0001021408-01-507194.txt : 20011009 0001021408-01-507194.hdr.sgml : 20011009 ACCESSION NUMBER: 0001021408-01-507194 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010924 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRIO TECH INTERNATIONAL CENTRAL INDEX KEY: 0000732026 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 952086631 STATE OF INCORPORATION: CA FISCAL YEAR END: 0625 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14523 FILM NUMBER: 1743538 BUSINESS ADDRESS: STREET 1: 355 PARKSIDE DR CITY: SAN FERNANDO STATE: CA ZIP: 91340 BUSINESS PHONE: 8183659200 MAIL ADDRESS: STREET 1: 355 PARKSIDE DRIVE CITY: SAN FERNANDO STATE: CA ZIP: 91340 10-K 1 d10k.htm FORM 10-K Form 10-K
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-K
 
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended June 30, 2001
 
OR
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission File Number 0-13914
 
TRIO-TECH INTERNATIONAL
(Exact name of Registrant as specified in its Charter)
 
California    95-2086631
(State or other jurisdiction of    (I.R.S. Employer
incorporation or organization)    Identification Number)
 
355 Parkside Drive   
San Fernando, California    91340
(Address of principal executive offices)    (Zip Code)
 
Registrant’s Telephone Number: 818-365-9200
 
Securities registered pursuant to Section 12(b) of the Act:
 
     Name of each exchange
Title of each class
    On which registered
Common Stock, no par value    AMEX
 
Securities registered pursuant to Section 12(g) of the Act:
 
None
 
          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  x    No  ¨
 
          The aggregate market value of voting stock held by non-affiliates of Registrant, as of September 7, 2001, was approximately $7 million (based upon the closing bid for shares of Registrant’s Common Stock as reported by the AMEX on September 7, 2001). Shares of Common Stock held by each officer, director and holder of 5% or more of the outstanding Common Stock (including shares with respect to which a holder has the right to acquire beneficial ownership within 60 days) have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
 
          The number of shares of common stock outstanding as of September 7, 2001 is 2,927,596.
 
          Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in the definitive proxy statement incorporated by reference in Part III of this Form 10-K.  ¨
 
 
TRIO-TECH INTERNATIONAL
 
INDEX
 
              Page
       PART I     
Item 1      Business      3
Item 2      Properties      10
Item 3      Legal Proceedings      11
Item 4      Submission of matters to a vote of security holders      11
 
       PART II     
 
Item 5      Market for registrant’s common equity and related stockholder matters      11
Item 6      Selected financial data      12
Item 7      Management’s discussion and analysis of financial condition and results of operations      13
Item 7A      Quantitative and qualitative disclosures about market risk      20
Item 8      Financial statements and supplementary data      20
Item 9      Changes in and disagreements with accountants on accounting and financial disclosure      20
 
       PART III     
 
Item 10      Directors and executive officers of registrant      21
Item 11      Executive compensation      21
Item 12      Security ownership of certain beneficial owners and management      21
Item 13      Certain relationships and related transactions      21
 
       PART IV     
 
Item 14      Exhibits, financial statement schedules, and reports on Form 8-K      21
 
Signatures      23
 
Exhibits     
       Independent Auditors’ Report      24
 
       Consolidated Balance Sheets
     as of June 30, 2001 and 2000		      25
 
       Consolidated Statements of Income and Comprehensive Income
      for the Years Ended June 30, 2001, 2000 and 1999		      26
 
       Consolidated Statements of Shareholders’ Equity
      for the Years Ended June 30, 2001, 2000 and 1999		      27
 
       Consolidated Statements of Cash Flows
      for the Years Ended June 30, 2001, 2000 and 1999		      28
 
       Notes to Consolidated Financial Statements      30
 
TRIO-TECH INTERNATIONAL
 
PART I
 
NOTE CONCERNING FORWARD-LOOKING STATEMENTS
 
          The discussions of Trio-Tech International’s (the “Company”) business and activities set forth in this Form 10-K 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 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. See the discussions elsewhere in this Form 10-K, 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.
 
ITEM 1 —BUSINESS
 
          Trio-Tech International was incorporated in 1958 under the laws of the State of California. As used herein, the term “Trio-Tech” or “Company” or “we” or “us” or “Registrant” includes Trio-Tech International and, or its subsidiaries unless the context otherwise indicates. Our mailing address and executive offices are located at 355 Parkside Drive, San Fernando, California 91340, and our telephone number is (818) 365-9200.
 
          With more than 43 years dedicated to the semiconductor and related industries, we have applied our expertise in design, engineering, manufacturing, distribution and test services to our global customer base.
 
General
 
          Trio-Tech designs, develops, manufactures and markets a broad range of equipment and systems used in the manufacture and testing of semiconductor devices and electronic components. In addition, we operate test facilities in the United States, Europe and Southeast Asia that provide semiconductor-testing services to component manufacturers and users.
 
          The Company operates in three industry segments: Manufacturing, Testing Services and Distribution.
 
          We manufacture “wet” processing and cleaning stations used in the manufacture of semiconductor circuits and temperature controlled chucks that are used to manufacture and test semiconductor wafers 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.
 
           We currently operate five test facilities, one in the United States, one in Europe and three in Southeast Asia. These provide customers a comprehensive range of testing services, such as burn-in and product life testing, for finished or packaged components. During 2000 and 2001 we closed two test facilities due to uncertainties in the Semiconductor industry.
 
          Our business in Southeast Asia has an active distribution operation. This provides marketing and support to distribute their own manufactured equipment in addition to distributing complimentary products from other manufacturers that are used by the Company’s customers and other semiconductor and electronics manufacturers.
 
          We are actively pursuing a strategic growth plan, which is designed to increase our addressable market by expanding product offerings with equipment and services for the front-end of the manufacturing process. This growth may be achieved through new product development and/or, although no agreements have been executed, the acquisition of complementary products and companies. The November 1997 acquisition of Universal Systems, a leader in the design and manufacture of wet process equipment, together with the continuing development of our temperature controlled chucks and the development of our COBIS-II burn-in systems, are important steps in this direction.
 
Company History
 
1958      Incorporated in California
 
1976      The Company formed Trio-Tech International Pte Ltd (TTI Pte) in Singapore.
 
1984      The Company formed the European Electronic Test Center (EETC), a Cayman Islands subsidiary, to
operate a test facility in Dublin, Ireland.
 
1985      The Company’s Singapore subsidiary entered into a joint-venture agreement, Trio-Tech Malaysia, to
operate a test facility in Penang.
 
1986      Trio-Tech International listed on the NASDAQ Small Cap market under the symbol TRTC.
 
1988      The Company acquired the Rotating Test Equipment Product Line of Genisco Technology Corporation.
 
1990      Trio-Tech International acquired Express Test Corporation in California. Trio-Tech Malaysia opened a
new facility in Kuala Lumpur.
 
1992      Trio-Tech Singapore opened Trio-Tech Bangkok, Thailand. Trio-Tech Singapore achieved ISO 9002
certification.
 
1994      Trio-Tech Malaysia started a new components assembly operation in Batang Kali.
 
1995      Trio-Tech Singapore achieved ISO 9001 certification.
 
1997      In November 1997, the Company acquired Universal Systems of Campbell, California.
 
1998      In September 1998, the Company listed on AMEX under the symbol TRT.
 
2000      Trio-Tech Singapore achieved QS 9000 certification. Trio-Tech Malaysia closed its facility in
Batang Kali.
 
2001      The Company divested the Rotating Test Equipment Product Line. Trio-Tech Malaysia closed its facility
in Kuala Lumpur.
 
Analysis of Sales
 
          Complete Business Segment and Geographic Area Information is set forth under Note 11 to the Consolidated Financial Statements for the years ended June 30, 2001, 2000 and 1999 includes as part of this Form 10-K.
 
Background Technology
 
          In 2001, the worldwide market for semiconductor devices was estimated at $175 billion. In addition to the growing demand for semiconductors, integrated circuits are continually shrinking in size while increasing in capacity, complexity, and versatility. In order to fabricate these semiconductors, manufacturers must continually improve their equipment, packaging and test facilities. In 2000, the world market for semiconductor manufacturing equipment was estimated at $48 billion, and is expected to decline by 20% in 2001.
 
          The market for semiconductor manufacturing equipment can be divided into “front-end” applications, including wafer fabrication and assembly, and “back-end” applications, comprised of packaging and testing. We estimate that the semiconductor equipment market is approximately 70% front-end equipment, 20% back-end equipment and 10% facilities.
 
“Front-End”
 
          Semiconductor devices are fundamental building blocks used in electronic equipment and systems. Each semiconductor device consists of an integrated circuit designed to perform a specific electronic function. Integrated circuits are manufactured through a series of complex steps on a wafer substrate, etching or depositing the circuit pattern on a surface, typically a circular silicon wafer, measuring three to eight inches in diameter. Multiple integrated circuit patterns are transferred to the wafer, and each completed integrated circuit is called a device or die. The number of devices or dies depends on the size of the circuit and the size of the wafer. Manufacturers can significantly increase the number of devices or dies per wafer by shrinking the circuit size or by expanding the wafer size. The transition to increased wafer size, from 200mm (8 inch) to 300mm (12 inch) wafers, is currently underway throughout the industry.
 
          After etching or deposition of integrated circuits, wafers are typically sent through a series of 100 to 300 additional processing steps. At many of these process steps, the wafer is washed and dried using wet process stations, which we manufacture.
 
          The finished wafer is then put through a series of tests where each separate integrated device on the wafer is tested for functionality. Our Artic temperature chucks are used with a wafer prober to test semiconductor wafers at accurately controlled temperatures. After testing, the wafer is “diced” or cut up, and each die is then placed into a packaging material, usually plastic or ceramic, with lead wires to permit mounting onto printed circuit boards.
 
“Back-End”
 
          Finished devices are then put through a series of tests, such as burn-in and electrical testing, to ensure they meet necessary performance and quality standards, before shipment to the customer. Our component centrifuges, leak detectors, HAST equipment and burn-in systems are all used to test and screen finished semiconductor devices to ensure they meet the specifications required by the manufacturers and customers.
 
          Trio-Tech’s test services are concentrated on the back-end screening and test of semiconductor devices. With the high concentration of semiconductor assembly and packaging facilities in Southeast Asia, a large demand exists for third party test services in this region. Customers use third party test services especially to accommodate fluctuations in output or to benefit from economies that can be offered by third party service providers.
 
Products
 
          The Company designs, develops, manufactures and markets equipment for the manufacture and test of semiconductor wafers, devices and other electronic components.
 
Front-End Products
 
    Wet Process Stations
 
          Wet process benches are used for cleaning, rinsing and drying semiconductor wafers, magnetic disks, flat panel displays and other microelectronic substrates. The wet process bench product line, which is manufactured by the Company’s subsidiary Universal Systems, includes manual, semi-automated and automated wet process stations, and features radial and linear robots, state-of-the-art PC touch-screen controllers and sophisticated scheduling and control software.
 
    Artic Temperature Controlled Wafer Chucks
 
          The Artic Temperature Controlled Chucks are used for test, characterization and failure analysis of semiconductor wafers and other components at accurately controlled hot and cold temperatures. Several models are available with temperature ranges from -65C to +400C and in diameters from 4 to 12 inch. These systems provide excellent performance to meet the most demanding customer applications. Several unique mechanical design features, for which patents are pending, provide excellent mechanical stability under high probing forces and across the temperature ranges.
 
Back-End Products
 
    Autoclaves and HAST (Highly Accelerated Stress Test) Equipment
 
          We manufacture a range of autoclaves and HAST systems and specialized test fixtures. Autoclaves provide pressurized, saturated vapor (100% relative humidity) test environments for fast and easy monitoring of integrated circuit manufacturing processes. HAST equipment, which provides a pressurized high temperature environment with variable humidity, is used to determine the moisture resistance of plastic encapsulated devices. HAST provides a fast and cost-effective alternative to conventional non-pressurized temperature and humidity testing.
 
    Burn-in Equipment and Boards
 
          We manufacture burn-in systems, burn-in boards and burn-in board test systems. Burn-in equipment is used to subject semiconductor devices to elevated temperatures while testing them electrically to identify early product failures (“infant mortalities”) as well as to assure long-term reliability. Burn-in testing approximates, in a compressed time frame, the electrical and thermal conditions to which the device would be subjected during its normal life.
 
          The Company offers the COBIS II burn-in system that offers state-of-the-art dynamic burn-in capabilities and a Windows-based operating system with full data logging and networking features. The Company developed, and now offers, a new Power Line Conditioner (PLC 8001) for the COBIS II, which reduces all varieties of electrical interruptions. The Company also offers burn-in boards for its BISIC, COBIS and COBIS II burn-in systems and other brands of burn-in systems. Burn-in boards are used to mount devices during high temperature environmental stressing.
 
          During 2000 through 2001, the Company developed several new products to complement the Burn-in processes including semi-automatic and automatic burn-in board loaders and unloaders (LUBIB) designed to perform precise, high-speed transfer of IC packages from Tray to BIB or vice-versa while maintaining lead integrity; burn-in board cleaning systems (CUBIB) designed to perform wet or dry cleaning for burn-in boards and other modular boards; and burn-in socket contact conditioners (SCC 9001) which is a new innovation that removes fragments of solder residue off the contact pins of an IC Socket making the test process more productive with a dramatic reduction in contact failure on socket pins.
 
    Component Centrifuges and Leak Detection Equipment
 
          Component centrifuges and leak detection equipment are used to test the mechanical integrity of ceramic and other hermetically sealed semiconductor devices and electronic parts for high reliability and aerospace applications. The Company’s centrifuges spin these devices and parts at specific acceleration rates, creating g-forces up to 30,000 g’s (900,000 pounds per square inch), thereby exposing any mechanical weakness in the devices. Leak detection equipment is designed to detect leaks in hermetic packaging by first pressurizing the devices in a tracer gas or fluid and then visually scanning for bubble trails emanating from defective devices. Applications include automotive and aerospace markets.
 
    Rate-of-Turn Tables
 
          The Company sold its range of rate-of-turn tables in 2001.
 
Testing Services
 
          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. All of the facilities in Southeast Asia are ISO 9002 as well as QS 9000 certified. The Company also operates test facilities in California and Ireland.
 
          The testing services are used by manufacturers and purchasers of semiconductors and other components who either lack testing capabilities or whose in-house screening facilities are insufficient for testing devices to military or certain commercial specifications. For those customers with adequate in-house capabilities, we offer testing services for their “overflow” requirements and also provide independent testing verification services.
 
          Trio-Tech’s laboratories perform a variety of tests, including stabilization bake, thermal shock, temperature cycling, mechanical shock, constant acceleration, gross and fine leak tests, electrical testing, static and dynamic burn-in tests, and vibration testing. The laboratories also perform qualification testing, consisting of intense tests conducted on small samples of output from manufacturers who require qualification of their processes and devices.
 
Distribution Activities
 
          The Company’s Singapore subsidiary continues to develop its international distribution division. The distribution operation markets, sells and supports our products in Southeast Asia. In addition to our own products, this operation also distributes other complementary products from other manufacturers based in the United States, Europe, Japan and other countries. These products are widely used by high quality and volume production manufacturers in the semiconductor and electronic industries. The products include environmental chambers, shaker systems, handlers, interface systems, vibration systems, solderability testers and other manufacturing products.
 
Product Research and Development
 
          We continue to invest in research and development to improve our products and services. Our efforts were concentrated in the “Front End” and in developing new testing technology that allows us to offer more advanced processes. The Company incurred research and development costs of $216,000 in 2001, $205,000 in 2000 and $347,000 in 1999.
 
    Artic Temperature Controlled Wafer Chucks
 
          We continue to develop our range of Artic temperature controlled wafer chucks. In July 1999, the Company introduced its new range of TC3000 series chucks for production wafer probing applications. These new chucks offer high levels of mechanical stability under high probing loads. A triaxial guarding option is available which enables very precise electrical measurements on the wafer. This new generation of chucks has been expanded for use in all major production wafer probers and for new applications such as high power device testing. The Company has also applied this new technology to 300 mm chucks in the new TC31200 temperature chuck for the emerging 12 inch or 300mm wafers.
 
    Wet Process Stations
 
          The Company is actively developing its line of wet process equipment. During 2001, we completed development of our Chemical Dispense Units (CDUs), which allows us to offer a complete wet process and chemical supply system.
 
          In addition, the Company also produced several new systems that allow photo resist stripping, rinsing and drying, all in a single process chamber. Other tools under development include a sophisticated plating tool and an advanced chemical dispensing tool that utilizes ozone injection systems for organic cleaning of silicon wafers. Use of ozone injection eliminates the need for toxic chemicals.
 
    Testing Services
 
          During 2000 through 2001, the Company developed new equipment and facilities to participate in a new generation of burn-in technology known as HBI (Hybrid Burn-in) that has been developed to meet the unique test requirements of the latest microprocessor products. The HBI Test System is a multiple position, independently programmed system that can economically run long test times at unique burn-in conditions. We developed significant facilities, including a power sub-station and greater air conditioning, to house the HBI technology.
 
Marketing, Distribution and Services
 
          The Company markets its products and services worldwide, directly and through independent sales representatives. Additionally we have approximately 20 independent sales representatives operating in the United States and another 21 in various foreign countries. Of the 41 sales representatives, 5 represent the Distribution Segment and the balance represent the Manufacturing Segment. Trio-Tech’s United States marketing efforts are coordinated from its California locations, Southeast Asia and European marketing efforts are assigned to its subsidiaries in Singapore and Ireland, respectively. The Company advertises its products in trade journals and participates in trade shows.
 
          Independent testing laboratories, users, assemblers and manufacturers of semiconductor devices; including many large well-known corporations purchase the Company’s products and services. These industries depend on the current and anticipated market demand for integrated circuits and products utilizing semiconductor devices. During the year ended June 30, 2001, the Company had sales of $5,421,000 (15%) and $8,859,000 (25%) to Catalyst Semiconductor and AMD, respectively.
 
Backlog
 
          The following table sets forth the Company’s backlog at the dates indicated (amounts in thousands):
 
       June 30,
2001
      June 30,
2000
Manufacturing backlog      $2,076      $  6,455
Testing service backlog      5,863      3,920
Distribution backlog      509      845
     
  
       $8,448      $11,220
     
  
 
          Based upon past experience, the Company does not anticipate any significant cancellations or renegotiation of profits. The purchase orders for manufacturing, testing and distribution require delivery within the next 12 months. The Company does not anticipate any difficulties in meeting delivery schedules.
 
Manufacturing and Supply
 
          The Company’s products are designed by its engineers and are assembled and tested at its facilities in California, Singapore and Ireland. We purchase all parts, and certain components, from outside sources for assembly by the Company. We have no written contracts with any of our key suppliers.
 
Competition
 
          The semiconductor equipment industry is highly competitive. The principal competitive factors in the industry are product performance, reliability, service and technical support, product improvements, price, established relationships with customers and product familiarity. The Company has competitors for its various products. However, the Company believes its products compete favorably with respect to each of these factors in the markets in which it operates. There can be no assurance that competition will not increase or that the Company’s technological advantages may not be reduced or lost as a result of technological advances by competitors or changes in semiconductor processing technology.
 
          There are numerous testing laboratories in the areas in which the Company operates that perform a range of testing services similar to those offered by the Company. Since the Company has sold and will continue to sell its products to competing laboratories and other test products are available from many other manufacturers, the Company’s competitors can offer the same testing capabilities. This equipment is also available to semiconductor manufacturers and users who might otherwise use outside testing laboratories, including the Company, to perform environmental testing. The existence of competing laboratories and the purchase of testing equipment by semiconductor manufacturers and users are potential threats to the Company’s future testing services revenues and earnings.
 
Patents
 
          Trio-Tech holds a United States Patent granted in 1987 in relation to its pressurization humidity testing equipment. The Company also holds a United States Patent granted in 1994 on certain aspects of its Artic temperature test systems. In 2000, the Company filed, and was granted in 2001, a new United States patent (20 years) for several aspects of its new range of Artic temperature chucks.
 
          In the semiconductor industry it is typical for companies to receive notices from time to time alleging infringement of patents or other intellectual property rights of others. We can provide no assurance that we will not receive notices alleging infringement. Moreover, the cost of litigation of any claim or damages resulting from infringement of patents or other intellectual property could materially and adversely affect our business, financial condition and results of operations.
 
Employees
 
          As of June 30, 2001, the Company had approximately 59 employees in the United States, 407 in Southeast Asia, and 17 in Ireland for a total of approximately 483 employees. None of the Company’s employees is represented by a labor union. There are approximately 359 employees in the testing segment, 104 employees in the manufacturing segment and 20 in the distribution segment.
 
