2012.08.06 The Company's Board of Directors approved its 2012 first half results.

Subject: The Company's Board of Directors approved its 2012 first half results.
Date of events:2012/08/06
Contents:
1.Date of occurrence of the event:2012/08/06
2.Name of the company: Motech Industries Inc.
3.Relationship to the Company (please enter "head office" or "affiliate company"):head office
4.Reciprocal shareholding ratios: N/A
5.Cause of occurrence:

The Board of Directors of Motech Industries, Inc.(the “Company” or “Motech”) approved 1H’12 standalone and consolidated financial statements.
(1) 1H’12 Standalone Financial Statements:

Revenue:NTD 5,915 million
Gross Loss:NTD 1,686 million
Operating Loss:NTD 2,110 million
Net Loss:NTD 3,209 million
Earnings per share after Tax:(NTD 7.34)

(2) 1H’12 Consolidated Financial Statements

Revenue:NTD 8,348 million
Gross Loss:NTD 1,785 million
Operating Loss:NTD 2,462 million
Net Loss:NTD 3,225 million 
Earnings per share after Tax:(NTD 7.34)

On a consolidated basis, the Company recorded a gross loss of NTD 1,785 million (gross margin of -21%), an operating loss of NTD 2,462 million (operating margin of -29%) and a net loss of USD 3,225 million (net margin of -38%) for 1H’12. Excluding one-time items of NTD 1,885 million (see below), gross loss, operating loss and net loss on a consolidated basis were NTD 897 million (gross margin of -11%), NTD 1,574 million (operating margin of -19%) and NTD 1,340 million (net margin of -16%), respectively.

One-time items:
A. Losses due to write-offs of exposures to AE Polysilicon Corporation (“AEP”): NTD 1,492 million

The Board of Directors of AEP adopted a resolution to proceed with a safe-shutdown of its manufacturing facilities and conduct an asset sale to repay debts. The asset sale proposal was subsequently approved by the shareholders and creditors of AEP in June 2012. The termination of polysilicon production and the asset sale undertaken by AEP no longer constituted a going concern. Based on the impairment assessment and AEP financial status, Motech had subsequently written off all debt and equity investments. Impacts to Motech’s 1H’12 financial statements due to the write-offs of exposures to AEP and impairment loss on prepayment totaled NTD 1,492 million.

B. Loss on write-down of inventory: NTD 223 million   

Certain products made by Motech’s Power Instrument Center did
not meet customer requirements. The Company agreed to product
returns and recognized losses on write-down and scrap of
inventory totaling NTD 223 million during 1H’12. 

C. Termination of long-term supply agreement: NTD 170 million

Due to the fluctuations in solar product prices, certain long
term supply agreements are no longer consistent with current
market conditions. To eliminate operational uncertainty and
reduce future input costs, the Company terminated a long-term
supply agreement with a wafer supplier in June 2012 and
recognized a loss of NTD 33 million during 1H’12.
Additionally, the Company recognized a loss of NTD 137 million
from other long-term supply agreements. Aggregate loss on
prepayments recognized during 1H’12 totaled NTD 170 million.

6.Countermeasures:N/A
7.Any other matters that need to be specified: N/A