10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2005

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ___ to ___

Commission File Number 1-14523

TRIO-TECH INTERNATIONAL

(Exact name of Registrant as specified in its Charter)

California	95-2086631
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
14731 Califa Street Van Nuys, California (Address of principle executive offices)	91411 (Zip Code)

Registrant’s Telephone Number, Including Area Code: 818-787-7000

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed with the Commission by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

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

Number of shares of common stock outstanding as of November 2, 2005 is 3,035,242.

TRIO-TECH INTERNATIONAL

INDEX TO CONSOLIDATED FINANCIAL INFORMATION, OTHER INFORMATION AND SIGNATURE

		Page
Part I.	Financial Information
Item 1.	Financial Statements
	Consolidated Balance Sheets as of September 30, 2005 (Unaudited) and June 30, 2005		3
	Consolidated Statements of Operations and Comprehensive Income (loss) for the Three Months Ended September 30, 2005 (Unaudited) and September 30, 2004 (Unaudited)		4
	Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2005 (Unaudited) and September 30, 2004 (Unaudited)		5
	Notes to Consolidated Financial Statements (Unaudited)		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		23
Item 4.	Controls and Procedures		24
Part II.	Other Information
Item 1.	Legal Proceedings		25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		25
Item 3.	Defaults upon Senior Securities		25
Item 4.	Submission of Matters to a Vote of Security Holders		25
Item 5.	Other Information		25
Item 6.	Exhibits		25
Signatures			26
Exhibit 10.1
Exhibit 10.2
Exhibit 31.1
Exhibit 31.2
Exhibit 32

2

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS (IN THOUSANDS EXCEPT NUMBER OF SHARES)

	Sep 30,			June 30,
ASSETS	2005			2005
	(Unaudited)
CURRENT ASSETS:
Cash	$	1,595		$	1,439
Restricted cash held in escrow		1,067			—
Short-term deposits		3,494			3,211
Trade accounts receivable, less allowance for doubtful accounts of $160 and $147, respectively		3,506			4,178
Other receivables		232			142
Inventories, less provision for obsolete inventory of $428 respectively		2,215			1,584
Prepaid expenses and other current assets		204			91
Assets held for sale		261			—
Total current assets		12,574			10,645
PROPERTY, PLANT AND EQUIPMENT, Net		6,681			7,176
OTHER INTANGIBLE ASSETS, Net		364			386
OTHER ASSETS		230			138
TOTAL ASSETS	$	19,849		$	18,345
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Lines of credit	$	285		$	336
Accounts payable		1,710			1,681
Accrued expenses		2,950			2,598
Accrued restructuring costs		223			—
Advances from buyer		1,067			—
Income tax payable		195			168
Current portion of notes payable		728			655
Current portion of capital leases		73			123
Current portion of deferred tax liabilities		274			275
Total current liabilities		7,505			5,836
NOTES PAYABLE, net of current portion		590			634
CAPITAL LEASES, net of current portion		94			110
DEFERRED TAX LIABILITIES		406			407
TOTAL LIABILITIES		8,595			6,987
MINORITY INTEREST		2,052			2,061
SHAREHOLDERS’ EQUITY:
Common stock; no par value, 15,000,000 shares authorized;
2,996,992 shares issued and outstanding as at Sep. 30, 2005, and
2,976,042 shares issued and outstanding as at Jun. 30, 2005, respectively		9,618			9,554
Paid-in capital		318			284
Accumulated deficit		(512	)		(298	)
Accumulated other comprehensive loss-translation adjustments		(222	)		(243	)
Total shareholders’ equity		9,202			9,297
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	19,849		$	18,345

See notes to condensed consolidated financial statements.

3

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND SEPTEMBER 30, 2004 (UNAUDITED, IN THOUSANDS, EXCEPT (LOSS) EARNINGS PER SHARE)

	Three Months Ended
	Sep. 30,			Sep. 30,
	2005			2004
	(Unaudited)			(Unaudited)
NET SALES
- PRODUCT SALES	$	2,160		$	4,957
- SERVICES		3,545			2,786
		5,705			7,743
COST OF SALES
- COST OF GOODS SOLD		1,695			4,066
- COSTS OF SERVICES RENDERED		2,186			1,770
		3,881			5,836
GROSS PROFIT		1,824			1,907
OPERATING EXPENSES:
General and administrative		1,289			1,257
Selling		285			269
Research and development		17			33
Impairment Loss		15			1
Total		1,606			1,560
INCOME FROM OPERATIONS		218			347
OTHER INCOME (EXPENSE)
Interest expense		(35	)		(32	)
Other income		30			55
Total		(5	)		23
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		213			370
INCOME TAXES		73			111
INCOME FROM CONTINUING OPERATIONS		140			259
DISCONTINUED OPERATION (NOTE 7)
LOSS FROM DISCONTINUED OPERATION		(378	)		(9	)
(LOSS) INCOME BEFORE MINORITY INTEREST		(238	)		250
MINORITY INTEREST		24			(13	)
NET (LOSS) INCOME	$	(214	)	$	237
BASIC (LOSS) EARNINGS PER SHARE
Basic earnings per share from Continuing operations	$	0.05		$	0.08
Basic loss per share from Discontinued operation		(0.13	)		0.00
Basic (loss) earnings per share from Net (loss) income	$	(0.08	)	$	0.08
DILUTED (LOSS) EARNINGS PER SHARE
Diluted earnings per share from Continuing operations	$	0.05		$	0.08
Diluted loss per share from Discontinued operation		(0.13	)		0.00
Diluted (loss) earnings per share from Net (loss) income	$	(0.08	)	$	0.08
WEIGHTED AVERAGE NUMBER OF COMMON AND POTENTIAL COMMON SHARES OUTSTANDING
Basic		2,994			2,965
Diluted		3,043			3,009
COMPREHENSIVE (LOSS) INCOME :
Net (loss) income	$	(214	)	$	237
Foreign currency translation adjustment		21			38
COMPREHENSIVE (LOSS) INCOME	$	(193	)		275

See notes to condensed consolidated financial statements.

4

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND SEPTEMBER 30, 2004 (UNAUDITED, IN THOUSANDS)

	Three Months Ended
	Sep 30,			Sep 30,
	2005			2004
	(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(214	)	$	237
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		392			337
Bad debt expense, net		18			11
Inventory provision		—			1
Interest income on short-term deposits		(15	)		(13	)
Impairment loss		15			1
Stock compensation		34			—
Restructuring costs		223			—
Deferred tax (benefit) provision		(2	)		27
Minority interest		(24	)		13
Changes in operating assets and liabilities:
Accounts receivable, net		654			(785	)
Other receivables		(90	)		(236	)
Other assets		(92	)		(482	)
Inventories		(631	)		(370	)
Prepaid expenses and other current assets		(113	)		(61	)
Accounts payable and accrued expenses		381			1,085
Income tax payable		27			38
Net cash provided by (used in) operating activities		563			(197	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturing short-term deposits		382			1,304
Investments in short-term deposits		(650	)		(79	)
Capital expenditures		(131	)		(457	)
Acquisition of business in Malaysia		—			(731	)
Proceeds from sale of property and equipment		—			168
Net cash (used in) provided by investing activities		(399	)		205
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments and borrowings on lines of credit		(51	)		—
Principal payments of debt and capital leases		(236	)		(208	)
Proceeds from long-term debt		199			285
Cash received from stock options exercised		64			—
Net cash (used in) provided by financing activities		(24	)		77
EFFECT OF EXCHANGE RATE CHANGES ON CASH		16			(8	)
NET INCREASE IN CASH		156			77
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		1,439			1,357
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	1,595		$	1,434
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest	$	37		$	35
Income taxes	$	45		$	57
NON-CASH OPERATING ACTIVITIES
- Assets held for sale	$	(261	)	$	—
- Carrying value of property reclassified from PPE	$	261		$	—
- Advances from buyer	$	1,067		$	—
- Restricted cash held in escrow	$	(1,067	)	$	—

See notes to condensed consolidated financial statements.

5

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AND NUMBER OF SHARES)

1.

ORGANIZATION AND BASIS OF PRESENTATION

Trio-Tech International (“the Company” or “TTI” hereafter) was incorporated in 1958 under the laws of the State of California. TTI provides third-party semiconductor testing and burn-in services primarily through its laboratories in Southeast Asia; in addition, TTI operates test facilities in the United States. The Company also designs, develops, manufactures and markets a broad range of equipment and systems used in the manufacturing and testing of semiconductor devices and electronic components. TTI conducts business in three industry segments: Testing Services, Manufacturing and Distribution. TTI has subsidiaries operating in the U.S., Singapore, Malaysia, Thailand and China as follows:

	Ownership			Location
Express Test Corporation		100	%	Van Nuys, California
Trio-Tech Reliability Services		100	%	Van Nuys, California
KTS Incorporated, dba Universal Systems		100	%	Van Nuys, California
European Electronic Test Centre		100	%	Dublin, Ireland
Trio-Tech International Pte. Ltd.		100	%	Singapore
Universal (Far East) Pte. Ltd.		100	%	Singapore
Trio-Tech Thailand		100	%	Bangkok, Thailand
Trio-Tech Bangkok		100	%	Bangkok, Thailand
Trio-Tech Malaysia		55	%	Penang and Selangor, Malaysia
Trio-Tech Kuala Lumpur — 100% owned by Trio-Tech Malaysia		55	%	Selangor, Malaysia
Prestal Enterprise Sdn. Bhd.		76	%	Selangor, Malaysia
Trio-Tech (Suzhou) Co. Ltd.		100	%	Suzhou, China

	The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. All significant inter-company accounts and transactions have been eliminated in consolidation. The unaudited consolidated financial statements are presented in U.S. dollars. Accordingly, the accompanying financial statements do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the three months ended September 30, 2005 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2006. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report for the fiscal year ended June 30, 2005.
2.	INVENTORIES
	Inventories consist of the following:

	Sep. 30,			June 30,
	2005			2005
	(Unaudited)
Raw materials	$	850		$	842
Work in progress		1,277			608
Finished goods		516			562
Less: provision for obsolete inventory		(428	)		(428	)
	$	2,215		$	1,584

6

3.	STOCK OPTIONS
	As of September 30, 2005, the Company has two share-based compensation plans, which are described below. The Company historically adopted the APB No. 25 approach — intrinsic value method — and presented the pro forma information in line with the requirements of SFAS No. 123. Historically, the stock based compensation cost has been charged against income, which was $0, $0, and $14 (related to directors option plan) for the fiscal years ended June 30, 2005, 2004 and 2003, respectively. There was no income tax benefit related to share-based compensation for the fiscal years ended June 30, 2005, 2004, and 2003, respectively, as the Company did not claim a deduction for corporate income tax purpose.
	Effective July 1, 2005, the Company adopted the fair value recognition provisions of Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 123R, “Share-Based Payments,” using the modified prospective application method. Under this transition method, compensation cost recognized in the quarter ended September 30, 2005 includes the applicable amounts of: (a) compensation cost of all share-based payments granted prior to, but not yet vested as of, July 1, 2005 (based on the grant-date fair value estimated in accordance with the original provisions of SFAS No. 123) and (b) compensation cost for all share-based payments granted subsequent to July 1, 2005 (based on the grant-date fair value estimated in accordance with the new provisions of SFAS No. 123R). Amortization of unrecognized fair value of the non-vested options as of July 1, 2005 was $1 for the three months ended September 30, 2005. The fair value of stock options granted to directors and one officer during the three months was $33 based on the fair value of $1.08 per share.
	Assumptions
	The disclosure of the above fair value for these awards was estimated using the Black-Scholes option pricing model with the assumptions listed below:

	Quarter Ended			Years Ended
	September 30, 2005			June 30, 2005			June 30, 2004			June 30, 2003
Expected Volatility		49.50	%		33.5 - 36.8	%		41.9	%		37.2	%
Weighted average volatility		49.50	%		33.9	%		41.9	%		37.2	%
Risk free interest rate		3.71	%		2.89 - 3.27	%		2.76	%		2.27 - 2.93	%
Expected terms (years)		2.00			2.00			2.00			2.00

The expected volatilities are based on the historical volatility of the Company’s stock. The observation is made on a weekly basis. The observation period covered is consistent with the expected terms of options. The expected terms of stock options are based on the average vesting period on a basis consistent with the historical experience of the similar option grants. The risk-free rate is consistent with the expected terms of stock option and based on the U.S. Treasury yield curve in effect at the time of grant.

1998 Stock Option Plan

The Company’s 1998 Stock Option Plan (the “1998 Plan”), which is shareholder-approved, permits the grant of stock options to its employees of up to 300,000 shares of common stock. The Company believes that such awards better align the interests of its employees with those of its shareholders. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant. These options should be used to award the employees who have provided continuous service to the Company for five years. These options have a five-year contractual life term. Options awards vest over four periods; the first 25% should generally vest on the grant date, and the next three 25%, respectively, should vest at each anniversary of the grant date. The share-based compensation will be amortized based on accelerated method over the four periods. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the Plan).

7

A summary of option activities under the 1998 Plan during the three months of fiscal 2006 ended September 30, 2005 is presented as follows:

						Weighted - Average
				Weighted- Average		Remaining
				Exercise		Contractual		Aggregate Intrinsic
Stock Options	Shares			Price		Term		Value
Outstanding at July 1, 2005		165,000		$	3.44
Granted		—			—
Exercised		(20,950	)		3.07
Expired		(22,000	)		5.40
Outstanding at September 30, 2005		122,050		$	3.15		2.00	$	141,462
Exercisable at September 30, 2005		101,050		$	3.10		2.00	$	121,042

Cash received from options exercised under the three months ended September 30, 2005 was approximately $64. There were no options granted during the three months ended September 30, 2005 under the 1998 Stock Option Plan.

A summary of the status of the Company’s non-vested stock options during the three months ended September 30, 2005 is presented below:

				Weighted-Average
				Grant-Date
Non-vested Options	Shares			Fair Value
Non-vested at July 1, 2005		34,750		$	0.86
Granted		—			—
Vested		(13,750	)		0.74
Forfeited or expired		—			—
Non-vested at September 30, 2005		21,000		$	0.94

As of September 30, 2005, there was approximately $20 of accumulated unrecognized stock compensation based on fair value on the grant date related to non-vested options granted under the 1998 Plan. That cost was expected to be recognized during the weighted average period of 2.5 years

Directors Stock Option Plan

The Directors Stock Option Plan (the “Directors Plan”), which was shareholder-approved in 1998, permits the grant of stock options to its duly elected non-employee Directors and one of the corporate officers of the Company (if he or she is also a director of the Company) of up to 300,000 shares of common stock. The Company believes that such awards better align the interests of its directors with those of its shareholders. Option awards are originally granted with an exercise price equal to 85% of the fair market price of the Company’s stock at the grant date. Subsequent to July 1, 2003, the Board approved and granted options to purchase the Company’s common stock at a price equal to 100% of the fair market value of the underlying shares on the grant date. These options will award the directors with continuous service over five years and have five-year contractual terms. Options awards are exercisable immediately as of the grant date.

A summary of the activities under the Directors Plan during the three months ended September 30, 2005 is presented below:

8

						Weighted - Average
				Weighted- Average		Remaining
				Exercise		Contractual		Aggregate Intrinsic
Stock Options	Shares			Price		Term		Value
Outstanding at July 1, 2005		137,000		$	3.63
Granted		30,000			3.75
Exercised		—			—
Expired		(32,000	)		5.37
Outstanding at September 30, 2005		135,000		$	3.24		2.00	$	146,200
Exercisable at September 30, 2005		135,000		$	3.24		2.00	$	146,200

The following table illustrates the pro forma effect on net (loss) income and earnings (loss) per share as if the Company had applied the fair value recognition provision of SFAS No. 123 to stock-based employee compensation for each period presented:

	Three Months Ended
	Sep. 30,
	2004
	(Unaudited)
Net income : as reported	$	237
Add: stock based employee compensation included in reported income		—
Deduct: total stock based employee compensation expense determined under fair value method for all awards		(8	)
Pro forma net income	$	229
Earnings per share — basic As reported	$	0.08
Pro forma	$	0.08
Earnings per share — diluted As reported	$	0.08
Pro forma	$	0.08

4.	EARNINGS PER SHARE
	The Company adopted Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per Share (“EPS”). Basic EPS are computed by dividing net income available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common             shares outstanding during a period. In computing diluted EPS, the average price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options and warrants.
	Stock options to purchase 257,050 shares at exercise prices ranging from $2.25 to $4.50 per share were outstanding as of September 30, 2005. The following options were excluded from the computation of diluted EPS because their effect would have been anti-dilutive.

Type	Shares		Exercise Price		Expiration
Options		4,500	$	4.50	December 6, 2009
Options		35,500	$	4.40	July 1, 2009

Stock options to purchase 391,000 shares at prices ranging from $2.25 to $6.00 per share were outstanding as of September 30, 2004. 150,500 options were excluded in the computation of diluted EPS because the exercise price was greater than the average market price of the common shares and therefore were anti-dilutive.