ITEM 2 —PROPERTIES
 
          The following table sets forth information as to the location and general character of the principal manufacturing and testing facilities of the Registrant:
 
Location
    Principal Use
      Approx.
Sq. Ft.
Occupied
      Owned (O) or
Leased (L)
Expiration Date
355 Parkside Dr.      Headquarters/      21,000      (L ) Jan. 2002
San Fernando, CA 9l340      Testing/Manufacturing          
 
6951-A Via Del Oro      Manufacturing      15,000      (L ) Feb. 2004
San Jose, CA 95119               
 
Abbey Road      Testing      18,400      (O )
Deansgrange Co.               
Dublin, Ireland               
 
1004, Toa Payoh North, Singapore               
HEX 07-01/07,      Testing      6,833      (L ) Sept. 2003
HEX 03-01/03,      Testing/Manufacturing      2,959      (L ) Sept. 2003
HEX 03-16/17,      Testing      1,983      (L ) Jul. 2002
HEX 01-08/15      Testing/Manufacturing      6,865      (L ) Jan. 2003
HEX 01-16/17      Testing      1,983      (L ) Feb. 2004
 
1008, Toa Payoh North, Singapore               
HEX 03-01/06,      Testing      7,345      (L ) Feb. 2003
HEX 03-09/15,      Logistics      4,435      (L ) Jan. 2003
HEX 03-16/18,      Distribution      5,130      (L ) Jan. 2003
HEX 01-08      Power Substation      603      (L ) Jun. 2003 *1
HEX 07-17/18,      Testing      4,315      (L ) Nov. 2003
HEX 07-01      Testing      3,466      (L ) Jan. 2004
 
Plot 1A, Phase 1      Testing      49,924      (O )
Bayan Lepas Free Trade Zone               
11900 Penang               
 
327, Chalongkrung Road,      Testing      11,300      (O )
Lamplathew, Lat Krabang,               
Bangkok 10520, Thailand               
 
Lot No. B7, Kawasan MIEL      Manufacturing      24,142      (O )
Batang Kali, Phase II,               
43300 Batang Kali               
Selangor Darul Ehsan, Malaysia               
*1
The Company built and owns a Power Substation building, which building is situated on property that the Company leases. The lease expires in June 2003, the Company anticipates that similar terms will be offered, at renewal, on such lease and does not believe that material expenses will be incurred.
 
ITEM 3 —LEGAL PROCEEDINGS
 
          On August 24, 1995, the Company was named in a civil action brought against 106 defendants alleging that they may have caused or contributed to soil and groundwater contamination that required the defendants to pay $3,750,000 to the Federal Environmental Protection Agency to settle. On April 6, 2001, the Company was dismissed from this action and has no liability.
 
          The Company is, from time to time, the subject of litigation claims and assessments arising out of matters occurring in its normal business operations. In the opinion of management, resolution of these matters will not have a material adverse effect on the Company’s financial statements.
 
          There are no material proceedings to which any director, officer or affiliate of the Registrant, any beneficial owner of more than five percent of the Registrant’s common stock or any associate of such person is a party that is adverse to the Registrant or its properties.
 
ITEM 4 —SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
          None.
 
PART II
 
ITEM 5 —MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
          The Registrant’s common stock is traded on the American Stock Exchange under the symbol “TRT”. The following table sets forth, for the periods indicated, the range of high and low sales prices of our common stock as quoted by AMEX. These prices do not include retail mark-ups, markdowns or commissions:
 
Quarter Ended
      High
      Low
Fiscal 2000          
          September 30, 1999      4.88      2.75
          December 31, 1999      4.25      3.00
          March 31, 2000      7.00      3.63
          June 30, 2000      8.00      3.63
 
Fiscal 2001          
          September 30, 2000      7.00      5.50
          December 31, 2000      6.25      3.00
          March 31, 2001      4.50      3.13
          June 30, 2001      3.70      3.00
 
Fiscal 2002          
          July 1, 2001 to September 7, 2001      4.10      3.16
 
          Approximately 609 shareholders of record as of September 7, 2001 hold the Registrant’s common stock. Approximately 2,002,631 shares are held by Cede and Co., a clearinghouse that holds stock certificates in “street” name for an unknown number of shareholders.
 
          The Company has never declared any cash dividends on its common stock. Any future determinations as to cash dividends will depend upon the earnings and financial position of the Company at that time and such other factors as the Board of Directors may deem appropriate. It is anticipated that no dividends will be paid to holders of common stock in the foreseeable future.
 
          In December 1999, the Company repriced certain outstanding warrants and options covering an aggregate of 529,480 shares of the Company’s common stock, which had an exercise price in excess of $5.00 per share down to $5.00 per share.
 
           In March 2000, the Company amended its outstanding redeemable warrants covering 349,600 shares of Common Stock that were issued in 1997, and expired in November 2000 and were exercisable in full at $5.00 per share. That amendment provided that, for each two warrants exercised on or before May 10, 2000, the Company would issue to the holder thereof a new redeemable warrant to purchase one share of the Company’s Common Stock. In response to that amendment, persons holding Warrants covering an aggregate of 73,740 shares of Common Stock exercised their Warrants and received in connection with that exercise new warrants covering a total of 36,870 shares of Common Stock. The new warrants expire on May 6, 2002, have an exercise price of $8.00 per share and may only be amended or modified by a written instrument signed by the holder or the Company against whom enforcement of the amendment or modification is sought.
 
          On September 18, 2000, the Company announced that, for and with respect to any two shares of its Common Stock issued after that date upon exercise of the Company’s outstanding $5.00 warrants, which shares are held for at least six months after the exercise of those warrants, the Company would grant the holder of those shares a new warrant to purchase one share of its Common Stock. The new warrants would be exercisable at $8.00 per share, expire two years from the date of grant and otherwise be on the same terms as the $5.00 warrants.
 
          In response to the foregoing, an aggregate of 19,830 shares of the Company’s Common Stock were issued upon the exercise of the Company’s $5.00 warrants after September 18, 2000, and, provided those shares are held for at least six months from the date of exercise, the Company issued the holders thereof new warrants covering an aggregate of 9,915 shares. The remaining $5.00 warrants, covering an aggregate of 233,030 shares of the Company’s Common Stock, expired without exercise at the close of business on November 3, 2000.
 
ITEM 6 —SELECTED FINANCIAL DATA
 
       June 30,
2001
      June 30,
2000
      June 30,
1999
      June 30,
1998
      June 30,
1997
       (In thousands except share and per share amounts)
Consolidated Statements of Income                         
 
Net sales      $36,133      $26,943      $21,181        $21,852      $21,548
 
Income (loss) from Operations      1,121      501      (207 )      969      3,057
 
Net Income      1,163      1,034      195        831      1,002
 
Net income per share:                         
          Basic      0.40      0.37      0.07        0.34      0.54
          Diluted      0.39      0.36      0.07        0.33      0.54
 
Weighted average common shares outstanding                         
          Basic      2,884      2,759      2,745        2,413      1,850
          Diluted      3,006      2,895      2,757        2,484      1,961
 
Consolidated Balance Sheets                         
 
Current assets      $15,501      $17,279      $12,723        $14,036      $13,843
Current liabilities      7,599      8,349      5,934        7,439      7,039
Working capital      7,902      8,930      6,789        6,597      6,804
 
Total assets      24,150      22,712      18,932        19,331      18,528
 
Long-term debt and capitalized leases      1,745      586      962        426      723
Shareholders’ equity      $11,609      $10,448      $  9,051        $  8,763      $  6,463
 
ITEM 7—MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
 
          The following discussion should be read in conjunction with the Company’s Consolidated Financial Statements, including the related notes thereto, and other financial information included herein. In addition, in order to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we hereby notify our readers that the factors set forth in “Certain Factors that May Affect Our Future Results” as set forth below in this Item 7, as well as other factors, in the past have affected and in the future could affect our actual results, and could cause our results for future periods to differ materially from those expressed in any forward looking statements made by or on our behalf, including without limitation those made in this report. In addition, past operating results are not necessarily indicative of the results to be expected in future periods. See “Note Concerning Forward-Looking Statements” prior to “Part I—Item 1—Business” on page 3.
 
Year Ended June 30, 2001 (“2001”) Compared to Year Ended June 30, 2000 (“2000”)
 
          Net sales increased by $9,190 or 34.1% from $26,943 in 2000 to $36,133 in 2001, as we were able to stay ahead of the current downturn in the semiconductor cycle due to our established customer base. However, we believe that due to the current condition of the semiconductor industry and our lower backlog, our first quarter of fiscal year 2002 will have decreased sales. We are uncertain whether sales will increase in the ensuing quarters of fiscal year 2002; therefore, we anticipate that the current fiscal year will have lower sales than fiscal year 2001.
 
          Geographically, net sales in the United States increased $1,332 or 12.7% from $10,529 in 2000 to $11,861 in 2001. The increase was attributable to the Artic Thermal Chuck. Net sales for the Southeast Asia operations increased $7,815 or 50.5% from $15,460 in 2000 to $23,275 in 2001 due mainly to higher manufacturing and testing volumes. Net sales for Europe increased $43 or 4.5% from $954 in 2000 to $997 in 2001. The increase was due primarily to an increase of $321 in testing offset by a decrease of $278 in distribution due to the closing of the European Distribution Operation which was subsequently transferred to the U.S.
 
          The Manufacturing Segment sales increased $5,107 or 38.2% from $13,361 in 2000 to $18,468 in 2001 due to higher volumes of the Artic Temperature Controlled Chucks and the COBIS-II Burn-in Board Systems. The Testing Services Segment sales increased $3,389 or 43.9% from $7,723 in 2000 to $11,112 in 2001 due to the introduction of the new HBI technology and the achievement of the QS 9000 certification. The Distribution Segment increased $694 or 11.9% from $5,859 in 2000 to $6,553 in 2001 due to a slight increase in demand for test equipment and a change in selling emphasis between existing products.
 
          The Company’s cost of sales varies depending on the mix of sector and geographic sales and increased $6,902 or 34.8% from $19,847 in 2000 to $26,749 in 2001. As a percentage of sales, it increased 0.3% from 73.7% in 2000 to 74% in 2001. The cost as a percentage of sales remained rather constant despite the significant increase in sales and change in the product mix. Various other factors including unit volumes, yield issues associated with production at factories, ramp of new technologies, variations in inventory valuation and mix of shipments will continue to affect the amount of cost of sales and the variability of gross margin percentages in future quarters.
 
          Operating expenses increased by $1,668 or 25.3% from $6,595 in 2000 to $8,263 in 2001. This increase is consistent with the level of sales and as a percentage of sales decreased by 1.6% from 24.5% in 2000 to 22.9% in 2001.
 
          General and Administrative (“G&A”) expenses increased by $1,566 or 34.3% from $4,570 in 2000 to $6,136 primarily due to increases in headcount and related expenses such as payroll and payroll related costs, bonuses, travel and entertainment, insurance and increased depreciation on office equipment and vehicles. Other increases included the plant expansion in Southeast Asia and the relocation expenses related thereto. As a percentage of sales, G&A was consistent at 17%.
 
           Sales expenses increased by $91 or 5% from $1,820 in 2000 to $1,911 in 2001 due to increases in commissions. As a percentage of sales, selling expenses decreased 1.5% from 6.8% in 2000 to 5.3% in 2001.
 
          Research and Development increased by $11 or 5.4% from $205 in 2000 to $216 in 2001. This increase is primarily due to increased payroll and payroll related costs and supplies offset by decreased travel to Original Equipment Manufacturers (OEM’s).
 
          The Manufacturing Segment income from operations increased by $31 or 26.3% from $118 in 2000 to $149 in 2001 due to the economies of scale from the higher volumes of the Artic Temperature Controlled Chucks, Semi-automatic Wet Process Benches and the COBIS-II Burn-in Board Systems. The Testing Services Segment income from operations increased $397 or 101% from $394 in 2000 to $791 in 2001 due to the increase in volumes afforded by the new HBI Testing Systems. The Distribution Segment income from operations increased by $367 or 114% from a loss of $322 in 2000 to income of $45 in 2001 due to a change in sales mix from lower margin equipment to more profitable new technology products. Corporate operating profit was reduced by $175 or 56.3% from $311 in 2000 to $136 in 2001 by reductions in overhead charged through to divisions and subsidiaries in order to afford divisions and all subsidiaries greater control locally.
 
          Interest expense increased in 2001 by $107 or 116.3%, from $92 in 2000 to $199 in 2001, due to increases in lines of credit, capitalized leases and financing activity for capital expenditures.
 
          Other income has decreased by $410 or 36.7% from $1,116 in 2000 to $706 in 2001 primarily due to costs in 2000 associated with the closure of the Company’s Kuala Lumpur, Malaysia facility. The gain on sale of building relates to one of the Company’s Singapore facilities. The Company also reversed an accrual of $295 that was held for the settlement of the civil action, which subsequently was dismissed, in which the Company was named along with 106 other defendants that alleged that they may have caused or contributed to soil and underground contamination.
 
          The effective tax rate for the year ended June 30, 2001 was 22% compared to 7% for the comparable prior year period. The increase in tax rate was primarily due from higher income from foreign operations.
 
Year Ended June 30, 2000 (“2000”) Compared to Year Ended June 30, 1999 (“1999”)
 
          Net sales increased by $5,762 or 27.2% from $21,181 in 1999 to $26,943 in 2000 due to the worldwide upturn in the semiconductor industry.
 
          Geographically, the increase in sales was mainly seen in the U.S., net sales increased $5,589 or 113.2% from $4,939 in 1999 to $10,529 in 2000. 32% and 68% of the increase were attributable to the Artic Thermal Chuck and Semi-automatic Wet Process Benches, respectively. Net sales for the Southeast Asia operations increased $415 or 2.8% from $15,045 in 1999 to $15,460 in 2000 due mainly to higher manufacturing volume in Singapore and testing volume in Malaysia. Net sales for Europe decreased $243 or 25% from $1,197 in 1999 to $954 in 2000.
 
          The Manufacturing Segment sales increased $6,531 or 95.3% from $6,853 in 1999 to $13,384 in 2000 due to higher volumes of the Artic Temperature Controlled Chucks, Semi-automatic Wet Process Benches and the COBIS-II Burn-in Board Systems. The Testing Services Segment sales increased $484 or 6.7% from $7,239 in 1999 to $7,723 in 2000. The Distribution Segment declined $1,253 or 17.7% from $7,089 in 1999 to $5,836 in 2000 as a result of lower demand in Southeast Asia.
 
          Cost of sales increased $4,343 or 28% from $15,504 in 1999 to $19,847 in 2000. As a percentage of sales, it increased 0.5% from 73.2% in 1999 to 73.7% in 2000. The cost as a percentage of sales remained rather constant despite the significant increase in sales.
 
          Operating expenses increased by $711 or 12.1% from $5,884 in 1999 to $6,595 in 2000 in order to cope with the increased demand in sales and provision for the downsizing of the facility in Kuala Lumpur. In addition, the Company’s subsidiary, Universal Systems moved to a new facility in February 1999.
 
           The Manufacturing Segment income from operations increased by $1,592 or 108% from a loss of $1,474 in 1999 to a profit of $118 in 2000 due to the economies of scale from the higher volumes of the Artic Temperature Controlled Chucks, Semi-automatic Wet Process Benches and the COBIS-II Burn-in Board Systems. The Testing Services Segment income from operations declined $492 or 55.5% from $886 in 1999 to $394 in 2000. This decrease is primarily due to price erosion from increased competitive pressure and intensified price-based competition. The Distribution Segment income from operations declined by $326 from income of $4 in 1999 to a loss of $322 in 2000 due to the sales mix of the products sold. Corporate operating profit was reduced by $66 or 17.5% from $377 in 1999 to $311 in 2000 due to increased costs.
 
          Research and development expenses decreased by $142 to $205 in 2000 from $347 in 1999 due to the maturity in the development of a range of Artic Temperature Controlled Chucks.
 
          Interest expense decreased in 2000 by $16 or 14.8%, from $108 in 1999 to $92 in 2000, due to decreases in lines of credit and capitalized leases.
 
          Other income has decreased by $377 or 47.3% from $797 in 1999 to $420 in 2000 primarily due to costs in 2000 associated with the closure of the Company’s Kuala Lumpur, Malaysia facility. The gain on sale of building relates to one of the Company’s Singapore facilities.
 
Liquidity and Capital Resources
 
          Net cash generated by operating activities during the year ended June 30, 2001 was $5,012 compared to $1,164 generated by operating activities during the year ended June 30, 2000. The cash flow from operating activities in 2001 was comprised of $1,163 from net income, a decrease accounts receivables, inventories and other receivables of $1,671, $838 and $683 respectively, and a decrease in prepaid expenses and other current assets of $320, $1,632 of non-cash depreciation and amortization. These amounts were partially offset by positive cash flow comprised of $1 gain on sale of property and equipment, a decrease in accounts payable and accrued expenses of $1,096, $74 in income taxes payable, $71 in deferred income taxes and $53 in minority interest.
 
          Net cash used by investing activities during 2001 was $7,152 compared to $549 used by investing activities in the 2000 year. The net cash used by investing activities was a result of (1) capital expenditures of $4,451 which included a Power Sub-station and enhanced air conditioning for its new HBI Test facilities in Southeast Asia coupled with further investment in the European Operations Test Equipment and U.S. Operations for Manufacturing equipment, (2) an increase in cash deposits of $2,541 (3) an increase in other assets of $263 offset by (4) proceeds from sale of property, plant and equipment of $103.
 
          Net cash provided by financing activities during 2001 was $1,516 compared to $138 used by financing activities in the 2000 year. The cash outflow from financing activities include $1,698 of payments on lines of credit, long term obligations and capitalized leases, which was offset by a cash inflow of $2,858 from additional borrowing under lines of credit and long term obligations and the issuance of common stock in the Company of $356 upon exercise of options and warrants.
 
          Cash and cash deposits have historically been the Company’s primary source of liquidity. The Company has a committed line of credit with a bank, aggregating $2,469 and lines of credit with various other banks, totaling $823, which were used to support short-term borrowing and commercial paper comprised of letters of credit, trust receipts, shipping and banker’s guarantees. These lines of credit and their anticipated cyclical increases are sufficient to finance buildups in inventories and other cash requirements.
 
          Cash deposits and corporate guarantees (the Company guarantees, but subsidiaries are the primary debtor) collateralize the first line of credit with a bank, aggregating $2,469, and contain certain debt covenants including maintaining a minimum net worth. The Company was in compliance with all debt covenants at June 30, 2001. There were no borrowings under all these lines at June 30, 2001 and these lines of credit expire between December 2001 and July 2002. Interest rates for these lines are from between 6.25% and 8.5%.
 
           The Company has various other machinery term loans, capitalized lease obligations and notes payable used for financing equipment and leasehold improvements with various banks and lending institutions aggregating $2,665. The equipment and improvements financed collateralizes these loans. Interest rates range from 4.63% to 13.39%. These term loans expire between March 2002 and July 2007 (see Note 7 to the Consolidated Financial Statements).
 
          The Company has two credit agreements that provide for mortgage loans totaling $350. Borrowings under the mortgage loans amounted to $112 and $64 as of June 30, 2001. Interest is at the bank’s prime rate (4.88% at June 30, 2001) plus 3.52% on the first loan and 3.0% on the second loan. The loans will expire in July 2007 and January 2008, respectively.
 
          Approximately $2,988 of cash deposits are held in the Company’s 55% owned Malaysian subsidiary. $2,420 of this cash is denominated in the currency of Malaysia. On September 1, 1998, the government of Malaysia announced its intention to limit the movement of certain cash balances denominated in Malaysian currency. Of the $2,420, $1,471 is currently available for movement, as the Central Bank of Malaysia has authorized $1,800 for movement and the Company has utilized $329 of this authorization. During 2001, limits on the movement of cash balances were removed. In addition, approximately $4,098 is available as dividend (after making deductions for income tax) pursuant to Malaysian regulations in force from July 1, 2000. There is an additional amount of $1,205 that is used as collateral for the Singapore credit facility.
 
          In March 2000, the Company executed a letter of intent to acquire all of the issued and outstanding capital stock of Thermo Voltek Corp. (doing business as KeyTek), an indirect, wholly owned subsidiary of Thermo Electron Corporation. Subsequent to September 30, 2000, the Company elected not to pursue the acquisition of KeyTek due to the uncertainty in the global electronics markets.
 
CERTAIN RISKS THAT MAY AFFECT OUR FUTURE RESULTS
 
          We hereby caution stockholders, prospective investors in Trio-Tech International and other readers that the following important factors, among others, in some cases have affected, and in the future could affect, our stock price or cause our actual results for the fiscal year ending June 30, 2001 and future fiscal years and quarters to differ materially from those expressed in any forward-looking statements, oral or written, made by or on behalf of us. In particular, due to the condition of the semiconductor industry and our lower backlog, we believe we will have decreased sales in the first quarter of fiscal year 2002. We also are uncertain if sales will increase in the ensuing quarters of fiscal year 2002. Therefore, we believe that the current fiscal year will have lower sales than fiscal year 2001.
 
Our operating results are affected by a variety of factors
 
          Our operating results are affected by a wide variety of factors that could materially affect revenues and profitability or lead to significant variability of quarterly or annual operating results. These factors include, among others, factors relating to:
 
Ÿ
economic and market conditions in the semiconductor industry;
 
Ÿ
market acceptance of our products and services;
 
Ÿ
changes in technologies in the semiconductor industry, which could affect demand for our products and services;
 
Ÿ
changes in testing processes;
 
Ÿ
the impact of competition;
 
Ÿ
the lack of long-term purchase or supply agreements with customers and vendors;
 
Ÿ
changes in military or commercial testing specifications, which could affect the market for our products and services;
 
Ÿ
difficulties in profitably integrating acquired businesses, if any, into the Company;
 
Ÿ
the loss of key personnel or the shortage of available skilled employees;
 
Ÿ
international political or economic events;
 
Ÿ
currency fluctuations; and
 
Ÿ
other technological, economic, financial and regulatory factors beyond our control.
 
          Unfavorable changes in these or other factors could materially and adversely affect our financial condition or results of operations. We may not be able to generate revenue growth and any revenue growth that is achieved may not be sustained. Our business, results of operations and financial condition would be materially adversely affected if operating expenses increase and are not subsequently followed by increased revenues. Although we have reported profits for the twenty-eight most recent consecutive quarters, we may not be able to sustain such profitability in the future and do not expect to do so in the first quarter of the current fiscal year.
 
