Kecheng and Ms. Zhou Fang Qin, provided guarantees, in aggregate, amounting to US$3,961,000 to secure the bills financing of ~~Directors~~the Company.

As of ~~January~~March 1531, ~~2009~~2012, ~~our~~Ruiling ~~Board of Directors has an Audit Committee~~Electronic, aMr. ~~Compensation~~Xu ~~Committee~~Kecheng and ~~a Corporate Governance and Nominating Committee established in accordance with the Exchange Act and NASDAQ rules~~ Ms. ~~Prior~~Zhou toFang ~~January~~Qin ~~15,~~provided ~~2009~~guarantees, wein ~~did not have an Audit Committee~~aggregate, aamounting ~~Compensation~~to ~~Committee or a Corporate Governance and Nominating Committee. During the fiscal year ended March 31~~US$1, ~~2011~~109,000 ~~the~~to ~~Audit~~secure ~~Committee met 5 times,~~ the ~~Compensation~~notes ~~Committee~~payable ~~met 2~~of ~~times and~~ the ~~Corporate Governance and Nominating Committee met 2 times~~Company. ~~A brief description of each committee is set forth below.~~

¨- ~~Audit~~60 Committee – The purpose of the Audit Committee is to provide assistance to our Board of Directors in fulfilling their oversight responsibilities relating to our consolidated financial statements and financial reporting process and internal controls in consultation with our independent registered public accountants. The Audit Committee is also responsible for ensuring that the independent registered public accountants submit a formal written statement to us regarding relationships and services which may affect the auditor’s objectivity and independence. The Board appointed Yun Hon Man, Gong Xiaoyan, Dong Quanfeng and Jiang Yanfu to serve as members of the Audit Committee, with Yun Hon Man serving as Chairman, commencing on January 15, 2009. Our Audit Committee financial expert is Yun Hon Man, an independent director.-

¨Policies ~~Compensation Committee – The purpose of the Compensation Committee is to review~~ and ~~make~~Procedures ~~recommendations~~for to our Board of Directors regarding all forms of compensation to be provided to our executive officers and directors, including stock compensation and loans, and all bonus and stock compensation to all employees. The Board appointed Jiang Yanfu, Dong Quanfeng, Yun Hon Man and Gong Xiaoyan to serve as members of the Compensation Committee, with Jiang Yanfu serving as Chairman, commencing on January 15, 2009.Related-Party Transactions

~~¨ Corporate Governance and Nominating Committee –~~ The purpose of the Nominating Committee is to review the composition and evaluate the performance of the Board, recommend persons for election to the Board and evaluate director compensation. The Nominating Committee is also responsible for reviewing the composition of committees of the Board and recommending persons to be members of such committees, and maintaining compliance of committee membership with applicable regulatory requirements. The Company does not have aany formal ~~diversity~~written policies ~~policy.~~or ~~Although~~procedures ~~the~~for ~~Board~~related ~~does~~party ~~not currently have formal specific minimum criteria for nominees~~transactions, ~~substantial~~however ~~relevant~~in ~~and diverse business and industry experience would generally be considered important qualifying criteria~~practice, ~~as would~~ the ~~ability~~Audit toCommittee ~~attend~~reviews and ~~prepare~~approves ~~for~~all ~~Board~~related party transactions and ~~shareholder~~other ~~meetings.~~matters Wepertaining ~~have not adopted procedures by which security holders may recommend nominees~~ to ~~our~~the ~~Board~~integrity of ~~Directors.~~management, ~~The~~including ~~Board~~potential ~~appointed~~conflicts ~~Gong~~of ~~Xiaoyan~~interest, ~~Dong~~trading in ~~Quanfeng~~our securities, ~~Yun~~or ~~Hon~~adherence ~~Man and Jiang Yanfu~~ to ~~serve~~standards ~~as members~~ of ~~the~~business ~~Corporate Governance and Nominating Committee, with Gong Xiaoyan serving as Chairman, commencing on January 15, 2009~~conduct.

¨Director Strategy and Steering Committee – Xu Kecheng and Wang Chunyan served as members of the Strategy and Steering Committee, with Xu Kecheng serving as Chairman, during the fiscal year ended March 31, 2011.Independence

~~Committee~~The ~~Charters~~following directors are independent: Dong Quanfeng, Jiang Yanfu, Gong Xiaoyan and Yun Hon Man. The following directors are not independent: Xu Kecheng, Liu Chuanjie and Lou Shourong.

OnITEM ~~January~~14. ~~15,~~Principal ~~2009,~~Accountant ~~the~~Fees ~~Board approved Charters for each of the Audit Committee, Compensation Committee~~ and ~~the Corporate Governance and Nominating Committee.~~Services

~~Director~~ The ~~Qualifications~~firm ~~and~~of ~~Experience~~Mazars CPA Limited (“Mazars”) acts as our independent registered public accounting firm effective as of January 14, 2009. The following is a summary of fees incurred for services rendered.

