DISCONTINUED OPERATION AND CORRESPONDING RESTRUCTURING PLAN

6 Months Ended

Dec. 31, 2015

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 five fiscal years, and the cash flow was minimal for the past five 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 205-20”), 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’s Indonesia operation is negotiating with its suppliers to settle the outstanding balance of accounts payable of $58 and had no collection for accounts receivable as at December 31, 2015. The Company’s fabrication operation in Indonesia is in the process of 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 Shanghai operation had an outstanding balance of accounts payable of $36 and accounts receivable of $2 as at December 31, 2015.

The discontinued operations in Shanghai and in Indonesia incurred general and administrative expenses of $2 for both the three and six months ended December 31, 2015, and $18 for both the same periods 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 subsidiaries through which the facilities operated.

Income / (loss) from discontinued operations was as follows:

	Three Months Ended						Six Months Ended
	Dec. 31, 2015			Dec. 31, 2014			Dec. 31, 2015			Dec. 31, 2014
	Unaudited			Unaudited			Unaudited			Unaudited
Revenue	$	-		$	-		$	-		$	-
Cost of sales		-			-			-			-
Gross margin		-			-			-			-
Operating expenses:
General and administrative		2			18			2			18
Total		2			18			2			18
Loss from discontinued operations		(2	)		(18	)		(2	)		(18	)
Other income / (expenses)		8			12			(2	)		38
Income / (loss) from discontinued operations	$	6		$	(6	)	$	(4	)	$	20

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