The semiconductor industry cycles have a large effect on our business
 
          Our business depends primarily upon the capital expenditures of semiconductor manufacturers, assemblers and other testing companies worldwide. These industries depend on the current and anticipated market demand for integrated circuits and products utilizing semiconductor devices. The global semiconductor industry generally, and the semiconductor testing equipment industry in particular, are volatile and cyclical, with periodic capacity shortages and excess capacity. In periods of excess capacity, the industry sharply cuts its purchases of capital equipment, including our distributed products, and reduces testing volumes, including our testing services. Excess capacity also causes downward pressure on the selling prices for our products and services.
 
          Our operating results have been adversely affected by past downturns and slowdowns. There is no assurance that there will not be downturns or slowdowns in the future that may adversely affect our financial condition or operating results. In addition, if one or more of our primary customers reduces its or their purchases or use of our products or testing services, our financial results could be materially and adversely affected. We anticipate that we will continue to be primarily dependent on the semiconductor industry for the foreseeable future.
 
Rapid technological changes may make our products obsolete or result in decreased prices or increased expenses
 
          Technology changes rapidly in the semiconductor industry and may make our services or products obsolete. Advances in technology may lead to significant price erosion for products tested with our older testing technologies. Our success will depend in part on our ability to develop and offer more advanced testing technologies and processes in the future, to anticipate both future demand and the technology to supply that demand, to enhance our current products and services, to provide those products and services at competitive prices on a timely and cost-effective basis and to achieve market acceptance of those products and services. To accomplish these goals, we may be required to incur significant engineering expenses. As new products or services are introduced, we may experience warranty claims or product returns. We may not be able to accomplish these goals correctly or timely enough. If we fail in our efforts, our products and services may become obsolete or less competitive.
 
Our dependence on international sales involves significant risk
 
          Sales and services to customers outside of the United States accounted for approximately 69%, 48% and 65% of our net revenues for fiscal 2001, 2000 and 1999, respectively. Approximately 65%, 57% and 71% of our net revenues in fiscal 2001, 2000 and 1999, respectively, were generated from business in Southeast Asia. We expect that our non-U.S. sales and services will continue to generate the major part of our future revenues. Testing services in Southeast Asia were performed primarily for American companies, and to a lesser extent German companies, selling products and doing business in that region. International business operations may be adversely affected by many factors including fluctuations in exchange rates, imposition of government controls, trade restrictions, political, economic and business events and social and cultural differences.
 
We may incur losses due to foreign currency fluctuations
 
          Significant portions of our revenues are denominated in Singapore, Malaysian 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 adjustments resulted in a decrease of $358 to shareholders’ equity for fiscal 2001, a decrease of $50 to shareholders’ equity for fiscal 2000 and an increase of $147 to shareholders’ equity for fiscal 1999.
 
          From time to time, we try to partially mitigate the effects of currency fluctuations over the short term by purchasing non-Southeast Asian currency denominated short-term instruments. We also try to reduce our risks 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.
 
We do not rely on patents to protect our products or technology
 
          We hold U.S. patents relating to our pressurization humidity testing equipment and certain aspects of our Arctic temperature test systems. Additionally, in 2001, we were granted patents for certain aspects of our new ranges of Arctic temperature chucks. However, generally we do not rely on patent or trade secret protection for our products or technology. Competitors may be able to copy and replicate our technology and designs. Competitors may develop technologies similar to or more advanced than ours. We cannot assure you that our current or future products will not be copied or will not infringe on the patents of others.
 
Competition
 
          The semiconductor equipment and testing industries are intensely competitive. Significant competitive factors include price, technical capabilities, quality, automation, reliability, product availability and customer service. We face competition from established and potential new competitors, many of whom have greater financial, engineering, manufacturing and marketing resources than our Company’s resources. New products or testing facilities offered by our competitors could cause a decline in our revenues or a loss of market acceptance of our existing products and services. Increased competitive pressure could also lead to intensified price-based competition. Price-based competition may result in lower prices, adversely affecting our operating results.
 
Customer concentration
 
          The semiconductor manufacturing industry is highly concentrated, with a relatively small number of large manufacturers and assemblers accounting for a substantial portion of our revenues from product sales and testing revenues. Our experience has been that sales to particular customers may fluctuate significantly from quarter to quarter and year to year. In fiscal 2001, 2000, and 1999, sales of equipment and services to our two largest customers accounted for approximately 40%, 28% and 26%, respectively, of our net revenues. Our ability to maintain close, satisfactory relationships with our customers is essential to our stability and growth. The loss of or reduction or delay in orders from our significant customers, or delays in collecting accounts receivable from our significant customers, could adversely affect our financial condition and results of operations.
 
Limited market for certain of our products and services
 
          If our competitors or we sell testing equipment to semiconductor manufacturers and assemblers, the likelihood that they will make further purchases of such equipment, or that they will contract for testing services by our laboratories, may be affected. Although military or other specifications require certain testing to be done by independent laboratories, over time other current customers may have less need for our testing services We believe that there is a growing trend toward outsourcing of the integrated circuit test process. As a result, we anticipate continued growth in the test laboratory business. However, in an attempt to diversify our sales mix, we may seek to develop and introduce new or advanced products, and to acquire other companies in the semiconductor equipment manufacturing business.
 
Acquisition and integration of new businesses could disrupt our ongoing business, distract management and employees, increase our expenses and adversely affect our business
 
          We anticipate that a portion of any future growth will be accomplished through the acquisition of other entities. The success of those acquisitions will depend, in part, on our ability to integrate the acquired personnel, operations, products, services and technologies into our organization, to retain and motivate key personnel of the acquired entities and to retain the customers of those entities. We may not be able to identify suitable acquisition opportunities, obtain financing on acceptable terms to bring the acquisition to fruition or to integrate such personnel, operations, products or services. The process of identifying and closing acquisition opportunities and integrating acquisitions into our operations may distract our management and employees, disrupt our ongoing business, increase our expenses and materially and adversely affect our operations. We may also be subject to certain other risks if we acquire other entities, such as the assumption of additional liabilities. We may issue additional equity securities or incur debt to pay for future acquisition.
 
We are dependent on key suppliers
 
          We have no written contracts with any of our key suppliers. Our key suppliers may terminate their relationships with us at any time without notice. We cannot assure you that we will be able to find satisfactory replacement suppliers or that new suppliers would not be more expensive than the current suppliers if any of our key suppliers were to terminate their relationship with us.
 
We are highly dependent on key personnel
 
          Our success has depended, and, to a large extent will depend, on the continued services of S.W. Yong, our Chief Executive Officer and President, Victor H. M. Ting, our Vice President and Chief Financial Officer, and our other key senior executives and engineering, marketing, sales, productions and other personnel. We do not have an employment agreement with Mr. Yong or Mr. Ting, but we are the beneficiary of “key man” life insurance in the amount of $6 million on Mr. Yong and $2 million on Mr. Ting. The Company also has “key man” life insurance in the amount of $3 million on Tony DiPiero, the President of our subsidiary Universal Systems. The loss of these key personnel, who would be difficult to replace, could harm our business and operating results. Competition for management in our industry is intense and we may be unsuccessful in attracting and retaining the executive management and other key personnel that we require.
 
Our management has significant influence over corporate decisions
 
          Currently our officers and directors and their affiliates beneficially own 31% of the outstanding shares of common stock, including options held by them that are exercisable within 60 days of the date of this 10-K. As a result, they may be able to significantly influence matters requiring approval of the shareholders, including the election of directors, and may be able to delay or prevent a change in control of the Company.
 
We have not paid cash dividends
 
          We have never paid any cash dividends on our common stock. We anticipate that the future earnings, if any, will be retained for use in the business or for other corporate purposes. We do not expect to pay cash dividends on our common stock in the future.
 
Possible dilutive effect of outstanding options and warrants
 
          As of June 30, 2001, there were 642,165 shares of common stock reserved for issuance upon exercise of outstanding stock options and warrants. The outstanding options and warrants are currently exercisable at exercise prices ranging from $3.67 to $8.00 per share. We anticipate that the trading price of our common stock at the time of exercise of any such outstanding options or warrants will exceed the exercise price under those options and warrants. Thus such exercise will have a dilutive effect on our shareholders.
 
The market price for our common stock is subject to fluctuation
 
          The trading price of our common stock has from time to time fluctuated widely. The trading price may similarly fluctuate in the future in response to quarter-to-quarter variations in our operating results, announcements of innovations or new products by us or our competitors, general conditions in the semiconductor industry and other events or factors. In addition, in recent years, broad stock market indices in general, and the securities of technology companies in particular, have experienced substantial price fluctuations. Fluctuations in the trading price of our common stock may adversely affect our liquidity.
 
ITEM 7A —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. 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.
 
          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, Malaysian 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 adjustments resulted in a decrease of $358 to shareholders’ equity for fiscal 2001, a decrease of $50 to shareholders’ equity for fiscal 2000 and an increase of $147 to shareholders’ equity for fiscal 1999.
 
          From time to time, we try to partially mitigate the effects of currency fluctuations over the short term by the hedging of foreign currency exposure through U.S. Dollar borrowings and forward foreign exchange rate contracts, as well as purchasing non-Southeast Asian currency denominated short-term instruments. We also try to reduce our risks 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 8 —FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
          The information called for by this item is included in the Company’s consolidated financial statements beginning on page 25 of this Annual Report on Form 10-K.
 
ITEM 9 —CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
          None
 
PART III
 
          The information required by Items 10 through 13 of Part III of this Form 10-K is hereby incorporated by reference from the Company’s Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after the end of fiscal 2001.
 
PART IV
 
ITEM 14 —EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
          (a)  (1and 2)    FINANCIAL STATEMENTS AND SCHEDULES:
 
          The following financial statements, including notes thereto and the independent auditors’ report with respect thereto, are filed as part of this Annual Report on Form 10-K, starting on page 23 hereof:
 
          1.  Independent Auditors’ Report
 
          2.  Consolidated Balance Sheets
 
          3.  Consolidated Statements of Income and Comprehensive Income
 
          4.  Consolidated Statements of Shareholders’ Equity
 
          5.  Consolidated Statements of Cash Flows
 
          6.  Notes to Consolidated Financial Statements
 
          (b)  REPORTS ON FORM 8-K:
 
          The Company did not file any reports on Form 8-K during the quarter ended June 30, 2001.
 
          (c)  EXHIBITS:
 
Number
      Description
 3.1    Articles of Incorporation, as currently in effect. [Previously filed as Exhibit 3.1 to the Annual Report
on Form 10-K for June 30, 1988.]
 
 3.2    Bylaws, as currently in effect. [Previously filed as Exhibit 3.2 to the Annual Report on Form 10-K for
June 30, 1988.]
 
 4.1    Form of Redeemable Warrants to purchase Common Stock issued in May 2000.
 
10.5    Real Estate Lease dated December 15, 1986, between San Fernando Associates and Registrant.
[Previously filed as Exhibit 10.17 to the Annual Report on Form 10-K for June 28, 1987.]
 
10.9    Credit Facility Letter dated January 4, 2001, between Trio-Tech International Pte. Ltd. and Standard
Chartered Bank*
 
10.10      1998 Stock Option Plan. [Previously filed as Exhibit 1 to the Company’s proxy statement filed under
regulation 14A on October 27, 1997].
 
10.11    Directors Stock Option Plan. [Previously filed as Exhibit 2 to the Company’s proxy statement filed
under regulation 14A on October 27, 1997].
 
10.12    Real Estate Lease dated February 1, 1999 between Martinvale Development Company and Universal
Systems.
 
10.13    Real Estate Lease dated February 16, 2001 between JTC Corporation and Trio-Tech International PTE
for Block 1004 Toa Payoh North #07-01/07 and #03-01/03. *
 
10.14    Real Estate Lease dated May 13, 1999 between JTC Corporation and Trio-Tech International PTE for
Block 1004 Toa Payoh North #03-16/17. *
 
10.15    Real Estate Lease dated October 13, 1999 between JTC Corporation and Trio-Tech International PTE
for Block 1004 Toa Payoh North #01-08/15. *
 
10.16    Real Estate Lease dated December 7, 2000 between JTC Corporation and Trio-Tech International PTE
for Block 1004 Toa Payoh North #01-16/7. *
 
10.17    Real Estate Lease dated January 3, 2000 between JTC Corporation and Trio-Tech International PTE for
Block 1008 Toa Payoh North #03-01/06. *
 
10.18    Real Estate Lease dated October 13, 1999 between JTC Corporation and Trio-Tech International PTE
for Block 1008 Toa Payoh North #03-09/15 and #03-16/18. *
 
10.19    Real Estate Lease dated May 2, 2000 between JTC Corporation and Trio-Tech International PTE for
Block 1008 Toa Payoh North #01-08. *
 
10.20    Real Estate Lease dated September 12, 2000 between JTC Corporation and Trio-Tech International PTE
for Block 1008 Toa Payoh North #07-17/18. *
 
10.21    Real Estate Lease dated October 30, 2000 between JTC Corporation and Trio-Tech International PTE
for Block 1008 Toa Payoh North #07-01. *
 
21.1    Subsidiaries of the Registrant (100% owned by the Registrant except as otherwise stated):
 
     Trio-Tech International Pte. Ltd., a Singapore Corporation
 
     Trio-Tech Test Services Pte. Ltd., a Singapore Corporation
 
     Trio-Tech Reliability Services, a California Corporation
 
     Express Test Corporation, A California Corporation
 
     European Electronic Test Center, Ltd., A Cayman Islands Corporation
 
     Trio-Tech Malaysia, a Malaysia Corporation (55% owned by the Registrant)
 
     Trio-Tech Kuala Lumpur, a Malaysia Corporation (100% owned by Trio-Tech Malaysia)
 
     Trio-Tech Bangkok, a Thailand Corporation
 
     Prestal Enterprise Sdn Bhd, a Malaysia Corporation (76% owned by the Registrant)
 
     KTS Incorporated, doing business as Universal Systems, a California Corporation
 
23.1    Independent Auditors’ Consent*
 *
Filed electronically herewith
 
SIGNATURES
 
          Pursuant to the requirements of Section 13 or 15(d) 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
Vice President and Chief Financial Officer
 
 
Date: September 19, 2001
 
          Pursuant to the requirement of the Securities Exchange Act of 1934, the following persons on behalf of the Registrant and in the capacities and on the dates indicated have signed this report below.
 
Signature
      Title
      Date
 
/s/    A. CHARLES WILSON         
                                                                                            
      A. Charles Wilson      		      Director, Chairman of the Board      September 19, 2001
 
/s/    S. W. YONG         
                                                                                            
      S. W. Yong       		      Director, Chief Executive Officer
and President		      September 19, 2001
 
/s/    VICTOR H.M. TING         
                                                                                            
      Victor H.M. Ting      		      Vice President, Chief Financial
Officer and Principal
Accounting Officer		      September 19, 2001
 
/s/    JASON T. ADELMAN         
                                                                                            
      Jason T. Adelman      		      Director      September 19, 2001
 
/s/    RICHARD M. HOROWITZ         
                                                                                            
      Richard M. Horowitz      		      Director      September 19, 2001
 
/s/    WILLIAM L. SLOVER         
                                                                                            
      William L. Slover      		      Director      September 19, 2001
 
INDEPENDENT AUDITORS’ REPORT
 
Board of Directors
Trio-Tech International
San Fernando, California:
 
          We have audited the accompanying consolidated balance sheets of Trio-Tech International and subsidiaries (the “Company”) as of June 30, 2001 and 2000, and the related consolidated statements of income and comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended June 30, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
          We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
          In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Trio-Tech International and subsidiaries as of June 30, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended June 30, 2001 in conformity with accounting principles generally accepted in the United States of America.
 
DELOITTE & TOUCHE LLP
 
/S /    DELOITTE & TOUCHE LLP
 
Los Angeles, California
September 7, 2001
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 
       June 30,
2001
      June 30,
2000
ASSETS          
                 
CURRENT ASSETS:
          Cash      $  1,149        $  1,956  
          Cash deposits      7,693        5,152  
          Trade accounts receivable, less allowance for doubtful accounts of $174 in 2001 and
               $221 in 2000		      4,432        6,103  
          Other receivables      162        845  
          Inventories      1,918        2,756  
          Prepaid expenses and other current assets      147        467  
     
     
  
                    Total current assets      15,501        17,279  
 
PROPERTY, PLANT AND EQUIPMENT, Net      7,534        4,497  
OTHER ASSETS, Net      1,115        936  
     
     
  
TOTAL ASSETS      $24,150        $22,712  
     
     
  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                 
 
CURRENT LIABILITIES:
          Lines of credit           $    241  
          Accounts payable      $  2,646        4,128  
          Accrued expenses      3,689        3,303  
          Income taxes payable      168        242  
          Current portion of long-term debt and capitalized leases      1,096        435  
     
     
  
                    Total current liabilities      7,599        8,349  
     
     
  
LONG-TERM DEBT AND CAPITALIZED LEASES, net of current portion      1,745        586  
     
     
  
DEFERRED INCOME TAXES      649        720  
     
     
  
MINORITY INTEREST      2,548        2,609  
     
     
  
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
          Common stock; no par value, authorized, 15,000,000 shares; issued and
               outstanding 2,927,596 shares (2001) and 2,836,618 shares (2000)		      9,423        9,067  
          Retained earnings      2,889        1,726  
          Accumulated other comprehensive loss      (703 )      (345 )
     
     
  
                    Total shareholders’ equity      11,609        10,448  
     
     
  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY      $24,150        $22,712  
     
     
  
 
See notes to consolidated financial statements.
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In thousands, except share amounts)
 
       Year Ended
       June 30,
2001
      June 30,
2000
      June 30,
1999
NET SALES      $36,133        $26,943        $21,181  
COST OF SALES      26,749        19,847        15,504  
     
     
     
  
GROSS PROFIT      9,384        7,096        5,677  
 
OPERATING EXPENSES:
          General and administrative      6,136        4,570        3,877  
          Selling      1,911        1,820        1,660  
          Research and development      216        205        347  
     
     
     
  
                    Total      8,263        6,595        5,884  
     
     
     
  
 
INCOME (LOSS) FROM OPERATIONS      1,121        501        (207 )
 
OTHER INCOME (EXPENSE)
          Interest expense      (199 )      (92 )      (108 )
          Other income      706        420        797  
          Gain on sale of building           696       
     
     
     
  
                    Total      507        1,024        689  
     
     
     
  
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST      1,628        1,525        482  
INCOME TAXES      (355 )      (106 )      (45 )
     
     
     
  
INCOME BEFORE MINORITY INTEREST      1,273        1,419        437  
MINORITY INTEREST      (110 )      (385 )      (242 )
     
     
     
  
NET INCOME      1,163        1,034        195  
     
     
     
  
 
OTHER COMPREHENSIVE (LOSS) INCOME :
          Foreign currency translation adjustment      (358 )      (50 )      147  
     
     
     
  
COMPREHENSIVE INCOME      $    805        $    984        $    342  
     
     
     
  
EARNINGS PER SHARE:
          Basic      $    0.40        $    0.37        $    0.07  
     
     
     
  
          Diluted      $    0.39        $    0.36        $    0.07  
     
     
     
  
WEIGHTED AVERAGE NUMBER OF COMMON AND POTENTIAL
     COMMON SHARES OUTSTANDING
          Basic      2,884        2,759        2,745  
          Diluted      3,006        2,895        2,757  
 
See notes to consolidated financial statements.
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except share amounts)
 
       Common Stock
      Retained
Earnings
      Accumulated
Other
Comprehensive
Loss
      Total
       Number of
Shares
      Amount
Balance, July 1, 1998      2,747        $8,708        $  497      $(442 )      $  8,763  
Net income                195           195  
Exercise of stock options      8        12                  12  
Repurchase of common stock      (14 )      (66 )                (66 )
Foreign currency translation adjustment                     147        147  
     
     
     
  
     
  
 
Balance, June 30, 1999      2,741        8,654        692      (295 )      9,051  
Net income                1,034           1,034  
Exercise of stock options      21        45                  45  
Issuance of common stock      75        368                  368  
Foreign currency translation adjustment                     (50 )      (50 )
     
     
     
  
     
  
 
Balance, June 30, 2000      2,837        9,067        1,726      (345 )      10,448  
Net income                1,163           1,163  
Issuance of common stock      43        214                  214  
Exercise of stock options      48        142                  142  
Foreign currency translation adjustment                     (358 )      (358 )
     
     
     
  
     
  
 
Balance, June 30, 2001      2,928        $9,423        $2,889      $(703 )      $11,609  
     
     
     
  
     
  
 
See notes to consolidated financial statements.
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
       Year Ended
       June 30,
2001
      June 30,
2000
      June 30,
1999
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income      $  1,163        $  1,034        $    195  
     Adjustments to reconcile net income to net cash provided by operating
          activities:
          Depreciation and amortization      1,632        1,523        1,222  
          (Gain)/loss on sale of property and equipment      (1 )      (809 )      7  
          Deferred income taxes      (71 )      138        1  
          Minority interest, net      (53 )      210        149  
          Changes in operating assets and liabilities:
               Accounts receivable, net      1,671        (1,643 )      (336 )
               Other receivables      683        (563 )      17  
               Inventories      838        (957 )      257  
               Prepaid expenses and other current assets      320        (377 )      215  
               Accounts payable and accrued expenses      (1,096 )      2,437        (936 )
               Income taxes payable      (74 )      171        (619 )
     
     
     
  
                          Net cash provided by operating activities      5,012        1,164        172  
     
     
     
  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
     Cash deposits      (2,541 )      (653 )      (552 )
     Capital expenditures      (4,451 )       (1,327 )      (703 )
     Other assets      (263 )      (363 )      (123 )
     Proceeds from sale of property and equipment      103        1,794        46  
     
     
     
  
                          Net cash used in investing activities       (7,152 )      (549 )       (1,332 )
     
     
     
  
 
CASH FLOWS FROM FINANCING ACTIVITIES:
     Payments on lines of credit      (806 )      (246 )      (481 )
     Borrowings under lines of credit      565        126        214  
     Principal payments of debt and capitalized leases      (892 )      (431 )      (308 )
     Proceeds from long-term debt      2,293  
     Issuance of common stock      356        413       
     Repurchase of common stock                (54 )
     
     
     
  
                          Net cash provided by (used in) financing activities      1,516        (138 )      (629 )
     
     
     
  
 
EFFECT OF EXCHANGE RATE CHANGES ON CASH      (183 )      (114 )      77  
 
NET (DECREASE)/INCREASE IN CASH      (807 )      363        (1,712 )
CASH, BEGINNING OF YEAR      1,956        1,593        3,305  
     
     
     
  
CASH, END OF YEAR      $  1,149        $  1,956        $  1,593  
     
     
     
  
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
     Cash paid during the year for:
          Interest      $    184        $    126        $    104  
          Income taxes      $    134        $    161        $    786  
 
See notes to consolidated financial statements.
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
NON-CASH INVESTING AND FINANCING ACTIVITIES
 
          During the years ended June 30, 2001 and 1999, the Company financed acquisitions of equipment amounting to $541 and $1,161 under capital lease arrangements, respectively.
 
