DISCONTINUED OPERATION AND CORRESPONDING RESTRUCTURING PLAN

3 Months Ended

Sep. 30, 2013

Notes to Financial Statements

DISCONTINUED OPERATION AND CORRESPONDING RESTRUCTURING PLAN (IN THOUSANDS, EXCEPT EARNINGS PER SHARE AND NUMBER OF SHARES)

The Company’s Indonesia operation and the Indonesia operation’s immediate holding company, which comprise the fabrication services segment, suffered continued operating losses in the past four fiscal years, and the cash flow was minimal for the past four years.  The Company established a restructuring plan to close the fabrication services operation, and in accordance with ASC Topic 205-20, Presentation of Financial Statement Discontinued Operations (“ASC Topic 250-20”), the Company presented the operation results from fabrication services as a discontinued operation, as the Company believed that no continued cash flow would be generated by the discontinued component and that the Company would have no significant continuing involvement in the operations of the discontinued component. In accordance with the restructuring plan, the Company is negotiating with its suppliers to settle the outstanding balance of accounts payable of $447 and is collecting the accounts receivable of $77. The Company’s fabrication operation in Indonesia is in the process of commencing winding down the operations.

In January 2010, the Company established a restructuring plan to close the Testing operation in Shanghai, China.  Based on the restructuring plan and in accordance with ASC Topic 205-20, the Company presented the operation results from Shanghai as a discontinued operation, as the Company believed that no continued cash flow would be generated by the discontinued component (Shanghai subsidiary) and that the Company would have no significant continuing involvement in the operations of the discontinued component.

The discontinued operations in Shanghai and in Indonesia, incurred general and administrative expenses of $4 for the quarter ended September 30, 2013 and incurred general and administrative expenses and selling expenses of $77 for the same period in the last fiscal year. The Company anticipates that it may incur additional costs and expenses at the time of winding down the business of the subsidiary through which the facilities operated.

Loss from discontinued operations for the quarter ended September 30, 2013 and 2012 was as follows:

	For the Quarter Ended September 30,
	2013			2012
Revenue	$	-		$	172
Cost of sales		(3	)		(247	)
Gross loss		(3	)		(75	)
Operating expenses
General and administrative		(4	)		(73	)
Selling		-			(4	)
Impairment		-			-
Total	$	(4	)	$	(77	)
Loss from discontinued operation		(7	)		(152	)
Other charges		(35	)		(79	)
Net loss from discontinued operation	$	(42	)	$	(231	)
Less: net income / (loss) attributable to the non-controlling interest		(19	)		(121	)
Loss from discontinued operations, net of tax		(23	)		(110	)

The Company does not provide a separate cash flow statement for the discontinued operation, as the impact of this discontinued operation was immaterial.