9

The following table is a reconciliation of the weighted average shares used in the computation of basic and diluted EPS for the years presented herein:

	Three Months Ended
	Sep. 30,			Sep. 30,
	2005			2004
	(Unaudited)			(Unaudited)
Income from continuing operations	$	140		$	259
Minority interest		24			(13	)
Net income from continuing operations used to
compute basic and diluted (loss) earnings per share	$	164		$	246
Loss from discontinued operation	$	(378	)	$	(9	)
Net income (loss) attribute to common shares	$	(214	)	$	237
Basic (Loss) Earnings Per Share
Basic earnings per share from Continuing operations	$	0.05		$	0.08
Basic loss per share from Discontinued operation		(0.13	)		—
Basic (loss) earnings per share from Net loss (income)	$	(0.08	)	$	0.08
Diluted (Loss) Earnings Per Share
Diluted earnings per share from Continuing operations	$	0.05		$	0.08
Diluted loss per share from Discontinued operation		(0.13	)		—
Diluted (loss) earnings per share from Net loss (income)	$	(0.08	)	$	0.08
Weighted average number of common shares outstanding — basic		2,994,045			2,964,542
Dilutive effect of stock options		48,670			44,013
Number of shares used to compute earnings per share — diluted		3,042,715			3,008,555

5.	ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
	Accounts receivable are customer obligations due under normal trade terms. We sell our products and services to manufacturers in the semiconductor industry. We perform continuing credit evaluations of our customers’ financial condition, and although we generally do not require collateral, letters of credit may be required from our customers in certain circumstances.
	Senior management reviews accounts receivable on a monthly basis to determine if any receivables will potentially be uncollectible. We include any accounts receivable balances that are determined to be uncollectible in our allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available to us, we believe our allowance for doubtful accounts for the three months ended September 30, 2005 and the twelve months ended June 30, 2005 was adequate. However, actual write-offs might be more or less than the recorded allowance.

	Sep. 30, 2005 (Unaudited)			June 30, 2005
Beginning	$	147		$	165
Additions charged to expenses		33			44
Recovered		(15	)		(62	)
Actual write-offs		(5	)		—
Ending	$	160		$	147

6. WARRANTY ACCRUAL

	Sep. 30, 2005 (Unaudited)		June 30, 2005
Beginning	$	155	$	162
Additions charged to cost and expenses		10		43
Recovered		—		—
Actual write-offs		—		(50	)
Ending	$	165	$	155

10

7.	ASSETS HELD FOR SALE AND CORRESPONDING RESTRUCTURING PLAN
	The Company’s Ireland operation, as a component of the Testing segment, suffered continued operating losses in the past three fiscal years. The revenue for the three months ended September 30, 2005, and 2004 were approximately $77 and $108, and the pre-tax loss was approximately $11 and $9, respectively. In August 2005, the Company established a restructuring plan to close the Testing operation in Dublin, Ireland. This fact was disclosed in the Form 10-K for the fiscal year ended June 30, 2005. Based on the restructuring plan and in accordance with EITF 03-13, the Company presented the operation results from Ireland as a discontinued operation as the Company believes that no continued cash flow will be generated by the disposed component (Ireland subsidiary) and that the Company would have no significant continuing involvement in the operation of the discontinued component. Management of the Company initiated a plan to sell the property located in Dublin in August 2005 and ceased the depreciation of the property in accordance with SFAS No. 144 and decided to ship the relevant machinery and equipment to Singapore. Therefore, the machinery and equipment located in Dublin, Ireland was not included in the assets held for sale. Management of the Company believes that the property should be disclosed as assets held for sale as this property was available for immediate sale in its then present condition subject only to terms that are usual and customary for sales of such property; the sale of the property was probable; and transfer of the property was expected to qualify for recognition as a completed sale within one year.
	In late September 2005, the Company entered into a definite sale and purchase agreement with a buyer through an auction process with a selling price of €8.85 million (equivalent to $10,670) and received a deposit of €885 (equivalent to $1,067) based on the exchange rate as of September 30, 2005 published by the Federal Reserve Statistical Release. The sale was consummated on November 1, 2005. Accordingly, the Company believes that the assets held for sale should be presented as part of current assets. In accordance with SFAS No. 144, the asset held for sale was recorded at historical carrying value of the property ($261), which was lower than its fair value, less the cost to sell. The tax on capital gain in Ireland from disposing this sale property has not yet been determined. However, the payment for capital gain tax will be deducted from the gross proceeds from selling the property when the gain is determined. The disposal gain realized in November 2005 will be presented in the gain from disposal of discontinued operation section in the statement of operations for the second quarter of fiscal 2006.
	During the process of establishing a restructuring plan, management of the Company estimated that the accrued liability for the restructuring would be one-time termination benefits of approximately $330, of which $107 were paid before September 30, 2005. In addition, the Company estimated to incur an additional $95 in closing costs in the future. The restructuring costs were included in the loss from discontinued operations in the statement of operations.
	Consequently, management of the Company believed that the accrued liability for restructuring cost was adequate at September 30, 2005. Management also did not believe that the discontinued Ireland operation would generate any income tax benefit because of the consecutive operating losses in the past three fiscal years in accordance with Ireland tax laws. Management expects to exit Ireland by the end of December 2005.
8.	BUSINESS SEGMENTS
	The Company operates principally in three industry segments, the testing service industry (which performs structural and electronic tests of semiconductor devices), the designing and manufacturing of equipment (which equipment tests the structural integrity of integrated circuits and other products), and the distribution of various products from other manufacturers in Singapore and Southeast Asia. The following net sales were based on customer location rather than subsidiary location.
	The allocation of the cost of equipment, the current year investment in new equipment and depreciation expense have been made on the basis of the primary purpose for which the equipment was acquired.
	All inter-segment sales were sales from the Manufacturing segment to the Testing and Distribution segments. Total inter-segment sales were $30 and $29 for the three months ended September 30, 2005 and 2004, respectively. Corporate assets mainly consisted of cash and prepaid expenses. Corporate expenses mainly consisted of salaries, insurance, professional expenses and directors’ fees.

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The following segment information is unaudited:

Business Segment Information:

	Quarter				Operating					Depr.
	Ended		Net		(Loss)			Total		and		Capital
	Sep. 30,		Sales		income			Assets		Amort.		Expenditures
Manufacturing		2005	$	1,355	$	(175	)	$	2,040	$	23	$	11
		2004		3,978		147			2,349		18		21
Testing Services		2005		3,545		458			16,455		366		120
		2004		2,786		181			15,739		281		269
Distribution		2005		805		(1	)		1,192		3		—
		2004		979		12			1,366		37		167
Corporate and		2005		—		(64	)		162		—		—
unallocated		2004		—		7			64		1		—
Total Company		2005	$	5,705	$	218		$	19,849	$	392	$	131
		2004	$	7,743	$	347		$	19,518	$	337	$	457

Geographic Area Information:

						Europe,									Elimin-
	Quarter					China									ations
	Ended		United			and other									and			Total
	Sep. 30,		States			countries			Singapore		Thailand		Malaysia		Other			Company
Net sales to		2005	$	434		$	328		$	3,791	$	461	$	721	$	(30	)	$	5,705
customers		2004		669			346			3,082		653		3,022		(29	)		7,743
Operating		2005		(18	)		(2	)		230		28		44		(64	)		218
(Loss) income		2004		(28	)		12			162		34		160		7			347
Long-lived		2005		17			40			3,346		852		2,830		(40	)		7,045
Assets		2004		3			365			3,744		860		1,842		(40	)		6,774

9.	IMPAIRMENT LOSS
	During the three months ended September 30, 2005, an impairment loss of approximately $15 was incurred in the Testing segment located in Singapore. The relevant machinery and equipment was not suitable to perform testing services for the high speed microprocessor chips. Consequently, this machinery and equipment was deemed obsolete.

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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The discussions of Trio-Tech International’s (the “Company”) business and activities set forth in this Form 10-Q and in other past and future reports and announcements by the Company may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and assumptions regarding future activities and results of operations of the Company. In light of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the following factors, among others, could cause actual results to differ materially from those reflected in any forward-looking statement made by or on behalf of the Company: market acceptance of Company products and services; changing business conditions or technologies and volatility in the semiconductor industry, which could affect demand for the Company’s products and services; the impact of competition; problems with technology; product development schedules; delivery schedules; changes in military or commercial testing specifications which could affect the market for the Company’s products and services; difficulties in profitably integrating acquired businesses, if any, into the Company; risks associated with conducting business internationally and especially in Southeast Asia, including currency fluctuations and devaluation, currency restrictions, local laws and restrictions and possible social, political and economic instability; and other economic, financial and regulatory factors beyond the Company’s control. The occurrence of a tsunami in Asia and hurricanes in the southern part of North America had an indirect impact on the Company. World-wide oil prices increased after several hurricanes in the first quarter of fiscal 2006, which caused companies to incur higher costs. We believe customers have tightened and will continue to tighten their spending resulting in a decline in the demand for electronic products and semiconductor equipment. We anticipate that this chain effect will hit the Company’s business gradually in the future. See the discussions elsewhere in this Form 10-Q, including under the heading “Certain Risks That May Affect Our Future Results”, for more information. In some cases, you can identify forward-looking statements by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,” “potential,” “believes,” “can impact,” “continue,” or the negative thereof or other comparable terminology.

We undertake no obligation to update forward-looking statements to reflect subsequent events, changed circumstances, or the occurrence of unanticipated events.

Overview

Founded in 1958, Trio-Tech International provides third-party semiconductor testing and burn-in services primarily through its laboratories in Southeast Asia. The Company also designs, manufactures and markets equipment and systems and distributes semiconductor processing and testing equipment manufactured by others. The Company operates in three business segments: Testing Services, Manufacturing and Distribution. The Testing segment is by far the largest of these business segments. It accounted for over 62.14% of our revenue in the first quarter of fiscal 2006, and historically it averages a higher growth rate than the other two business segments, although the semiconductor market is characterized by wide swings in growth rates from year to year.

We own and operate facilities that provide testing services for semiconductor devices and other electronic components to meet the requirements of military, aerospace, industrial and commercial applications. The Company uses its own proprietary equipment for certain burn-in, centrifugal and leak tests, and commercially available equipment for various other environmental tests. The Company conducts the majority of its testing operations in Southeast Asia with facilities in Singapore, Malaysia and Thailand.

The Company’s Ireland operation, as a component of Testing segment, suffered continued operating losses in the past three fiscal years. The revenue for the three months ended September 30, 2005, and 2004 were approximately $77 and $108, and the pre-tax loss was approximately $11 and $9, respectively. In August 2005, the Company established a restructuring plan to close the Testing operation in Dublin, Ireland. This fact was disclosed in the Form 10-K for the fiscal year ended June 30, 2005. Based on the restructuring plan and in accordance with EITF 03-13, the Company presented the operation results from Ireland as a discontinued operation as the Company believes that no continued cash flow would be generated by the disposed component (Ireland subsidiary) and that the Company would have no significant continuing involvement in the operation of the discontinued component. Management of the Company initiated a plan to sell the property located in Dublin in August 2005 and ceased the depreciation of the property in accordance with SFAS No. 144 and decided to ship the relevant machinery and equipment to Singapore. Therefore, the machinery and equipment located in Dublin, Ireland was not included in the assets held for sale. Management of the Company believes that the property should be disclosed as assets held for sale as this property was available for immediate sale in its then present condition subject only to terms that are usual and customary for sales of such property; the sale of the property was probable; and transfer of the property was expected to qualify for recognition as a completed sale within one year.

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In late September 2005, the Company entered into a definite sale and purchase agreement with a buyer through an auction process with a selling price of €8.85 million (equivalent to $10,670) and received a deposit of €885 (equivalent to $1,067) based on the exchange rate as of September 30, 2005 published by the Federal Reserve Statistical Release. The sale was consummated on November 1, 2005. Accordingly, the Company believes that the assets held for sale should be presented as part of current assets. In accordance with SFAS No. 144, the asset held for sale was recorded at historical carrying value of the property which was lower than its fair value, less the cost to sell. The tax on capital gain in Ireland from disposing this sale property has not yet been determined. However, the payment for capital gain tax will be deducted from the gross proceeds from selling the property when the gain is determined. The disposal gain realized in November 2005 will be presented in the gain from disposal of discontinued operation section in the statement of operations for the second quarter of fiscal 2006.

During the process of establishing a restructuring plan, management of the Company estimated that the accrued liability for the restructuring would be one-time termination benefits of approximately $330, of which $107 were paid before September 30, 2005. In addition, the Company estimated to incur an additional $95 in closing costs in the future. The restructuring costs were included in the loss from discontinued operations in the statement of operations.

On June 3, 2005, the Company executed a Letter of Offer to a seller to acquire Seller’s China operation entity which is conducting business in testing semiconductor components. The due diligence work was completed in August 2005 with satisfactory results. In accordance with the Letter of Offer the Company committed to pay $153 to acquire 100% of outstanding share capital of the target company with the corresponding value of assets, mainly including the equipment and machinery to perform testing services and business licenses and excluding cash and bank deposits, accounts receivables, other receivables and all of liabilities of the target company. At September 30, 2005, the Company was in the process of negotiating with the seller on taking over all cash and bank deposits and the estimated purchase price was approximately $370.

Our Manufacturing segment manufactures “Artic Temperature Controlled Wafer Chucks”, which are used for test, characterization and failure analysis of semiconductor wafers, “Wet Process Stations”, which wash and dry wafers at a series of 100 to 300 additional processing steps after the etching or deposition of integrated circuits, and other microelectronic substrates in what is commonly called the “front-end”, or creation of semiconductor circuits. Additionally, we also manufacture centrifuges, leak detectors, HAST (Highly Accelerated Stress Test) systems and “burn-in” systems that are used primarily in the “back-end” of the semiconductor manufacturing process to test finished semiconductor devices and electronic components.
Our Distribution segment operates primarily in Southeast Asia. This segment markets and supports distribution of the Company’s own manufactured equipment in addition to distributing complementary products from other manufacturers that are used by the Company’s customers and other semiconductor and electronics manufacturers. One of the strategic business units also serves as a distributor of electronic components to customers.

Results of operations and business outlook

The following table sets forth our revenue components for the three months ended September 30, 2005 and 2004, respectively.

	Three Months Ended (unaudited)
	Sept. 30,			Sept. 30,
	2005			2004
Net Sales:
Manufacturing		23.76	%		51.38	%
Testing		62.14			35.98
Distribution		14.10			12.64
Total		100.00	%		100.00	%

Testing Segment

Net sales in the Testing segment went up 26.16% from 35.98% of total net sales in the first quarter of fiscal 2005 to 62.14% in the first quarter of fiscal 2006. Volume in the Testing segment varies depending on market demand and customer forecasts. The sales of one of our major customers, an electronics device manufacturer, increased in the first quarter of fiscal 2006 due to the rise in demand for personal computers, notebooks and server chips, combined with greater acceptance of such customer’s products. We anticipate that our customers will require our testing services to perform ‘burn-in’ on chips, which will be used in many other products, such as wireless handsets, automotive applications and wired communications that are currently in demand in the market.

We currently operate four Testing facilities, one in the United States and three in Southeast Asia. These facilities provide customers with a full range of testing services, such as burn-in and product life testing for finished or packaged components. We will be adding capacity in Singapore and are actively evaluating the opportunities to expand our business in China and Malaysia.

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Our facilities require substantial investment to construct and are largely fixed-costs assets once in operation. Because we own most of the testing capacity, a significant portion of our operating costs are fixed. In general, these costs do not decline with reductions in customer demand or our utilization of our testing capacity, and can adversely affect profit margin as a result. Conversely, as product demand rises and factory utilization increases, the fixed costs are spread over the increased output, which should improve profit margins.

Our Testing segment’s strategy is to maintain a minimum workforce in the segment and either recruit foreign workers in Singapore or engage subcontractors to supply labor for the shortfall. This strategy enables the Testing business segment to have the flexibility to meet the customers’ demands. Foreign workers and contract workers made up approximately 60% of our total Testing workforce in the first quarter of fiscal 2006. The Testing operation in Malaysia is still in the stage of catching up to meet the volume of customers. We intend to stabilize the work force and train our operators so as to improve the quality of the work and move towards meeting customers’ specific requirements. However, our customers indicate that they will require ample testing services for their chips volume in the upcoming year.

Manufacturing Segment

Net sales in the Manufacturing segment accounted for 23.76% of overall net sales, a drop of 27.62% from 51.38% in the first quarter of fiscal 2005. Volume for front-end and back-end semiconductor equipment fluctuates according to the demand in the semiconductor industry. According to data in the Worldwide Semiconductor Equipment Market Statistics (SEMS) Report, worldwide semiconductor equipment sales reached $21.7 billion for the first eight months of 2005, or approximately 12% below the first eight months of 2004. Korea and North America continued to exhibit stronger performances over the first eight months of 2005, while Japan, China and Taiwan billings for wafer processing equipment declined by 6.4%, 67.0% and 15.3% respectively, when compared to the same period last year. Semiconductor equipment sales in the North American market seem to be recovering gradually. Semiconductor Equipment and Materials International (SEMI), the global trade association, reported that the book-to-bill ratio in the North American market increased from 0.93 in June 2005 to 1.02 in September 2005.

As Manufacturing costs such as labor and rental expenses in the U.S. are expensive, the Company shifted the Wet Process Station Manufacturing operation from San Jose to Singapore in fiscal 2004, which is currently managed by our existing personnel. In the U.S. we are focusing on marketing used and refurbished equipment, which some of our customers are more willing to purchase since it is less expensive than new equipment.

As part of our Manufacturing segment’s strategy, we outsource a portion of our product manufacturing to outside suppliers (Electrical and Mechanical fab houses), which reduces the amount of capital expenditure required to meet customer demands. By outsourcing, it reduced the fixed costs such as depreciation and rental expense of our Manufacturing segment. As a result, profit margins will fluctuate directly with revenue without the need to cover the fixed costs. Electrical and Mechanical fab houses provided about 30% of our total capacity needs in the first quarter of fiscal 2006.

Distribution Segment

The Distribution segment represented 14.10% of total net sales in the first quarter of fiscal 2006, a slight increase of about 1.46% over 12.64% in the first quarter of fiscal 2005. Product volume for the Distribution segment depends on sales activities such as bookings, queries on products and backlog. Equipment and electronic component sales are very competitive, as the products are prevalent in the market. Thus, “add value” has been a key phrase in the Company’s sales mission for the past 12 months.