          Concluded
 
See notes to consolidated financial statements.
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended June 30, 2001, 2000 and 1999
(In thousands, except per share and share amounts)
 
1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
          Principles of Consolidation—Trio-Tech International and subsidiaries (the “Company” or “TTI”) is a designer and manufacturer of equipment used to test the structural integrity of semiconductor devices that must meet high-reliability specifications. The Company also owns and operates testing facilities that perform structural and electronic testing of semiconductor devices and acts as a distributor of electronic testing equipment in Singapore and other Southeast Asian countries. The consolidated financial statements include the accounts of the Company and its principal subsidiaries: Trio-Tech International Pte Ltd (TTI Pte), Trio-Tech Test Services Pte Ltd (TTTS Pte), Express Test, European Electronic Test Centre (EETC), Trio-Tech Bangkok (TTBK), Trio-Tech Malaysia (TTM) (a 55% owned subsidiary of TTI Pte), Prestal Enterprise Sdn Bhd (PESB) (a 76% owned subsidiary of TTI Pte) and Universal Systems. All material intercompany transactions, profits and balances have been eliminated.
 
          Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
          Accounting Period—The Company’s fiscal reporting period coincides with the 52-53 week period ending on the last Friday in June. Fiscal 2001, 2000 and 1999 are a 52, 53 and 52-week reporting period, respectively. For simplicity purposes the Company refers to its fiscal year end as June 30.
 
          Cash and Cash Deposits—The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash. Cash deposits consist of bank balances and amounts invested in interest earning instruments having maturity of 12 months or less. Approximately $2,988 of cash deposits are held in the Company’s 55% owned Malaysian subsidiary. $2,420 of this cash is denominated in the currency of Malaysia. On September 1, 1998, the government of Malaysia announced its intention to limit the movement of certain cash balances denominated in Malaysian currency. During 2001, limits on the movement of cash balances were removed. Of the $2,420, $1,471 is currently available for movement, as the Central Bank of Malaysia has authorized $1,800 for movement and the Company has utilized $329 of this authorization. In addition, approximately $4,098 is available as dividend (after making deductions for income tax) pursuant to Malaysian regulations in force from July 1, 2000. There is an additional amount of $1,205 that is used as collateral for the Singapore credit facility.
 
          Inventories—Inventories are stated at the lower of cost, using the first-in, first-out (FIFO) method, or market.
 
          Property, Plant and Equipment—Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are provided for over the estimated useful lives of the assets or the terms of the leases, whichever are shorter, using the straight-line method. Capital grants from the Industrial Development Authority in Ireland are accounted for when claimed by reducing the cost of the related assets. The grants are amortized over the depreciable lives of those assets.
 
          Foreign Currency Translation—All assets and liabilities of operations outside the United States have been translated at the foreign exchange rates in effect at year-end. Revenues and expenses for the year are translated at average exchange rates in effect during the year. Unrealized translation gains and losses are not included in determining net income but are accumulated and reported as a separate component of shareholders’ equity entitled accumulated other comprehensive loss. Net realized gains and losses resulting from foreign currency transactions are credited or charged to income.
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
 
Years Ended June 30, 2001, 2000 and 1999
(In thousands, except per share amounts)
 
 
           Other Assets—The excess of cost over net assets acquired is included in other assets and is being amortized over 5-10 years. The Company reviews the carrying value of all intangible assets on a regular basis, and if future cash flows are believed insufficient to recover the remaining carrying value of an intangible asset, the carrying value is written down in the period the impairment is identified to its estimated fair value.
 
          Taxes on Income—Deferred income taxes are computed annually for differences between the financial statement basis and tax basis of assets and liabilities. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized.
 
          Retained earnings—It is the intention of the Company to reinvest earnings of its foreign subsidiaries in the operations of those subsidiaries. Accordingly, no provision has been made for U.S. income and foreign withholding taxes that would result if such earnings were repatriated. These taxes are undeterminable at this time. The amount of earnings retained in foreign subsidiaries is $7,563 at June 30, 2001.
 
          Revenue recognition—The Company recognizes revenue when products are shipped to customers or upon the completion of services.
 
          Research and Development Costs—The Company incurred research and development costs of $216 in 2001, $205 in 2000 and $347 in 1999 that were charged to operating expenses as incurred.
 
          Stock Based Compensation—In October 1995, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation. The Company has determined that it will not change to the fair value method and will continue to use Accounting Principles Board Opinion No. 25 for measurement and recognition of employee stock-based transactions.
 
          Earnings per Share—The Company adopted SFAS No. 128, Earnings per Share (“EPS”). Basic Earnings Per Share is 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 exercise of stock options and warrants.
 
          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:
 
       June 30,
2001
      June 30,
2000
      June 30,
1999
Net income used to compute basic and diluted earnings
     per share		      $      1,163      $      1,034      $        195
     
  
  
Weighted average number of common shares
     outstanding—basic		      2,884,000      2,759,000      2,745,000
Dilutive effect of stock options and warrants      122,000      136,000      12,000
     
  
  
Number of shares used to compute earnings per
     share—diluted		      3,006,000      2,895,000      2,757,000
     
  
  
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
 
Years Ended June 30, 2001, 2000 and 1999
(In thousands, except per share amounts)
 
 
           Stock options and warrants to purchase 612,165 shares at prices ranging from $3.67 to $8.00 per share were outstanding during 2001 and were excluded in the computation of diluted EPS because their effect would have been antidilutive. Stock options and warrants to purchase 36,870 shares at a price of $8.00 per share were outstanding during 2000 and were excluded in the computation of diluted EPS because their effect would have been antidilutive. Stock options and warrants to purchase 697,105 shares at prices ranging from $3.69 to $7.69 per share were outstanding during 1999 and were excluded in the computation of diluted EPS because their effect would have been antidilutive.
 
          Recently Issued Accounting Pronouncements—In July 2001, the Financial Standards Board (“FASB”) issued Financial Accounting Standards (“SFAS”), No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets”. SFAS No. 141 replaces Accounting Principles Board Opinion No. 16 (APB No. 16), “Business Combination,” and eliminates pooling-of-interests accounting prospectively. It also provides guidance on purchase accounting related to the recognition of intangible assets and accounting for negative goodwill. SFAS No. 142 changes the accounting for goodwill from an amortization method to an impairment-only approach. Under SFAS No. 142, goodwill will be tested annually and whenever events or circumstances occur indicating that goodwill might be impaired. Upon adoption of SFAS No. 142, amortization of goodwill recorded for business combinations consummated prior to July 1, 2001 will cease, and intangible assets acquired prior to July 1, 2001 that do not meet the criteria for recognition under SFAS No. 141 will be reclassified to goodwill. Companies are required to adopt SFAS No. 142 for fiscal years beginning after December 15, 2001. In connection with the adoption of SFAS No. 142, companies will be required to perform a transitional goodwill impairment assessment. The Company has not yet determined the effects, if any, that SFAS No. 142 will have on its consolidated financials position and results of operations. During the year ended June 30, 2001, goodwill amortization totaled approximately $34.
 
          Reclassification—Certain reclassifications have been made to the previous year’s financial statements to conform to current year presentation.
 
          Fair Values of Financial Instruments—The carrying value of trade accounts receivable and accounts payable approximate the fair value due to their short-term maturities. The carrying values of the Company’s lines of credit and long-term debt are considered to approximate their fair value because the interest rates are based on variable reference rates or approximates rates currently available to the Company.
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
 
Years Ended June 30, 2001, 2000 and 1999
(In thousands, except per share amounts)
 
 
           Concentration of credit risk—Financial instruments that subject the Company to credit risk consists primarily of accounts receivable. Concentration of credit risk with respect to accounts receivable is generally diversified due to the number of entities composing the Company’s customer base and their geographic dispersion. The Company had two major customers who accounted for 15% and 25% of the Company’s sales during fiscal year 2001; these customers represented 16% and 25% of accounts receivable at June 30, 2001. Two major customers accounted for 15% and 13% of the Company’s sales during fiscal year 2000; these customers represented 18% and 8% of accounts receivable at June 30, 2000. Two major customers accounted for 15% and 14% of the Company’s net sales during fiscal year 1999. The Company performs ongoing credit evaluations of its customers and maintains an allowance for potential credit losses. The allowance for doubtful accounts is composed of:
 
       Year Ended
       June 30,
2001
      June 30,
2000
      June 30,
1999
Beginning      $221        $219        $468  
          Additions charged to cost and expenses      60        34        55  
          Recovered      (85 )      (32 )      (229 )
          Actual write-offs      (22 )           (75 )
     
     
     
  
Ending      $174        $221        $219  
     
     
     
  
 
2.    INVENTORIES
 
          Inventories consist of the following:
 
       June 30,
2001
      June 30,
2000
Raw materials      $1,180      $1,251
Work in progress      311      1,160
Finished goods      427      345
     
  
       $1,918      $2,756
     
  
 
3.    PROPERTY, PLANT AND EQUIPMENT
 
          Property, plant and equipment consist of the following:
 
       Useful
Life in years
      June 30,
2001
      June 30,
2000
Building and improvements      3-20      $  1,059      $  999
Leasehold improvements      3-27      2,524      1,177
Machinery and equipment      3-7      7,113      5,033
Furniture and fixtures      3-5      766      793
Equipment under capital leases      3-5      2,003      1,666
           
  
            13,465      9,668
Less:
          Accumulated depreciation and amortization           4,825      4,204
          Accumulated amortization on equipment under capital leases           1,106      967
           
  
            $ 7,534      $4,497
           
  
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
 
Years Ended June 30, 2001, 2000 and 1999
(In thousands, except per share amounts)
 
4.    OTHER ASSETS
 
          Other assets consist of the following:
 
       June 30,
2001
      June 30,
2000
Cost in excess of net assets acquired, net of accumulated amortization of $730
     (2001) and $696 (2000)		      $  393      $430
Intangibles, net of accumulated amoritization of $86 (2001) and $38 (2000)      133      141
Other      589      365
     
  
Total      $1,115      $936
     
  
 
5.    LINES OF CREDIT
 
          Cash and cash deposits have historically been the Company’s primary source of liquidity. The Company has a committed line of credit with a bank, aggregating $2,469 and lines of credit with various other banks, totaling $823, which were used to support short-term borrowing and commercial paper comprised of letters of credit, trust receipts, shipping and banker’s guarantees. These lines of credit and their anticipated cyclical increases are sufficient to finance buildups in inventories and other cash requirements.
 
          Cash deposits and corporate guarantees (the Company guarantees, but subsidiaries are the primary debtor) collateralize the first line of credit with a bank, aggregating $2,469, and contain certain debt covenants including maintaining a minimum net worth. The Company was in compliance with all debt covenants at June 30, 2001. There were no borrowings under all these lines at June 30, 2001 and these lines of credit expire between December 2001 and July 2002. Interest rates for these lines are from between 6.25% and 8.5%.
 
6.    ACCRUED EXPENSES
 
          Accrued expenses consist of the following:
 
       June 30,
2001
      June 30,
2000
Payroll and related      $1,751      $  912
Legal and audit      150      430
Utilities      473      62
Other      1,315      1,899
     
  
Total      $3,689      $3,303
     
  
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
 
Years Ended June 30, 2001, 2000 and 1999
(In thousands, except per share amounts)
 
 
7.    LONG-TERM DEBT AND CAPITALIZED LEASES
 
          Long-term debt and capitalized leases consist of the following:
 
       June 30,
2001
      June 30,
2000
Machinery loans, due in various installments through 2003 bearing interest at
     6.5%, collateralized by equipment		      $1,186     
 
Notes payable, due in various installments through 2005 bearing interest at prime
     plus 1.5% (Bank’s prime rate of 6.25% at June 30, 2001), collateralized by
     equipment		      601     
 
Capitalized lease obligations, due in various installments through 2005 bearing
     interest at rates ranging from 4.63% to 13.39%, collateralized by leased assets
     (see Note 9)		      878      $  801
 
Mortgage loan, due in monthly installments through 2008, bearing interest at prime
     plus 3% and 3.52% (Bank’s prime rate of 4.88% at June 30, 2001),
     collateralized by Building		      176      220
     
  
       2,841       1,021
          Less current portion      1,096      435
     
  
       $1,745      $  586
     
  
 
          Maturities of long-term debt as of June 30, 2001 are as follows (exclusive of capitalized lease obligations):
 
Year Ending
June 30,
       
     2002      $  698
     2003      705
     2004      375
     2005      121
     2006      64
     
       $1,963
     
 
          Aggregate collateral is $2,579
 
8.    TAXES ON INCOME
 
          The provision (benefit) for income taxes consist of the following:
 
       June 30,
2001
      June 30,
2000
      June 30,
1999
Current:
          Domestic      $      1        $  73        $    
          Foreign      425         (105 )      44
     
     
     
       426        (32 )      44
     
     
     
Deferred:
          Foreign      (71 )      138        1
     
     
     
       $ 355        $106        $45
     
     
     
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
 
Years Ended June 30, 2001, 2000 and 1999
(In thousands, except per share amounts)
 
 
           Income (loss) before income taxes and minority interest related to domestic and foreign operations is as follows:
 
       June 30,
2001
      June 30,
200
      June 30,
1999
Domestic      $  (154 )      $  271      $(500 )
Foreign      1,782        1,254      982  
     
     
  
  
       $1,628        $1,525      $482  
     
     
  
  
 
          The reconciliation between the U.S. federal statutory tax rate and the effective income tax rate is as follows:
 
       June 30,
2001
      June 30,
2000
      June 30,
1999
Statutory federal tax rate      35  %      35  %      35  %
Foreign income taxes       (15 )      (37 )      (56 )
Other      2        9        30  
     
     
     
  
Effective rate      22  %      7  %      9  %
     
     
     
  
 
          The Company files income tax returns in several countries. Income in one country is not offset by losses in another country. Accordingly, no benefit is provided for losses in countries except where the loss can be carried back against income recognized in previous years. Income taxes are provided in those countries where income is earned. The effect of providing tax against profits while not providing benefit for losses results in an effective tax rate that differs from the federal statutory rate.
 
          The components of deferred income tax assets (liabilities) are as follows:
 
       June 30,
2001
      June 30,
2000
Deferred tax assets:
          Net operating loss carry forward      $809        $    952  
          Provision for local tax      6        79  
          Provision for bad debts      61        77  
          Reserve for obsolescence      72        61  
          Other      17        30  
     
     
  
          Total deferred tax assets      965        1,199  
 
Deferred tax liabilities:
          Depreciation      415        216  
          Other      234        504  
     
     
  
          Total deferred income tax liabilities      649        720  
     
     
  
                    Subtotal      316        479  
          Valuation allowance      (965 )       (1,199 )
     
     
  
          Net deferred tax liability      $(649 )      $    (720 )
     
     
  
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
 
Years Ended June 30, 2001, 2000 and 1999
(In thousands, except per share amounts)
 
 
           The valuation allowance was decreased by $234 and $391 in 2001 and 2000, respectively.
 
          At June 30, 2000, the Company had net operating loss carry forwards of approximately $2,311 available to offset future U.S. federal taxes, which expire as follows: $1,053 in 2004, $151 in 2005, $170 in 2006 and $937 in 2014.
 
9.    COMMITMENTS AND CONTINGENCIES
 
          The Company leases certain of its facilities and equipment under long-term agreements expiring at various dates through 2007. Certain of these leases require the Company to pay real estate taxes and insurance and provide for escalation of lease costs based on certain indices. Future minimum payments under capital leases and noncancellable operating leases as of June 30, 2001 are as follows:
 
Year ending June 30,
      Capital
Leases
      Rental
Commitments
2002      $496        $  659
2003      234        483
2004      159        186
2005      89       
2006      64       
Thereafter      49       
     
     
Total future minimum lease payments      1,091        $1,328
     
     
Less amount representing interest      (213 )     
     
  
Present value of net minimum lease payments      878       
Less current portion of capitalized lease obligations      (398 )     
     
  
Long-term obligations under capital leases      $480       
     
  
 
          Total rental expense on all operating leases, both cancelable and noncancellable, amounted to $765 in 2001, $543 in 2000 and $415 in 1999. Total rental income under sublease was $118 in 2001, $169 in 2000, and $59 in 1999.
 
          On August 24, 1995, the Company was named in a civil action brought against 106 defendants alleging that they may have caused or contributed to soil and groundwater contamination that required the defendants to pay $3,750 to the Federal Environmental Protection Agency to settle. On April 6, 2001, the Company was dismissed from this action.
 
          The Company is, from time to time, the subject of litigation claims and assessments arising out of matters occurring in its normal business operations. In the opinion of management, resolution of these matters will not have a material adverse effect on the Company’s financial statements.
 
10.    STOCK OPTIONS
 
          The Company has three stock option plans under which officers, directors and employees are eligible to receive options to purchase shares of the Company’s common stock. One of these plans, adopted in 1988, has been terminated except for outstanding options, which are still exercisable, to purchase an aggregate of 27,000 shares. Additionally, the Board of Directors issues non-qualified options at their discretion at a price not less than fair market value at the date of grant.
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
 
Years Ended June 30, 2001, 2000 and 1999
(In thousands, except per share amounts)
 
 
           On December 8, 1997, the Company’s shareholders approved the Company’s 1998 Stock Option Plan (the “1998 Plan”) under which employees, officers, directors and consultants receive options to purchase the Company’s common stock at a price that is not less than 100 percent of the fair market value at the date of grant. The Plan Administrator at the rate of at least 20% per year over five years determines vestment. There are 300,000 shares authorized for grant under the 1998 Plan.
 
          On December 8, 1997, the Company’s shareholders approved the Directors Stock Option Plan (the “Directors Plan”) under which duly elected non-employee Directors and the President (if he or she is a director of the Company) of the Company (currently six individuals) receive options to purchase the Company’s common stock at a price of 85% of the fair market value of the underlying shares on the date of grant. Each option granted under the Plan shall be exercisable in full at any time and from time to time commencing as of the date of grant. The shares are nonqualified and there are 300,000 shares authorized for grant under the Directors Plan.
 
          The Company applies Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its Plans. Accordingly, no compensation expense has been recognized. Had compensation cost for the Company’s Plan been determined based upon the fair value at the grant date for awards under this Plan consistent with the methodology prescribed under SFAS No. 123, the Company’s net income and earnings per share would have been reduced to the pro forma amounts indicated below:
 
       Year Ended
       June 30,
2001
      June 30,
2000
      June 30,
1999
Net Income:
          As Reported      $1,163      $1,034      $  195  
          Pro forma      $  822      $  699      $  (204 )
 
Basic Earnings per Share:
          As Reported      $  0.40      $  0.37      $  0.07  
          Pro forma      $  0.29      $  0.25      $(0.07 )
 
          The fair value of the options granted during fiscal 2001, 2000 and 1999 was $5.40, $4.95 and $3.85, respectively, on the date of grant using the Black Scholes option-pricing model with the assumptions listed below:
 
       Year Ended
       June 30,
2001
      June 30,
2000
      June 30,
1999
Volatility      56.7 %      52.6 %      42.1 %
Risk free interest rate      4.97 %      6.18 %      5.91 %
Expected life (years)      2.54        2.93        2.65  
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
 
Years Ended June 30, 2001, 2000 and 1999
(In thousands, except per share amounts)
 
 
           The following table summarizes the stock option activity for the three years ended June 30, 2001:
 
Stock Options
      Number of
Shares
Balance at July 1, 1998 (weighted average price of $4.77 per share)      192,688  
          Granted at a weighted average price of $3.85 per share      59,500  
          Exercised at a weighted average price of $1.60 per share      (7,500 )
          Canceled at a weighted average price of $1.60 per share      (7,500 )
 
Balance at June 30, 1999 (weighted average price of $4.77 per share)      237,188  
          Granted at a weighted average price of $4.95 per share      167,750  
          Exercised at a weighted average price of $2.17 per share      (20,625 )
 
Balance at June 30, 2000 (weighted average price of $5.89 per share)      384,313  
          Granted at a weighted average price of $5.40 per share      86,000  
          Exercised at a weighted average price of $3.33 per share      (47,688 )
          Canceled at a weighted average price of $5.41 per share      (14,625 )
     
  
 
Balance at June 30, 2001 (weighted average price of $4.83 per share)      408,000  
     
  
Options exerciseable at June 30, 2001 at a weighted average price of $4.66 per share      334,000  
     
  
 
          The following table summarizes the stock option activity for the three years ended June 30, 2001:
 
Year Ended June 30, 2001
Options and Warrants Outstanding
    Options and Warrants Exercisable
Number
Outstanding
      Weighted Average
Remaining
Contractual Life
      Exercise Price
      Number
Exercisable
      Exercise Price
    27,000    0.45    3.67     27,000    3.67
    30,000    0.56    4.69     30,000    4.69
    22,500    0.56    3.67     22,500    3.67
    45,000    1.25    5.00     45,000    5.00
    15,000    1.25    5.00     15,000    5.00
    15,000    1.25    5.00     15,000    5.00
    69,920    1.35    5.00     69,920    5.00
    34,960    1.35    5.00     34,960    5.00
     9,915    1.35    8.00      9,915    8.00
    75,000    1.38    5.00     75,000    5.00
     5,000    1.44    5.00      5,000    5.00
    45,000    2.02    3.69     45,000    3.69
    14,500    2.02    4.34     10,875    4.34
    35,000    3.03    2.82     35,000    2.82
    75,500    3.74    6.00     37,750    6.00
    36,870    3.86    8.00     36,870    8.00
    42,000    4.03    5.37     42,000    5.37
    40,000    4.03    5.63     10,000    5.63
     4,000    4.76    3.40      1,000    3.40
 
 
 
 
   642,165    2.19    5.05    567,790    4.97
 
 
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
 
Years Ended June 30, 2001, 2000 and 1999
(In thousands, except per share amounts)
 
 
           Included in the total options and warrants outstanding at June 30, 2001 were 234,165 warrants issued in fiscal 1997, 1998, 2000 and 2001 that permit purchase of common stock of the Company at an average price of $5.56.
 
