Top Green Energy Technologies Inc---Final · Top Green Energy Technologies, Inc”TGE” is an ......

Top Green Energy Technologies, Inc.”TGE” Polysilicon Investment Plan

Confidential

APM&F Archbank Projcet Management & Financing Corp. “APM&F”

Headquarter No. 8-4, No 9,Section 2, Roosevelt Rd, Taipei, Taiwan HK Office：Flat D,4/F.Block 1, Sunshine Grove,

6, Tak Yi St., Shatin,N.T.H.K Tel:886-2-2396-7238 Fax:886-2-2396-7282

http://www.archbank.com.tw

TGE Polysilicon Investment Plan 1

Content 1. Executive Summary -2-5 1.1 Strong Market Demand 2 1.2 High Entry Barriers Creating Short Supply - 2 1.3 TGE Polysilicon Investment Plan -2-3 1.4 TGE Profits Growth 3 1.5 Development Capital and The Offering 4 1.6 Investment Return 4-5 2. Industry and Products -5-6 2.1 PV Industry - --5-6 2.2 Product - 6 2.3 Product Plan - 6 3. Manufacturing and Methods 7-10 3.1 Core Technologies 7 3.2 Manufacturing methods and steps 7 3.3 Technical Origin, Execution Time Frame -8-10 4. Facilities Construction Plan -- - 10-11 4.1 -Plant location, lot size, design abstracts -* 10 4.2 -The chart below is an abstract of the facilities layout - * 10 4.3 -Technical origins for facilities construction *-* 11 4.4 -Electricity Use and Pollution Prevention * 11 5. Price and Cost Analysis * 11 5.1 -Cost Analysis 11 5.2 –Capital Expenditure 11 6. Marketing Plan 11-15 6.1- Global demand for solar materials -11-12 6.2 -Projected Global Supply of Solar Materials 12 6.3 -Market Data -13 6.4 -Target Market,Characteristics,Trends, and Opportunities for TGE’s polysilicon13 6.5 -Product Marketing Strategies -13-14 7. Management Team -- -14 8. Financial Plan -14-19 8.1 -Source of Capital 16 8.2 -Use of Capital -16 8.3 -Financial situation the prior 3 years and the projections for the next 5 years 16-19 Note 1 20 Note 2 21


Top Green Energy Technologies, Inc.”TGE” Polysilicon Investment Plan

1. Executive Summary

1.1 Strong Market Demand

With developed countries around the world increasing renewable energy and governmental subsidies for developments in solar technologies, the need for solar energy continues to increase, and indirectly facilitated a growth in the need for high purity polysilicon, with the demand greatly outnumbering existing supplies. The polysilicon production capacity is hard to meet market demand due to 1). a 3000 metric ton polysilicon production facility requires over 300 million USD of capital investment at the onset. 2). two to three years of construction time before mass production may begin. 3). technology entry barriers on managing polysilicon chemical plant. 4). continue market growth at 40% per annual from year 2005 to 2011, and years thereafter. 1.2 High Entry Barriers Creating Short Supply

Three technical issues place high barriers for new entrants for this industry. The first is the high capital requirements, the second is the high level of chemical engineering requirements, and the third is the proper detoxification techniques required to deal with the harmful gases that are produced during the manufacturing process. 1.3 TGE Polysilicon Investment Plan

Top Green Energy Technologies, Inc”TGE” is an intergrated solar power industrial group with competitive advantages. The solar power industrial group includes Powercom Corp (3043: TSE). and Top Green Energy Technologies, Inc. Powercom Corporation has over 2600 employees globally, and manufactures solar inverters, photo-voltaic modules, and TGE manufactures solar cells and due to the shortage in polysilicon materials of solar cell, TGE will enter into the production of solar grade polysilicon materials. TGE will apply Modified Siemens Method with a turn key solutions provided by renowned DEI and managed by technological executives from Formosa Plastic Group, the number one industrial group built on chemical technologies in Taiwan. TGE Polysilicon production system is the most reliable and well proven production process which is currently produced by Wacker,


Tokuyama, MEMC, DC Chemical, Hemlock, REC, Mitsubishi, and Sumitomo. This process will purify metallurgical silicon into a high purity polysilicon material of 7N~9N through a series of chemical processes.

TGE has already acquired 125,000 square meter plant site located in the Li-Tse Industrial Park in Yi-Lan County, Taiwan for developing 12,000 tons polysilicon facility.