Our marketing is mainly focused on Asia as the recovery of equipment sales in the U.S. seems gradual. With Singapore as the manufacturing base for Wet Process Stations, the Singapore Distribution operations market Wet Process Stations mainly to research institutions and local universities, as well as work closely with customers on their specific requirements. Volume for servicing also increased where there was a need for equipment to be tested and integrated before delivery and installation.

The financial information on the measurement of profit or loss and total assets for the three segments as well as geographic areas information can also be found under financial conditions and notes to consolidated financial statements. The working capital requirements of the Company are covered under liquidity and capital resources.

Uncertainties and Remedies

There are several influencing factors which create uncertainties when forecasting performance, such as the ever-changing nature of technology, including specific requirements from the customer, decline in demand for certain types of burn-in devices or equipment, and other similar factors. One of these factors is the highly competitive nature of the semiconductor industry. Another is that some customers are unable to provide a forecast of the products required in the upcoming weeks; hence it is difficult to plan for the resources needed to meet these customers’ requirements due to short lead time and last minute order confirmation. This will normally result in a lower margin for these products, as it is more expensive to purchase materials in a

15

short time frame. However, the Company has taken action to protect itself and has formulated plans for dealing with these unpredictable factors. For example, in order to meet customers’ demands upon short notice the Company maintains higher inventories, but continues to work closely with its customers to avoid stock piling. We continue to cut costs by upgrading some of our existing facilities to cater to the changing requirements of customers and maintaining a lean headcount, while still keeping quality high so as to sell new products at a competitive price. We have also been improving customer service from staff by keeping them up to date on the newest technology and stressing the importance of understanding and meeting the stringent requirements of our customers. Finally, the Company is exploring new markets and products, looking for new customers, and upgrading and improving burn-in technology while at the same time searching for improved testing methods of higher technology chips.

Comparison of First Quarter Ended September 30, 2005 (“Q1 2006”) and September 30, 2004 (“Q1 2005”)

The following table sets forth certain consolidated statements of income data as a percentage of net sales for the first quarters of fiscal 2006 and 2005, respectively:

	Q1 2006			Q1 2005
Net Sales		100.0	%		100.0	%
Cost of Sales		68.0	%		75.4	%
Gross Margin		32.0	%		24.6	%
Operating Expenses
General and administrative		22.6	%		16.2	%
Selling		5.0	%		3.5	%
Research and development		0.3	%		0.4	%
Impairment Loss		0.3	%		0.0	%
Total Operating Expenses		28.2	%		20.1	%
Income from operations		3.8	%		4.5	%

Overall Net Sales

Overall sales decreased by 26.3% from Q1 2005 to Q1 2006, a variable of $2,038. The difference can be attributed to the sudden surge in sales volume of burn-in boards in the Manufacturing segment in Q1 2005 from newly acquired customers in Asia. However, the countries in which these customers are located began implementing localization programs that discourage them from purchasing from overseas vendors, as discussed later. Part of the decrease in sales was offset by an increase in demand for burn-in services in the Testing segment. During June 2005, the U.S. Manufacturing operation delivered a Wet Process Station to a customer and the installation of this machine was finished in August 2005. However, as the customer had not signed the acceptance document as of September 30, 2005, the sale in the amount of $122 was not recognized during the three months ended September 30, 2005. The Company expects to recognize this sale in the second quarter of fiscal 2006.

Geographically, we operate in the U.S., Singapore, Malaysia and Thailand, having closed our Ireland facility in August 2005. Our customers are mainly concentrated in Southeast Asia and they are either semiconductor chip manufacturers or testing facilities that purchase our testing equipment. The decrease in net sales in all regions was consistent with the overall drop in sales. Net sales into and within the Southeast Asia region decreased 26.4%, or $1,785, compared to Q1 2005, attributed mainly to the Manufacturing segment. Net sales into and within the U.S. decreased 35.1%, or $235, in Q1 2006 compared to Q1 2005, primarily as a result of the drop in sales of HAST and Environmental Test Equipment in the U.S. Manufacturing operation, and a decline of sales of Test chambers in the Singapore Testing operation. The impact of the decline in overall sales on net sales into and within China and other countries was minimal.

Overall Gross Margin

Overall gross margin increased from Q1 2005 to Q1 2006 by 7.4%. The change in product mix was responsible for this gain in sales due to increased sales of higher margin burn-in services, which offset the decrease in sales of lower margin burn-in boards. With the higher gross profit resulting from the Testing segment, the impact of the sharp decline in Manufacturing segment sales was less adverse. In terms of dollar value, the overall gross margin declined from $1,907 in Q1 2005 to $1,824 in Q1 2006, a drop of $83, as a result of the dip in overall sales.

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Income from operations

Income from operations decreased $129, from $347 in Q1 2005 to $218 in Q1 2006, which was consistent with the decline in overall sales. The Manufacturing segment suffered a $175 operating loss in Q1 2006 as compared to an income in Q1 2005 due to the sharp decline in burn-in board sales, which will be discussed later. A significant portion of operating costs was fixed, as the Company was already operating with a lean headcount. In general, these costs do not decline with reductions in customer demand, hence the fixed costs adversely affected the operating income results.

Operating Expenses

The operating expenses for the first quarters of 2006 and 2005 were as follow:

(In Thousands, unaudited)	Q1 2006		Q1 2005
General and administrative	$	1,289	$	1,257
Selling	$	285	$	269
Research and development	$	17	$	33
Impairment Loss	$	15	$	1
Total	$	1,606	$	1,560

General and administrative expenses increased from $1,257 in Q1 2005 to $1,289 in Q1 2006, a difference of $32. As a percentage of sales, general and administrative expenses increased 6.4%, from 16.2% in Q1 2005 to 22.6% in Q1 2006 due partly to the decrease in overall sales. We recognized a share-based compensation expense of $34 as we adopted the Statements of Financial Accounting Standards (SFAS) No. 123(R), “Share-Based Payments,” beginning in the first quarter of fiscal 2006. See Note 3 to the Financial Statements for additional information.

Selling expense increased $16 from Q1 2005 to Q1 2006, primarily due to the increase in commissions in the Distribution segment for higher commissionable equipment sales. As a percentage of sales, selling expenses for Q1 2006 increased 1.5% over selling expenses for Q1 2005.

Research and development costs decreased $16 due to less activity in the U.S. operation.

During the three months ended September 30, 2005, the increase in impairment loss of approximately $14 as compared to the three months ended September 30, 2004 was attributable to the Testing operation located in Singapore. The relevant machinery and equipment was not suitable for performing testing services for the high speed microprocessor chips. Consequently, this machinery and equipment was deemed obsolete.

Other Income

Other income for the first quarters of 2006 and 2005 were as follow:

(In Thousands, unaudited)	Q1 2006		Q1 2005
Other income	$	30	$	55

Other income decreased by $25 in Q1 2006 compared to the other income for Q1 2005. The $25 decrease can be explained in part by the lower rental income of $11 from the Malaysia operation due to vacant properties and due to the result of no exchange gain in Q1 2006 compared to an exchange gain of $12 incurred Q1 2005 from the appreciation of the U.S. dollar against foreign currency in U.S. denominated assets.

Income Tax

The total income tax provision decreased $38, from $111 in Q1 2005 to $73 in Q1 2006. This decrease was attributable mainly to lower taxable income generated by our Singapore and Thailand operations. Though the Singapore operations generated a higher profit of $301 in Q1 2006 as compared to a profit of $227 in Q1 2005, the accelerated depreciation for tax purposes incurred in Q1 fiscal 2006 was higher than depreciation for book purpose incurred in Q1 2006, which led to the lower taxable income in Singapore. In addition, there was a tax provision of $7 in the Thailand operation based on taxable income of $37 in Q1 2006, compared to the result of the tax provision of $19 in Q1 2005 based on taxable income of $81 incurred in Q1 2005. Because of the different income tax jurisdictions, the taxable income generated in foreign countries does not offset the net loss generated in the U.S. Therefore, we generally incur certain income tax expenses in any fiscal year.

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Loss from Discontinued Operation

Based on the restructuring plan and in accordance with EITF 03-13, the Company presented the operation results from Ireland as a discontinued operation, as the Company believes that no continued cash flow would be generated by the disposed component (Ireland subsidiary) and that the Company would have no significant continuing involvement in the operation of the discontinued component. The loss from discontinued operations increased $369 from $9 in Q1 2005 to $378 in Q1 2006 due to the restructuring costs incurred in Ireland.

Net (Loss) Income

As a result of all of the factors analyzed above, the net loss attributable to common shares for the first quarter ended September 30, 2005 was approximately $214, which represented a decline of $451 from a net income of approximately $237 attributable to common shares for the first quarter ended September 30, 2004. Consequently, basic earnings per share contributed from continuing operations for the first quarter ended September 30, 2005 decreased by $0.03 from $0.08 in fiscal 2005 to $0.05 in fiscal 2006. Diluted earnings per share contributed from continuing operations for the first quarter ended September 30, 2005 were $0.05, which represents a decrease of $0.03 from diluted earnings per share of $0.08 for the first quarter ended September 30, 2004. Consequently, basic and diluted loss per share contributed to discontinued operations for the first quarter ended September 30, 2005 was $0.13 loss per share for the first quarter ended September 30, 2005 due to the closing of Ireland facility.

Manufacturing Segment

The revenue, gross margin and (loss) income from operations for the Manufacturing segment for the first quarters of 2006 and 2005 were as follows:

(In Thousands, unaudited)	Q1 2006			Q1 2005
Revenue	$	1,355		$	3,978
Gross margin		18.4	%		16.0	%
(Loss) income from operations	$	(175	)	$	147

Net sales in the Manufacturing segment fell by $2,623 in Q1 2006 compared to Q1 2005, a difference of 65.9%. Several different countries began implementing localization programs, which encourage customers to purchase from vendors in their same region, and as a result few customers purchased from overseas vendors. Therefore, we lost some of our sales to customers’ local vendors. As a result, sales of burn-in boards dropped by $2,472, with a 60.6% decrease in quantity sold and a 77.8% drop in average unit selling price. HAST Systems and Environmental Test Equipment also experienced a decline in sales due to cautious spending in the U.S. as a result of inventory adjustments on capital equipment in the distribution channel. This in turn affected the manufacturing of equipment in the U.S. operation. HAST Systems sales fell by $49 and Environmental Test Equipment fell by $39.

Gross profit in the Manufacturing segment was $249 in Q1 2006, or 18.4% of sales, down from $636 in Q1 2005. Gross margin increased by 2.4% over 16.0% in Q1 2005 mainly due to the increase in average unit selling price of 38.9% for burn-in systems, and the decrease in low-margin burn-in boards sales.

Operating loss in the Manufacturing segment was $175 in Q1 2006, representing a decrease of $322 from an operating income of $147 in Q1 2005. This loss was the result of lower Manufacturing revenue and, to a lesser extent, higher operating expenses.

Testing Segment

The revenue, gross margin and income from operations for the Testing segment for the first quarters of 2006 and 2005 were as follows:

(In Thousands, unaudited)	Q1 2006			Q1 2005
Revenue	$	3,545		$	2,786
Gross margin		38.3	%		36.5	%
Income from operations	$	458		$	181

Net sales in the Testing segment increased $759 from Q1 2005 to Q1 2006, an increase of 27.2%. The increase mainly came from the strong growth in demand for the testing of the high speed microprocessor chips in the Singapore Testing operation. Consequently, the increase in revenue of testing services of high speed microprocessor chip was more than enough to make up for the drop in revenue of testing services of slower microprocessor chips. Also, the service volume of the higher-speed

18

microprocessor chips increased due to a rise in demand for personal computers, along with greater acceptance in the market place of our customers’ products. The Company ultimately abandoned certain testing machinery and equipment, which led to the impairment loss of $15 in Singapore

Gross profit in the Testing segment was $1,358, or 38.3% of sales. It went up $341 over the same period last year due to higher service revenue and more efficient utilization of our Testing segment assets, especially in the Singapore operation, despite greater utilities expenses for certain burn-ins to accommodate customers’ requirement.

Operating income in the Testing segment was $458, or 12.9% of sales, up $277 as a result of higher service revenue while the segment maintained a lean headcount to cope with the increase in testing service volume. The semi-fixed costs, such as salaries, in the operating expenses were spread over the increased output, which improved the operating income as compared to Q1 2005.

Distribution Segment

The revenue, gross margin and (loss) income from operations for the Distribution segment for the first quarters of 2006 and 2005 were as follows:

(In Thousands, unaudited)	Q1 2006			Q1 2005
Revenue	$	805		$	979
Gross margin		26.9	%		26.0	%
(Loss) income from operations	$	(1	)	$	12

Net sales in the Distribution segment decreased $174 from Q1 2005 to Q1 2006, a 17.8% decline. This decrease was due in part to the decline in sales of low margin front-end products as a result of waning customer interest in these products. Sales dropped $56, with a 46.3% dip in quantity sold and a 56.4% increase in average unit selling price. Test Chamber and other new products also experienced a drop in sales, dipping $51 with a 60% decrease in percentage sold and a 125.3% increase in average unit selling price. After the expansion of the Distribution operation in Singapore, the sales team there focused more on meeting the stringent requirements of a few major customers. Prior to that, their focus had been on capturing the market around Asia. We were able to meet our customers’ stringent requirements for Vibration Test equipment thereby allowing us to price said equipment competitively in the market, but the time spent on these few customers resulted in less time spent on marketing to other customers. As a result, lower unit volume of Test equipment was sold in Q1 2006 as compared to the same quarter last year.

Gross profit in the Distribution segment was $216, or 26.9% of sales, a decrease of $38 due to lower product revenue. However, gross margin increased by 0.9% to 26.9% in Q1 2006 mainly due to the increase in average unit selling price of Test Chambers and other new products as mentioned above.

Operating income in the Distribution segment was $12 in Q1 2005, down $13 to an operating loss of $1 in Q1 2006 primarily due to lower gross profit in absolute amount.

Corporate

The (loss) income from operations for Corporate for the first quarters of 2006 and 2005 were as follow:

(In Thousands, unaudited)	Q1 2006			Q1 2005
(Loss) income from operations	$	(64	)	$	7

The Corporate office reimbursed its operating expenses by imposing a fee on all the subsidiaries on a fixed percentage of revenue. Operating loss was $64 in Q1 2006, down $71 from an income of $7 in Q1 2005 due primarily to a decrease of 30% in allocation charges to all subsidiaries. At the same time, sales generated by subsidiaries dropped 26.3% compared to the sales in Q1 2005.

Financial Condition

During the three months ended September 30, 2005, total assets increased $1,504 from $18,345 at June 30, 2005 to $19,849 at September 30, 2005. The majority of the increase was in cash, restricted cash held in escrow, short term deposits, inventories and assets held for sale, but offset by a decrease in accounts receivables and property, plant and equipment of $672 and $495, respectively.

At the end of the first quarter of fiscal 2006, total cash and short term deposits totaled $5,089, up $439 from fiscal year-end 2005. During the first three months of fiscal 2006, cash increased due to proceeds from the draw down of a long-term loan of $199 in the Singapore operation and more efficient collections in the Southeast Asia operations. The restricted cash held in

19

escrow of $1,067 was a result of the down payment of ten percent (10%) of the sale price related to the property located in Ireland, which was deposited in an escrow account held by the Company’s attorney in Ireland. The deposit amount of €885 (approximately $1,067) was based on the exchange rate as of September 30, 2005 published by the Federal Reserve Statistical Release. The same amount was also accounted for as an advance from the buyer under current liabilities.

Inventories of $2,215 at the end of the first quarter of fiscal 2006 increased $631 from fiscal year-end 2005 mainly due to the increase in work-in-progress in the Singapore Manufacturing operation in anticipation of large orders expected in the next quarter. The turnover of inventory was 44 days at the end of the first quarter of fiscal 2006 compared with 28 days at fiscal year-end 2005.

Assets held for sale of $261 at the end of the first quarter of fiscal 2006 comprised of carrying value (the net book value of the property), in accordance with SFAS No. 144.

Accounts receivable at the end of the first quarter of fiscal 2006 decreased $672 from fiscal year-end 2005 primarily due to lower Manufacturing sales in Southeast Asia in Q1 2006, compared with fiscal year ended June 30, 2005 and more efficient collections in the Southeast Asia operations. Accounts receivables turnover was 61 days at the end of the first quarter of fiscal 2006 compared with 56 days at fiscal year-end 2005.

Property, plant and equipment decreased by $495 from $7,176 at June 30, 2005 to $6,681 at September 30, 2005. The carrying value of $261 included in assets held for sale in the Ireland Testing operation contributed to part of this decrease. The higher capital expenditures offset by lower depreciation over the first quarter of fiscal 2005 also contributed to the decrease in property, plant and equipment.

Capital expenditures were $131 for the first three months of fiscal 2006, compared with $457 the first three months of fiscal 2005. The decrease in capital expenditures was mainly due to higher purchases of machinery and equipment during the first quarter of fiscal 2005 in the acquired Malaysia Testing operation to meet customer’s requirements.

Depreciation was $368 for the first three months of fiscal 2006, compared with $337 for the first three months of fiscal 2005.

Accrued expenses of $2,950 at the end of the first quarter of fiscal 2006 increased $352 from June 30, 2005 primarily due to increased accrued purchases, accrued commissions and sales tax provision in one of the Singapore operations.