11.    BUSINESS SEGMENTS
 
          The Company operates principally in three industry segments, the designing and manufacturing of equipment (that tests the structural integrity of integrated circuits and other products which measure the rate of turn), the testing service industry (that performs structural and electronic tests of semiconductor devices) and the distribution of various products from other manufacturers in Singapore and Southeast Asia.
 
          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.
 
          The Company’s wholly owned subsidiary, TTI Pte. in Singapore (including TTI Pte.’s wholly owned subsidiaries, TTTS Pte and TTBk, 55% owned joint venture of Trio-Tech Malaysia, another subsidiary wholly owned by Trio-Tech Malaysia and 76% owned Prestal Enterprise Sdn Bhd) operates in the manufacturing, the testing service and the distribution industry segments.
 
          All intersegment sales are sales from the manufacturing segment to the testing and distribution segment. Corporate assets mainly consist of cash and prepaid expenses. Corporate expenses mainly consist of salaries, insurance, professional expenses and directors’ fees.
 
Business Segment Information:
 
              Net Sales
      Operating
Income
(loss)
      Assets
      Depr.
and
Amort.
      Capital
Expenditures
Manufacturing      2001      $18,468      $    149        $  6,898      $  488      $  163
       2000      13,361      118        9,020      450      436
       1999      6,831      (1,474 )      7,156      425      657
 
Testing Services      2001      11,112      791        16,563      1,051      3,806
       2000      7,723      394        11,553      924      654
       1999      7,239      886        9,131      731      1,052
 
Distribution      2001      6,553      45        350      92      478
       2000      5,859      (322 )      2,081      149      237
       1999      7,111      4        2,605      66      154
 
Corporate and unallocated      2001           136        339      1      4
       2000           311        58
       1999           377        40
 
Total Company      2001      $36,133      $ 1,121        $24,150      $1,632      $4,451
       2000      26,943      501        22,712      1,523      1,327
       1999      21,181      (207 )      18,932      1,222      1,863
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
 
Years Ended June 30, 2001, 2000 and 1999
(In thousands, except per share amounts)
 
 
Geographic Area Information:
 
              United
States
      Europe
      Southeast
Asia
      Eliminations
and Other
      Total
Company
Net sales to customers      2001      $11,253        6,761        18,489      (370 )      $36,133  
       2000      $14,432        2,893        10,121      (503 )      $26,943  
       1999      $  8,552        2,219        11,502      (1,092 )      $21,181  
 
Operating Income (loss)      2001      $    (483 )      64        1,404      136        $  1,121  
       2000      $    132        27        30      311        $    501  
       1999      $    (813 )      (81 )      305      382        $    (207 )
 
Property, plant and equipment—net      2001      $    869        424        6,241           $  7,534  
       2000      $    996        259        3,242           $  4,497  
       1999      $    829        299        4,408      2        $  5,538  
 
12.    QUARTERLY FINANCIAL DATA (UNAUDITED)
 
          The Company’s summarized quarterly financial data are as follows:
 
       Sep. 30,
      Dec. 31,
      Mar. 31,
      Jun. 30,
Year ended June 30, 2000                    
Revenues      $5,556        $  6,787        $5,925        $8,675  
Expenses      5,493        6,189        5,719        8,017  
     
     
     
     
  
Income before income taxes and minority interest      63        598        206        658  
Income taxes      47        (111 )      (65 )      23  
     
     
     
     
  
Income before minority interest      110        487        141        681  
Minority interest      (66 )      18        (27 )      (310 )
     
     
     
     
  
Net income      $    44        $    505        $  114        $  371  
     
     
     
     
  
Net income per share:                    
          Basic      $  0.02        $    0.18        $  0.04        $  0.13  
          Fully diluted      $  0.02        $    0.18        $  0.04        $  0.12  
 
Year ended June 30, 2001                    
Revenues      $9,158        $12,035        $7,877        $7,063  
Expenses      8,875        11,133        7,797        6,700  
     
     
     
     
  
Income before income taxes and minority interest      283        902        80        363  
Income taxes      (68 )      (211 )      35        (111 )
     
     
     
     
  
Income before minority interest      215        691        115        252  
Minority interest      (31 )      (53 )      (2 )      (24 )
     
     
     
     
  
Net income      $  184        $    638        $  113        $  228  
     
     
     
     
  