1.4 TGE Profits Growth

TGE was founded in 2006, and has been profitable since April of 2008. Prior to full capacity of polysilicon production plant, the income and profits source for Top Green Energy in year 2008 and 2009 would be solar cells, with an estimated after-tax income of US$6,048,179 in 2008 and US$19,833,494 in 2009. The polysilicon plant is scheduled for completion on October 23rd, 2009, with full mass-production to begin in the first quarter of 2010. The estimated net income after tax for year 2010, 2011and 2012 is US$ 438,430,635, US$534,209,530, and US$ 832,752,330 epectively. The estimated operating income, net income after tax , and EPS for 2008 to 2012 are listed in the table below.

1US$:30.5NT$

Year 2008 2009 2010 2011 2012

Operating Income (US$) 53,835,600 83,354,700 864,693,600 1,036,847,400 1,708,309,200

Net Income After Tax

(US$) 6,048,179 19,833,494 438,430,635 534,209,530 832,752,330

EPS (US$) EPS (NT$)

0.02

0.6

0.05

2.1

1.12

16.3

1.37

28.7

2.13

37.9

Y

US$000 US$

Y


1.5 Development Capital and the offering TGE Polysilicon production capacity planned in Yi-Lan County, Taiwan is 12,000 tons per year with first phase capacity 1500 Tons/ Year and second phase capacity 1,500 tons/year will be started very soon due to market strong demand. TGE Polysilicon plant is scheduled to start production on October 23rd, 2009.

Total capital investment for first phase 1,500 Tons / Year is NT$ 6 billion and NT$1.5 billion for working capital, total investment for first phase production to be NT$ 7.5 Billion, US$ 245,901,639, which is budgeted at conservative approach. Total capital investment of NT$ 7.5 Billion, US$ 245,901,639 shall be paid back less than one year when TGE polysilicon plant is completed in full production.

To fund capital investment for first phase 1,500 Tons / Year production, TGE

shall increase capital from NT$ 900 Million to NT$2.9 Billion by issuing 200 Million shares of common stock at NT$ 30 per share. The new offering shall raise NT$ 6 Billion first phase 1,500 polysilicon production plant. Committed and capital being wired to TGE from management team related to and retired from Formorsa Plastic Group, China Development and Investment Bank (TSE: 2883), Solartech Energy Corp. ( TSE:3561) and Powercom Corp. ( TSE:3043) has already exceeded NT$ 4.575 Billion, US$ 150 Million. Remaining offering for international investors to subscribe is less than US$50 Million. If subscription from international investors exceeding US$ 50 Million,TGE may select two alternative plans as follow:

-1. Reduce project loan amount of NT$ 1.5 Billion 2. Increase first phase production capacity to 3,000 Tons per year from 1,500

tons per year to meet market demand and create capital value for investors.

1.6 Investment Returns Since TGE announced Polysilicon Plant Investment Plan, solar power wafering companies, PV cell companies, PV module companies have approached TGE to made 5-10 year long term orders. If TGE agreed to sale 1,500 tons polysilicon and accept 5-10 year long term order with committed 5-10 % deposit at US$100/Kg, TGE shall make NT$ 2.9 Billion , EPS: NT$ 9.5, per year continued for ten year profits. Investment return to investor is as follow; EPS NT$ 9.5x P/E 20 ＝ NT$ 190 NT$ 190 / NT 30 ＝ 6.3 → 630% Return on Investment


Current spot market for Polysilicon is US$ 400-500/Kg. If TGE sold production capacity 1,500 tons polysilicon at spot market at US$ 400/Kg, TGE may have NT$ 16.25 Billion, EPS: NT$ 56, total profits. EPS NT$ 56 x P/E 20 ＝ NT$ 1,120 NT$ 1,120 / NT 30 ＝ 37.3 → 3730% Return on Investment Polysilicon plant is scheduled to complete within 2 years. After completion of the Polysilicon plant, the investment return is forecasted to be 6.3 times to 37.3 times of initial investment.

IPO Schedule：

2008 Q3 2009 Q1 2009 Q4 2010 Q1

Because securities firms in Taiwan are interesting to be underwriters and co-managers on TGE listing plan, TGE shall select marketing leading securities companies as underwriters and co-managers. 2. Industry and Products

2.1 PV Industry

Prepare and apply listing in the E

merging Stock

Listing in

Em

erging Stock

Apply listing in

TSE

Listing in T

SE


TGE will produce the 8N-9N graded polysilicon materials required for solar and

semiconductor industries. Currently the global production for high purity polysilicon is about thirty thousand metric tons per annum The industry currently has seven producers providing over 90% of the global supply, with the remaining 10% provided by China and Russia.Hemlock of the US is in the lead with a 23% production share, Tokuyama of Japan and Wacker of Germany are following closely behind at second and third place respectively. REC, MEMC, Mitsubishi, and Sumitomo have a combined market share of 39%.