Liquidity and Capital Resources

Net cash provided by operating activities during the first quarter of fiscal 2006 was $563, increasing $760 from net cash of $197 used during the first quarter of fiscal 2005. The increase was primarily due to the following reasons: the net impact of adjusting non-cash items in the first quarter of fiscal 2006 was $641 compared to $377 in the first quarter of fiscal 2005, whereas the total changes in operating assets and liabilities for the first quarter of fiscal 2006 were a positive $136 compared to a negative $811 for the first quarter of fiscal 2005; accounts receivable, accrued restructuring costs, accounts payable and accrued expenses in the first quarter of fiscal 2006 made a significant impact of $1,035 (positive cash flow) whereas the inventories, prepaid expenses and other current assets in the first quarter of fiscal 2006 made a significant impact of $744 (negative cash flow). In addition to the negative impact on cash flow, there was a swing in net results from income of $237 during the first three months of fiscal 2005 to a loss of $214 during the first three months of fiscal 2006.

Net cash used in investing activities in the first quarter of fiscal 2006 was $399 compared to the net cash provided by investing activities of $205 in the first quarter of fiscal 2005, reflecting a decrease of $604 in cashflow. The proceeds from maturing short-term deposits of $382 were not adequate to cover the higher investments in short-term deposits of $650 in the first quarter of fiscal 2006, thereby incurring a negative cash flow. As we anticipated that funds would be required in the second and third quarters of fiscal 2006 for working capital purposes, we invested in short-term deposits to generate some interest income from the higher collection from customers in the Southeast Asia operations. In the first quarter of fiscal 2005, the proceeds from maturing short-term deposits of $1,304 were used for capital expenditures of $457 and the acquisition of the business in Malaysia of $731. Certain machinery and equipment in the Southeast Asia operations had been disposed of at $168 during the first quarter of fiscal 2005, whereas there were no such proceeds from selling fixed assets during the first quarter of fiscal 2006.

Net cash used in financing activities in the first quarter of fiscal 2006 was $24, reflecting a decrease of $101 compared to the net cash provided by financing activities of $77 during the first quarter of fiscal 2005. The decrease was due mainly to the lower proceeds from long-term debt of $199 during the first quarter of fiscal 2006 compared to $285 in the first quarter of fiscal 2005 and higher repayments of $236 made in the first quarter of fiscal 2006 compared to repayments of $208 made in first quarter of fiscal 2005. We received $64 of cash proceeds from stock options exercised during the first quarter of fiscal 2006 compared to no such proceeds in the first quarter of fiscal 2005. However, the proceeds were not enough to offset the net repayment of $51 for lines of credits incurred in the first quarter of fiscal 2006, while there was no such repayment in the first quarter fiscal 2005.

20

Approximately $667 of cash deposits as of September 30, 2005 were held in the Company’s 55% owned Malaysian subsidiary. Of such amount, $664 were denominated in the currency of Malaysia, of which $139 is currently available for movement to overseas, as authorized by the Central Bank of Malaysia. There are additional amounts available for distribution as dividends (after making deductions for income tax) pursuant to Malaysian regulations.

The current ratio (defined as current assets divided by current liabilities) remained positive at 1.68 as of September 30, 2005 compared to 1.82 as of June 30, 2005. We believe we have the necessary financial resources to fund our working capital needs, capital expenditures, dividend payments and other business requirements for the next 12 months.

As of the quarter ended September 30, 2005, the Malaysia Testing operation will need funds of $284 to purchase additional equipment for the burn-in services of the new type of microprocessor chips, in line with a customer’s request. We are in the process of negotiating with our banker for a term loan to finance equipment as well as for working capital purposes.

Corporate Guarantee Arrangement

The Company provides a corporate guarantee of approximately $1,480 to one of its subsidiaries in Southeast Asia to secure line-of-credit and term loans from a bank to finance the operations of such subsidiary. With the strong financial position of the subsidiary company, the Company believes this corporate guarantee arrangement will have no material impact on its liquidity or capital resources.

Recently Issued Accounting Pronouncements

In May 2005, the FASB issued Statement No. 154, “Accounting Changes and Error Corrections", a replacement of APB Opinion No. 20, Accounting Changes, and Statement No. 3, “Reporting Accounting Changes in Interim Financial Statements.” (SFAS No. 154). SFAS No. 154 changes the requirements for the accounting for, and reporting of, a change in accounting principle. Previously, most voluntary changes in accounting principles were required to be recognized by way of a cumulative effect adjustment within net income during the period of the change. SFAS No. 154 generally requires retrospective application to the prior period financial statements of voluntary changes in accounting principles. SFAS No. 154 is effective for accounting changes made in fiscal years beginning after December 15, 2005. However, SFAS No. 154 does not change the transition provisions of any existing accounting pronouncements. The Company does not believe the adoption of SFAS No. 154 will have a material effect on its results of operations or financial condition.

Critical Accounting Estimates & Policies

We prepare the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements require the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result of different assumptions or conditions.

In response to the SEC’s Release No. 33-8040, “Cautionary Advice Regarding Disclosure About Critical Accounting Policy,” the Company identified the most critical accounting principles upon which its financial status depends. The Company determined that those critical accounting principles are related to the use of estimates, inventory valuation, revenue recognition, income tax and impairment of long-lived assets. The Company states these accounting policies in the relevant sections in this management’s discussion and analysis, including the Recently Issued Accounting Pronouncements discussed below.

Use of Estimates

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which require us to make estimates and judgments that significantly affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. The Company regularly evaluates these estimates, including those related to inventory valuation, revenue recognition and income taxes. These estimates are based on historical experience and on assumptions that are believed by management to be reasonable under the circumstances. The most important estimates included in the financial statements are the allowance for doubtful accounts, provision for inventory obsolescence, the estimated useful life of long-lived assets, and valuation allowance for deferred tax assets. Actual results may differ materially from these estimates, which may impact the carrying values of assets and liabilities.

21

Accounts Receivable and Allowance for Doubtful Accounts

During the normal course of business, we extend unsecured credit to our customers. Typically, credit terms require payment to be made between 30 to 60 days of the sale. We do not require collateral from our customers. We maintain our cash accounts at credit worthy financial institutions.

We regularly evaluate and monitor the creditworthiness of each customer on a case-by-case basis. We include any account balances that are determined to be uncollectible, along with a general reserve, in the overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available to management, we believe that our allowance for doubtful accounts was adequate as of September 30, 2005.

Inventory Valuation

Our inventories are stated at the lower of cost (on a first-in, first-out basis) or market value. Our industry is characterized by rapid technological change, short-term customer commitments and rapid changes in demand. We make provisions for estimated excess and obsolete inventory based on our regular reviews of inventory quantities on hand and the latest forecasts of product demand and production requirements from our customers. We write-down inventories for not saleable, excess or obsolete raw materials, works-in-process and finished goods by charging such write-downs to cost of sales. In addition to write-downs based on newly introduced parts, statistics and judgments are used for assessing provision of the remaining inventory based on salability and obsolescence.

Revenue Recognition

Revenue from sales of the Company’s products is recognized upon shipment or delivery, depending upon the terms of the sales order, provided that persuasive evidence of a sales arrangement exists, title and risk of loss have transferred to the customer, the sales amount is fixed and determinable, and collection of the revenue is reasonably assured. We allocate a portion of the invoice value to products sold and the remaining portion of invoice value to installation work in proportion to the fair value of products sold and installation work to be performed. The fair value determination of products sold and the installation and training work is also based on our specific historical experience of the relative fair values of the elements if there is no easily determinable market price to be considered. A portion of the Company’s sales is contributed from testing services. Revenue derived from testing service is recognized when testing services are rendered.

The Company reduces revenue based on estimates of future credits to be granted to customers. Credits are granted for reasons such as product returns due to quality issues, volume-based incentives, and other special pricing arrangements.

Income Tax

In determining income for financial statement purposes, the Company must make certain estimates and judgments in the calculation of tax expense and the resultant tax liabilities and in the recoverability of deferred tax assets that arise from temporary differences between the tax and financial statement recognition of revenue and expense.

In the ordinary course of global business there may be many transactions and calculations where the ultimate tax outcome is uncertain. The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax laws. Our foreign subsidiaries are subject to income taxes in the regions where they operate. Because of the different income tax jurisdictions, net losses generated in the U.S. cannot be utilized to offset the taxable income generated in foreign countries. Therefore, we may incur certain income tax expenses in any fiscal year though the Company may generate lower income before income taxes. Although the Company believes the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals.

As part of its financial process, the Company must assess the likelihood that its deferred tax assets can be recovered. If recovery is not likely, the provision for taxes must be increased by recording a reserve in the form of a valuation allowance for the deferred tax assets that are estimated not to be ultimately recoverable. In this process, certain relevant criteria are evaluated including the existence of deferred tax liabilities that can be used to absorb deferred tax assets, the taxable income that can be used to absorb net operating losses and credit carrybacks, and taxable income in future years. The Company’s judgment regarding future profitability may change due to future market conditions, changes in U.S. or international tax laws and other factors. These changes, if any, may require material adjustments to these deferred tax assets and an accompanying reduction or increase in net income in the period when such determinations are made.

In addition to the risks described above, the effective tax rate is based on current enacted tax law. Significant changes during the year in enacted tax law could affect these estimates.

22

Impairment of Long-Lived Assets

We review long-lived assets for impairment when certain indicators are present that suggest the carrying amount may not be recoverable. This review process primarily focuses on other intangible assets from business acquisitions and property, plant and equipment. Factors considered include the under-performance of a business compared to expectations and shortened useful lives due to planned changes in the use of the assets. Recoverability is determined by comparing the carrying amount of long-lived assets to estimate future undiscounted cash flows. If future undiscounted cash flows are less than the carrying amount of the long-lived assets, an impairment charge would be recognized for the excess of the carrying amount over fair value determined by either a quoted market price, if any, or a value determined by utilizing a discounted cash flow technique. Additionally, in the case of assets that will continue to be used by the Company in future periods, a shortened life may be utilized if appropriate, resulting in accelerated amortization or depreciation based upon the expected net realizable value of the asset at the date the asset will no longer be utilized by the Company. Actual results may vary from estimates due to, among other things, differences in operating results, shorter asset useful lives and lower market values for excess assets.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk. We do not use derivative financial instruments in our investment portfolio. Our investment portfolio is generally comprised of cash deposits. Our policy is to place these investments in instruments that meet high credit quality standards. These securities are subject to interest rate risk, and could decline in value if interest rates fluctuate and thus subject us to market risk due to those fluctuations. Due to the short duration and conservative nature of our investment portfolio, we do not expect any material loss with respect to our investment portfolio, though no assurances can be given that material losses will not occur.

As of September 30, 2005, the outstanding aggregate principal balance on these loans, capital leases and lines of credit was approximately $1,770. The interest on our loans, capital leases and lines of credit range from 4.19% to 7.50% per annum. These interest rates are mostly variable and they are subject to change in line with the market rates.

	Sep. 30,		June 30,
	2005		2005
	(unaudited)
Loans:
denominated by Singapore dollars with variable interest at prime rates ranging from 2.95% to 5.75% plus 1% to 6.25% per annum	$	1,098	$	1,045
denominated by Irish pound with variable interest at prime rates ranging from 2.09% to 2.11% plus 5.11% to 5.59% per annum		88		98
denominated by Thailand baht with fixed interest rate at 4.50% per annum		132		146
Subtotal	$	1,318	$	1,289
Capital leases:
denominated by Singapore dollars with fixed interest rates ranging from 4.19% to 6.60% per annum	$	147	$	199
denominated by Malaysia ringgit with fixed interest rate at 4.30% per annum		20		22
denominated by Irish pound with variable interests at prime rate of 2.09% plus 7.10% per annum		—		12
Subtotal	$	167	$	233
Line of credit:
denominated by Singapore dollars with variable interest rate at 5.75% plus 6.00% per annum	$	285	$	336
Total	$	1,770	$	1,858

23

The outstanding aggregate principal balance on these loans, capital leases and lines of credit were mainly utilized by the Testing segment for investments in facilities and equipment to meet customers’ requirement. One of the Singapore operations used 84.4% of such facility as of September 30, 2005. Nevertheless, the Singapore operation was able to meet its obligation as the majority of the overall net sales were contributed from the operation. The Thailand operation utilized term loans to finance the extension of a building in Bangkok and it will be able to meet its obligation as the operation has been generating cash for the past few years. Since the Ireland operation ceased in August 2005, the term loan will be repaid in the second quarter of fiscal 2006 using the proceeds from the sale of property.

Foreign Currency Exchange Rate Risk. Although the majority of our sales, cost of manufacturing and marketing are transacted in U.S. dollars, significant portions of our revenues are denominated in Singapore and Euro dollars, Malaysian ringgit, Thai Baht and other currencies. Consequently, a portion of our costs, revenues and operating margins may be affected by fluctuations in exchange rates, primarily between the U.S. dollar and such foreign currencies. We are also affected by fluctuations in exchange rates if there is a mismatch between our foreign currency denominated assets and liabilities. Foreign currency translation adjustments resulted in an increase of $21 and $38 to shareholders’ equity for the three months ended September 30, 2005 and 2004, respectively.

We try to reduce our risk of foreign currency fluctuations by purchasing certain equipment and supplies in U.S. dollars and seeking payment, when possible, in U.S. dollars. However, we may not be successful in our attempts to mitigate our exposure to exchange rate fluctuations. Those fluctuations could have a material adverse effect on the Company’s financial results.

ITEM 4. CONTROLS AND PROCEDURES

An evaluation was carried out by the Company’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of September 30, 2005, the end of the period covered by this Form 10-Q. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective. During the period covered by this report, there have been no changes in the Company’s internal control over financial reporting that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

24

TRIO-TECH INTERNATIONAL

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Malaysian and Singapore regulations prohibit the payment of dividends if the Company does not have sufficient retained earnings and tax credit. In addition, the payment of dividends can only be made after making deductions for income tax pursuant to the regulations. Furthermore, the cash movements from the Company’s 55% owned Malaysian subsidiary to overseas are restricted and must be authorized by the Central Bank of Malaysia. California law also prohibits the payment of dividends if the Company does not have sufficient retained earnings or cannot meet certain asset to liability ratios.

Item 3. Defaults Upon Senior Securities

Not applicable

Item 4. Submission of Matters to Vote of Security Holders

Not applicable

Item 5. Other Information

Not applicable

Item 6. Exhibits

10.1	Memorandum of Agreement, dated September 30, 2005 between European Electronic Test Centre Ltd. and Dorville Homes Ltd.
10.2	Deed of Assignment, dated October 27, 2005 between European Electronic Test Centre Ltd. and Dorville Homes Ltd.
31.1	Rule 13a-14(a) Certification of Principal Executive Officer of Registrant
31.2	Rule 13a-14(a) Certification of Principal Financial Officer of Registrant
32	Section 1350 Certification.

25

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TRIO-TECH INTERNATIONAL
	By:	/s/ Victor H.M. Ting
		VICTOR H.M. TING
Dated: November 21, 2005		Vice President and Chief Financial Officer (Principal Financial Officer)

26

EX-10.1

Exhibit 10.1

WARNING: IT IS RECOMMENDED THAT THE WITHIN SHOULD NOT BE

COMPLETED WITHOUT PRIOR LEGAL ADVICE

Law Society of Ireland

GENERAL CONDITIONS OF SALE
2001 (REVISED) EDITION

PARTICULARS
and
CONDITIONS OF SALE
of
PROPERTY AT ABBEY ROAD, DUN LAOGHAIRE, CO. DUBLIN

SALE BY AUCTION
to be held at Lisney, 24 St. Stephen’s Green, Dublin 2
on the 30 day of September 2005
at 3.00 o’clock

Vendor: European Electronic Test Centre

Vendor’s Agents: Lisney

Address: 24 St. Stephen’s Green, Dublin 2

Vendor’s Solicitor: A & L Goodbody

Address: International Financial Services Centre, North Wall Quay, Dublin 1

Reference: FBH 01-335491

Law Society General Conditions of Sale
2001 (Revised) Edition
0 Law Society of Ireland

MEMORANDUM OF AGREEMENT made this 30 day of September 2005
BETWEEN

EUROPEAN ELECTRONIC TEST CENTRE
having its registered office at PO Box 271, Grand Cayman Islands, British West Indies

PPS Number(s)
	(VENDOR)
AND
Dekmot Haughey (In trust for Dorville Homes Ltd)
of
PPS Number(s)
	(PURCHASER)

whereby it is agreed that the Vendor shall sell and the Purchaser shall purchase in accordance with the annexed Special and General Conditions of Sale the property described in the within Particulars at the Purchase Price mentioned below

Purchase Price: €8,850,000	Closing Date: 27 October 2005
less deposit: €885,000	Interest rate: 10% per cent per annum
Balance: €7,965,000
SIGNED	SIGNED
:/s/ Lynn Wong
(Vendor)	(Purchaser)
Witness :/s/ Fiona Hickey	Witness :/s/ Peter Browne
Occupation: Solicitor	Occupation:
Address: Dublin	Address: 211 St.

PARTICULARS AND TENURE

ALL THAT AND THOSE part of the hereditaments and promises demised by Lease dated 21 February 1949 (the Lease) made between Clara Espinasse of the first part, Arthur James Beatty of the second part, Anthony Boyland and Patrick Boyland of the third part being the property comprised in and demised by a Deed of Assignment dated 16 November 1960 and made between the said Christopher G. Cooney Limited of the first part, The Governor and Company of the Bank of Ireland of the second part and Warner-Lambert Ireland Limited of the third part and thereon edged red. HELD for the term of 200 years from the 29 day of September 1948 subject to the yearly rent of €115.00 (but indemnified against the payment of the entire thereof) and subject to the covenants and conditions therein contained on the Lessee’s part to be observed and performed insofar as same may affect the Subject Property.