Net income per share:                    
          Basic      $  0.06        $    0.22        $  0.04        $  0.08  
          Fully diluted      $  0.06        $    0.22        $  0.04        $  0.08  
EX-10.9 3 dex109.txt CREDIT FACILITY LETTER EXHIBIT 10.9 Standard. Chartered ------------------- Date : 4 January 2001 Standard Chartered Bank Corporate & Institutional Banking Our Ref: C&IB/CDT/CFS/LG/AH Credit Operations CPF Tampines Building #03-00 1 Tampines Central 5 PRIVATE AND CONFIDENTIAL Singapore 529508 ------------------------ Trio-Tech International Pte Ltd Postal Address: 1008 Toa Payoh North Robinson Road P. O. Box 1901 #03-09/18 Singapore 903801 Singapore 903801 Toa Payoh Industrial Estate Singapore 318996 Telephone +65 225 8888 Facsimile +65 260 2513 Telegrams STANCHART Telex RS 24290 Attn:- Mr Mok Chia Kwang ---- Financial Controller Dear Sirs BANKING ARRANGEMENTS -------------------- Standard Chartered Bank (the "Bank") is pleased to confirm its willingness to continue to make available to Trio-Tech International Pte Ltd (the "Customer") the banking facilities (the "Facilities") outlined below on the following terms and conditions, subject to the Bank's Standard Terms and Conditions, as set out in Form 338-1198 attached hereto, and to the satisfactory completion of documentation: BANKING FACILITIES ------------------ AMOUNT DESCRIPTION AND PRICING ------ ----------------------- 1 SGD500,000 Overdraft in current account, repayable upon demand, to assist with working capital requirements. Interest at prime plus 1.25% p.a. payable monthly in arrears to the debit of the Customer's current account. 1a) (USD200,000) Overdraft in United States Dollar (USD) current account, repayable upon demand, to assist with working capital requirements. Interest at USD prime plus 1% p.a. payable monthly in arrears to the debit of the Customer's USD current account. 2) SGD2,000,000 For opening irrevocable letters of credit, drafts at sight and/or at usance for period up to 120 days, covering the import of electronic test equipment and accessories into Singapore and/or Malaysia. 2a) (SGD1,000,000) Loans against trust receipts and/or acceptance against trust receipts for period up to 120 days, covering the release of goods imported under and complementary to limit 2). Interest at SBFR plus 1.25% p.a. during the term of each trust receipt. 2b) (SGD1,000,000) Shipping guarantees may be issued to secure the release of goods imported under letters of credit or collection bills routed through the Bank. Initials: M.C.K Initials: V.T Standard. Chartered ------------------- 2c) (SGD1,000,000) For opening irrevocable letters of credit, drafts at sight and/or at usance for period up to 120 days, covering the import of electronic test equipment and accessories in favour of Singapore or Malaysian suppliers. Note: ----- Combined outstandings under limits 2a) to 2c) must not exceed SGD1,000,000 at any one time. 2d) (SGD500,000) Loans against imports by way of promissory notes covering collection DA and DP bills for period up to 120 days, including original usance period. Financing of approved suppliers' invoices are also permitted but at the sole discretion of the Bank and pricing is at 0.25% flat for commission. Interest at SBFR plus 1.25% p.a. during the term of each bill. Condition --------- Proceeds of invoice financing are to be paid direct to suppliers and not credited to the Customer's account. 3) SGD2,000,000 For issuing standby letters of credit for a period of 365 days in favour of suppliers in consideration of credits terms granted to the Customer. 3a) (SGD2,000,000) For issuing customs and other non-shipping guarantees for period not exceeding twelve months. Counter indemnities to be held. 3b) (SGD2,000,000) For issuing advance payment guarantees / performance bonds retention bonds for period not exceeding twelve months. Counter indemnities to be held. 3c) (SGD1,000,000) For issuing tender bonds for period not exceeding six months. Counter indemnities to be held. 4) SGD1,292,000 A 4-year term loan to assist the Customer in financing the construction of a high tension power sub-station. Interest at prime plus 1.5% p.a. Tenor ----- 4 years from date of first drawdown. Drawdown -------- Drawdown in tranches against contractors invoices & architect's certification. 3 days notice is to be given to the Bank before drawdown. Repayment --------- Repayable in 47 monthly instalments of SGD26,916 each (excluding interest) and a final instalment of SGD26,948 (excluding interest). Initials: M.C.K Initials: V.T Standard. Chartered ------------------- Prepayment ---------- Partial repayments will be applied in inverse order of maturity and may not be redrawn. The Customer is to give at least 30 days written notice before such repayment is effected. Commitment / Cancellation Fee ----------------------------- A fee of 1% flat on the amount prepaid if full prepayment is made within one year from the date of first drawndown. Condition: For limits 1). 1a) and 4) ------------------------------------ In the event that the Bank's prime rate is lower than its 1- month cost of funds rate, the Bank reserves the right to convert the prime rate to its 1-month cost of funds rate. Note:- ------ I) Combined outstandings under limits 1) and 1a) must not exceed SGD500,000 at any one time. ii) The Bank may at any time at its sole discretion suspend the availability of prime-based funds by reason or circumstances affecting the money market including but not limited to volatile rate fluctuations or tight liquidity. SECURITY -------- Security for the above Facilities and for facilities which may be extended by the Bank to the Customer from time to time :- 1) Registered charge over fixed deposits of SGD1,650,000 and USD300,000 in the name of the Customer and supported by an appropriate board resolution. 2) Existing corporate guarantee for SGD2,500,000 executed by Trio-Tech International USA and supported by an appropriate board resolution. 3) Fresh registered fixed charge over high tension power sub-station located at Mukim No. 17 Lots No. A4551 J and No. A4551 K. Fire insurance policy covering the above asset for the full reinstatement value with the Bank's interest indicated as mortgagee thereon including mortgagee, non-cancellation and reinstatement value clauses and premium paid receipt are to be lodged with the Bank. CONDITIONS ---------- 1) Loans to parent company Trio-Tech International USA (directly and indirectly) and associated companies must not exceed SGD3,500,000 at all times. 2) The Customer is to maintain a minimum networth of SGD6,000,000 at all times. Networth is defined as the aggregate of paid-up capital and revenue reserves, excluding revaluation reserves and deducting any loans made to the directors in their personal capacities or to the parent company, Trio-Tech International USA directly and indirectly or other related companies and other intangible assets. 3) Gearing ratio of Trio-Tech International Pte Ltd (Singapore) is not to exceed 1. Gearing ratio is defined as total external debts: networth. 4) Any dividends to be declared are subject to prior written consent from the Bank which will not be unreasonably withheld. Initials: M.C.K Initials: V.T Standard. Chartered ------------------- 5) The Customer is to submit to the Bank its quarterly management accounts and its operating subsidiaries including Trio-Tech International (M) Sdn Bhd, Trio-Tech (KL) Sdn Bhd and Trio Tech International (Thailand) Co. Ltd. 6) The Customer is to submit to the Bank its quarterly lists of stocks and ageing debtors (trade and non-trade, including related company debts) and stocks are subject to periodic inspection by the Bank's officers. INTEREST -------- The Bank's Singapore Dollar and United States Dollar prime lending rates are currently 6.25% p.a. and 9.5% p.a. respectively and are subject to fluctuation without prior notice but the rates and any changes thereto are notified in the press and are featured in the Bank's statements of account and on notices displayed at the Bank's branches. The Bank's Standard Bills Finance Rate (SBFR) for all Trade Finance related loans is also subject to fluctuation without prior notice and will be determined by the Bank according to market forces but the prevailing rate and any changes thereto are featured in the Bank's Trade Finance statements and are available on request from our Trade Customer Services Centre. The SBFR for Singapore Dollar denominated Trade loans is currently 6.25% p.a. and for Foreign Currency Trade loans is the respective currency's local inter-bank offer rate or Cost of Funds (i.e. SIBOR) for three months or such other period as the Bank in its discretion may consider appropriate. INSURANCE --------- The Customer agrees that fire insurance for the asset described under paragraph herein (individually and collectively referred to as "Security") shall be obtained through the Bank's approved insurance company, Commercial Union Assurance Company Plc, a member company of the CGU Insurance Group (CGU) for such amount(s) and on such terms as the Bank may require to cover the rights and interests of the Bank for as long as banking facilities are being extended to the Customer by the Bank. The fire insurance policy shall cover against risks of fire and extraneous perils and such other risk(s) as the Bank may in its absolute discretion require and determine fit. In the event where Customer is not the owner of the said asset, the Customer agrees to procure the consent of the owner of the said asset to take up the said fire insurance through CGU. The Customer agrees that the Bank shall be entitled to deduct all costs, fees, expenses and payments (including but not limited to premium payments) to CGU from the Customer's account to ensure that the fire insurance policy is in place and/or duly renewed on such terms as the Bank may require. The Customer consents to the Bank disclosing to CGU any information whatsoever about the Customer and the Security for any purpose in connection with the said fire insurance policy. FEES ---- Upon acceptance of the Facilities detailed in this letter, a facility fee of SGD500 becomes payable and will be debited to the Customers account accordingly. DISCLOSURE ---------- The Customer hereby consent to Standard Chartered Bank, Singapore, its officers and agents disclosing information relating to the Customer and the Customers, account or dealing relationship with the Bank, including but not limited to details of the Customer's Facilities, any security taken, transactions undertaken and balances and positions with the Bank, to (i) the head office of the Bank, any of its representative and branch offices in any jurisdiction, related corporations and its agents and independent contractors who are under a duty of confidentiality to the Bank; (ii) any potential assignee of the Bank or other participant in any of its rights and/or obligations in relation to the Customer's Facilities and (iii) any guarantors, third party pledgors or security providers. MAS NOTICE 757 -------------- In accordance with MAS Notice 757, Facilities denominated in Singapore Dollars granted to nonresidents are only to be used to finance operations and economic activities in Singapore specifically allowed under the said MAS Notice 757. Singapore Dollar denominated facilities granted to nonresidents are not to be used for:- Initials: M.C.K Initials: V.T Standard. Chartered ------------------- (a) speculating in the Singapore Dollar currency and interest rate markets; (b) financing third-country trade between countries not involving Singapore; (c) financing the acquisition of shares of companies not listed on the Singapore Exchange; and (d) financing any activities outside Singapore; except when approved by the Monetary Authority of Singapore. ACCEPTANCE ---------- This offer will remain open for acceptance for a period of thirty days from the date of this letter, after which time it will lapse unless an extension has been agreed by the Bank in writing. To confirm your acceptance of this offer, please return the attached duplicate copy of this letter duly signed in acceptance together with a certified true extract of the board resolution as per specimen attached to: Standard Chartered Bank Corporate & Institutional Banking Credit Operations 1 Tampines Central 5 #03-00 CPF Tampines Building Singapore 529508 Attention: Ms Anna Hee This Facility letter supersedes all previous Facility letters. DOCUMENTATION ------------- Please advise the name of the solicitors who will be acting for the Customer in the completion of the legal documentation. All expenses costs and fees relating to the completion of the charge are to be borne by the Customer and will be debited from the Customer's account accordingly. We also enclosed a set of documents which should be duly completed and returned to the Bank at the abovementioned address. AVAILABILITY ------------ In accordance with normal banking practice, the Facilities are made available solely at the discretion of the Bank and are subject to repayment on demand by the Bank. Without prejudice to this obligation of the Customer, the Facilities shall be subject to review by the Bank from time to time. We are pleased to make this offer of banking arrangements and look forward to receiving your formal acceptance in due course. Yours faithfully For and on behalf of Standard Chartered Bank By: /s/ Laurance Goh ------------------------ Laurence Goh Senior Manager Corporate Financial Services Initials: M.C.K Initials: V.T Standard.Chartered ------------------ We confirm the Customer's acceptance of the Facilities on the terms and conditions outlined in this letter dated 4 January 2001 By: /s/ Yong Siew Wai ---------------------------------------------------- For and on behalf of Trio-Tech International Pte Ltd EX-10.13 4 dex1013.txt REAL ESTATE LEASE DATED FEB 16, 2001 EXHIBIT 10.13 JTC(L)3729/199 1 March, 2001 JTC Corporation JTC East Zone Office TRIO-TECH INTERNATIONAL PTE LTD 25 Kallang Avenue 405-01 BLOCK 1008 TOA PAYOH NORTH Singapore 339416 #03-09 SINGAPORE 318996 telephone 1800-299 9405 facsimile 885 4232 email feedback@ jtc.gov.sg web site www.jtc.gov.sg Dear Sirs, ACCEPTANCE OF RENEWAL OFFER ON PTE LOTS A4551, A4551A, A4551G AT BLK 1004 TOA PAYOH NORTH #07-01/07 AND #07-R1, #03-01/03 1 We are pleased to forward herewith the stamped letter of acceptance dated 16 Feb 2001, for your retention. Yours faithfully By: /s/ Margie Ho -------------------------- Margie Ho (Mrs) JTC East Zone for Director Customer Services Group ENCL. DID-8854207 FAX: 8854232 EMAIL:margieho@jtc.gov.sg TRIO-TECH --------- INTERNATIONAL 8 February 2001 [STAMP] JTC EAST ZONE 25 KALLANG AVENUE #15-01 SINGAPORE 339416 Attn: Ms Mabel Tan Dear Sirs, RENEWAL OF TENANCY FOR PTE LOT: AA45519 A4551A, A455IG AT BLK 1004 TOA PAY0H NORTH #07-01/07 SINGAPORE 318995, #07-R1, SINGAPORE 318995, #03-01/03 SINGAPORE 318995 1. We refer to your letter of Offer dated 14 November 2000 and hereby confirm acceptance of the covenants, terms and conditions of the Tenancy. 2. We enclose herewith a cheque for the amount of $1,178.00 and a Banker's/Insurance Guarantee for the amount of $37,006.39 as security deposit as confirmation of our acceptance. By: /s/ Lee Siew Kuan ------------------------------------------------------------------------------- Signature of authorised signatory : Lee Siew Kuan Name of authorised signatory : Director of Logistic Designation For and on behalf of : TRIO-TECH INTERNATIONAL PTE LTD In the presence of : By: /s/ Betty Ang ------------------------------------------------------------------------------- Name of witness : Miss Betty Ang NRIC No. : S6945849A JTC(L)3729/199/MT 14 November, 2000 DID: 8854193 FAX: 8854232 EMAIL: mabeitan@jtc.gov.sg TRIO-TECH INTERNATIONAL PTE LTD BLOCK 1008 TOA PAYOH NORTH #03-09 SINGAPORE 318996 Dear Customer, RE: RENTAL AND PROPERTY TAX REBATES FOR TENANTS UPON RENEWAL PTE LOT NO. AA4661, A4551 A, A4651G 1. In November 1999, we informed you that JTC has extended the rental rebate measures announced in January 1999 by another year until 31st December 2000. On the 31st of December 2000, the rebates given to you will cease to be effective and rental payable will revert to the contracted amounts without further notice. 2. You may be pleased to note that the Ministry of Finance has extended the property tax rebate for another year from 1st July 2000 to 3 June 2001, but at a lower rate of 25%. This works out to a rebate of 3% on the rent payable after any rental rebates, if applicable. 3. You may like to take note that the rental and property tax rebate, will cease on 31st Dec 2000 or 30th June 2001 respectively or when your tenancy expires, whichever is earlier. An updated statement of account reflecting the amount payable, due to the renewed rental rates and property tax rebates is attached. If you have any queries, please do not hesitate to contact me at DID 8854193. 4. On behalf of JTC, I wish you continued success in the years ahead Yours Faithfully, By: /s/ Mabel Tan ------------------------------ MABEL TAN (MISS) SNR LEASE MANAGEMENT OFFICER JTC EAST ZONE CUSTOMER SERVICES GROUP ENCL JTC(L)3729/199/MT 14 November, 2000 DID: 8854193 FAX: 8854232 EMAIL: mabeltan@jtc.gov.sg TRIO-TECH INTERNATIONAL PTE LTD BLOCK 1008 TOA PAYOH NORTH #03-09 SINGAPORE 318996 Attn : Ms Betty Ang LUM Dear Sirs, OFFER OF TENANCY OF FLATTED FACTORY AT BLK 1004 TOA PAYOH NORTH #07-01/07, #07- R1 & #03-01/03, SINGAPORE 318996 PTE LOTS A4561, A4551A, A4551G ("THE PREMISES") 1. We are pleased to offer a tenancy of the Premises subject to the following covenants, terms and conditions in this letter and in the annexed Memorandum of Tenancy ("the Offer"): 1.01 Location: Units #07-01/07, #07-R1, #03-01/03, , at Blk 1004 Toa Payoh North ("the Building" ) as delineated and edged in red on the plan attached to the Offer. 1.02 Term of Tenancy: 2 years 10 months 15 days ("the Term") with effect from 16 Nov 2000 ("the Commencement Date"). 1.03 Tenancy Agreement: Upon due acceptance of the Offer in accordance with clause 2 of this letter, you shall have entered into a tenancy agreement with us ("the Tenancy") and will be bound by the Ovenants, terms and conditions thereof. In the event of any inconsistency or conflict between any covenant, term or condition of this letter and the Memorandum of Tenancy, the relevant covenant, term or condition in this letter shall prevail. Jurong Town Corporation 1.04 Area: Site Unit No. Floor Area (sq m) 4551 #07-01/07 637.7 ) 4551A #07-R1 9.4 ) subject 4551G #03-01/03 274.9 ) to 922.00 ) survey 1.05 Rent and Service Charge: For Discounted Rent: -------------------- (a) Discounted rate of: - Site Unit No. Discounted Rent per sqm per month 4551 #07-01/07 $10.96 4551A #07-R1 $10.96 4551 G #03-01/03 $12.03 for so long as the Tenant shall occupy by way of tenancy an aggregate floor area of 1,000 square metres in the Building or in the various flatted factories belonging to the Landlord, and (b) Normal rate of Site Unit No. Normal Rent per sqm per month 4551 #07-01/07 $11.30 4551A #07-R1 $11.30 4551 G #03-01/03 $12.40 in the event that the said aggregate floor area occupied is at any time reduced to below 1,000 square metre (when the discount shall be totally withdrawn) with effect from the date of reduction in the said aggregate floor, ("Rent" ) to be paid without demand and in advance without deduction on the 1st day of each month of the year (i.e. 1st of January, February, March, etc.). The first payment shall be made on 16 Dec 2000. Jurong Town Corporation Service charge: $2.10 per square metre per month, ("Service Charge") as charges for services rendered by us, payable without demand on the same date and in the same manner as the Rent, subject to our revision from time to time. 1.06 Security Deposit/ Banker's Guarantee: For Discounted Rent: ------------------- You will at the time of acceptance of the Offer be required to place with us a deposit of $37,006.39 equivalent to 3 months' Rent (at the discounted rate) and Service Charge ("Security Deposit") as security against any breach of the covenants, terms and conditions in the Tenancy. The Security Deposit may be in the form of cash and/or acceptable Banker's Guarantee in the form attached (effective from 16 Nov 2000 to 31 Mar 2004) and/or such other form of security as we may in our absolute discretion permit or accept. The Security Deposit must be maintained at the same sum throughout the Term and shall be repayable to you without interest or returned to you for cancellation, after the termination of the Term (by expiry or otherwise) or expiry of the Banker's Guarantee, as the case may be, subject to appropriate deductions or payment to us for damages or other sums due under the Tenancy. If the Rent at the discounted rate is increased to the normal rate or Service Charge is increased or any deductions are made from the Security Deposit, you are to immediately pay the amount of such increase or make good the deductions so that the Security Deposit shall at all times be equal to 3 months' Rent and Service Charge. 1.07 Mode of Payment: Except for the payment to be made with your letter of acceptance pursuant to clause 2 of this letter, during the Term, you shall pay Rent, Service Charge and GST by Interbank GIRO or any other mode to be determined by us. You have an existing account with us from which we will continue to deduct the aforesaid payments. You are therefore not required to submit a duly completed GIRO form as part of the Mode of Acceptance herein unless you wish to have a separate GIRO account to meet the aforesaid payments. Jurong Town Corporation 1.08 Permitted Use: (a) You shall commence full operations for #07-01/07 --------- assembly and test of semi-conducters and test equipment only #07-RI ------ storage of raw materials related to the production only #03-01/03 --------- ancillary storage of raw materials to main operation at #07-01/07 only and for no other purpose whatsoever ("the Authorised Use"). (b) Thereafter, you shall maintain full and continuous operations and use and occupy the whole of the Premises for the Authorised Use. (c) Subject to clauses (a) and (b) above, you shall use and occupy at least sixty per cent (60%) of the gross floor area of the Premises for industrial activities and ancillary stores, and use and occupy the remaining gross floor area, if any, for offices, neutral areas, communal facilities and such other uses as may be approved in writing by us and the relevant governmental and statutory authorities Provided That you shall not use and occupy the Premises for the purpose of commercial office and storage unrelated to the Authorised Use. 1.09 Preparation and Submission of Plans: (a) No alteration, addition, improvement, erection, installation or interference to or in the Premises or the fixtures and fittings therein is permitted without Building Control Unit's [BCU(JTC)] prior written consent. Your attention is drawn to clauses 2.10 to 2.19 and 2.34 of the Memorandum of Tenancy. (b) If you have made any changes to the original layout of your factory, you shall be required to engage a qualified architect or engineer to prepare and submit plans showing the layout of all installations including any alterations and additions. And you may wish to make and submit to Controller, BCU(JTC) four copies of fresh layout plan showing the alterations or additions etc, for our record/approval. If you have any enquiries on the preparation and submission of your plans for JTC endorsement, please contact Mr Song Bee Keng/Mr Foo See Keong at Tel No 5688389/5688382. Jurong Town Corporation (c) No work shall commence until the plans have been approved by our BCU(JTC). 1.10 Special Conditions: (a) Loading Capacity: Normal (Ground & Non-ground) Floor Premises You shall comply and ensure compliance with the following restrictions: (i) maximum loading capacity of the goods lifts in the Building; and (ii) maximum floor loading capacity of 15.0 or 10.0 kiloNewtons per square metre respectively of the Premises on the 3d and 7th storey of the Building PROVIDED THAT any such permitted load shall be evenly distributed. We shall not be liable for any loss or damage that you may suffer from any subsidence or cracking of the ground floor slabs and aprons of the Building. 1.11 Option for renewal of tenancy: (a) You may within 3 months before the expiry of the Term make a written request to us for a further term of tenancy (b) We may grant you a further term of tenancy of Premises upon mutual terms to be agreed between you and us subject to the following : (i) there shall be no breach of your obligations at the time you make your request for a further term; (ii) our determination of revised rent, having regard to the market rent of the Premises at the time of granting the further term, shall be final; (iii) we shall have absolute discretion to determine such covenants, terms and conditions, but excluding a covenant for renewal of tenancy; and (iv) there shall not be any breach of your obligations at the expiry of Term. Jurong Yown Corporation 2. Mode of Acceptance: The Offer shall lapse if we do not receive the following within three weeks from the date of this letter. . Duly signed letter of acceptance of all the covenants, terms and conditions in the Tenancy in the form enclosed at the Appendix 1. (Please date as required in the Appendix) . Payment of the sum $50,568.57 (inclusive of GST) arrived at Appendix 2. . Alternatively, please let us have your remittance of $1,178.00 (inclusive of GST) and the Bankers Guarantee (in lieu of the three months' cash deposit) for the sum of $37,006.39. Please note that your first month's rent of $12,384.18 will be deducted through your Giro Account in Dec 2000. 3. Please note that payments made prior to your giving us the other items listed above may be cleared by and credited by us upon receipt. However, if the said other items are not forthcoming from you within the time stipulated herein, the Offer shall lapse and there shall be no contract between you and us arising hereunder. Any payments received shall then be refunded to you without interest and you shall have no claim of whatsoever nature against us. 4. Variation to the Tenancy This letter and the Memorandum of Tenancy constitute the full terms and conditions governing the Offer and no terms or representation or otherwise, whether express or implied, shall form part of the Offer other than what is contained herein. Any variation, modification, amendment, deletion, addition or otherwise of the covenants, terms and conditions of the Offer shall not be enforceable unless agreed by both parties and reduced in writing by us. 5. Car-Parking Scheme: (a) The car park for Block 1004 Toa Payoh North is currently managed by Wilson Parking (S) Pte Ltd and you will have to observe and be bound by all the rules and regulations governing the use and operation of the car park. You are requested to contact the following person on the use of the car park: Jurong Town Corporation Ms Susan Ng Wilson Parking (S) Pte Ltd 32 Sultan Gate Singapore 198480 TelNo.2966600 (b) The Corporation shall not be liable for any loss, damage, injury, liability, claim or action you may sustain or suffer in the use of the car park and the tenants shall fully indemnify the Corporation against any loss, claims, penalties, demands, damage arising from the private management and operations of the car park by the tenants. 6. Please note that our granting of your request/application here does not at any time prejudice or waive any of our rights or remedies for breaches of your obligations to us. Any waiver by us, to be effective, must be clearly and specifically stated in writing. Yours faithfully By: /s/ Mabel Tan ------------------------------ MABEL TAN (MISS) SNR LEASE MANAGEMENT OFFICER JTC EAST ZONE CUSTOMER SERVICES GROUP ATTD EX-10.14 5 dex1014.txt REAL ESTATE LEASE DATED MAY 13, 1999 EXHIBIT 10.14 TRIO-TECH --------- INTERNATIONAL 3 June 1999 Marketing & Sales Department BY HAND Jurong Town Corporation Jurong Town Hall 301 Town Hall Road Singapore 609431 Dear Ms Lai Get Luan ACCEPTANCE OF OFFER OF TENANCY FOR THE PREMISES AT BLK 1004 TOA PAYOH NORTH #03-16 TO #03-17 TOA PAYOH INDUSTRIAL ESTATE SINGAPORE 318995 1. We refer to your letter of offer dated 13 May 1999 for the Tenancy and hereby confirm our acceptance of all the covenants, terms and conditions stipulated therein. 2. We hereby enclose following as for an of confirmation of our acceptance : (i) A cheque (cheque no. : SCB 132065) for the amount of S$ 2,778.20. (ii) A Banker's Guarantee for the amount of S$7,808.24 which will be forwarded to you by 7th June 99. (iii) A copy of our RCB Certificate. 3. In addition, we also enclose herewith a duly completed GIRO authorisation form as requested by you for your information and record. By: /s/ Lee Siew Kuan ------------------------------------------------ Name of authorised signatory : Mrs Lee Siew Kuan Designation: Director Of Logistics for and on behalf of: TRIO-TECH INTERNATIONAL PTE LTD In the presence of By: /s/ Chong Siew Chang ------------------------------- Name of witness: Chong Siew Chang NRIC No: 6928801/D LSK/ic- JTC(L)3729/199/TEMP IALGUSN DID: 5688574 FAX: 5688593 Email: getluan@jtc.gov.sgw 13 May 1999 Trio-Tech International Pte Ltd 5 Kian Teck Rd BY LUM ------ Singapore 628765 (Attn: Ms Betty Ang) Dear Sirs, OFFER OF TENANCY FOR FLATTED FACTORY SPACE 1. We are pleased to offer a tenancy of the Premises subject to the following covenants, terms and conditions in this letter and in the annexed Memorandum of Tenancy ("the Offer") : 1.01 Location: Pte Lot A455 I (h), Blk 1004 ("the Building"), Toa Payoh North #03-16 to #03-17 Toa Payoh Industrial Estate Singapore 318995 ("the Premises") as delineated and edged in red on the plan attached to the Offer. 1.02 Term of Tenancy: 3 years ("the Term") with effect from 01 August 1999 ("the Commencement Date"). 1.03 Tenancy Agreement: Upon due acceptance of the Offer in accordance with clause 2 of this letter, you shall have entered into a tenancy agreement with US ("the Tenancy") and will be bound by the covenants, terms and conditions thereof. In the event of any inconsistency or conflict between any covenant, term or condition of this letter and the Memorandum of Tenancy, the relevant covenant, term or condition in this letter shall prevail. 