Polysilicon can be classified based on its purity. Solar grade requires a 6N purity

(99.9999% pure), and semiconductors require a 11N purity (99.999999999% pure). Currently polysilicon materials are highly correlated to the major energy sources such as oil, natural gas, and coal. The price for polysilicon has had a very high correlation to the price of oil since 2004.

2.2 Product

2.2.1 Uses and Specifications for Solar Grade Polysilicon

This project focuses on the production of the most vital raw material for solar power generation system industry, which is the polysilicon material necessary for solar cell production, the Solar Graded Polysilicon.

Currently there are few methods in use to produce Solar Graded Polysilicon, and TGE’s facility will utilize the Modified Siemens manufacturing method, to produce polysilicon materials with 8N to 9N of purity.

2.2.2 Global developments in solar grade polysilicon

Life expectancy: Solar power generation can last up to 100 years, with the average life expectancy of 30 years for photo-voltaic modules.

2.2.3 Competitive advantages of Top Green Energy Selecting the newest method for polysilicon production, possessing a 30 MW

photo-voltaic cell manufacturing capacity to allow TGE to quality test quality of the polysilicon produced, combining Powercom PV modules and inverters with TGE’s solar cells and polysilicon to create a vertically integrated company focused on solar power generation products.


Future developments: The trend for solar grade polysilicon is pointing toward even higher purity materials that can produce solar cell with higher efficiencies unavailable today; and lower the cost of solar cell through reduction in the thickness of the PV modules.

2.3 Product Plan

Top Green Energy will use the polysilicon produced through the improved Siemens method to produce the solar grade polysilicon and serve the need of crystal growth companies, wafering companies and PV cells companies, and then turn into

solar cells necessary for solar power generation plants.

3. Manufacturing and Methods

3.1 Core technologies This project utilizes Trichlorosilane (TCS, HSiCl3) CVD method to produce

polysilicon materials. It’s required raw materials include metallurgical silicon, hydrogen, and chlorine. Its core techniques includes TCS reacting system, TCS purifying system, the CVD reactor, STC-TCS Converter, and vent gas recovering system. 3.2 Manufacturing methods and steps


3.2.1 TCS Reacting System:

TSC reacting system uses the fluidized bed reactor. It works mainly by using metallic silicon as the stuffing agent for the fluidized bed and passing the silicon through a waterless chlorine hydrogen gas to fluidize the metallic silicon to create TCS and its byproducts and impurities such as STC (SiCl4).

3.2.2 TCS Purifying System:

Because the purity requirement for polysilicon is higher than 7N, the TCS produced must be purified prior to entering the CVD reactor to guarantee end product quality. The impurities will enter into the STC-TCS converter and the vent gas recovering system to further convert and reclaim. 3.2.3 CVD Reactor:

The purified TCS enters into the CVD reactor, then injected with hydrogen which induces a chemical reaction to produce polysilicon.

3.2.4 STC-TCS Converter:

During the CVD process, aside from the reaction process producing the desired polysilicon, other chemical reactions also occur. To increase yield, a STC converter is installed and breaks down the STC back into TCS for recovering.

3.2.5 Vent Gas Recovering System:

During gas venting at the different stages, the gas may contain useful particles


such as H2, HCl, and TCS, therefore a vent gas recovering system is installed to increase the yield of the polysilicon. 3.3 Technical Origin, Execution Time Frame

3.3.1 The techniques the company will utilize are transferred from the US, with the company responsible for detailed designs and facilities construction. The time schedule for facilities construction is as listed in the chart below:

TGE Polysilicon Plant Development Timeline

3.3.2 The manufacturing method selected is the most reliable and proven successful process selected by most companies currently producing polysilicon materials. Mass-production can begin as soon as the facility is completed.

3.3.3 Proprietary technical advantages as compared to technical expertise of rivals.

3.3.4 This project is scheduled to complete construction and start production on

October 23rd, 2009, and begin mass-production of 1500 TPA polysilicon by 2010 for downstream users.


Technical Origins for Rivals Producing Polysilicon

Company TOKUYAMA PPP CHISSO DEI CENTROTHERM

/ SOLMIC SIEMENS SOLARVALUE

Country Japan USA Japan USA Germany Germany Germany

Technology Siemens Way Siemens Way zinc-reduction Improving Siemens WayImproving Siemens