SUBJECT TO AND WITH THE BENEFIT OF:-

(1)	Lease dated 12 March 1962 between Warner-Lambert (Ireland) Limited and The Electricity Supply Board for the term of 100 years from 12 March 1962 for the yearly rent of 1 shilling.
(2)	Lease dated 27 June 2003 (the Occupational Lease) and made between the Vendor of the one part and Abbey Healthcare Limited of the other part in respect that part of the Subject Property therein described for a term of 4 years and 9 months from 1 April 2003 expiring on 31 December 2007 for the annual rent of €66,000.

DOCUMENTS SCHEDULE

A.	TITLE
1	Certified copy Lease dated 21 February 1949 and made between Clara Espinasse of the first part, Arthur James Beatty of the second part and Anthony Boyland and Patrick Boyland of the third part.
2.	Original Assignment dated 16 November 1960 made between Christopher G. Cooney Limited of the first part, The Governor and Company of Ireland of the second part and Warner-Lambert (Ireland) Limited of the third part.
3.	Original Deed of Assignment dated 9 May 1985 made between Warner-Lambert Ireland Limited of the one part and the Vendor of the other part.
4.	Original Declaration dated 1 April 1985 of Denis Bergin confirming compliance with covenants contained in the Lease and the Supplemental Indentures dated 7 May 1954 and 23 September 1960.
5.	Original counterpart Lease dated 12 March 1962 made between Warner-Lambert (Ireland) Limited of the one part and The Electricity Supply Board of the other part.
6.	Original counterpart Deed of Covenant dated 17 November 1960 between Warner-Lambert (Ireland) Limited and The County Council of the County of Dublin of the other part.
7.	Certified copy counterpart Deed of Endorsement dated 23 September 1960 between Clara Espinasse and Christopher G. Cooney Limited in respect of Lease dated 21 February 1949.
8.	Counterpart Lease dated 27 June 2003 and made between the Vendor of the one part and Abbey Healthcare Limited of the other part.
B.	PLANNING
9.	Copy Notification of Grant of Permission Register Reference Number G498.
10.	Copy Notification of Decision to Grant Permission Register Reference Number K298.
11.	Copy Notification of Grant of Permission Register Reference Number M489.
12.	Copy Notification of Grant of Permission Register Reference Number M2368.
13.	Planning Permission Register Reference Number 2652.
14.	Planning Permission Register Reference Number R.A.1315.
15.	Copy Building Bye-Law Approval Notice BBL/771/77.

16.	Copy Building Bye-Law Approval Order Number BBL/617/68.
17.	Original Architect’s Certificate of Compliance of Paddy Dowling dated 5 December 1985.
18.	Certificate of Compliance dated 3 May 1985 of Christopher Kearon with Planning Permission renew boundary wall and railings and external loading dock.
19.	Copy Planning Search dated 22 June 2005.
C.	GENERAL
20.	Original Family Law Declaration of Denis Bergin dated 27 March 1985 for the benefit of the Vendor.
21.	Copy Section 45 Consent dated 23 March 1985.
22.	Copy Certificate of Incorporation and Memorandum and Articles of Association of the following:-

22.1.	Christopher G. Cooney Limited.
22.2.	Warner-Lambert Ireland Limited.
22.3.	European Electronic Test Centre.

SEARCHES SCHEDULE

Negative Search No. 1007/1985 together with Negative Search for all acts by Warner-Lambert Ireland Limited from 19 March 1985 to 4 March 1996 and against the Vendor from 9 May 1985 to the date of the Certificate to affect the lands of Kill-O’The-Grange in the Barony of Rathdown and County of Dublin and situate at Abbey Road, Dun Laoghaire in the County of Dublin.

SPECIAL CONDITIONS

1	Save where the context otherwise requires or implies or the text hereof expresses to the contrary, the definitions and provisions as to interpretation set forth in the within General Conditions shall be applied for the purposes of these Special Conditions.
2.	The said General Conditions shall:

2.1.	apply to the sale in so far as the same are not hereby altered or varied, and these Special Conditions shall prevail in case of any conflict between them and the General Conditions
2.2.	be read and construed without regard to any amendment therein, unless such amendment shall be referred to specifically in these Special Conditions.

3. Title

3.1.	The title to the Subject Property shall commence with the Lease dated 21 February 1949 and shall pass to Indenture of Assignment dated 16 November 1960 and shall be deduced therefrom. A certified copy only of the Lease shall be handed over on closing. Without prejudice all intermediary title and prior title documents in the Vendors possession shall be handed over on closing.
3.2.	By virtue of Supplemental Indentures dated 7 May 1954 and 23 September 1960 each made between Clara Espinasse of the one part and Christopher G. Cooney Limited of the other part the Lease was varied in that the said Supplemental Indentures permitted (inter alia) the erection of a factory on the Subject Property and the user thereof for traders, manufacturers or businesses. The Purchaser will be furnished with a certified copy of the Deed of Endorsement dated 23 September 1960 and will accept same as evidence of the Lessor’s consent for the construction of the buildings on the Subject Property and that all conditions to which such consents may be subject have been complied with. The Vendor does not have in its possession a copy of the Supplemental Deed dated 7 May 1954 and the Purchaser shall not call for the Vendor to produce the said Deed and the Purchaser shall raise no objection, requisition or enquiry in this regard.
3.3.	The Subject Property is being sold subject to and with the benefit of Indenture of Sub-Lease dated 12 March 1962 and made between Warner-Lambert (Ireland) Limited of the one part and The Electricity Supply Board of the other part for the term of 100 years from 12 March 1962 subject to yearly rent of one shilling (if demanded). The consent of the party entitled to the Lessors’ interest under the 1949 Lease, to the grant to the 99 year Lease to the ESB is endorsed on the said Lease. Nothing further will be provided. The Vendor has never demanded from the ESB the rent payable under the Sub-Lease from the date the Vendor acquired the Property. No objection, requisition or enquiry shall be raised in this regard. The Vendor will notify the ESB of the change in ownership following the sale.

3.4.	The Property is being sold subject to the restrictive covenant contained in the Deed dated 17 November 1960 and made between Warner-Lambert (Ireland) Limited of the one part and Dublin County Council of the other part in relation to the use of the Subject Property. In this regard the Purchaser is referred to Declaration of Denis Bergin (Director of Warner-Lambert Ireland Limited) dated 1 April 1985 (paragraph 5) in which he confirms to the best of his knowledge, information and belief that the covenants and conditions contained in this Deed have been complied with and that no notices have been served on Warner-Lambert (Ireland) Limited by the County Council. On closing the Purchaser will be furnished with a similar declaration from an officer of the Vendor confirming that insofar as they are aware the covenants and conditions contained in the Deed dated 17 November 1960 have been complied with since the Vendor acquired the Subject Property and that no notices have been served on the Vendor by the said County Council or on their behalf or by any other party. Nothing further shall be provided and no objection, requisition or enquiry shall be raised in this regard.
3.5.	The Purchaser is referred to the Declaration of Denis Bergin (Director of Warner-Lambert (Ireland) Limited) dated 1 April 1985 (paragraph 4) as evidence of compliance of the obligations of the Lessee contained in the Lease and the Supplemental Agreements and as evidence that there has been no material change of use of the Subject Property by Warner-Lambert (Ireland) Limited since it acquired the Property in 1960. On closing an officer of the Vendor will provide a Declaration confirming that to the best of their knowledge, information and belief there have been no breaches of the said covenants and that no notices have been served in respect of the Subject Property comprised in and demised by the Lease and that there has been no material change of use of the Subject Property by the Vendor since it acquired the Subject Property in 1985.
3.6.	The Vendor has made no steps to acquire the freehold interest in the Property. It will be matter for the Purchaser to make any enquiries in relation to the acquisition of the freehold of the Subject Property and no objection, requisition or enquiry shall be raised in this regard.
3.7.	To the extent that the Vendor’s interest in the Subject Property is subject to any mortgage or charge on completion, the Purchaser shall not require a release and discharge of the relevant mortgage or charge on the completion of the Sale but shall accept the Vendors Solicitors’ undertaking to discharge out of the proceeds of sale all sums required to satisfy the relevant mortgage or charge and to furnish a release and/or discharge in respect thereof (or alternatively the relevant mortgage with a vacate endorsed) as soon as practicable following completion of the Sale.

4. Occupational Lease

4.1. The Purchaser is referred to the Occupational Lease at document number 8 of the Documents Schedule hereto in which part of the Subject Property is let to the Occupational Tenant for a term of 4 years and 9 months from 1 April 2003 to 31 December 2007 and subject to the annual rent of €66,000 (inclusive of insurance).

4.2.	The Purchaser shall assume and the Vendor shall not be obliged to prove compliance by the Occupational Tenant of the Subject Property with any covenants on the their part contained in the Occupational Lease.
4.3.	The rent for the quarter in which the closing date falls shall be apportioned from the date of closing to the end of that quarter in respect of the rent actually received. In the event that the Occupational Tenant shall not have discharged the rent in respect of the period up to the date of actual closing the Vendor shall be entitled to collect from the Occupational Tenant outstanding arrears of rent due under the Occupational Lease in respect of the period up to the date of completion and if necessary to issue proceedings against the Occupational Tenant (but not proceedings for bankruptcy, winding up, dissolution or ejectment).
4.4.	The Purchaser shall not call for evidence of payment of rates by the Occupational Tenant in relation to that part of the Subject Property let to the Occupational Tenant or for evidence of payment of water charges, refuse charges and similar outgoings and accepts that the same is the liability of the Occupational Tenant as occupier thereof. The Purchaser shall be deemed to satisfy itself in that regard prior to the execution hereof and shall raise no objection, requisition or enquiry in relation thereto. No apportionment shall be required on completion in respect of such outgoings in respect of that portion of the Subject Property. The Vendor will apportion commercial rates only in respect of the part of the Subject Property occupied by the Vendor.

5. Planning

5.1.

The Purchaser shall carry out its own inspection and survey of the Subject Property and will satisfy itself regarding the extent to which the Subject Property (which, for the avoidance of doubt includes all buildings and structures thereon and any work carried out thereon) and use thereof complies with the provisions of the Local Government (Planning and Development) Acts 1963 to 1999, the Planning and Development Act 2000, the Local Government (Sanitary Services) Acts 1878 to 1964, the Building Control Act 1990, the Safety, Health and Welfare at Work Act 1989, the Fire Services Act 1981 (hereinafter collectively referred to as the Planning Acts) and any enactments or re-enactment thereof and all regulations made from time to time thereunder effect the Subject Property or the use thereof.

5.2.

The Purchaser is furnished with the Planning Permissions, the Building Bye Law Approval Notice and the Certificate of Compliances referred to at 9 to 18 of the Document Schedule and copy planning search at number 19 of the Document Schedule. The Vendor refers to Permission D00A/0530 listed on the planning search and confirms that no works were carried out on foot of this Permission. The Vendor does not have a copy of Permission D00A/0530 and the Purchaser shall not call for a copy of same. No further permissions, approvals, certificates, opinions or correspondence shall be furnished or required in relation to the Subject Property and General Condition 36 is hereby varied.

6.	Identity
	The Purchaser shall be deemed to have satisfied itself in relation to all matters pertaining to the identity of the Subject Property and the boundaries thereof prior to the execution hereof and shall raise no objection, requisition or enquiry in this regard. General Condition 14 is hereby deleted.
7.	Completion
	The sale shall be completed and the balance of the purchase money paid by the Purchaser on or before the closing date in sufficient time to enable the Vendor to receive full value for the balance of the purchase price on the date of actual completion. The provisions of General Condition 24 (a) of the 2001 Contract are hereby varied accordingly.
8.	Insurance
	The Vendor shall on the date of closing cancel its insurance in respect of the Subject Property. The Purchaser shall effect its own insurance as and from the date of completion of the sale.
9.	Vacant Possession
	The sale of the Subject Property is subject to the Occupational Lease and accordingly vacant possession of that portion of the Subject Property let to the Occupational Tenant shall not be delivered on completion.
10.	Roads and Services
	The Purchaser shall be deemed to have satisfied itself prior to the execution hereof that the Subject Property is adequately serviced and has the benefit of all easements, rights and privileges required for the proper use and enjoyment of same and the extent to which the roads, laneways and services to and abutting the Subject Property have been taken in charge by the Local Authority and shall raise no objection, requisition or enquiry in this regard.
11.	Non-Title Information
	The non-title information has not been completed as the Property comprises a commercial property.
12.	No Turn
	The Purchaser shall not (without the prior consent of the Vendor) assign, novate, sub-sell or otherwise dispose of its interest in respect of the Subject Property under this Contract.
13.	Entire Agreement
	This Contract comprises the entire of the Agreement between the Vendor and the Purchaser. Any

statements, representations, warranties or otherwise whatsoever made by the Vendor, its agents or employees during the course of negotiations leading up to the closing date which are not herein contained and set forth are hereby treated as having been withdrawn and will have no force or effect at law whatsoever.

NON-TITLE INFORMATION

Query	Reply	(Please tick and / or Insert
		comments as appropriate)

1 SERVICES	YES	NO	COMMENT
1.1. How is the Subject Property serviced as to:
1.1.1. drainage;
1.1.2. Water supply,
1.1.3. electricity;
1.1.4. gas; and
1.1.5. otherwise.
1.2. Have the services (including roads, lanes, footpaths, sewers and drains) abutting or servicing the Subject Property been taken over by the Local Authority?
Will a letter from the Local Authority or a solicitor’s certificate to vouch the position be furnished on or before closing?
If services are not in charge, are there appropriate easements and indemnities in existence?
1.3. Is the Subject Property serviced by:
1.3.1. septic tank; or,
1.3.2. private drainage scheme.
1.4. Is the Subject Property serviced for television and K so, is it by;
1.4.1. Cable T.V.;
1.4.2. Satellite Dish;
1.4.3. MMDF;
1.4.4. TV aerial owned by Vendor; or
1.4.5. TV aerial owned by another.
If 1.4.2 or 1.4.4 applies, will it be included in the Purchase Price?
1.5. Is there a telephone line to be supplied with the Subject Property?.
1.6. Is there an ISDN line to be supplied with the Subject Property’?

2.1. Are there any contents included in the Purchase Price?
If so, give Vendors estimate of value.	€
2.2. Are there any fixtures, fittings or chattels included in this Sale which are the subject of any Lease, Rent, Hire Purchase Agreement or Chattel Mortgage?
If so, furnish now the Agreement and on closing proof of payment to date or discharge thereof.
3. OUTGOINGS
3.1. What is the Rateable Valuation of:
3.1.1. Lands;	€
3.1.2. Buildings.	€
3.2. Give particulars of any other periodic or annual charge which affects the Subject Property or any part of it.

2.	CONTENTS                     Yes No           Comment
i.	Are there any contents included in the Purchase Price.
	If so, give Vendor’s estimate of value.
ii.	Are there any fixtures, fittings or chattels included in this Sale which are the subject of any Lease, Rent, Hire Purchase Agreement or Chattel Mortgage.
	If so, furnish now the Agreement and on closing proof of payment to date or discharge thereof.
3.	OUTGOINGS
i.	What is the Rateable Valuation of:

(a)	Lands;
(b)	Buildings.

ii. Give particulars of any other periodic or annual charge which affects the Subject Property or any part of it.

NOTE: These General Conditions are not to be altered or deleted other than by way of Special Condition. A Special Condition altering or deleting a General Condition should give the reason for such variation, unless manifestly evident. Special Conditions should be utilised in instances where it is required to adopt Recommendations or Advices of the Law Society or of any Committee associated with it, where such Recommendations or Advices are at variance with provisions expressed in the General Conditions.

GENERAL CONDITIONS OF SALE
DEFINMONS

In these General Conditions:
“Conditions” means the attached Special Conditions and these General Conditions

“Documents Schedule”, “Searches Schedule” and “Special Conditions” mean respectively the attached Documents Schedule, Searches Schedule and Special Conditions.

“Memorandum” means the Memorandum of Agreement on Page 1 hereof

“Particulars” means the Particulars and Tenure on Page 2 hereof and any extension of the same

“Purchaser” means the party identified as such in the Memorandum

“Sale” means the transaction evidenced by the Memorandum, the Particulars and the Conditions

“Subject Property” means the property or interest in property which is the subject of the Sale

“Vendor” means the party identified as such in the Memorandum.

2. In the Conditions save where the context otherwise requires or implies:

“Apportionment Date” means either (a) the later of (i) the Closing Date (as defined hereunder) and (ii) such subsequent date from which delay in completing the Sale shall cease to be attributable to default on the part of the Vendor or (b) in the event of the Vendor exercising the right referred to in Condition 25 (a)(ii) hereunder, the date of actual completion of the Sale or (c) such other date as may be agreed by the Vendor and the Purchaser to be the Apportionment Date for the purpose of this definition

“Assurance” means the document or documents whereby the Sale is to be carried into effect

“Closing Date” means the date specified as such in the Memorandum, or, if no date is specified, the first Working Day after the expiration of five weeks computed from the Date of Sale

“Competent Authority” includes the State, any Minister thereof, Government Department, State Authority, Local Authority, Planning Authority, Sanitary Authority, Building Control Authority, Fire Authority, Statutory Undertaker or any Department, Body or person by statutory provision or order for the time being in force authorised directly or indirectly to control, regulate, modify or restrict the development, use or servicing of land or buildings, or empowered to acquire land by compulsory process

“Date of Sale” means the date of the auction when the Sale shall have been by auction, and otherwise means the date upon which the contract for the Sale shall have become binding on the Vendor and the Purchaser

“Development” has the meaning ascribed to it by the Local Government (Planning and Development Act) 1963 or by the Planning and Development Act, 2000 which ever meaning shall be applicable to the circumstances

“Lease” includes (a) a fee farm grant and every contract (whether or not in writing or howsoever effected, derived or evidenced) whereby the relationship of Landlord and Tenant is or is intended to be created and whether for any freehold or leasehold estate or interest and (b) licences and agreements relating to the occupation and use of land, cognate words being construed accordingly

“Non-Title Information Sheet” means the Non-Title Information sheet attached hereto

“Planning Legislation” means the Local Government (Planning and Development) Acts 1963 to 1999, the Planning and Development Act, 2000, Building Bye Laws, the Building Control Act 1990, and all regulations made under those Acts

“Purchased Chattels” means such chattels, fittings, tenant’s fixtures and other items as are included in the Sale

“Purchase Price” means the Purchase Price specified in the Memorandum PROVIDED HOWEVER that, if the Sale provides for additional moneys to be paid by the Purchaser for goodwill, crops or Purchased Chattels, the expression “Purchase Price” shall be extended to include such additional moneys

“Requisitions” include Requisitions on the title or titles as such of the Subject Property and with regard to rents, outgoings, rights, covenants, conditions, liabilities (actual or potential), planning and kindred matters and taxation issues material to such property

“Stipulated Interest Rate” means the interest rate specified in the Memorandum, or, if no rate is so specified, such rate as shall equate to 4 per centum per annurn above the Court Rate obtaining pursuant to Section 22, Courts Act, 1981 and ruling at the date from which interest is to run

“Working Day” does not include any Saturday or Sunday or any Bank or Public Holiday or any of the seven days immediately succeeding Christmas Day.