~~The~~Audit ~~following discussion sets forth the specific experience, qualifications, attributes and skills that the Company considered in making its decision to appoint and nominate directors to the Board.~~Fees

50During the year ended March 31, 2012, the fees for our current principal accountant, Mazars, were US$209,500 for the audit of our consolidated financial statements included in this Annual Report on Form 10-K and reviews of Form 10-Q.

~~Mr.~~Audit-Related Xu Kecheng was selected to serve on the Board based on his management and corporate governance experience having founded CCEC in 2002 and having served as Chairman of the Board and President of that company, President and Chief Executive Officer of the Registrant as well as serving as Chairman of the Board and Executive Director of Ai Ge Organism Products Co., Ltd., a biological and pharmaceutical company in China. Mr. Xu was also chosen to serve on the Board based on his professional standing in the industry as a member of the China Battery Industry Association, a member of Huzhou CPPCC, a member of the Standing Committee of Changxing People’s Congress and having been honored with the title of “Integrity Entrepreneur” by the Changxing Government. Lastly, Mr. Xu was selected based on his expertise in the industry and in management, having been involved in the formulation of coated tempered glass panel standing used for home gas kitchen ranges, which was put on the list of National Building Materials Industry Standard and having graduated from Hangzhou University with a major in economic management.Fees

~~Mr.~~During ~~Liu Chuanjie was selected to serve on~~ the ~~Board~~year ~~based~~ended onMarch ~~his~~31, ~~financial management experience having served as Controller~~2012, ~~Director~~our current ofprincipal ~~Finance and as a Director of CCEC since 2004 and as head of the financial department of Changxing Chisen Xinguanyuan Co.~~accountant, ~~Ltd.~~Mazars, adid ~~manufacturing~~not ~~company~~render inassurance ~~China~~and ~~from~~related ~~October~~services ~~2000~~reasonably torelated ~~April 2004. Mr. Liu was also selected~~ to ~~serve on~~ the ~~Board~~performance ~~based~~of onthe audit ~~his~~or ~~expertise~~review inof ~~accounting~~financial ~~systems and national accounting policies, fund raising and investing, and having graduated from Nanjing PLA Polytechnic University with a degree in economics and management~~statements.

~~Mr.~~Tax Lou Shourong was selected to serve on the Board based on his management experience having served as Deputy General Manager of CCEC since October 2007 and Executive Deputy General Manager of Changxing Nuo Wan Te Ke Co., Ltd., a manufacturing company in China. Mr. Lou was also selected based on his extensive experience in materials supply, procurement and production plan management, having served as the factory director and marketing manager in Changxing Chisen Glass Co., Ltd., a manufacturing company in China from June 1996 to March 2006.Fees

~~Professor~~During ~~Dong Quanfeng was selected to serve on~~ the ~~Board~~year ~~based~~ended ~~on his professional standing and expertise in the industry, having served as a Chemistry professor and doctorial tutor at the Department of Chemistry of Xiamen University since~~ March ~~2006~~31, ~~as a visiting research fellow at the National Hi-Tech Green Material Development Center in China~~2012, asour current aprincipal ~~Member of the Editorial Board of the industry magazine “Battery”~~accountant, ~~as a Member of the Chinese Institute of Electrics Chemical and Physical Power Committee~~Mazars, asdid anot ~~Member~~render ofassurance ~~ISE, as a Member of the American ECS~~ and asrelated ~~the~~services ~~Vice~~reasonably ~~Director of the Changxing Chisen Physical Chemistry Battery Research Center. Professor Dong is engaged in the research of new chemical electric power sources and~~ related ~~energy~~to ~~storage material and has finished several national and provincial-municipal scientific research projects. In 1997, Professor Dong won~~ the ~~provincial~~performance ~~second prize~~ of the audit ~~Development~~or ofreview ~~Science and Technology. In 1999, Professor Dong won the technology innovation prize~~ of ~~Hubei~~financial ~~province~~statements. In 2004, Professor Dong won third prize of the Development of Science and Technology of Xiamen. In 2006, he won the title of “Technology Innovation Advanced Individual” by the National Information Industry. Professor Dong has issued over 80 papers on internationally significant academic journals and has applied for several patents.