Way Siemens Way Metallurgy

Technology Offer

Willing No High Medium High High High Medium

Mass Production Yea Yea In Experiment Yea Yea Yea No

Cost USD 30-40 USD 35-40 USD 20-25 USD 35-40 USD 40-50 No Offer USD 30-35

Engineering

Staffs 20 6 8 25 23 3 5

TurnKey Type NO TCS + CVD NO TCS + CVD TCS + CVD TCS + CVD Metallurgy

TurnKey NO Turnkey Some Turnkey Turnkey Turnkey Some

Background of

Technicians Tokuyama

MEMC,

Wacker Chisso

Mitsubishi, Dow Coring,

Hemlock Wacker Siemens Scholar

Experience Tokuyama NO NO Mitsubishi, Dow Coring,

Hemlock NO NO Offer NO

Progress Project Expansion for

Tokuyama

Asia

Polysilicon

(China)

NO Hoku (USA), TGE POLYPROPYLENE NO NO

4. Facilities Construction Plan

4.1 Plant location, lot size, design abstracts 4.1.1 Location: Li-Tse Industrial Park Phase 2, Yi-Lan, Taiwan 4.1.2 Lot Size: 130,000 squared meters 4.1.3 Land: Leased and purchased according to the 00-66-88 project of the

Industrial Development Bureau of the Ministry of Economic Affairs. 4.1.4 Building: The building will be constructed by TGE.

4.2 The chart below is an abstract of the facilities layout


4.3 Technical origins for facilities construction

The technical team responsible for facilities construction comes from a professional technical company in the US. The team possesses over 30 years of experience regarding know how and Turn Key polysilicon production facilities, and has over 30 years of polysilicon related equipment design.

4.4. Electricity Use and Pollution Prevention The public utility resources required for the facility are: 4.4.1 Fresh water usage per 10,000 square meter is 90 cubic meters. 4.4.2 The waste water volume produced per 10,000 square meter is 65 cubic meters. 4.4.3 The electricity used per 10,000 square meter is 455 kilowatts (includes heating

and machine operations). If the waste water volume exceeds the planned capacity of the planned waste

water pipeline, a special waste water discharge pipeline will be connected to the waste water treatment plant.

5. Price and Cost Analysis 5.1 Cost Analysis

See Note 1 5.2 Capital Expenditure

See Note 2


6. Marketing Plan

Market analysis, market segmentation, market share, marketing strategies

6.1 Global demand for solar materials Projection of Global Demand of Solar Market 2006~2011

Source: photon consulting/solar annual 2007, September 2007

Global Demand for Solar Polysilicon Statistics and Projections

Source：Photon, APRIL 2008

6.2 Projected Global Supply of Solar Materials

Global Supply for Solar Polysilicon Statistics and Projections

Year 2006 2007 2008 2009 2010 2011

GW 2.5 4 6 10.5 15 21

Growth rate

(%) 37% 50% 75% 50% 40%

POLYSILICON ”Demand” (Thousand tons) 000 Tons


Source：Photon, APRIL 2008

6.3 Market Data Solar energy is growing fast in the future above other energies.

6.4 Target Market, Characteristics, Trends, and Opportunities for TGE’s

polysilicon 6.4.1 Target Market:

Focus on mainly in solar grade materials, with ingot, wafer, and cell manufacturers as main selling clients.

POLYSILICON ”Production” (Thousand tons)

000 Tons


6.4.2 Characteristic: Prepare major clients to become long term partners, carefully choosing partners with goals for steady growth to maximize synergies and create greater competitive advantages.

6.4.3 Development Trends: Continued improvements in techniques, work flow, and work management; actively improving product purity, increase yield and lowering cost of production, to prepare for an increasingly diverse marketplace.

6.4.4 Growth Opportunities: Enter into the rapidly evolving industry of alternative energy through the role of the professional materials supplier.

6.5 Product Marketing Strategies

As the solar grade polysilicon market is currently experiencing acute shortages in polysilicon materials, there are a great number of downstream users of polysilicon searching for supplies, with more entrants to the market growing each day helped by the ease of entry and the short construction timelines; while it is very difficult for polysilicon material suppliers to increase production capacity quickly. So in the medium term, the acute shortage of polysilicon materials will persist. However, as viewed from an industry life cycle perspective, in 10 years, the solar industry may enter into a cyclical pattern, thus establishing relationships with long term partners will be the primary marketing strategy.

7. Management Team

Team

Member Department Title

Academic

BackgroundBackground

Experien

ce

Simon,

Chang Chairman Chairman Master

Chairman & CEO of

PowerCom Corp. 20 Years

Sung-Yueh

Shieh CEO CEO Ph.D.

CTO of Nan Ya Plastics Corp.