INTERPRETATION

3. In the Conditions save where the context otherwise requires or implies:

Words importing the masculine gender only include the feminine, neuter and common genders, and words importing the singular number only include the plural number and vice versa

The words “Vendor” and “Purchaser” respectively include (where appropriate) parties deriving title under them or either of them and shall apply to any one or more of several Vendors and Purchasers as the case may be and so that the stipulations in the Conditions contained shall be capable of being enforced on a joint and several basis

Any condition (or, as the case may be, any part of any condition) herein contained, not going to the root of the Contract, which shall be or become void, illegal or invalid or shall contravene any legislation for the time being in force, shall, while the same shall continue to be void, illegal, invalid, or so in contravention be deemed to have been severed and omitted from the Conditions PROVIDED HOWEVER that neither its inclusion in the first instance nor its deemed severance and omission as aforesaid shall prejudice the enforceability of the

Conditions nor affect or curtail the other stipulations and provisions herein set forth

Unless the contrary appears, any reference hereunder:

(a)	to a particular Condition shall be to such of these General Conditions of Sale as is identified by said reference
(b)	to a Statute or Regulation or a combination of Statutes or Regulations shall include any extension, amendment, modification or re-enactment thereof, and any Rule, Regulation, Order or Instrument made thereunder, and for the time being in force

Headings and marginal notes inserted in the Conditions shall not affect the construction thereof nor shall the same have any contractual significance.

AUCTION

4. Where the Sale is by auction, the following provisions shall apply:

(a)	the Vendor may divide the property set forth in the Particulars into lots and sub-divide, consolidate or alter the order of sale of any lots
(b)	there shall be a reserve price for the Subject Property whether the same shall comprise the whole or any part of the property set forth in the Particulars and the Auctioneer may refuse to accept any bid. If any dispute shall arise as to any bidding the Auctioneer shall (at his option) either determine the dispute or again put up the property in question at the last undisputed bid. No person shall advance at a bidding a sum less than that fixed by the Auctioneer, and no accepted bid shall be retracted. Subject to the foregoing, the highest accepted bidder shall be the Purchaser
(c)	the Vendor may:

(i) bid himself, or by an agent, up to the reserve price

(ii) withdraw the whole of the property set forth in the Particulars or, where such property has been divided into lots, withdraw any one or more of such lots at any time before the same has been sold without disclosing the reserve price

(d) the Purchaser shall forthwith pay to the Vendor’s Solicitor as stakeholder a deposit of ten per centum (10%) of the Purchase Price in part payment thereof, and shall execute an agreement in the form of the Memorandum to complete the purchase of the Subject Property in accordance with the Conditions.

PRIVATE TREATY SALE

5.	Where the sale is by private treaty, the following provisions shall apply:
(a)	the Purchaser shall, on or before the Date of Sale, pay to the Vendor’s Solicitor a deposit of the amount stated in the Memorandum in part payment of the Purchase Price, which deposit is, with effect on and from the Date of Sale, to be held by the said Solicitor as stakeholder
(b)	if notwithstanding Condition 5(a) a part of such deposit has been or is paid to any other person appointed or nominated by the Vendor, that other person, with effect as from the Date of Sale, shall be deemed to receive or to have received said part as stakeholder

(c) any moneys paid by way of deposit by or on behalf of the Purchaser prior to the Date of Sale to the Vendor’s Solicitor or to any such other person as aforesaid shall, up to the Date of Sale, be held by the recipient thereof as trustee for the Purchaser.

THE FOLLOWING CONDITIONS APPLY WHETHER THE SALE IS BY
AUCTION OR BY PRIVATE TREATY

PURCHASER QN NOTICE OF CERTAIN DOCUMENTS

6. The documents specified in the Documents Schedule or copies thereof have been available for inspection by the Purchaser or his Solicitor prior to the Date of Sale. If all or any of the Subject Property is stated in the Particulars or in the Special Conditions to be held under a lease or to be subject to any covenants, conditions, rights, liabilities or restrictions, and the lease or other document containing the same is specified in the Documents Schedule, the Purchaser, whether availing of such opportunity of inspection or not, shall be deemed to have purchased with full knowledge of the contents thereof, notwithstanding any partial statement of such contents in the Particulars or in the Conditions.

DELIVERY OF TITLE

7. Within seven Working Days from the Date of Sale, the Vendor shall deliver or send by post to the Purchaser or his Solicitor copies of the documents necessary to vouch the title to be shown in accordance with the Conditions.

TITLE

8. (a)   The Title to be shown to the Subject Property shall be such as is set forth in the Special Conditions

(b)

Where the title to be shown to the whole or any part of the Subject Property is based on possession, the Vendor shall, in addition to vouching that title and dealing with such further matters as are required of him by the Conditions, furnish to the Purchaser on or before completion of the Sale a certificate from the Revenue Commissioners to the effect (i) that the Subject Property or (as the case may be) such part of the same as aforesaid is not charged with any of the taxes covered by the provisions of Section 146, Finance Act, 1994 as amended by Section 128 Finance Act, 1996 or (ii) that the Revenue Commissioners are satisfied that any such charge will be discharged within a time considered by them to be reasonable

(c)

Save as stipulated in the Special Conditions the Vendor shall, prior to or at the completion of the Sale, discharge all mortgages and charges for the payment of money (other than items apportionable under Condition 27(b)) which affect the Subject Property.

FOREIGN VENDOR

9. Where the Vendor is a company, corporation, association or other similar entity incorporated, formed or established outside the State, the Vendor shall disclose this fact in the Special Conditions.

LEASEHOLD TITLE

10. (a)    Where any of the Subject Property is held under a lease, the Purchaser shall not call for or investigate the title of the grantor or lessor to make the same, but shall conclusively assume that it was well and validly made, and is a valid and subsisting lease.

(b) Where any of the Subject Property is stated to be held under a lease or an agreement therefor then:

(i)	no Objection or Requisition shall be made or indemnity required on account of such lease or agreement being (if such is the case) a sublease or agreement therefor, or on account of any superior lease comprising other property apart from the Subject Property or reserving a larger rent, or on the ground of any superior owner not having concurred in any apportionment or exclusive charge of rent
(ii)	no Objection or Requisition shall be made by reason of any discrepancy between the covenants, conditions and provisions contained in any sublease and those in any superior lease, unless such as could give rise to forfeiture or a right of re-entry
(iii)	the production of the receipt for the last gale of rent reserved by the lease or agreement therefor, under which the whole or any part of the Subject Property is held, (without proof of the title or authority of the person giving such receipt) shall (unless the contrary appears) be accepted as conclusive evidence that all rent accrued due has been paid and all covenants and conditions in such lease or agreement and in every (if any) superior lease have been duly performed and observed or any breaches thereof (past or continuing) effectively waived or sanctioned up to the actual completion of the Sale, whether or not it shall appear that the lessor or reversioner was aware of such breaches. If the said rent (not being a rack rent) shall not have been paid in circumstances where the party entitled to receive the same is not known to the Vendor, or if the Subject Property is indemnified against payment of rent, the production of a Statutory Declaration so stating shall (unless the contrary appears) be accepted as such conclusive evidence, provided that the Declaration further indicates that no notices or rent demands have been served on or received by the Vendor under the lease or agreement on foot of which the Subject Property is held; that the Vendor has complied with all the covenants (other than those in respect of payment of rent) on the part of the lessee and the conditions contained in such lease or agreement, and that he is not aware of any breaches thereof either by himself or by any of his predecessors in title
(iv)	if any of the Subject Property is held under a lease or agreement for lease requiring consent to alienation, the Vendor shall apply for and endeavour to obtain such consent, and the Purchaser shall deal expeditiously and constructively with and shall satisfy all reasonable requirements of the lessor in relation to the application therefor, but the Vendor shall not be required to institute legal proceedings to enforce the issue of any such consent or otherwise as to the withholding of the same. If such consent shall have been refused or shall not have been procured and written evidence of the same furnished to the Purchaser on or before the Closing Date, or if any such consent is issued subject to a condition, which the Purchaser on reasonable grounds refuses to accept, either party may rescind the Sale by seven days prior notice to the other.

PRIOR TITLE

11. (a) The title to the Subject Property prior to the date of the instrument specified in the Special Conditions as the commencement of title, whether or not appearing by recital, inference or otherwise, shall not be required, objected to or investigated.

(b) In the case of registered freehold or leasehold land registered under the Registration of Title Acts, 1891 to 1942 or the Registration of Title Act, 1964 the provisions of subparagraph (a) of this Condition shall apply without prejudice to Sections 52 and 115 of the last mentioned Act and shall not disentitle the Purchaser from investigating the possibility of there having been a voluntary disposition on the title within the period of twelve years immediately preceding the Date of Sale or a disposition falling within Section 121, Succession Act, 1965 as extended by Section 25 (5), Family Law Act, 1995 and the Vendor shall be required to deal with all points properly taken in or arising out of such investigation.

INTERMEDIATE TITLE

12. Where in the Special Conditions it is provided that the title is to commence with a particular instrument and then to pass to a second instrument or to a specified event, the title intervening between the first instrument and the second instrument or the specified event, whether or not appearing by recital, inference or otherwise, shall not be required, objected to or investigated.

REGISTERED LAND

13. Where all or any of the Subject Property consists of freehold or leasehold registered land registered under the Registration of Title Acts, 1891 to 1942 (“the Acts of 1891 to 1942”) or the Registration of Title Act, 1964 (“the Act of 1964”) then:

(a)	if the registration is subject to equities under the Acts of 1891 to 1942, the Purchaser shall not require the equities to be discharged, but the Vendor shall, with the copy documents to be delivered or sent in accordance with Condition 7, furnish sufficient evidence of title prior to first registration or otherwise to enable the Purchaser to procure their discharge
(b)	if the registration is with a possessory title under the Act of 1964 the Purchaser shall not require the Vendor to be registered with an absolute title, but the Vendor shall, with the copy documents to be delivered or sent in accordance with Condition 7, furnish sufficient evidence of the title prior to such registration or otherwise to enable the Purchaser to be registered with an absolute title
(c)	the Vendor shall, with the copy documents to be delivered or sent in accordance with Condition 7, furnish to the Purchaser a copy of the Land Registry Folio or Folios relating to the Subject Property written up-to-date (or as nearly as practicable up-to date), together with a copy of the relevant Land Registry map or file plan
(d)	the Vendor shall furnish a Statutory Declaration, by some person competent to make it, confirming that there are not in existence any burdens which under the Act of 1964 affect registered land without registration, save such (if any) as are specifically mentioned in the Particulars or the Special Conditions
(e)	if the Land Certificate has been issued to the Land Commission or if no such Certificate has been issued, the Purchaser shall not be entitled to require such Certificate to be produced, handed over on completion or issued
(f)	the Purchaser shall procure himself to be registered as owner of the Subject Property at his own expense
(g)	in the.event of the Subject Property being subject to a Land Purchase Annuity the Vendor shall, prior to completion, redeem the same or (as the case may be) such proportion thereof as may be allocated to the Subject Property

(h) where the Subject Property is part only of the lands in a Folio, the Vendor shall (i) do everything within the reasonable power or procurement of the Vendor to satisfy within a reasonable time any Land Registry mapping queries arising on the registration of the Assurance to the Purchaser so far as it affects that land, and (ii) pay and discharge any outlay to the Land Registry which ought properly to be paid by the Vendor, including additional fees attributable to default on the part of the Vendor.

IDENTITY

14. The Purchaser shall accept such evidence of identity as may be gathered from the descriptions in the documents of title plus (if circumstances require) a statutory declaration to be made by a competent person, at the Purchaser’s expense, that the Subject Property has been held and enjoyed for at least twelve years in accordance with the title shown. The Vendor shall be obliged to furnish such information as is in his possession relative to the identity and extent of the Subject Property, but shall not be required to define exact boundaries, fences, ditches, hedges or walls or to specify which (if any) of the same are of a party nature, nor shall the Vendor be required to identify parts of the Subject Property held under different titles.

RIGHTS — LIABILITIES — CONDITION OF SUBJECT PROPERTY

15.

The Vendor shall disclose before the Date of Sale, in the Particulars the Special Conditions or otherwise, all easements, rights, reservations, exceptions, privileges, covenants, restrictions, rents, taxes and other liabilities (not already known to the Purchaser or apparent from inspection) which are known by the Vendor to affect the Subject Property and are likely to affect it following completion of the Sale.

16.

Subject to Condition 15, the Purchaser shall be deemed to buy:

(a)	with full notice of the actual state and condition of the Subject Property and
(b)	subject to (i) all leases (if any) mentioned in the Particulars or in the Special Conditions and (ii) all easements, rights, reservations, exceptions, privileges, covenants, restrictions, rents, taxes, liabilities, outgoings and all incidents of tenure affecting the Subject Property.

REQUISITIONS

17.

The Purchaser shall, within fourteen Working Days after the later of (i) the Date of Sale or (ii) the delivery of the copy documents of title in accordance with Condition 7, send to the Vendor’s Solicitor a written statement of his Objections (if any) on the title and his Requisitions. Any Objection or Requisition not made within the time aforesaid and not going to the root of the title shall be deemed to have been waived. The Vendor’s Replies to any Objections or Requisitions shall be answered by the Purchaser in writing within seven Working Days after the delivery thereof and so on toties quoties, and, if not so answered, shall be considered to have been accepted as satisfactory. In all respects time shall be deemed to be of the essence of this Condition.

18.

If the Purchaser shall make and insist on any Objection or Requisition as to the title, the Assurance to him or any other matter relating or incidental to the Sale, which the Vendor shall, on the grounds of unreasonable delay or expense or other reasonable ground, be unable or unwilling to remove or comply with, the Vendor shall be at liberty (notwithstanding any intermediate negotiation or litigation or attempts to remove or comply with the same) by giving to the Purchaser or his Solicitor not less than five Working

Days notice to rescind the Sale. In that case, unless the Objection or Requisition in question shall in the meantime have been withdrawn, the Sale shall be rescinded at the expiration of such notice.

SEARCHES

19. The Purchaser shall be furnished with the searches (if any) specified in the Searches Schedule and any searches already in the Vendor’s possession, which are relevant to the title or titles on offer. Any other searches required by the Purchaser must be obtained by him at his own expense. Where the Special Conditions provide that the title shall commence with a particular instrument and then pass to a second instrument or to a specified event, the Vendor shall not be obliged to explain and discharge any act which appears on a search covering the period between such particular instrument and the date of the second instrument or specified event, unless same goes to the root of the title. Subject as aforesaid the Vendor shall explain and discharge any acts appearing on Searches covering the period from the date stipulated or implied for the commencement of the title to the date of actual completion.

ASSURANCE

20. (a) On payment of all moneys payable by him in respect of the Sale, and subject to the provisions of Section 980, Taxes Consolidation Act, 1997, and (if relevant) to those contained in Section 107, Finance Act, 1993 (in relation to Residential Property Tax), the Purchaser shall be entitled to a proper Assurance of the Subject Property from the Vendor and all other (if any) necessary parties, such Assurance to be prepared by and at the expense of the Purchaser. The draft thereof shall be submitted to the Vendor’s Solicitor not less than seven Working Days, and the engrossment not less than four Working Days, before the Closing Date. The delivery of the said draft or engrossment shall not prejudice any outstanding Objection or Requisition validly made.

(b) If the Stamp Duty (Particulars to be Delivered) Regulations, 1995 apply to the Sale, the Vendor shall, on or before handing over the Assurance, furnish to the Purchaser the Form referred to in such Regulations duly completed in accordance therewith.

VACANT POSSESSION

21. Subject to any provision to the contrary in the Particulars or in the Conditions or implied by the nature of the transaction, the Purchaser shall be entitled to vacant possession of the Subject Property on completion of the Sale.

LEASES

22.

Where the Subject Property is sold subject to any lease, a copy of the same (or, if the provisions thereof have not been reduced to writing, such evidence of its nature and terms as the Vendor shall be able to supply) together with copies of any notices in the Vendor’s possession served by or on the lessee (and of continuing and material relevance) shall, prior to the Sale, be made available for inspection by the Purchaser or his Solicitor.

23.

Unless the Special Conditions provide to the contrary, the Purchaser shall be entitled to assume that, at the Date of Sale, the lessee named in any such Lease (as is referred to in Condition 22) is still the lessee; that there has been no variation in the terms and conditions of said Lease (other than such as may be evident from an inspection of the Subject Property or apparent from the Particulars or the documents furnished to the Purchaser prior to the Sale), and that the said terms and conditions (save those pertaining to the actual state and condition of the Subject Property) have been complied with.