~~Professor~~All ~~Jiang~~Other Yanfu was selected to serve on the Board based on his professional standing and expertise in entrepreneurial management, corporate governance and institutional economics, having served as a professor and doctorial tutor of business administration at Tsinghua University since December 1993, as Dean of the Entrepreneurial Research Center since April 2000 and as academic director-general and co-founded of Trinity Innovation since December 2003, a consulting company in China. He has undertaken many important research programs such as the “Theoretical Study on Chinese Technology Innovation.” He served as a director of and as an advisor to many companies. Professor Jiang’s main research fields include risk investment and entrepreneurial management, corporate governance and cyber economy. The major courses he has instructed include Entrepreneurial Management, Technology and Institution Innovation, and Analysis of Institutional Economics.Fees

~~Ms.~~During ~~Gong Xiaoyan was selected to serve on~~ the ~~Board~~year ~~based~~ended onMarch ~~her professional standing in the industry and her civic and community involvement~~31, ~~having served as Chairman of Tianjin Bicycle Industrial Association~~2012, athere were ~~non-governmental~~no ~~organization~~fees inbilled ~~China~~for ~~since~~products ~~June 2006~~ and ~~having~~services ~~been~~provided ~~honored~~by ~~with~~ the ~~titles~~current ~~“China~~principal ~~Top-Hundred~~accountant, ~~Female Entrepreneurs~~Mazars,” ~~“Most~~other ~~Influential~~than ~~Enterprises~~those ~~Leader~~set ~~of China” and “Tianjin Female Entrepreneur” issued by Tianjin Municipal Government~~forth above.

~~Mr.~~- ~~Yun~~61 Hon Man was selected to serve on the Board based on his experience in finance and accounting as a “financial expert” as defined under the rules of the SEC and for his US public company experience as an officer, director and audit committee chairman, having served as a director of CH Lighting International Corporation (OTCBB: CHHN) since July 28, 2008, as a Director of Xinde Technology Company (OTCBB: WTFS) since January 2010 and having previously served as Chief Operating Officer of China INSOnline Corp. (NASDAQ: CHIO) from January 2008 through April 2010. Mr. Yun is a Chartered Accountant having memberships with the Institute of Chartered Accountants in England and Wales. He is also a Fellow Member of the Chartered Association of Certified Accountants and a member of the Hong Kong Institute of Certified Public Accountants. He was a member of Association of International Accountants, the Society of Registered Financial Planners, the Institute of Financial Accountants and the Institute of Crisis and Risk Management. Mr. Yun received his MBA at the University of Western Sydney in 2007.-

~~Board~~Audit ~~Leadership~~Committee ~~Structure~~Pre-Approval

The ~~Board~~policy ~~believes~~of ~~that~~ the ~~Company’s~~Audit ~~Chief~~Committee ~~Executive Officer~~ is ~~best~~to ~~situated~~pre-approve all toaudit ~~serve~~and asnon-audit ~~Chairman~~services ofprovided by the ~~Board~~independent ~~because~~accountants. heThese isservices ~~ultimately~~may ~~responsible~~include ~~for~~audit ~~the~~services, ~~day~~audit-~~to-day~~related services, ~~operation~~tax offees, ~~the~~and ~~Company~~other ~~and~~services. Pre-approval is ~~the~~generally ~~director~~provided ~~most~~for ~~familiar~~up ~~with~~to ~~the~~one ~~Company’s~~year ~~business~~ and ~~industry~~any ~~and~~pre-approval ~~most~~is ~~capable~~detailed as to the particular service or category of ~~effectively~~services. ~~identifying~~The ~~strategic~~Audit ~~priorities~~Committee ~~and~~has ~~leading~~delegated ~~the~~pre-approval ~~discussion~~authority ~~and~~to ~~execution~~certain committee members when expedition of ~~strategy~~services is necessary. ~~Independent~~The ~~directors~~independent accountants and management ~~have~~are ~~different~~required ~~perspectives~~to ~~and~~periodically ~~roles~~report to inthe ~~strategy~~full ~~development.~~Audit ~~Our~~Committee regarding the extent of services provided by the independent ~~directors~~accountants ~~bring~~in ~~experience,~~accordance ~~oversight~~with this pre-approval delegation, and ~~expertise~~the ~~from~~fees ~~outside~~for the ~~Company~~services ~~and~~performed ~~industry,~~to ~~while~~date. All of the ~~Chief~~services ~~Executive~~described ~~Officer~~above ~~brings~~in ~~company-specific~~this ~~experience~~Item ~~and~~14 ~~expertise.~~were ~~The~~approved in advance by the Board ~~believes~~of ~~that~~Directors during the ~~combined~~fiscal ~~role~~year ofended ~~Chairman~~March ~~and~~31, ~~Chief~~2012, ~~Executive~~which, ~~Officer~~at ~~promotes~~the ~~strategy~~time ~~development~~of ~~and~~such ~~execution~~approval, ~~and~~performed all ~~facilitates~~of ~~information~~the ~~flow~~functions ~~between~~of ~~management~~an ~~and~~Audit Committee in light of the ~~Board,~~subsequent ~~which~~formal ~~are~~creation ~~essential~~of tothe ~~effective~~Company’s ~~governance~~existing Audit Committee and adoption of the Audit Committee’s Charter in January 2009.

51- 62 -

~~One~~PART of the key responsibilities of the Board is to develop strategic direction and hold management accountable for the execution of strategy once it is developed. The Board believes the combined role of Chairman and Chief Executive Officer, together

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