Director of No. 6 Naphtha

Cracking Project

25 Years

Yu-Jen

Hung Manufacture Director Master

TDI Factory Director of

Formosa Plastics Corp. 22 Years

Shin-Fu Wu QA Director Master ProMoa Technologies、UMC 9 Years

Yung-Cheng

Chao

General

Manager

Office

Director Master

Inotera (Formosa Groups)、

Mechanical Dep. of Industrial

Tech Research Institute

14 Years


8. Financial Plan 8.1 Source of Capital

US$295,081,967 Equity Investment 8.2 Use of Capital

Development of polysilicon project, using 3,000 tons to plan for its uses

8.3 Financial situation for the prior 3 years and the projections for the next 5 years

Exchange rate: 1USD= 30.5 TWD

Chao-An

Lee

Production

Engineering Director Master

Inotera (Formosa Groups)、

ProMoa Technologies 11 Years

Yen-Chang

Chen R&D Director Master UMC 11 Years


8.3.1 Balance Sheet USD

Year 2007/12/31 2008/12/31 2009/12/31 2010/12/31 2011/12/31 2012/12/31 Current Assets 17,227,378 202,030,576 54,185,541 317,070,802 420,032,223 796,057,527Cash and Cash Equivalents 6,945,453 166,193,920 6,557,377 193,077,360 226,241,600 524,101,369Short-Term Investments - - - - - -Notes Receivable 54,214 196,721 295,082 5,901,639 708,197 1,062,295 Accounts Receivable 78,866 8,196,721 13,185,541 51,147,541 92,822,951 137,672,131 Other Receivables 33,967 327,869 377,049 452,459 542,951 557,377 Inventories 4,734,042 6,853,049 19,967,213 52,557,377 82,470,623 121,779,108 Other Prepayments 52,779 98,361 163,934 295,082 327,869 491,803 Prepayments for purchases 4,314,443 19,672,131 13,114,754 13,114,754 16,393,443 9,836,066 Restricted Assests -current 652,459 - - - - - Other Current Assets 361,155 491,803 524,590 524,590 524,590 557,377Long–Term Investments in Stocks - - - - - -Long–Term Investments - - - - - -Fixed Assets 17,579,895 142,890,232 382,573,839 526,440,436 701,841,010 769,072,886Cost: - - - - - -Land - - - - - -Buildings and Structures - - 163,934,426 173,114,754 238,688,525 337,049,180Machinery and Equipment 1,329,339 1,329,339 112,804,749 201,329,339 257,067,044 289,853,929Office Equipment 168,016 168,016 168,016 168,016 168,016 168,016Research Development Equipment 315,883 315,883 315,883 315,883 315,883 315,883Other Facilities 858,328 858,328 858,328 858,328 858,328 858,328Production Eguipment 10,896,718 10,896,718 109,257,374 122,372,128 220,732,784 286,306,554Leasehold Improvements 1,953,263 1,953,263 1,953,263 1,953,263 1,953,263 1,953,263Fixed Assets Cost 15,521,548 15,521,548 389,292,040 500,111,712 719,783,843 916,505,155Accumulated Depreciation (1,101,807) (4,106,725) (7,111,644) (39,736,850) (84,008,407) (147,924,072)Prepayment for equipments 2,137,858 131,147,541 - 65,573,770 65,573,770 -Prepayment for equipments 1,022,297 - - - - -Construction in progress - 327,869 393,443 491,803 491,803 491,803Intangible Assets 6,757 - - - - -TradeMarks 82 - - - - -Patents 6,675 - - - - -OtherAssets 549,963 1,311,475 1,016,393 1,016,393 983,607 983,607Unamortized expenses - - - - - -Guarantee deposits paid 102,152 163,934 196,721 196,721 196,721 196,721Deferred charges - - - - - - Restricted Assests 447,811 1,147,541 819,672 819,672 786,885 786,885Deferred income tax assets - non current - - - - - -Deferred Tax Assests - - - - - -

Total Assets 35,363,993 346,232,284 437,775,773 844,527,631 1,122,856,840 1,566,114,019


8.3.1 Balance Sheet USD Year 2008/12/31 2009/12/31 2010/12/31 2011/12/31 2012/12/31

Current Assets 202,030,576 54,185,541 317,070,802 354,458,453 651,795,232Cash and Cash Equivalents 166,193,920 6,557,377 193,077,360 160,667,830 379,839,074Short-Term Investments - - - - -Notes Receivable 196,721 295,082 5,901,639 708,197 1,062,295Accounts Receivable 8,196,721 13,185,541 51,147,541 92,822,951 137,672,131Other Receivables 327,869 377,049 452,459 542,951 557,377Inventories 6,853,049 19,967,213 52,557,377 82,470,623 121,779,108Other Prepayments 98,361 163,934 295,082 327,869 491,803Prepayments for purchases 19,672,131 13,114,754 13,114,754 16,393,443 9,836,066Restricted Assests -current - - - - -Other Current Assets 491,803 524,590 524,590 524,590 557,377