COMPLETION AND INTEREST

24. (a) The Sale shall be completed and the balance of the Purchase Price paid by the Purchaser on or before the Closing Date.

     (b) Completion shall take place at the Office of the Vendor’s Solicitor.

25. (a) If by reason of any default on the part of the Purchaser, the purchase shall not have been completed on or before the later of (a) the Closing Date or (b) such subsequent date whereafter delay in completing shall not be attributable to default on the part of the Vendor

(i) the Purchaser shall pay interest to the Vendor on the balance of the Purchase Price remaining unpaid at the Stipulated Interest Rate for the period between the Closing Date (or as the case may be such subsequent date as aforesaid) and the date of actual completion of the Sale. Such interest shall accrue from day to day and shall be payable before and after any judgment and

(ii) the Vendor shall in addition to being entitled to receive such interest, have the right to take the rents and profits less the outgoings of the Subject Property up to the date of the actual completion of the Sale

(b) If the Vendor by reason of his default shall not be able, ready and willing to complete the Sale on the Closing Date he shall thereafter give to the Purchaser at least five Working Days prior notice of a date upon which he shall be so able ready and willing and the Purchaser shall not before the expiration of that notice be deemed to be in default for the purpose of this Condition provided that no such notice shall be required if the Vendor is prevented from being able and ready to complete or to give said notice by reason of the act or default of the Purchaser

(c) The Vendor shall not be entitled to delay completion solely because of a dispute between the parties with regard to liability for such interest or as to the amount of interest payable PROVIDED ALWAYS that such completion and the delivery of any Assurance on foot of these Conditions shall be had strictly without prejudice to the right of the Vendor to pursue his claim for interest.

26. The submission of an Apportionment Account made up to a particular date or other corresponding step taken in anticipation of completing the Sale shall not per se preclude the Vendor from exercising his rights under the provisions of Condition 25 and in the event of such exercise the said Apportionment Account or the said other corresponding step shall (if appropriate) be deemed not to have been furnished or taken, and the Vendor shall be entitled to furnish a further Apportionment Account.

APPORTIONMENT AND POSSESSION

27. (a) Subject to the stipulations contained in the Conditions, the Purchaser, on paying the Purchase Price shall be entitled to vacant possession of the Subject Property or (as the case may be) the rents and profits thereout with effect from the Apportionment Date

(b) All rents, profits, rates, outgoings and moneys (including rent, outgoings and money payable in advance but not including impositions derived from hypothecation) referable to the Subject Property shall for the purpose of this Condition, be apportioned (whether apportionable by law or not) on a day to day basis as at the Apportionment Date, up to which the liability for or the entitlement to the same shall (subject to apportionment as aforesaid to accord with the position obtaining as to

	moneys paid or due at such date) be for the account of the Vendor and thereafter for that of the Purchaser provided that if completion shall have been delayed through the default of the Vendor the Purchaser may opt for apportionment under this Condition as at the Closing Date or at the date at which the Purchaser (if also in default) shall have ceased to have been so in default whichever shall be the later
(c)	In the implementation of this Condition the Vendor shall be regarded as being the owner of the Subject Property until midnight on such date as is appropriate for apportionment purposes
(d)	The balance of the Purchase Price shall (where appropriate) be adjusted upwards or downwards to accommodate apportionments calculated pursuant to this Condition and the expression ‘balance of the Purchase Price” where used in the Conditions shall be construed accordingly
(e)	To the extent that same shall be unknown at the Apportionment Date (or shall not then be readily ascertainable) amounts to be apportioned hereunder, including any amount apportionable pursuant to Condition 27(f), shall be apportioned provisionally on a fair estimate thereof, and, upon ascertainment of the actual figures, a final apportionment shall be made, and the difference between it and the provisional apportionment shall be refunded by the Vendor or the Purchaser (as the case may be) to the other within ten Working Days of the liable party becoming aware of the amount of such difference
(f)	Excise and kindred duties payable in respect of the Subject Property or any licence attached thereto shall be apportioned on a day to day basis as at the Apportionment Date up to which the liability for the same shall be for the account of the Vendor and thereafter for that of the Purchaser and Condition 27 (c) shall apply for the purposes of such apportionment.

SECTION 45. LAND ACT 1965

28. Where Section 45, Land Act, 1965 applies, the Purchaser shall, at his own expense, procure any such Certificate or Consent as may be necessary thereunder for the vesting of the Subject Property in him or his nominee and the Sale is not conditional upon such consent being obtained

COMPULSORY REGISTRATION

29. (a) If all or any of the Subject Property is unregistered land the registration of which was compulsory prior to the Date of Sale the Vendor shall be obliged to procure such registration prior to completion of the Sale

(b) If all or any of the Subject Property is unregistered land, the registration of which shall become compulsory at or subsequent to the Date of Sale, the Vendor shall not be under any obligation to procure such registration but shall at or prior to such completion furnish to the Purchaser a Map of the Subject Property complying with the requirements of the Land Registry as then recognised and further the Vendor shall, if so requested within two years after completion of the Sale, by and at the expense of the Purchaser, supply any additional information, which he may reasonably be able to supply, and produce and furnish any documents in his possession that may be required to effect such registration.

SIGNING “IN TRUST” OR “AS AGENT”

30. A Purchaser who signs the Memorandum “in Trust”, “as Trustee” or “ as Agent”, or with any

similar qualification or description without therein specifying the identity of the principal or other party for whom he so signs, shall be personally liable to complete the Sale, and to fulfil all such further stipulations on the part of the Purchaser as are contained in the Conditions, unless and until he shall have disclosed to the Vendor the name of his principal or other such party.

FAILURE TO PAY DEPOSIT

31.	The failure by the Purchaser to pay in full the deposit hereinbefore specified as payable by him shall constitute a breach of condition entitling the Vendor to terminate the Sale or to sue the Purchaser for damages or both but such entitlement shall be without prejudice to any rights otherwise available to the Vendor.
32.	In case a cheque taken for the deposit (having been presented and whether or not it has been re-presented) shall not have been honoured, then and on that account the Vendor may (without prejudice to any rights.otherwise available to him) elect either

(a)	to treat the Contract evidenced by the Memorandum, the Particulars and the Conditions as having been discharged by breach thereof on the Purchaser’s part or
(b)	to enforce payment of the deposit as a deposit by suing on the cheque or otherwise.

DIFFERENCES — ERRORS

33. (a) In this Condition “error” includes any omission, non-disclosure, discrepancy, difference, inaccuracy, mis-statement or mis-representation made in the Memorandum, the Particulars or the Conditions or the Non-Title Information Sheet or in the course of any representation, response or negotiations leading to the Sale, and whether in respect of measurements, quantities, descriptions or otherwise

(b)

The Purchaser shall be entitled to be compensated by the Vendor for any loss suffered by the Purchaser in his bargain relative to the Sale as a result of an error made by or on behalf of the Vendor provided however that no compensation shall be payable for loss of trifling materiality unless attributable to recklessness or fraud on the part of the Vendor nor in respect of any matter of which the Purchaser shall be deemed to have had notice under Condition 16(a) nor in relation to any error in a location or similar plan furnished for identification only

(c)

Nothing in the Memorandum, the Particulars or the Conditions shall:

(i)	entitle the Vendor to require the Purchaser to accept property which differs substantially from the property agreed to be sold whether in quantity, quality, tenure or otherwise, if the Purchaser would be prejudiced materially by reason of any such difference or
(ii)	affect the right of the Purchaser to rescind or repudiate the Sale where compensation for a claim attributable to a material error made by or on behalf of the Vendor cannot be reasonably assessed

(d) Save as aforesaid, no error shall annul the Sale or entitle the Vendor or the Purchaser (as the case may be) to be discharged therefrom.

DOCUMENTS OF TITLE RELATING TO OTHER PROPERTY

34. (a) Documents of title relating to other property as well as to the Subject Property shall be retained by the Vendor or other person entitled to the possession thereof

(b)	where the property is sold in lots, all documents of title relating to more than one lot shall be retained by the Vendor, until the completion of the Sales of all the lots comprised in such documents, and shall then (unless they also relate to any property retained by the Vendor) be handed over to such of the Purchasers as the Vendor shall consider best entitled thereto
(c)	the Vendor shall give to the Purchaser (and where the property is sold in lots, to the Purchaser of each lot) certified copies of all documents retained under this Condition and pertinent to the title to be furnished (other than documents of record, of which plain copies only will be given)
(d)	subject as hereinafter provided, the Vendor shall give the usual statutory acknowledgement of the right of production and undertaking for safe custody of all documents (other than documents of record) retained by him under this Condition and pertinent to the title to be furnished. Such acknowledgement and undertaking shall be prepared by and at the expense of the Purchaser
(e)	if the Vendor is retaining any unregistered land held wholly or partly under the same title as the Subject Property, the Assurance shall be engrossed in duplicate by and at the expense of the Purchaser, who shall deliver to the Vendor the Counterpart thereof, same having been stamped and registered and (if appropriate) executed by the Purchaser.

DISCLOSURE OF NOTICES

35. Where prior to the Date of Sale

(a)	any closing, demolition or clearance order
	or
(b)	any notice for compulsory acquisition or any other notice (other than such other notice, details of which are required to be entered on the Planning Register pursuant to the requirements of Planning Legislation)

made or issued by or at the behest of a Competent Authority in respect of the Subject Property and affecting the same at the Date of Sale has been notified or given to the Vendor (whether personally or by advertisement or posting on the Subject Property or in any other manner) or is otherwise known to the Vendor, or where the Subject Property is, at the Date of Sale, affected by any award or grant, which is or may be repayable by the Vendor’s successor in title, then if the Vendor fails to show

(i)	that, before the Date of Sale, the Purchaser received notice or was aware of the matter in question
	or
(ii)	that the matter in question was apparent from inspection of the Development Plan or the current or published Draft Development Plan for the area within which the Subject Property is situate
	or
(iii)	that same is no longer applicable or material

or

(iv) that same does not prejudicially affect the value of the Subject Property

or

(v) that the subject thereof can and will be dealt with fully in the Apportionment Account

the Purchaser may by notice given to the Vendor rescind the Sale.

DEVELOPMENT

36.

In cases where property is affected by all unauthorised development or a breach of Condition I Conditions I . it a Permission Approval amounting to a non-conforming development or where the Bye-Law Amnesty covered by Section 22M, Building Control Act, 1990 is relevant, it is recommended that same be dealt with expressly by Special Condition.

(a) Unless the Special Conditions contain a stipulation to the contrary, the Vendor warrants:

(i)	that there has been no Development of the Subject Property since the 1st day of October, 1964, for which Planning Permission or Building Bye-Law Approval was required by law
	or
(ii)	that all Planning Permissions and Building Bye-Law Approvals required by law for the Development of the Subject Property as at the Date of Sale were obtained (save in respect of matters of trifling materiality), and that, where implemented, the conditions thereof in relation to and specifically addressed to such Development were complied with substantially

PROVIDED HOWEVER that the foregoing warranty shall not extend to (and the Vendor shall not be required to establish) the obtaining of approvals under the Building Bye-Laws or compliance with such Bye-Laws in respect of Development or works carried out prior to the 13th day of December, 1989 (this proviso being here inafter in Condition 36 referred to as the “Proviso”)

(b) unless the Special Conditions contain a stipulation to the contrary, the Vendor warrants in all cases where the provisions of the Building Control Act, 1990 or of any Regulation from time to time thereunder apply to the design or Development of the
     Subject Property or any part of the same or any activities in connection therewith, that there has been substantial compliance with the said provisions in so far as they pertained to such design, Development or activities

(c) the warranties referred to in (a) and M of this Condition shall not extend to any breach of provisions contained in Planning Legislation, which breach has been remedied or is no longer continuing at the Date of Sale.

(d) the Vendor shall prior to the Date of Sale make available to the Purchaser for inspection or furnish to the Purchaser copies of:-

(i) all such Permissions and Approvals as are referred to in Condition 36 (a) other than in the Proviso

(ii) all Fire Safety Certificates and (if available) Commencement Notices issued under Regulations made pursuant to the Building Control Act, 1990, and referable to the Subject Property (such Permissions, Approvals and Certificates specified in this Condition 36(d) other than those specified in the Proviso being hereinafter in Condition 36 referred to as the “Consents”)

and

(iii) (Save where Development is intended to be carried out between the Date of Sale and the date upon which the Sale shall be completed) the documents referred to in Condition 36 (e)

(e) the Vendor shall, on or prior to completion of the Sale, furnish to the Purchaser

(i) written confirmation from the Local Authority of compliance with all conditions involving financial contributions or the furnishing of bonds in any such Consents PROVIDED HOWEVER that where

the Development authorised by such Consents relates to a residential housing estate of which the Development of the Subject Property forms part and

such Consents relate to the initial construction of a building on the Subject Property

written confirmation from the Local Authority that the roads and services abutting on the Subject Property have been taken in charge by it shall be accepted as satisfactory evidence of compliance with such conditions, unless the said confirmation discloses a requirement for payment of outstanding moneys

(ii) a Certificate or Opinion by an Architect or an Engineer (or other professionally qualified person competent so to certify or opine) confirming that

-	such Consents relate to the Subject Property
-	(where applicable) the design of the buildings on the Subject Property is in substantial compliance with the Building Control Act, 1990 and the Regulations made thereunder
-	the Development of the Subject Property has been carried out in substantial compliance with such Consents and (where applicable)the requirements of the Building Control Act, 1990 and Regulations made thereunder
-	all conditions (other than financial conditions) of such Consents have been complied with substantially
	and
-	in the event of the Subject Property forming part of a larger development, all conditions (other than financial conditions) of such Consents which relate to the overall development have been complied with substantially so far as was reasonably possible in the context of such development as at the date of such Certificate or       Opinion

(f) (i)where the Vendor has furnished Certificates or Opinions pursuant to Condition 36 (e), the Vendor shall have no liability on foot of the warranties expressed in Condition 36(a) or 36(b) or either of them in respect of any matter with regard to which such Certificate or Opinion is erroneous or inaccurate, unless the Vendor was aware at the Date of Sale that the same dontained any material error or inaccuracy

(ii) if, subsequent to the Date of Sale and prior to the completion thereof, it is established that any such Certificate or Opinion is erroneous or inaccurate,

then, if the Vendor fails to show

that before the Date of Sale the Purchaser was aware of the error or inaccuracy

or

that same is no longer relevant or material

or

that same does not prejudicially affect the value of the Subject Property the Purchaser may by notice given to the Vendor rescind the Sale.

RESCISSIQN

37. Upon rescission of the Sale in accordance with any of the provisions herein or in the Special Conditions contained or otherwise:

(a)	the Purchaser shall be entitled to a return of his deposit (save where it shall lawfully have been forfeited) but without interest thereon
(b)	the Purchaser shall remit to the Vendor all documents in his possession belonging to the Vendor and the Purchaser shall at his expense (save where Special Conditions otherwise provide) procure the cancellation of any entry relating to the Sale in any register.

38.

If any such deposit as is to be returned pursuant to Condition 37 shall not have been returned to the Purchaser within five Working Days from the date upon which the Sale shall have been rescinded, the Purchaser shall be entitled to interest thereon at the Stipulated Interest Rate from the expiration of the said period of five Working Days to the date upon which the deposit shall have been so returned.

39.

The right to rescind shall not be lost by reason only of any intermediate negotiations or attempts to comply with or to remove the issue giving rise to the exercise of such right.

COMPLETION NOTICES

40. Save where time is of the essence in respect of the Closing Date, the following provisions shall apply:

(a)	if the Sale be not completed on or before the Closing Date either party may on or after that date (unless the Sale shall first have been rescinded or become void) give to the other party notice to complete the Sale in accordance with this condition, but such notice shall be effective only if the party giving it shall then either be able, ready and willing to complete the Sale or is not so able, ready or willing by reason of the default or misconduct of the other party
(b)	upon service of such notice the party upon whom it shall have been served shall complete the Sale within a period of twenty-eight days after the date of such service (as defined in Condition 49 and excluding the date of service), and in respect of such period time shall be of the essence of the contract but without prejudice to any intermediate right of rescission by either party
(c)	the recipient of any such notice shall give to the party serving the same reasonable advice of his readiness to complete

(d)	if the Purchaser shall not comply with such a notice within the said period (or within any extension thereof which the Vendor may agree) he shall be deemed to have failed to comply with these Conditions in a material respect and the Vendor may enforce against the Purchaser, without further notice, such rights and remedies as may be available to the Vendor at law or in equity, or (without prejudice to such rights and remedies) may invoke and impose the provisions of Condition 41
(e)	if the Vendor does not comply with such a notice within the said period (or within any extension thereof which the Purchaser may agree), then the Purchaser may elect either to enforce against the Vendor, without further notice, such rights and remedies as may be available to the Purchaser at law or in equity or (without prejudice to any right of the Purchaser to damages) to give notice to the Vendor requiring a return to the Purchaser of all moneys paid by him, whether by way of deposit or otherwise, on account of the Purchase Price. Condition 38 shall apply to all moneys so to be returned, the period of five Working Days therein being computed from the date of the giving of such last mentioned notice. If the Purchaser gives such a notice and all the said moneys and interest (if any) are remitted to him, the Purchaser shall no longer be entitled to specific performance of the Sale, and shall return forthwith all documents in his possession belonging to the Vendor, and (at the Vendor’s expense) procure the cancellation of any entry relating to the Sale in any register
(f)	the party serving a notice under this Condition may, at the request of or with the consent of the other party, by written communication to the other party extend the term of such notice for one or more specified periods of time, and, in that case, the term of the notice shall be deemed to expire on the last day of such extended period or periods, and the notice shall operate as though such extended period or periods had been specified in this Condition in lieu of the said period of twenty-eight days, and time shall be of the essence in relation to such extended period
(g)	the Vendor shall not be deemed to be other than able, ready and willing to complete for the purposes of this Condition:

(i) by reason of the fact that the Subject Property has been mortgaged or charged, provided that the funds (including the deposit) receivable on completion shall (after allowing for all prior claims thereon) be sufficient to discharge the aggregate of all amounts payable in satisfaction of such mortgages and charges to the extent that they relate to the Subject Property

or

(ii) by reason of being unable, not ready or unwilling at the date of service of such notice to deliver vacant possession of the Subject Property provided that (where it is a term of the Sale that vacant possession thereof be given) the Vendor is, upon being given reasonable advice of the other party’s intention to close the Sale on a date within the said period of twenty-eight days or any extension thereof pursuant to Condition 40 (0, able, ready and willing to deliver vacant possession of the Subject Property on that date.

FORFEITURE OF DEPOSIT AND RESALE

41. (a) If the Purchaser shall fail in any material respect to comply with any of the Conditions, the Vendor (without prejudice to any rights or remedies available to him at law or in equity) shall be entitled to forfeit the deposit and to such purpose unilaterally to direct his Solicitor to release same to him AND the Vendor shall be at liberty (Without being obliged to tender an Assurance) to resell the Subject Property, with or without notice to the Purchaser, either by public auction or private treaty. In the event of the Vendor re-selling the Subject Property within one year after the Closing Date (or within one year computed from the expiration of any period by

which the closing may have been extended pursuant to Condition 40) the deficiency (if any) arising on such re-sale and all costs and expenses attending the same or on any attempted re-sale shall (without prejudice to such damages to which the Vendor shall otherwise be entitled) be made good to the Vendor by the Purchaser, who shall be allowed credit against same for the deposit so forfeited. Any increase in price obtained by the Vendor on any re-sale, whenever effected, shall belong to the Vendor.

(b)

A Solicitor acting on any such direction as is referred to in Condition 41(a) shall have no further obligations as stakeholder or otherwise in respect of such deposit to the Vendor or to the Purchaser PROVIDED that he shall have given to the Purchaser notice of the receipt by him of the said direction and the Purchaser shall not within twenty one days of the giving of such notice have instituted and served proceedings disputing the rights alleged by the Vendor to forfeit the deposit.

DAMAGES FOR DEFAULT

42.	(a)	Neither the Vendor nor the Purchaser, in whose favour an order for specific performance has been made, shall be precluded from an award of damages at law or in equity, in the event of such order not being complied with.
	(b)	Notwithstanding any rule of law to the contrary failure on the part of the Vendor to show title to the Subject Property in accordance with the Conditions shall not per se preclude the making of an award for damages to the Purchaser for loss of bargain or otherwise in relation to the Sale.

43.

Subject as hereinafter provided, the Vendor shall be liable for any loss or damage howsoever occasioned (other than by the Purchaser or his Agent) to the Subject Property (and the Purchased Chattels) between the Date of Sale and the actual completion of the Sale BUT any such liability (including liability for consequential or resulting loss) shall not as to the amount thereof exceed the Purchase Price.

44.

The liability imposed on the Vendor by Condition 43 shall not apply:

(a)	to inconsequential damage or insubstantial deterioration from reasonable wear and tear in the course of normal occupation and use, and not materially affecting value
(b)	to damage occasioned by operations reasonably undertaken by the Vendor in his removal from, and vacation of the Subject Property, provided that the same are so undertaken with reasonable care
(c)	where any such loss or damage has resulted from a requirement restriction or obligation imposed by a Competent Authority after the Date of Sale.

45. Nothing in Conditions 43 and 44 shall affect:

(a)	the Purchaser’s right to specific performance in an appropriate case
(b)	the Purchaser’s right to rescind or repudiate the Sale upon the Vendor’s failure to deliver the Subject Property substantially in its condition at the Date of Sale (save where such failure shall have been occasioned by the Purchaser or his Agent)
(c)	the operation of the doctrine of conversion
(d)	the Purchaser’s right to gains accruing to the Subject Property (or the Purchased Chattels) after the Date of Sale

(e)	the Purchaser’s right to effect on or after the Date of Sale his own insurance against loss or damage in respect of the Subject Property or any part of the same (or the Purchased Chattels)
(f)	the rights and liabilities of parties other than the Vendor and the Purchaser
(g)	the rights and liabilities of the Purchaser on foot of any lease subsisting at the Date of Sale, or of any arrangement whereby the Purchaser shall prior to the actual completion of the Sale have been allowed into occupation of the Subject Property or any part thereof (or into possession of the Purchased Chattels).

CHATTELS

46. Unless otherwise disclosed to the Purchaser prior to the Sale the Vendor warrants that, at the actual, completion of the Sale, all the Purchased Chattels shall be his unencumbered property and that same shall not be subject to any lease, rental hire, hire-purchase or credit sale agreement or chattel mortgage.

INSPECTION

47. The Vendor shall accede to all such requests as may be made by the Purchaser for the inspection on a reasonable number of occasions and at reasonable times of the Subject Property (and the Purchased Chattels).

NON-MERGER

48. Notwithstanding delivery of the Assurance of the Subject Property to the Purchaser on foot of the Sale, all obligations and provisions designed to survive completion of the Sale and all warranties in the Conditions contained, which shall not have been implemented by the said Assurance, and which shall be capable of continuing or taking effect after such completion, shall enure and remain in full force and effect.

NOTICES

49. Unless otherwise expressly provided, any notice to be given or served on foot of the Conditions shall be in writing, and may (in addition to any other prescribed mode of service) be given:

(a)	by handing same to the intended recipient, and shall be deemed to have been delivered when so handed
(b)	by directing it to the intended recipient, and delivering it by hand, or sending same by prepaid post to:

(i) such address as shall have been advised by him to the party serving the notice as being that required by the intended recipient for the service of notices,

or

(ii) (failing such last mentioned advice) the address of the intended recipient as specified in the Memorandum,

or

(iii) (in the event of the intended recipient being a Company) its Registered Office for the time being,

or

(iv) the office of the Solicitor representing the intended recipient in relation to the Sale

(c) by facsimile transmission directed to the office of the Solicitor representing the intended recipient in relation to the Sale

and any such notice shall be deemed to have been given or served, when delivered, at the time of delivery, and, when posted, at the expiration of three Working Days after the envelope containing the same, and properly addressed, was put in the post and, when sent by facsimile transmission, at the time of its transmission.

TIME LIMITS

50. Where the last day for taking any step on foot of the Conditions or any Notice served thereunder would, but for this provision, be a day other than a Working Day, such last day shall instead be the next following Working Day provided that for the purpose of this Condition the expression “Working Day” shall not be deemed to include 0) any Saturday, Sunday, Bank or Public Holiday nor (ii) any of the seven days immediately succeeding Christmas Day nor (iii) any day on which the registers or records wherein it shall be appropriate to make searches referable to the Sale shall not be available to the public nor (iv) any day which shall be recognised by the Solicitors’ Profession at large as being a day on which their offices are not open for business.

ARBITRATION

51. All differences and disputes between the Vendor and the Purchaser as to:

(a)	whether a rent is or is not a rack rent for the purpose of Condition 10 (c), or
(b)	the identification of the Apportionment Date, or the treatment or quantification of any item pursuant to the provisions for apportionment in the Conditions, or
(c)	any issue on foot of Condition 33, including the applicability of said Condition, and the amount of compensation payable thereunder, or
(d)	the materiality of any matter for the purpose of Condition 36 (a), or
(e)	the materiality of damage or any other question involving any of the provisions in Conditions 43,44 and 45, including the amount of compensation (if any) payable, or
(f)	whether any particular item or thing is or is not included in the Sale, or otherwise as to the nature or condition thereof

shall be submitted to arbitration by a sole Arbitrator to be appointed (in the absence of agreement between the Vendor and the Purchaser upon such appointment and on the application of either of them) by the President (or other Officer endowed with the functions of such President) for the time being of the Law Society of Ireland or (in the event of the President or other Officer as aforesaid being unable or unwilling to make the appointment) by the next senior Officer of that Society who is so able and willing to make the appointment and such arbitration shall be governed by the Arbitration Acts, 1954 to 1998 provided however that if the Arbitrator shall relinquish his appointment or die, or if it shall become apparent that for any reason he shall be unable or shall have become unfit or unsuited

(whether because of bias or otherwise) to complete his duties, or if he shall be removed from office by Court Order, a substitute may be appointed in his place and in relation to any such appointment the procedures hereinbefore set forth shall be deemed to apply as though the substitution were an appointment de novo which said procedures may be repeated as many times as may be necessary.

Law Society of Ireland

GENERAL CONDITIONS OF SALE
2001 (REVISED) EDITION

Law Society General Conditions of Sale
2001 (Revised) Edition
© Law Society of Ireland

EX-10.2

Exhibit 10.2

McCann FitzGerald
SOLICITORS

Dated the 27 day of October 2005

EUROPEAN ELECTRONIC TEST CENTRE
to
DORVILLE HOMES LIMITED

DEED OF ASSIGNMENT

re: Premises at Abbey Road
Dunlaoghaire Co. Dublin

MCCANN FITZGERALD
2 Harbourmaster Place
International Financial Services Centre
Dublin I

McCann FitzGerald
SOLICITORS

THIS DEED OF ASSIGNMENT is made on the 27 October 2005
BETWEEN

1.	EUROPEAN ELECTRONIC TEST CENTRE having its registered office at P.O. Box 27 1, Grand Cayman Islands, British West Indies (“the Vendor” which expression shall where the context so admits or requires include its successors in title) of the one part and
2.	DORVILLE HOMES LMMTED having its registered office at 24-26 City Quay, Dublin 2 (“the Purchaser” which expression shall where the context admits or requires include its successors in title) the other part.

RECITALS:

1. By Lease dated the 21th day of February 1949 (“the Lease”) and made between Clara Espinasse of the first part Arthur James Beatty of the second part, Anthony Boyland and Patrick Boyland of the third part (registered in the Registry of Deeds Dublin on the 4th day of March 1949 Book 11 No. 44) a plot of ground described in the First Schedule hereto and portion of which is intended to be hereby assigned was demised to the said Anthony Boyland and Patrick Boyland for the term of 200 years from the 29th day of September 1948 subject to the yearly rent of €74 and subject to the covenants on the part of the lessee and the conditions therein contained.

2. By a Deed dated the 7^th day of May 1954 supplemental to the Lease (registered in the Registry of Deeds Dublin on the 25th day of May 1954 Book 35 No. 116) and made between the said Clara Espinasse of the one part and Christopher G. Cooney Limited of the other part the covenants and conditions in the Lease were varied and the rent reserved by the Lease was increased by the additional yearly rent of €41.00.

3. By a further Deed dated the 23rd day of September 1960 supplemental to the Lease (registered in the Registry of Deeds Dublin on the 14th day of October 1960 Book 61 No. 112) and made between the said Clara Espinasse of the one part and the said Christopher G. Cooney Limited of the part the covenants and conditions contained in the Lease were thereby further amended to allow the said Christopher G. Cooney Limited to erect factory premises on a portion of the ground demised by the Lease in accordance with plans and specifications approved by the Lessor’s architect and the yearly rent reserved by the Lease was increased by the additional yearly rent of €15.00.

4. By Deed of Assignment dated the 16th day of November 1960 (“the 1960 Assignment”) and made between the said Christopher G. Cooney Limited of the first part The Governor and Company of the Bank of Ireland of the second part and Warner-Lambert (Ireland) Limited of the third part (registered in the Registry of Deeds on the 16th January 1961 Book 4 No. 34) the plot of ground forming portion of the lands demised by the Lease and being the premises intended to be hereby assigned were assigned to Warner-Lambert (Ireland) Limited for the residue of the term of years granted by the Lease subject to the rents thereby reserved but indemnified in manner appearing in the 1960 Assignment subject to the covenants on the part of the lessee (other than for payment of rent) and the conditions contained in the Lease as varied by the herein recited Supplemental Deeds insofar as same related to the premises thereby assigned.

McCann FitzGerald
SOLICITORS

5. Warner-Lambert (Ireland) Limited with the consent of the Minister for Industry and Commerce changed its name to Warner-Lambert Ireland Limited on the 14th day of March 1968.

6. Warner-Lambert Ireland Limited erected a factory premises on the lands the subject matter of the 1960 Assignment in accordance with plans and specifications approved by the Lessor’s architect.

7. By Deed of Assignment dated the 9th day of May 1985 and made between Warner Lambert Ireland Limited of the one part and the Vendor of the other part (registered in the Registry of Deeds on the 4th day of March 1986 Book 27 No. 18) the plot of ground forming portion of the lands demised by the Lease and being the premises intended to be hereby assigned were assigned to the Vendor for the residue of the term of years granted by the Lease subject to the rents thereby reserved but indemnified in manner appearing in the 1960 Assignment subject to the covenants on the part of the lessee (other d= for payment of rent) and the conditions contained in the Lease as varied by the herein recited Supplemental Deeds insofar as same related to the premises thereby assigned.

8. The Vendor has agreed with the Purchaser for the sale to it of the hereditaments and premises described in the Second Schedule hereto and forming portion of the lands demised by the Lease for the price or sum of €8,850,000 free, from encumbrances.

NOW THIS DEED WITNESSES that in pursuance of the said agreement and in consideration of the payment by the Purchaser to the Vendor of the sum of €8,850,000 (die receipt whereof the Vendor hereby acknowledges) the Vendor as beneficial owner HEREBY ASSIGNS unto the Purchaser ALL THIS AND THOSE the hereditaments and premises described in the Second Schedule hereto TO HOLD the same unto the Purchaser for all the residue of the term of years granted by the Lease subject to the rents reserved by the Lease and the within recited Supplemental Deeds but indemnified fully against same by virtue of the indemnities contained in the 1960 Assignment and subject to the covenants on the part of the Lessee contained in the Lease insofar as the premises hereby assigned is concerned but otherwise free from encumbrances.

AND THE PURCHASER HEREBY COVENANTS with the Vendor that it will henceforth during the continuance of the term created by the Lease perform and observe the covenants on the part of the Lessee (other than for payment of rent) and the conditions on the part of the Lessee contained in the Lease insofar as same relate to the premises hereby assigned and will at all time keep the Vendor effectually indemnified against all actions proceedings costs claims damages and expenses by reason or on account of any breach nonperformance or non-observance of the said covenants or conditions or any of them in respect of the premises hereby assigned

And for the consideration aforesaid the Vendor HEREBY ASSIGNS unto the Purchaser the benefit of the acknowledgment and undertaking for the production of title documents contained in the 1960 Assignment

IT IS HEREBY CERTIFIED that section 29 (conveyance on sale combined with building agreement for dwellinghouse/apartment) of the Stamp Duties Consolidation Act, 1999, does not apply to this instrument.

IT IS HEREBY FURTHER CERTIFIED by Dorville Homes Limited being the person becoming entitled to the entire beneficial interest in the Premises hereby assured that it is a body corporate incorporated in the Member State which is a contracting party to the European Economic Area Agreement and has its registered office, central administration or principal place of business within the territory of those States and as such is a qualified person within the meaning of Section 45 of the Land Act, 1965

IN WITNESS whereof the parties hereto have executed this deed on the day and year first above written.

FIRST SCHEDULE
Premises demised by the Lease

“ALL THAT AND THOSE part of the lands of Kill-of-the-Grange in the Barony of Rathdown and County of Dublin with the frontage of three hundred and eighty feet to Abbey Road and in breadth in the rere on the West side Four Hundred and four feet and in depth from front to rere on the North side Three hundred and thirty feet and on the South side Three hundred and twenty-nine feet be the said several admeasurements more or less which said premises are shown on the plan annexed to these presents and thereon edged with red.”

SECOND SCHEDULE
Premises hereby assigned

“ALL THAT AND THOSE that portion of the premises demised by the Lease and described in the First Schedule hereto as are described in and assigned by the 1960 Assignment and are therein described as “ALL THAT plot of ground part of the lands of Kill-of-the-Grange known as the Espinasse Estate Ground containing approximately sixty-seven thousand square feet as more particularly delineated and edged red on the plant hereto annexed situate in the Barony of Rathdown and County of Dublin.”

PRESENT when the Common Seal of
EURAPEAN ELECTRONICS TEST
CENTRE was affixed hereto:	:/s/ Yong Siew Wai
	Director
	:/s/ Martin Kelly
	Director
	Witness:
	:/s/ Paul Murphy
	TS Brookwood Avenue
	Artane
	Dublins

EX-31.1

CERTIFICATIONS

Exhibit 31.1

I, S. W. Yong, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Trio-Tech International, a California corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 21, 2005

/s/ S. W. YONG  

S. W. Yong, Chief Executive Officer 

and President (Principal Executive Officer) 

EX-31.2

Exhibit 31.2

I, Victor H.M. Ting, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Trio-Tech International, a California corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 21, 2005

/s/ VICTOR H.M. TING  

Victor H.M. Ting, Chief Financial Officer 

and Vice President (Principal Financial Officer) 

EX-32

Exhibit 32

SECTION 1350 CERTIFICATION

Each of the undersigned, S.W. Yong, President and Chief Executive Officer of Trio-Tech International, a California corporation (the “Company”), and Victor H.M. Ting, Vice President and Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge (1) the quarterly report on Form 10-Q of the Company for the three months ended September 30, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ S. W. YONG
Name:	S. W. Yong
Title:	President and Chief Executive Officer
Dated:	November 21, 2005

/s/ VICTOR H. M. TING
Name:	Victor H.M. Ting
Title:	Vice President and Chief Financial Officer
Dated:	November 21, 2005

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.