Long–Term Investments in Stocks - - - - -Long–Term Investments - - - - -Fixed Assets 142,890,232 382,573,839 526,440,436 767,414,781 913,335,181Cost: - - - - - Land - - - - - Buildings and Structures - 163,934,426 173,114,754 238,688,525 369,836,066 Machinery and Equipment 1,329,339 112,804,749 201,329,339 257,067,044 368,542,454 Office Equipment 168,016 168,016 168,016 168,016 168,016 Research Development Equipment 315,883 315,883 315,883 315,883 315,883 Other Facilities 858,328 858,328 858,328 858,328 858,328 Production Eguipment 10,896,718 109,257,374 122,372,128 220,732,784 319,093,440 Leasehold Improvements 1,953,263 1,953,263 1,953,263 1,953,263 1,953,263Fixed Assets Cost 15,521,548 389,292,040 500,111,712 719,783,843 1,060,767,450 Accumulated Depreciation (4,106,725) (7,111,644) (39,736,850) (84,008,407) (147,924,072) prepayment for equipments 131,147,541 - 65,573,770 131,147,541 - Prepayment for equipments - - - - - Construction in progress 327,869 393,443 491,803 491,803 491,803Intangible Assets - - - - - TradeMarks - - - - - Patents - - - - -OtherAssets 1,311,475 1,016,393 1,016,393 983,607 983,607 Unamortized expenses - - - - - Guarantee deposits paid 163,934 196,721 196,721 196,721 196,721 Deferred charges - - - - - Restricted Assests 1,147,541 819,672 819,672 786,885 786,885

Deferred income tax assets - non curre - - - - - Deferred Tax Assests - - - - - Total Assets 346,232,284 437,775,773 844,527,631 1,122,856,840 1,566,114,019

- - - - -Current Liabilities - - - - - Short-term borrowings 16,393,443 86,539,708 - - - Notes payable 202,693 295,082 918,033 1,409,836 1,636,066 Accounts payable 590,164 944,262 34,253,115 40,096,000 35,881,705 Accrued expenses 1,967,213 2,950,820 4,426,230 5,311,475 7,967,213 Other payables - - - - - Advance receipts 147,541 262,295 295,082 327,869 426,230 Income tax payable - - 27,651,607 35,221,311 50,983,607 Deferred income tax liabilities - curren 6,557 6,557 6,557 6,557 6,557 Other current liabilities 13,115 13,115 13,115 13,115 13,115Total Liabilities 19,320,726 91,011,839 67,563,738 82,386,164 96,914,492

- - - - -Stockholders' Equity - - - - - Common stock 127,868,852 127,868,852 135,540,984 203,311,475 304,967,213 Advance receipts for common stock - - - - - Stock dividend to be distributed - - - - - Capital Surplus 199,672,131 199,672,131 199,672,131 199,672,131 199,672,131 Retained Earnings - - - - - Legal reserve - 604,818 2,588,167 46,431,231 99,852,184 Special reserve - - - - - Unappropriated retained earnings (6,677,606) (1,215,361) 731,977 56,846,309 31,955,670 Net Income or Loss For Current Perio 6,048,179 19,833,494 438,430,635 534,209,530 832,752,330 Cumulative translation adjustments - - - - -

- - - - -- - - - -

Total Stockholders' Equity 326,911,557 346,763,934 776,963,894 1,040,470,676 1,469,199,528Liabilities and Stockholders' Equity 346,251,956 437,775,773 844,527,631 1,122,856,840 1,566,114,019

Unrealized gains (losses) onfinancial instruments


8.3.2 Income Statement USD

NOTE：1. 2008-2009 Main Revenue is from Solar Cell

2. 2010~2012 Total Revenue is based on Polysilicon contract U.S.$150/Kg、U.S.$140/Kg、

U.S.$130/Kg。2008-2012 Total Revenue is based on Solar Cell contract U.S.3.4/W、

Year 2006 2007 2008 2009 2010 2011 2012 Operating income 227,992 3,529,797 53,835,600 83,354,700 864,693,600 1,036,847,400 1,708,309,200 Cost of sales 133,894 5,607,814 47,905,938 60,566,016 359,077,056 420,503,220 749,294,700 Unrealized gains on intercompany transactions - - - - - - - Realized gains on intercompany transactions - - - - - - - Gross profit (loss) from operations 94,097 (2,078,017) 5,929,662 22,788,684 505,616,544 616,344,180 959,014,500 Selling expense 109,480 186,732 229,508 261,639 418,623 502,348 602,817 General and administrative expenses 1,300,472 2,271,589 721,311 1,777,049 2,310,164 3,003,213 3,904,177 Research and development expenses 258,188 416,875 393,443 1,416,393 2,124,590 2,549,508 3,059,410 Operating expenses 1,668,140 2,875,197 1,344,262 3,455,082 4,853,377 6,055,069 7,566,404 Operating income (loss) (1,574,042) (4,953,213) 4,585,400 19,333,602 500,763,167 610,289,111 951,448,096 Non-Operating Income Interest income 129,299 58,984 125,685 819,672 163,934 65,574 65,574 Inome from long-term equity investments under the equity metho - - - - - - - Gains on disposal of assets 128 - - (281) (468) - - Dividend income - - - - - - - Gains on physical inventory - - - - - - - Foreign exchange gain 14,031 - 74,685 124,475 207,458 196,721 196,721 Unrealized foreign exchange gain 48,271 - 103,745 172,908 288,180 163,934 163,934 Rent income - - - - - - - Gains on sale of investments - - - - - - - Revenue from sale of scraps - 2,360 6,555 10,924 18,207 6,557 6,557 Other revenue 408 12,606 1,674,238 58,156 96,927 32,787 32,787 Non-operating revenue and gain 192,137 73,950 1,984,908 1,185,855 774,239 465,574 465,574 Non-Operating Expenses Interest expense 18,818 191,387 351,552 721,311 - - - Loss from long-term equity investments under the equity method - - - - - - - Loss on disposal of fixed assets - - - - - - - Loss on physical inventory - - - - - - - Loss on inventory valuation and obsolescence - - - - - - - Revaluation loss on financial assets - - - - - - - Foreign exchange loss 18,926 49,034 191,785 - 532,737 229,508 196,721 Unrealized foreign exchange loss 24,971 113,301 (21,209) (35,348) (58,914) - - Other losses - - - - - - - Non-operating expenses and loss 62,715 353,721 522,128 685,963 473,823 229,508 196,721 Income from continuing operations before income tax (1,444,620) (5,232,985) 6,048,179 19,833,494 501,063,583 610,525,177 951,716,949 Income tax expense (benefit) - - - - 62,632,948 76,315,647 118,964,619Income after tax (1,444,620) (5,232,985) 6,048,179 19,833,494 438,430,635 534,209,530 832,752,330Estimated Capital after raise - - 12,786,885 12,786,885 13,554,098 20,331,148 30,496,721 Earing Per Share (TWD) - - 0.5 1.6 32.3 26.3 27.3 Earing Per Share - - 0.02 0.05 1.06 0.86 0.90Capital after Raise - - 12,786,885 12,786,885 12,786,885 12,786,885 12,786,885 Earing Per Share(TWD) - - 0.5 1.6 34.3 41.8 65.1 Earing Per Share - - 0.02 0.05 1.12 1.37 2.13


U.S.$3.35/W、U.S.$2.8/W、U.S.$2.7/W、U.S.2.6$/W.

3. Equipments use 10 years for depreciation, and buildings use 30 years for depreciation.

4. Poly-Silicon production cost is U.S$39. Considering the electronic cost, production cost

will be adjusted to U.S$42.

5. Capital Stock is based on 12,786,885 shares.


8.3.3 Cash Flow USD Year 2008 2009 2010 2011 2012

CASH FLOWS FROM OPERATING ACTIVITIESNet income(loss) 6,048,179 19,833,494 438,430,635 534,209,530 832,752,330

Adjust:

Depreciation Expenses 3,004,918 3,004,918 32,625,207 44,271,557 63,915,665

Various amortization 6,757 - - - -

Gain on disposal of investments - - - - -

Notes receivable (increase) decrease - - - - -

Accounts receivable (increase) decrease (8,260,363) (5,087,180) (43,568,557) (36,481,967) (45,203,279)

Other receivables (increase) decrease (293,902) (49,180) (75,410) (90,492) (14,426)

Inventory (increase) decrease (2,119,007) (13,114,164) (32,590,164) (29,913,246) (39,308,485)

Prepayments (increase) decrease (45,582) (65,574) (131,148) (32,787) (163,934)

Prepayment for purchases (increase) decrease (15,357,688) 6,557,377 - (3,278,689) 6,557,377

Other current assets (increase) decrease (130,648) (32,787) - - (32,787)

Certificate of cruuent assets (increase) decrease (47,271) 327,869 - 32,787 -

Intangible current assets (increase) decrease - - - - -

Certificate of uncruuent assets (increase) decrease - - - - -

Deferred income tax assets (increase) decrease - - - - -

Prepaid on equipment (increase) decrease - - - - -

Prepaid on construction (increase) decrease - - - - -

Construction in progress (increase) decrease - - - - -

Accounts payable (increase) decrease 202,693 92,389 622,951 491,803 226,230

Accounts pay able (increase) decrease 438,660 354,098 33,308,852 5,842,885 (4,214,295)

Accrued expenses (increase) decrease 1,324,819 983,607 1,475,410 885,246 2,655,738

Accrued taxes payable (increase) decrease - - 27,651,607 7,569,705 15,762,295

Other accrued expenses payable (increase) decrease (1,155,606) - - - -

Sales revenue received in advance (increase) decrease 147,396 114,754 32,787 32,787 98,361

Deferred income tax liabilities (increase) decrease 6,557 - - - -

Other current liabilities (increase) decrease (14,657) - - - -

Net cash flows from operating activities (16,244,742) 12,919,620 457,782,169 523,539,119 833,030,788

CASH FLOWS FROM INVESTING ACTIVITIES

Cash paid to acquire fixed assets (128,315,255) (242,688,525) (176,491,803) (285,245,902) (209,836,066)

NetCashReceivedFromDisposalOfFixedAssets - - - - -

Refundable deposit (increase) decrease (61,782) (32,787) - - -

Patents (increase) decrease - - - - -

Trademarks (increase) decrease - - - - -

Net cash flows from investing activities (128,377,037) (242,721,311) (176,491,803) (285,245,902) (209,836,066)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash received from capital contribution 295,081,967 - - - -

Dividend Paid and Emply's Bonus - 18,883 (8,230,675) (270,702,747) (404,023,478)

Short-term borrowings (increase) decrease 8,788,279 70,146,266 (86,539,708) - -

Net cash flows from financing activities 303,870,247 70,165,148 (94,770,383) (270,702,747) (404,023,478)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALE 159,248,467 (159,636,543) 186,519,983 (32,409,530) 219,171,244

Cash equivalents at beginning of year 6,945,453 166,193,920 6,557,377 193,077,360 160,667,830

Cash equivalents at end of year 166,193,920 6,557,377 193,077,360 160,667,830 379,839,074


Note 1 Polysilicon Cost USD

Note(1): Other raise reasons and uncertain costs

Land Cost: No cost in 2008 and 2009.

Rent will be US$950,819 in 2010 and 2011. However, the rent will get back.

3000Tons capacity needs 950,000 M2 , every M2 for US$0.82 rent.

Rent fees can offset the purchase price

Cell Cost USD

Year 2008 2009 2010 2011 2012

Wafer Cost 43,155,738 53,400,000 230,280,000 223,680,000 409,080,000 Others 4,750,200 7,166,016 65,797,056 70,823,220 151,214,700

Total 47,905,938 60,566,016 296,077,056 294,503,220 560,294,700

Year 2010 2011 2012CostUltility 15 15 15 15Raw Material 4.3 4.3 4.3 4.3HCL 0.8 0.8 0.8 0.8Depreciation & Others(1) 14 14 14 14Human Resource 4.5 4.5 4.5 4.5Others 3.4 3.4 3.4 3.4Total 42 42 42 42

Kilogram 1,500,000 3,000,000 4,500,000 Sell Cost 63,000,000 126,000,000 189,000,000


Note 2 USD

Note: Equipments use 10 years for depreciation, and buildings use 30 years for depreciation.

Year 2008 2009 2010 2011 2012CELL+100 CELL+100

Change in Fixed Assets Land Buildings and Structures 163,934,426 9,180,328 65,573,770 131,147,541 Machinery and Equipment 111,475,410 88,524,590 55,737,705 111,475,410 Office Equipment Research Development Equipment Other Facilities Production Eguipment 98,360,656 13,114,754 98,360,656 98,360,656 Leasehold Improvements

Fixed Assets Cost 373,770,492 110,819,672 219,672,131 340,983,607 Accumulated Depreciation prepayment for equipments 131,147,541 65,573,770 131,147,541 Prepayment for equipments Construction in progressTotal Change in Fixed Assets 131,147,541 373,770,492 176,393,443 350,819,672 340,983,607

Year 2008 2009 2010 2011 2012

Building 278,689 278,689 278,689 278,689 278,689 6,305,170 6,305,170 6,305,170

353,090 353,090 2,522,068

Machinery Equipment 1,901,639 1,901,639 1,901,639 1,901,639 1,901,639 - - - -

12,386,157 12,386,157 12,386,157 9,836,066 9,836,066

6,193,078 Prodution Equipment 824,590 824,590 824,590 824,590 824,590

- - - - 10,928,962 10,928,962 10,928,962

1,457,195 1,457,195 10,928,962

Total 3,004,918 3,004,918 32,625,207 44,271,557 63,915,665

Depreciation

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