1.04 Area: Approximately 184.20 square metres (subject to survey). Jurong Town Corporation 1.05 Rent and Service Charge: (a) Discounted rate of $12.03 per square metres for so long as the Tenant shall occupy by way of tenancy an aggregate floor area of not less than 1,000 square metres in the Building or in the various flatted factories belonging to the Landlord, and (b) Normal rate of $12.40 per square metres with effect from the date the said aggregate floor area occupied is reduced to below 1,000 square metres (ie. when the discount shall be totally withdrawn), ("Rent") to be paid without demand and in advance without deduction on the 1st day of each month of the year (i.e. I st of January, February, March, etc.). The next payment shall be made on 01 September 1999. Service charge: $2.10 per square metre per month, ("Service Charge") as charges for services rendered by us, payable without demand on the same date and in the same manner as the Rent, subject to our revision from time to time. 1.06 Security Deposit/Banker's Guarantee: You will at the time of acceptance of the Offer be required to place with us a deposit of $7,808.24 equivalent to 3 months' Rent (at the discounted rate) and Service Charge ("Security Deposit") as security against any breach of the covenants, terms and conditions in the Tenancy. The Security Deposit may be in the form of cash and/or acceptable Banker's Guarantee in the form attached (effective from 01 June 1999 to 31 January 2003) and/or such other form of security as we may in our absolute discretion permit or accept. The Security Deposit must be maintained at the same sum throughout the Term and shall be repayable to you without interest or returned to you for cancellation, after the termination of the Term (by expiry or otherwise) or expiry of the Banker's Guarantee, as the case may be, subject to appropriate deductions or payment to us for damages or other sums due under the Tenancy. If the Rent at the discounted rate is increased to the normal rate or Service Charge is increased or any deductions are made from the Security Deposit, you are to immediately pay the amount of such increase or make good the deductions so that the Security Deposit shall at all times be equal to 3 months' Rent and Service Charge. 1.07 Mode of Payment: You have an existing account with us from which we will deduct the aforesaid payments. You are therefore not required to submit a duly completed GIRO form as part of the Mode of Acceptance herein unless you wish to have a separate GIRO account to meet the aforesaid payments. 1.08 Permitted Use: (a) Subject to clause 1. 12 of this letter, you shall commence full operations within four (4) months of the Commencement Date for the purpose of IC testing, services and packing for semi-cofiductors industry only and for no other purpose whatsoever ("the Authorised Use"). (b) Thereafter, you shall maintain full and continuous operations and use and occupy the whole of the Premises for the Authorised Use. (c) Subject to clauses (a) and (b) above, you shall use and occupy at least sixty percent (60%) of the gross floor area of the Premises for industrial activities and ancillary stores, and use and occupy the remaining gross floor area, if any, for offices, neutral areas, communal facilities and such other uses as may be approved in writing by us and the relevant governmental and statutory authorities PROVIDED THAT you shall not use and occupy the Premises for the purpose of commercial office and storage unrelated to the Authorised Use. 1.09 Approvals The Tenancy is subject to approvals being obtained from the relevant government and statutory authorities. 1.10 Possession of Premises: (a) Keys to the Premises will be given to you two (2) months prior to the Commencement Date subject to due acceptance of the Offer ("Possession Date"). (b) From the Possession Date until the Commencement Date, you shall be deemed a licensee upon the same terms and conditions in the Tenancy. (c) if you proceed with the Tenancy after the Commencement Date, the licence fee payable from the Possession Date to the Commencement Date shall be waived ("Rent-Free Period"). Should you fail to so proceed, you shall (i) remove everything installed by you; (ii) reinstate the Premises to its original state and condition; and (iii) pay us a sum equal to the prevailing market rent payable for the period from the Possession Date up to the date the installations are removed and reinstatement completed to our satisfaction, without prejudice to any other rights and remedies we may have against you under the Tenancy or at law. 1.11 Preparation and Submission of Plans: (a) No alteration, addition, improvement, erection, installation or interference to or in the Premises or the fixtures and fittings therein is permitted without Building Control Unit [BCU(JTC)] prior written consent. Your attention is drawn to clauses 2.10 to 2.19 and 2.34 of the Memorandum of Tenancy. (b) You will be required to prepare and submit floor layout plans of your factory and plans of the air-conditioning works in accordance with the terms of the tenancy and the 'Guide' attached. It is important that you should proceed with the preparation and submission of the plans in accordance with the procedures set out in the said 'Guide'. (c) Should there be alteration of existing automatic fire alarm and sprinkler system installation, alteration plans shall be submitted to Building Control Unit [BCU(JTC)] for approval on fire safety aspects. All air-conditioning, fire alarm & sprinkler system plans must be signed by a relevant Professional Engineer, registered with the Professional Engineers Board of Singapore. (d) Upon due acceptance of the Offer, a copy of the floor and elevation plans (transparencies) will be issued to you to assist in the preparation of the plans required herein. (e) No work shall commence until the plans have been approved by Building Control Unit [BCU(JTC)]. 1.12 Final inspection: You shall ensure that final inspection by us of all installations is carried out and our approval of the same is obtained before any operations in the Premises may be commenced. 1.13 Special Conditions: 1 You shall comply and ensure compliance with the following restrictions: (a) maximum loading capacity of the goods lifts in the Building; and (b) maximum floor loading capacity of 15.00 kiloNewtons per square metre of the Premises on the 3rd storey of the Building PROVIDED THAT any such permitted load shall be evenly distributed. We shall not be liable for any loss or damage that you may suffer from any subsidence or cracking of the ground floor slabs and aprons of the Building. 2 Option for renewal of tenancy: ------------------------------ (a) You may within 3 months before the expiry of the Term make a written request to us for further term of tenancy. (b) We may grant you a further term of tenancy of the Premises upon mutual terms to be agreed between you and us subject to the following: (i) there shall be no breach of your obligations at the time you make your request for a further term; (ii) our determination of revised rent, having regard to the market rent of the Premises at the time of granting the further term, shall be final; (iii) we shall have absolute discretion to determine such covenants, terms and conditions, but excluding a covenant for renewal of tenancy; and (iv) there shall not be any breach of your obligations at the expiry of the Term. 2. Mode of Acceptance: . The Offer shall lapse if we do not receive the following by 27 May 1999:- . Duly signed letter of acceptance (in Duplicate) of all the covenants, terms and conditions in the Tenancy in the form enclosed at the Appendix. (Please date as required in the Appendix) . Payment of the sum set out in clause 4. . Duly completed GIRO authorization form (if any). 3. Please note that payments made prior to your giving us the other items listed above may be cleared by and credited by us upon receipt. However, if the said other items are not forthcoming from you within the time stipulated herein, the Offer shall lapse and there shall be no contract between you and us arising hereunder. Any payments received shall then be refunded to you without interest and you shall have no claim of whatsoever nature against US. 4. The total amount payable is as follows:
-------------------------------------------------------------------------------------------------------- AMOUNT +3 % GST -------------------------------------------------------------------------------------------------------- Rent: ----- Rent at $12.03 psm per month on 184.20 sqm for period 01 August 1999 to 31 August 1999 $ 2,215.93 Less: 6.6% Property tax rebate on rental value (01/07/1998 to 30/06/2000) $ 146.25 ------------- $ 2,069.68 -------------------------------------------------------------------------------------------------------- Service Charge: --------------- Service Charge at $2.10 psm per month on 184.20 sqm for period 01 August 1999 to 31 August 1999 $ 386.82 $ 2,456.50 $ 73.70 ------------- -------------------------------------------------------------------------------------------------------- Deposit equivalent to three months' rent and service charge (or Banker's Guarantee provided in accordance with sub-paragraph 1.06 above) $ 7,808.24 -------------------------------------------------------------------------------------------------------- Stamp fee payable on Letter of Acceptane which will be stamped by JTC on your behalf $ 248.00 -------------------------------------------------------------------------------------------------------- Sub-Total Payable $ 10,512.74 $ 73.70 -------------------------------------------------------------------------------------------------------- Add: 3 % GST $ 73.70 -------------- -------------------------------------------------------------------------------------------------------- Total Amount Payable $ 10,586.44 -------------- --------------------------------------------------------------------------------------------------------
5. Rent-Free Period: As the Commencement Date will not be deferred, we advise you to accept the Offer as soon as possible and to collect the keys to the Premises on the scheduled date in order to maximize the Rent-Free Period referred to in clause 1. 1 0(c) of this letter. 6. Variation to the Tenancy This letter and the Memorandum of Tenancy constitute the full terms and conditions governing the Offer and no terms or representation or otherwise, whether express or implied, shall form part of the Offer other than what is contained herein. Any variation, modification, amendment, deletion, addition or otherwise of the covenants, terms and conditions of the Offer shall not be enforceable unless agreed by both parties and reduced in writing by us. 7. Car-Parking Scheme: (a) The car park for Blk 1004 is currently managed by a Tenants' Committee and you will: (i) have to contribute towards all the operational and management costs, if any, incurred in connection with the car parks; (ii) observe and be bound by all the rules and regulations governing the use and operation of the car park. A copy of the Tenant Committeds current rules and regulations is obtainable ------------- from the Tenants' Committee. You are required to contact: Ms Susan Ng Wilson Parking (S) Pte Ltd 32 Sultan Centre Singapore 198480 Tel No: 2966600 a member of the Committee, on your use of the car park. (b) The Corporation shall not be liable for any loss, damage, injury, liabilities, claim or action you may sustain or suffer in the use of the car park and the tenants shall fully indemnify the Corporation against any loss, claims, penalties, demands, damage arising from the private management and operations of the car park by the tenants. 8. Application for Approvals, Utilities etc. Upon your acceptance of the covenants, terms and conditions of the Offer, you are advised to proceed expeditiously as follows: 8.01 Preliminary Clearance: Comply with the requirements of the Chief Engineer (Central Building Plan Unit), Pollution Control Department and/or other departments pursuant to your application/s for preliminary clearance. (Please note that we have referred your application to the relevant department/s) 8.02 Discharge of Trade Effluence: Complete the attached Application for Permission to Discharge Trade Effluent into Public Sewer and return the application form direct to the Head, Pollution Control Department, Ministry of Environment, Environment Building, 40 Scotts Road. Singapore 228231 (Telephone No. 7327733). 8.03 Electricity: Engage a registered electrical consultant or competent contractor to submit three sets of electrical single-line diagrams to and in accordance with the requirements of our Property Support Department (PSD), Customer Services Group, JTC East Zone Office for endorsement before an application is made to the Power Supply Pte Ltd to open an account for electricity connection. Please contact our Property Support Department (PSD) at Blk 25 Kallang Avenue #05-01 Kallang Basin Industrial Estate Singapore 339416 direct for their requirements. 8.04 Water: Submit four copies of sketch plans, prepared by a licensed plumber, showing the section and layout of the plumbing, to our Building Control Unit [BCU(JTC)] for approval prior to the issue of a letter to Water Conservation Department Public Utilities Board to assist you in your application for a water sub-meter. 8.05 Telephone: Apply direct to Singapore Telecommunications Ltd for all connections. 8.06 Automatic Fire Alarm System (Incorporating Heat Detector) Engage a registered electrical consultant/professional engineer to submit two sets of fire alarm drawings, indicating the existing fixtures if any, the proposed modifications of the fire alarm and the layout of machinery, etc to and in accordance with the requirements of our Building Control Unit [BCU(JTC)]. Please contact our Building Control Unit [BCU(JTC)] at 301 Jurong Town Hall Road (3rd level) Singapore 609431 direct for further requirements. 8.07 Factory Inspectorate Complete and return direct to Chief Inspector of Factories the attached form, "Particulars to be submitted by occupiers or Intending Occupiers of Factories". Yours faithfully By: /s/ Lai Get Luan -------------------- LAI GET LUAN (Ms) MARKETING & SALES DEPARTMENT INDUSTRIAL PARKS DEVELOPMENT GROUP JURONG TOWN CORPORATION Attd EX-10.15 6 dex1015.txt REAL ESTATE LEASE DATED OCT 13, 1999 BLOCK 1004 EXHIBIT 10.15 TRIO-TECH --------- INTERNATIONAL 25 November 1999 Marketing & Sales Department [STAMP] BY HAND ------- Jurong Town Corporation Jurong Town Hall 301 Town Hall Road Singapore 609431 Dear Ms Lai Get Luan ACCEPTANCE OF OFFER OF TENANCY FOR THE PREMISES AT BLK 1004 TOA PAYOH NORTH #01- 08 TO #01-15 TOA PAYOH INDUSTRIAL ESTATE SINGAPORE 318995 1. We refer to your letter of dated 13 October 1999 and a letter of amendment dated 19 November 1999 for the Tenancy and hereby confirm our acceptance of all the covenants, terms and conditions stipulated therein. 2. We enclose herewith a cheque for the amount of $12,499.07 and the Banker's guarantee as security deposit as confirmation of our acceptance. 3. In addition, we also enclose herewith a duly completed GIRO authorization form as requested by you for your information and record. By: /s/ Yong Siew Wai --------------------------------------------------------------------------- Name of authorized signatory : Mr. Yong Siew Wai Designation : President, Chief Executive Officer For and on behalf of TRIO-TECH INTERNATIONAL PTD LTD In the presence of : By: /s/ Betty Ang --------------------------------------------------------------------------- Name of witness : Miss Betty Ang NRIC No. : S6945849A DID :5688574 FAX: 5688593 Email: getluan@jtc.gov.sg 19 November, 1999 Trio-Tech International Pte Ltd BY FAX @ 264 2235 & BY LUM 5 Kian Teck Rd -------------------------- Singapore 628765 (Attn: Mrs Lee Siew Kuan/Ms Betty Ang) Dear Sirs AMENDMENT TO LETTER OF OFFER OF TENANCY IN RESPECT OF THE PREMISES AT BLK 1004 TOA PAYOH NORTH #01-08 TO #01-15 TOA PAYOH INDUSTRIAL ESTATE 1 We refer to your letter dated 15 November 1999 and our letter of offer dated 13 October 1999. 2 We are agreeable to your request to defer the commencement date of the said tenancy from 01 January 1999 to 16 January 2000. Hence, our letter of offer dated 13 October 1999 shall be amended as follows: - Sub-Paragraph 1.02: ------------------- Term of Tenancy: ---------------- 3 years ("the Term") with effect from 16 January 2000 ("the Commencement Date"). Sub-Paragraph 1.05: ------------------- Rent and Service Charge: ------------------------ Standard Rent: -------------- (a) Discounted rate of $16.30 per square metres for so long as the Tenant shall occupy by way of tenancy an aggregate floor area of not less than 1,000 square metres in the Building or in the various flatted factories belonging to the Landlord, and (b) Normal rate of $16.80 per square metres with effect from the date the said aggregate floor area occupied is reduced to below 1,000 square metres (ie. when the discount shall be totally withdrawn), ("Rent") to be paid without demand and in advance without deduction on the 1st day of each month of the year (i.e. 1st of January, February, March, etc.). The next payment shall be made on 01 February 2000. Service charge: $2.10 per square metre per month, ("Service Charge") as charges for services rendered by us, payable without demand on the same date and in the same manner as the Rent, subject to our revision from time to time. Sub-Paragraph 1.06: -------------------- Security Deposit/Banker's Guarantee: ------------------------------------ You will at the time of acceptance of the Offer be required to place with us a deposit of $35,201.04 equivalent to 3 months' Rent (at the discounted rate) and Service Charge ("Security Deposit") as security against any breach of the covenants, terms and conditions in the Tenancy. The Security Deposit may be in the form of cash and/or acceptable Banker's Guarantee in the form attached (effective from 16 November 1999 to 15 July 2003) and/or such other form of security as we may in our absolute discretion permit or accept. The Security Deposit must be maintained at the same sum throughout the Term and shall be repayable to you without interest or returned to you for cancellation, after the termination of the Term (by expiry or otherwise) or expiry of the Banker's Guarantee, as the case may be, subject to appropriate deductions or payment to us for damages or other sums due under the Tenancy. If the Rent at the discounted rate is increased to the normal rate or Service Charge is increased or any deductions are made from the Security Deposit, you are to immediately pay the amount of such increase or make good the deductions so that the Security Deposit shall at all times be equal to 3 months' Rent and Service Charge. Paragraph 2: ------------ Mode of Acceptance: ------------------- The Offer shall lapse if we do not receive the following by 22 November 1999:- . Duly signed letter of acceptance (in duplicate) of all the covenants, terms and conditions in the Tenancy in the form enclosed at the Appendix. (Please date as required in the Appendix) . Payment of the sum set out in clause 4. . Duly completed GIRO authorization form. Jurong Town Corporation 3 The Statement of Account in paragraph 4 of our offer is adjusted accordingly as follows:-
------------------------------------------------------------------------------------------------------------- AMOUNT +3 % GST ------------------------------------------------------------------------------------------------------------- Rent: ----- Rent at $16.30 psm per month on 637.70 sqrn for period 16 January 2000 to 15 February 2000 $10,394.51 Less: ---- 6.6% Property tax rebate on rental value (01/07/1998 to 30/06/2000) $ 686.04 ---------- $ 9,708.47 ------------------------------------------------------------------------------------------------------------- Service Charge: -------------- Service Charge at $2.10 psm per month on 637.70 sqrn for period 16 January 2000 to 15 February 2000 $ 1,339.17 $11,047.64 $331.43 ---------- ------------------------------------------------------------------------------------------------------------- Deposit equivalent to three months' rent and service charge (or Banker's Guarantee provided in accordance with sub-paragraph 1.06 above) $35,201.04 ------------------------------------------------------------------------------------------------------------- Stamp fee payable on Letter of Acceptane which will be stamped by JTC on your Behalf $ 1,120.00 ------------------------------------------------------------------------------------------------------------- Sub-Total Payable $47,368.68 $331.43 ------------------------------------------------------------------------------------------------------------- Add: 3 % GST $ 331.43 ---------- ------------------------------------------------------------------------------------------------------------- Total Amount Payable $47,700.11 ---------- -------------------------------------------------------------------------------------------------------------
4 All other terms and conditions stipulated in unchanged. our letter of offer dated 13 October 1999 remain unchanged. 5 Please let us have letter of offer dated remittance amounting to $12,499.07 together with your letter of 13 October 1999 and $47,700.11. a Banker's Guarantee in acceptance of the the above amendments (Alternatively, you may lieu of the cash deposit terms and conditions together with your wish to produce a cheque of of $35,201.04) by 22 stipulated in our November 1999. 6 We enclose herewith a draft of the letter of acceptance and the Banker's Guarantee format for your use/reference Yours faithfully By: /s/ Lai Get Luan ______________________________ LAI GET LUAN (Ms) MARKETING & SALES DEPARTMENT INDUSTRIAL PARKS DEVELOPMENT GROUP JURONG TOWN CORPORATION Attd: Draft of letter of acceptance Banker's Guarantee format DID: 5688574 FAX: 5688593 Email: getluan@jtc.gov.sg 13 October 1999 Trio-Tech International Pte Ltd 5 Kian Teck Rd Singapore 628765 BY FAX @ 264 2235 & By LUM -------------------------- (Attn-. Mrs Lee Siew Kuan/Ms Betty Ang) Dear Sirs, OFFER OF TENANCY FOR FLATTED FACTORY SPACE 1. We are pleased to offer a tenancy of the Premises subject to the following covenants, terms and conditions in this letter and in the annexed Memorandum of Tenancy ("the Offer"): 1.01 Location: Pte Lot A455 1 (i), Blk 1004 ("the Building"), Toa. Payoh North #01 - 08 to #01-15 Toa Payoh Industrial Estate Singapore 318995 ("the Premises") as delineated and edged in red on the plan attached to the Offer. 1.02 Term of Tenancy; 3 -years ("the Term") with effect from of 01 January 2000 ("the Commencement Date") 1.03 Tenancy Agreement: Upon due acceptance of the Offer in accordance with clause 2 of this letter, you shall have entered into a tenancy agreement with US ("the Tenancy") and will be bound by the covenants, terms and conditions thereof. In the event of any inconsistency or conflict between any covenant, term of condition of this letter and the Memorandum of Tenancy, the relevant covenant, term or condition in this letter shall prevail. 1.04 Area: Approximately 637.70 square metres (subject to survey). Jurong Town Corporation 1.05 Rent and Service Charge. (a) Discounted rate of $16.30 per square metres for so long as the Tenant shall occupy by way of tenancy an aggregate floor area of not less thin 1,000 square metres in the Building or in the various flatted factories belonging to the Landlord, and (b) Normal rate of $16.80 per square metres with effect from the date the said aggregate floor area occupied is reduced to below 1,000 square metres (ie. when the discount shall be totally withdrawn), ("Rent") to be paid without demand and in advance without deduction on the 1st day of each mouth of the you (i.e. 1st of January, February, March, etc.). The next payment shall be made on 01 February 1999. Service charge: $2.10 per square metre per month, ("Service Charge") as charges for services rendered by us, payable without demand on the same date and in the same manner as the Rent, subject to our revision from time to time. 1.06 Security Deposit/Banker's Guarantee: You will at the time of acceptance of the Offer be required to place with us a deposit of $35,201.04 equivalent to 3 months' Rent (at the discounted rate) and Service Charge ("Security Deposit") as security against any breach of the covenants, terms and conditions in the Tenancy. The Security Deposit may be in the form of cash and/or acceptable Banker's Guarantee in the form attached (effective from 0 November 1999 to 30 June 2003) and/or such other form of security as we may in our absolute discretion or accept. The Security Deposit must be maintained at the same sum throughout the Term and shall be repayable to you without interest or returned to you for cancellation, after the termination of the Term (by expiry or otherwise) or expiry of the Banker's Guarantee, as the case may be, subject to appropriate deductions or payment to us for damages or other sums due under the Tenancy. If the Rent at the discounted rate is increased to the normal rate or Service Charge is increased or any deductions are made from the Security Deposit, you are to immediately pay the amount of such increase or make good the deductions so that the a Security Deposit shall at all times be equal to 3 months' Rent and Service Charge. Jurong Town Corporation 1.07 Mode of Payment: You have an existing account with us from which we will deduct the aforesaid payments. You are therefore not required to submit a duly completed GIRO form as part of the Mode of Acceptance herein unless you wish to have a separate GIRO account to meet the aforesaid payments. 1.08 Permitted Use: (a) Subject to clause 1.12 of this letter, you shall commence full operations within four (4) months of the Commencement Date for the purpose of design and assembly of printed circuit boards and burn-in test equipment only and for no other purpose whatsoever ("the Authorised Use"). (b) Thereafter, you shall maintain full and continuous operations and use and occupy the whole of the Premises for the Authorised Use. (c) Subject to clauses (a) and (b) above, you shall use and occupy at least sixty percent (60%) of the gross floor area of the Premises for industrial activities and ancillary stores, and use and occupy the remaining gross floor area if any, for offices, neutral areas, communal facilities and such other uses as may be approved in writing by us and the relevant governmental and statutory authorities PROVIDED THAT you shall not use and occupy the Premises for the purpose of commercial office and storage unrelated to the Authorised Use. 1.09 Approvals The Tenancy is subject to approvals being obtained from the relevant government and statutory authorities. 1.10 Possession of Premises: (a) Keys to the Premises will be given to you two (2) months prior to the Commencement Date subject to due acceptance of the Offer ("Possession Date"). (b) From the Possession Date until the Commencement Date, you shall be deemed a licensee upon the same terms and conditions in the Tenancy. Jurong Town Corporation (c) If you proceed with the Tenancy after the Commencement Date, the licence fee payable from the Possession Date to the Commencement Date shall be waived ("Rent-Free Period"). Should you fail to so proceed, you shall: (i) remove everything installed by you; (ii) reinstate the Premises to its original state and condition; and (iii) pay us a sum equal to the prevailing market rent payable for the period from the Possession Date up to the date the installations are removed and reinstatement completed to our satisfaction, without prejudice to any other rights and remedies we may have against you under the Tenancy or at law. 1.11 Preparation and Submission of Plans: (a) No alteration, addition, improvement, erection, installation or interference to or in the Premises or the fixtures and fittings therein is permitted without Building Control Unit [BCU(PTC)] prior written consent. Your attention is drawn to clauses 2.10 to 2.19 and 2.34 of the Memorandum of Tenancy. (b) You will be required to prepare and submit floor layout plans of your factory and plans of the air-conditioning works in accordance with the terms of the tenancy and the 'Guide' attached. It is important that you should proceed with the preparation and submission of the plans in accordance with the procedures set out in the said 'Guide'. (c) Should there be alteration of existing automatic fire alarm and sprinkler system installation, alteration plans shall be submitted to Building Control Unit [BCU(JTC)] for approval on fire safety aspects. All air-conditioning, fire alarm & sprinkler system plans must be signed by a relevant Professional Engineer, registered with the Professional Engineers Board of Singapore. (d) Upon due acceptance of the Offer, a copy of the floor and elevation plans (transparencies) will be issued to you to assist in the preparation of the plans required herein- (e) No work shall commence until the plans have been approved by Building Control Unit [BCU(JTC)] 1.12 Final inspection: You shall ensure that final inspection by us of all installations is carried out and our approval of the same is obtained before any operations in the Premises may be commenced. Jurong Town Corporation 1.13 Special Conditions: 1 You shall comply and ensure compliance with the following restrictions.- (a) maximum loading capacity of the goods lifts in the Building; and (b) maximum floor loading capacity of 12.50 kiloNewtons per square metre of the Premises on the 1st storey of the Building PROVIDED THAT any such permitted load shall be evenly distributed. We shall not be liable for any loss or damage that you may suffer from any subsidence or cracking of the ground floor slabs and aprons of the Building. 2 Option for renewal of tenancy ----------------------------- (a) You may within 3 months before the expiry of the Term make a written request to us for a further term of tenancy. (b) We may grant you a further term of tenancy of the Premises upon mutual terms to be agreed between you and us subject to the following: (i) there shall be no breach of your obligations at the time you make your request for a further term; (ii) our determination of revised rent, having regard to the market rent of the Premises at the time of granting the further term, shall be final; (iii) we shall have absolute discretion to determine such covenants terms and conditions, but excluding a covenant for renewal of tenancy; and (iv) there shall not be any breach of your obligations at the expiry of the term. 2. Mode of Acceptance: The Offer shall lapse if we do not receive the following by November 1999:- . Duly signed letter of acceptance (ie. duplicate) of all the covenants, terms and conditions in the Tenancy in the form enclosed at the Appendix. (Please date as required in the Appendix) . Payment of the sum set out in clause 4. . Duly completed GIRO authorization form (if any). Jurong Town Corporation 3. Please note that payments made prior to your giving us the other items listed above may be cleared by and credited by us upon receipt, However, if the said other items are not forthcoming from you within the time stipulated herein, the Offer shall lapse and the shall be no contract between you and us arising hereunder. Any payments received shall then be refunded to you without interest and you shall have no claim of whatsoever nature against. 4 The total amount payable is as follows:
---------------------------------------------------------------------------------------------------------- AMOUNT +3 % GST ---------------------------------------------------------------------------------------------------------- Rent: ---- Rent at $16.30 psm. per month on 637.70 sqm for period 01 January 2000 to 31 January 2000 $10,394.51 Less: ---- 6.6% Property tax rebate on rental value (01/07/1998 to 30ID6/2000) $ 686.04 ---------- $ 9,708.47 ---------------------------------------------------------------------------------------------------------- Service Charge: -------------- Service Charge at $2.10 psm per month on 637.70 sqm for period 01 January 2000 to 31 January 2000 $ 1,339.17 $11,047.64 $331.43 ---------- ---------------------------------------------------------------------------------------------------------- Deposit equivalent to three months' rent and service charge (or Banker's Guarantee provided in accordance with sub- paragraph 1.06 above) $35,201.04 ---------------------------------------------------------------------------------------------------------- Stamp fee payable on Letter of Acceptance which will be stamped by JTC on your Behalf $ 1,118.00 ---------------------------------------------------------------------------------------------------------- Sub-Total Payable $47,366.68 $331.43 ---------------------------------------------------------------------------------------------------------- Add: 3 % GST $ 331.43 ---------- ---------------------------------------------------------------------------------------------------------- Total Amount Payable $47,698.11 ----------------------------------------------------------------------------------------------------------
Jurong Town Corporation 5. Rent-Free Period: As the Commencement Date, will not be deferred, we advise you to accept the Offer as soon as possible and to collect the keys to the Premises on the scheduled date in order to maximize the Rent-Free Period referred to in clause 1.10(c) of this letter. 6. Variation to the Tenancy This letter and the Memorandum of Tenancy constitute the full tenancy and conditions governing the Offer and no terms or representation or otherwise, whether express or implied, shall form part of the Offer other than what is contained herein. Any variation, modification, amendment deletion, addition or otherwise of the covenants, terms and conditions of the Offer shall not be enforceable unless agreed by both parties and reduced in writing by us. 7. Car-Parking Scheme: (a) The car park for Blk 1004 is currently managed by a Tenants' Committee and you will: (i) have to contribute towards all the operational and management costs, if any, incurred in connection with the car parks, (ii) observe and be bound by all the rules and regulations governing the use and operation of the car park. A copy of the Tenant Committee's current rules and regulations is obtainable from the Tenants' Committee. You are required to contact: Ms Susan Ng Wilson Parking (S) Pte Ltd 32 Sultan Contra Singapore 198480 Tel No: 2966600 a member of the Committee, on your use of the car park. (b) The Corporation shall not be liable for any loss, damage, injury, liabilities, claim or action you may sustain or suffer in the use of the car park and the tenants shall fully indemnify the Corporation against any loss, claims, penalties, demands, damage arising from the private management and operations of the car park by the tenants. Jurong Town Corporation 8. Application for Approvals, Utilities etc. Upon your acceptance of the covenants, terms and conditions of the Offer, you are advised to proceed expeditiously as follows: 8.01 Preliminary Clearance Comply with the requirements of the Chief Engineer (Central Building Plan Unit), Pollution Control Department and/or other departments pursuant to your application/s for preliminary clearance. (Please note that we have referred your application to the relevant department/s). 8.02 Discharge of Trade Effluence: Complete the attached Application for Permission to Discharge Trade Effluent into Public Sewer and return the application form direct to the Head, Pollution Control Department, Ministry of Environment, Environment Building, 40 Scotts Road. Singapore 228231 (Telephone No. 7327733). 8.03 Electricity: Engage a registered electrical consultant or competent contractor to submit three sets of electrical single-line diagrams to and in accordance with the requirements of our property Support Department (PSD), Customer Services Group, JTC East Zone Office for endorsement before an application is made to the Power Supply Pte Ltd to open an account for electricity connection. Please contact our Property Support Department (PSD) at Blk 25 Kallang Avenue #05-01 Kallang Basin Industrial Estate Singapore 339416 direct for their requirements. 8.04 Water: Submit four copies of sketch plans, prepared by a licensed plumber, showing the section and layout of the plumbing to our Building Control Unit [BCU(JTC)] for approval prior to the issue of a letter to Water Conservation Department, Public Utilities Board to assist you in your application for a water sub-meter. 8.05 Telephone: Apply direct to Singapore Telecommunications Ltd for all connections. 8.06 Automatic Fire Alarm System (Incorporating Beat Detector) Engage a registered electrical coa5ultanVprofessional engineer to submit two sets of fire alarm drawings, indicating the existing fixtures if any, the proposed modifications of the fire alarm and the layout of machinery, etc to and in accordance with the requirements of our Building Control Unit (BCU(JTC)]. Please contact our Building Control Unit [BCU(JTC)] at 301 Jurong Town Hall Road (3rd level) Singapore 609431 direct for further requirements. 8.07 Factory Inspectorate Complete and return direct to Chief Inspector of Factories the attached form, "Particulars to be submitted by occupiers or Intending Occupiers of Factories". Yours faithfully By: /s/ Lai Get Luan ----------------------------- LAI GET LUAN (Ms) MARKETING & SALES DEPARTMENT INDUSTRIAL PARKS DEVELOPMENT GROUP JURONG TOWN CORPORATION Attd EX-10.16 7 dex1016.txt REAL ESTATE LEASE DATED DEC 7, 2000 EXHIBIT 10.16 [LETTERHEAD OF TRIO-TECH INTERNATIONAL] [LOGO] TRIO-TECH INTERNATIONAL 15 December 2000 [STAMP] Marketing & Sales Department JTC Corporation The JTC Summit 8 Jurong Town Hall Road Singapore 609434 Attn: Mr Teo Soon Siang ACCEPTANCE OF OFFER OF TENANCY FOR THE PREMISES AT BLK 1004 TOA PAYOH NORTH #01- 16 TO #01-17 TOA PAYOH INDUSTRIAL ESTATE SINGAPORE 318995 We refer to your letter of offer dated 7 December 2000 for the Tenancy and hereby confirm our acceptance of all the covenants, terms and conditions stipulated therein. 1. We enclose herewith a cheque for the amount of S$3,726.19 and the Banker's Guarantee as security deposit as confirmation of our acceptance. 2. In addition, we also enclose herewith a duly completed GIRO authorisation form. By: / s/ Lee Siew Kuan --------------------------------------------------------------- Name of authorised signatory : Mrs Lee Siew Kuan Designation : Director of Logistics For and on behalf of TRIO-TECH INTERNATIONAL PTE LTD In the presence of : By: / s/ Betty Ang --------------------------------------------------------------- Name of witness : Miss Betty Ang NRIC No. : S6945849A [LETTERHEAD OF TRIO-TECH INTERNATIONAL [LOGO] TRIO-TECH INTERNATIONAL 1 [LETTERHEAD OF jtc Corporation] [LOGO OF jtc Corporation] 7 December 2000 (Attn: Miss Betty Ang) Dear Sirs, OFFER OF TENANCY FOR FLATTED FACTORY SPACE 1 We are pleased to offer a tenancy of the Premises subject to the following covenants, terms and conditions in this letter and in the annexed Memorandum of Tenancy ("the Offer"): 1.01 Location: Pte Lot A4551(s), Blk 1004 ("the Building") Toa Payoh North #01-16 to #01-17, Toa Payoh Industrial Estate Singapore 318995 ("the Premises") as delineated and edged in red on the plan attached to the Offer. 1.02 Term of Tenancy: 3 years ("the Term") with effect from 1 March 2001 ("the Commencement Date"). 1.03 Tenancy Agreement: Upon due acceptance of the Offer in accordance with clause 2 of this letter, you shall have entered into a tenancy agreement with US ("the Tenancy") and will be bound by the covenants, terms and conditions thereof. In the event of any inconsistency or conflict between any covenant, term or condition of this letter and the Memorandum of Tenancy, the relevant covenant, term or condition in this letter shall prevail. 1.04 Area: Approximately 184.20 square metres (subject to survey). 2 1.05 Rent and Service Charge: Rent: ---- (a) Discounted rate of Dollars $16.30 per square metre per month for so long as the Tenant shall occupy by way of tenancy an aggregate floor area of 1000 square metres in the Building or in the various flatted factories belonging to the Landlord, and (b) Normal rate of Dollars $16.80 per square metro per month in the event that the said aggregate floor area occupied is at any time reduced to below 1000 square metre (when the discount shall be totally withdrawn) with effect from the date of reduction in the said aggregate floor, ("Rent") to be paid without demand and in advance without deduction on the 1st day of each month of the year (i.e. 1st of January, February, March, etc.). The next payment shall be made on I April 2001. Service charge: -------------- $2.10 per square metro per month, ("Service Charge") as charges for services rendered by us, payable without demand on the same date and in the same manner as the Rent, subject to our revision from time to time. 1.06 Security Deposit/Banker's Guarantee: You will, at the time of acceptance of the Offer, be required to place with us a deposit of $10,167.84 equivalent to 3 months' Rent and Service Charge ("Security Deposit") as security against any breach of the covenants, terms and conditions in the Tenancy. The Security Deposit may be in the form of cash and/or acceptable Banker's Guarantee in the form attached (effective from 1 January 2001 to 31 August 2004) and/or such other form of security as we may in our absolute discretion permit or accept. The Security Deposit must be maintained at the same sum throughout the Term and shall be repayable to you without interest, or returned to you for cancellation, after the termination of the Term (by expiry or otherwise) or expiry of the Banker's Guarantee, as the case may be, subject to appropriate deductions or payment to us for damages or other sums due under the Tenancy. If the Service Charge is increased or any deductions are made from the Security Deposit, you are to immediately pay the amount of such increase or make good the deductions so that the Security Deposit shall at all times be equal to 3 months' Rent and Service Charge. 3 1.07 Mode of Payment: [Note: You have an existing account with us from which we will ----- deduct the aforesaid payments. You are therefore not required to submit a duly completed GIRO form as part of the Mode of Acceptance herein unless you wish to have a separate GIRO account to meet the aforesaid payments.] 1.08 Permitted Use: (a) Subject to clause 1.12 of this letter, you shall commence full operations within four (4) months of the Commencement Date for the purpose of IC Testing only and for no other purpose whatsoever ("the Authorised Use"). (b) Thereafter, you shall maintain full and continuous operations and use and occupy the whole of the Premises for the Authorised Use. (c) Subject to clauses (a) and (b) above, you shall use and occupy at least sixty percent (60%) of the gross floor area of the Premises for industrial activities and ancillary stores, and use and occupy the remaining gross floor area, if any, for offices, neutral areas, communal facilities and such other uses as may be approved in writing by us and the relevant governmental and statutory authorities PROVIDED THAT you shall not use and occupy the Premises for the purpose of commercial office and storage unrelated to the Authorised Use. 1.09 Approvals The Tenancy is subject to approvals being obtained from the relevant government and statutory authorities. 1.10 Possession of Premises: (a) Keys to the Premises will be given to you two (2) months prior to the Commencement Date subject to due acceptance of the Offer ("Possession Date"). (b) From the Possession Date until the Commencement Date, you shall be deemed a licensee upon the same terms and conditions in the Tenancy. (c) if you proceed with the Tenancy after the Commencement Date, the licence fee payable from the Possession Date to the Commencement Date shall be waived ("Rent-Free Period"). Should you fail to so proceed, you shall: 4 (i) remove everything installed by you; (ii) reinstate the Premises to its original state and condition; and (iii)pay us a sum equal to the prevailing market rent payable for the period from the Possession Date up to the date the installations are removed and reinstatement completed to our satisfaction, without prejudice to any other rights and remedies we may have against you under the Tenancy or at law. 1.11 Preparation and Submission of Plans: (a) No alteration, addition, improvement, erection, installation or interference to or in the Premises or the fixtures and fittings therein is permitted without Building Control Unit [BCU(JTC Corporation)] prior written consent. Your attention is drawn to clauses 2.10 to 2.19 and 2.34 of the Memorandum of Tenancy. (b) You will be required to prepare and submit floor layout plans of your factory and plans of the air-conditioning works in accordance with the terms of the tenancy and the 'Guide' attached. It is important that you should proceed with the preparation and submission of the plans in accordance with the procedures set out in the said 'Guide'. (c) Should there be alteration of existing automatic fire alarm and sprinkler system installation, alteration plans shall be submitted to Building Control Unit [BCU(JTC Corporation)] for approval on fire safety aspects. All air-conditioning, fire alarm & sprinkler system plans must be signed by a relevant Professional Engineer, registered with the Professional Engineers Board of Singapore. (d) Upon due acceptance of the Offer, a copy of the floor and elevation plans (transparencies) will be issued to you to assist in the preparation of the plans required herein. (e) No work shall commence until the plans have been approved by Building Control Unit [BCU(JTC Corporation)]. 1.12 Final inspection: You shall ensure that final inspection by us of all installations is carried out and our approval of the same is obtained before any operations in the Premises may be commenced. 5 1.13 Special Conditions: (1) Normal (Ground & Non-ground) Floor Premises ------------------------------------------- You shall comply and ensure compliance with the following restrictions: (a) maximum loading capacity of the goods lifts in the Building; and (b) maximum floor loading capacity of 12.50 kiloNewtons per square metre of the Premises on the Ist storey of the Building PROVIDED THAT any such permitted load shall be evenly distributed. We shall not be liable for any loss or damage that you may suffer from any subsidence or cracking of the ground floor slabs and aprons of the Building. (2) Option for renewal of tenancy ----------------------------- (a) You may within 3 months before the expiry of the Term make a written request to us for a further term of tenancy. (b) We may grant you a further term of tenancy of the Premises upon mutual terms to be agreed between you and us subject to the following: (i) there shall be no breach of your obligations at the time you make your request for a further term; (ii) our determination of revised rent, having regard to the market rent of the Premises at the time of granting the further term, shall be final; (iii) we shall have absolute discretion to determine such covenants, terms and conditions, but excluding a covenant for renewal of tenancy; and (iv) there shall not be any breach of your obligations at the expiry of the Term. 6 2. Mode of Acceptance: The Offer shall lapse if we do not receive the following by 31 December 2000:- Duly signed letter of acceptance (in duplicate) of all the covenants, terms and conditions in the Tenancy in the form enclosed at the Appendix. (Please date as required in the Appendix) Payment of the sum set out in clause 4. Duly completed GIRO authorization form. 3. Please note that payments made prior to your giving us the other items listed above may be cleared by and credited by us upon receipt. However, if the said other items are not forthcoming from you within the time stipulated herein, the Offer shall lapse and there shall be no contract between you and us arising hereunder. Any payments received shall then be refunded to you without interest and you shall have no claim of whatsoever nature against us. 4. The total amount payable is as follows:
------------------------------------------------------------------------------------------- Amount +3 % GST ------------------------------------------------------------------------------------------- Rent at $16.30 psm per month on 184.20 sq rn for the period 1 March 2001 to 31 March 2001 $3,002.46 ------------------------------------------------------------------------------------------- Less: ------------------------------------------------------------------------------------------- 3% property tax rebate on rental value $ 90.07 $2,912.39 ------------------------------------------------------------------------------------------- Service Charge at $2.10 psm per month on 184.20 sq m for the period 1 March 2001 to 31 March 2001 $ 386.82 $ 3,299.21 $98.98 ------------------------------------------------------------------------------------------- Deposit equivalent to three months' rent and service charge (or Banker's Guarantee provided in accordance with sub-paragraph 1.06 above) $10,167.84 ------------------------------------------------------------------------------------------- Stamp fee payable on Letter of Acceptance which will be stamped by JTC on your behalf $ 328.00 ------------------------------------------------------------------------------------------- Sub-Total Payable $13,795.05 $98.98 ------------------------------------------------------------------------------------------- Add: GST + 3% $ 98.98 ------------------------------------------------------------------------------------------- Total Amount Payable $13,894.03 -------------------------------------------------------------------------------------------
7 5. Rent-Free Period: As the Commencement Date will not be deferred, we advise you to accept the Offer as soon as possible and to collect the keys to the Premises on the scheduled date in order to maximize the Rent-Free Period referred to in clause 1.10(c) of this letter. 6. Variation to the Tenancy This letter and the Memorandum of Tenancy constitute the full terms and conditions governing the Offer and no terms or representation or otherwise, whether express or implied, shall form part of the Offer other than what is contained herein. Any variation, modification, amendment, deletion, addition or otherwise of the covenants, terms and conditions of the Offer shall not be enforceable unless agreed by both parties and reduced in writing by us. 7. Car-Parking Scheme: (a) The car park for Blk 1004 Toa Payoh North is currently managed by Wilson Parking (S) Pte Ltd and you will have to observe and be bound by all the rules and regulations governing the use and operation of the car park. You are requested to contact the following person on the use of the car park: Ms Susan Ng Wilson Parking (S) Pte Ltd 32 Sultan Gate Singapore 198480 TelNo:2966600 (b) The Corporation shall not be liable for any loss, damage, injury, liability, claim or action you may sustain or suffer in the use of the car park and the tenants shall fully indemnify the Corporation against any loss, claims, penalties, demands, damage arising from the private management and operations of the car park by the tenants. 8. Application for Approvals, Utilities etc. Upon your acceptance of the covenants, terms and conditions of the Offer, you are advised to proceed expeditiously as follows: 8.01 Preliminary Clearance: Comply with the requirements of the Chief Engineer (Central Building Plan Unit), Pollution Control Department and/or other departments pursuant to your application/s for preliminary clearance. (Please note that we have referred your application to the relevant department/s) 8 8.02 Discharge of Trade Effluence: Complete the attached Application for Permission to Discharge Trade Effluent into Public Sewer and return the application form direct to the Head, Pollution Control Department, Ministry of Environment, Environment Building, 40 Scotts Road. Singapore 228231 (Telephone No. 7327733). 8.03 Electricity: Engage a registered electrical consultant or competent contractor to submit three sets of electrical single-line diagrams to and in accordance with the requirements of our Property Support Department (PSD), Customer Services Group, JTC East Zone Office for endorsement before an application is made to the Power Supply Pte Ltd to open an account for electricity connection. Please contact our Property Support Department (PSD) at Blk 25 Kallang Avenue #05-01 Kallang Basin Industrial Estate Singapore 339416 direct for their requirements. 8.04 Water: Submit four copies of sketch plans, prepared by a licensed plumber, showing the section and layout of the plumbing, to our Building Control Unit [BCU(JTC Corporation)] for approval prior to the issue of a letter to Water Conservation Department, Public Utilities Board to assist you in your application for a water sub-meter. 8.05 Telephone: Apply direct to Singapore Telecommunications Ltd for all connections. 8.06 Automatic Fire Alarm System (Incorporating Heat Detector) Engage a registered electrical consultant/professional engineer to submit two sets of fire alarm drawings, indicating the existing fixtures if any, the proposed modifications of the fire alarm and the layout of machinery, etc to and in accordance with the requirements of our Building Control Unit [BCU(JTC Corporation)]. Please contact our Building Control Unit [BCU(JTC Corporation)] at The JTC Summit, One- Stop Centre (1st level) 8 Jurong Town Hall Road Singapore 609434 direct for further requirements. 9 8.07 Factory Inspectorate Complete and return direct to Chief Inspector of Factories the attached form, "Particulars to be submitted by occupiers or Intending Occupiers of Factories". Yours faithfully By: /s/ Teo Soon Siang ----------------------------------- TE0 S0ON SIANG MARKETING & SALES DEPARTMENT INDUSTRIAL PARKS DEVELOPMENT GROUP JTC CORPORATION Encl EX-10.17 8 dex1017.txt REAL ESTATE LEASE DATED JAN 3, 2000 EXHIBIT 10.17 TRIO-TECH --------- INTERNATIONAL 5 January 2000 Marketing & Sales Department [STAMP] BY HAND ------- Jurong Town Corporation Jurong Town Hall 301 Town Hall Road Singapore 609431 Dear Ms Lai Get Luan ACCEPTANCE OF OFFER OF TENANCY FOR THE PREMISES AT BLK 1008 TOA PAYOH NORTH #03- 01 TO #03-06 TOA PAYOH INDUSTRIAL ESTATE SINGAPORE 318996 1. We refer to your letter of dated 3 January 2000 for the Tenancy and hereby confirm our acceptance of all the covenants, terms and conditions stipulated therein. 2. We enclose herewith a cheque for the amount of S$ 10,295.52 and the Banker's guarantee as security deposit as confirmation of our acceptance. 3. In addition, we also enclose herewith a duly completed GIRO authorization form as requested by you for your information and record. By: /s/ Lee Siew Kuan ------------------------------------------------------- Name of.authorized signatory : Mrs Lee Siew Kuan Designation : Director of Logistics For and on behalf of TRIO-TECH INTERNATIONAL PTE LTD In the presence of By: /s/ Betty Ang ------------------------------------------------------- Name of Witness : Miss Betty Ang NRIC No. : S6945849A Pk JTC(L)3601/2506ALGL/SN DID - 5688574 FAX; 5688593 Email: getluan@jtc.gov.sg 03 January, 2000 JTC Trio-Tech International Pte Ltd Blk 1008 Toa Payoh North #03-09 to #03-15 Toa Payoh Industrial Estate Singapore -318996 (Attn: Mrs Lee Siew Kuan/Ms Betty Ang) Dear Sirs. OFFER OF TENANCY FOR FLATTED FACTORY SPACE I We are pleased to offer a tenancy of the Premises subject to the following covenants, terrns, and conditions in this letter and in the annexed Memorandum of Tenancy ("the Offer"): 1.01 Location: Pte Lot A19597(a), Blk 1008 ("the Building"), Toa Payoh North #03-01 to #03-06 Toa Payoh Industrial Estate Singapore 318996 ("the Premises") as delineated and edged in red on the plan attached to the Offer. 1.02 Term of Tenancy.- 3 years ("the Term") with effect from 01 March 2000 ("the Commencement Date"). 1.03 Tenancy Agreement: Upon due acceptance of the Offer in accordance with clause 2 of this letter, you shall have entered into a tenancy apartment with US ("the Tenancy") and will be bound by the covenants, terms and conditions thereof In the event of any inconsistency or conflict between any covenant, term or condition of this letter and the Memorandum of Tenancy, the relevant covenant, term or condition in this letter shall prevail. 1.04 Area: Approximately 682.40 square metres (subject to survey)- 2 Jurong Town Corporation 1.05 Rent and Service Charge: (a) Discounted rate of $12.03 per square metres for so long as the Tenant shall occupy by way of tenancy an aggregate floor area of not less than 1000 square metres in the Building or in the various flatted factories belonging to the Landlord, and (b) Normal rate of $12.40 per square metres with effect from the date the said aggregate floor area occupied is reduced to below 1,000 square metres (ie. when the discount shall be totally withdrawn), ("Rent") to be paid without demand and in advance without deduction on the 1st day of each month of the year (i.e. 1st of January, February, March, etc.) The next payment shall be made on 01 April 2000. Service charge; $2.10 per square metre per month, ("Service Charge") as charges for services rendered by us, payable without demand on the same date and in the same manner as the Rent, subject to out revision from time to time, 1.06 Security Deposit/Banker's Guarantee: You will at the time of acceptance of the Offer be required to place with us a deposit of $28,926.94 equivalent to 3 morkths' Rent (at the discounted rate) and Service Charge ("Security Deposit') as security against any breach of the covenants, terms and conditions in the Tenancy. The Security Deposit may be in the form of cash and/or acceptable Banker's Guarantee in the form attached (effective frorn 01 January 2000 to 31 August 2003) and/or such other form of security as we may in our absolute discretion permit or accept. The Security Deposit must be maintained at the same sum throughout the Term and shall be repayable-to you without interest or returned to you for cancellation, after the termination of the Term (by expiry or otherwise) or expiry of the Banker's Guarantee, as the case may be, subject to appropriate deductions or payment to us for damages or other sums due under the Tenancy. If the Rent at the discounted rate is increased to the normal rate or Service Charge is increased or any deductions are made from the Security Deposit, you are to immediately pay the amount of such increase or make good the deductions so that the Security Deposit shall at all times be equal to 3 months' Rent and Service Charge. 3 Jurong Town Corporation 1.07 Mode of Payment: Except for the payment to be made with your letter of acceptance pursuant to clause 2 of this letter, during the Term, you shall pay Rent, Service Charge and GST by Interbank GIRO or any other mode to be determined by us. Accordingly, you are to provide us with the duly completed GIRO authorization form enclosed herewith. However, pending finalisation for the GIRO arrangement, you shall pay Rent; Service Charge and GST as they fall due by cheque. 1.08 Permitted use: (a) Subject to clause 1.12 of this letter, you shall commence full operations within four (4) months of the Commencement Date for the purpose of IC testing, services and packing for semi-conductor industry only and for no other purpose whatsoever ("the Authorised Use"). (b) Thereafter, you shall maintain full and continuous operations and use and occupy the whole of the Premises for the Authorised Use. (c) Subject to clauses (a) and (b) above, you shall use and occupy at least sixty percent (60%) of the gross floor area of the Premises for industrial activities and ancillary stores, and use and occupy the remaining gross floor area, if any. for offices, neutral areas, communal facilities and such other uses as may be approved in writing by us and the relevant governmental and statutory authorities PROVIDED THAT you shall not use and occupy the Premises for the purpose of commercial office and storage unrelated to the Authorised Use. 1.09 Approvals The Tenancy is subject to approvals being obtained from the relevant government and statutory authorities. 1.10 Possession of Premises: (a) Keys to the Premises will be given to you two (2) months prior to the Commencement Date subject to due acceptance of the Offer ("Possession Date"), (b) From the Possession Date until the Commencement Date you shall be deemed a licensee upon the some terms and conditions in the Tenancy. 4 Jurong Town Corporation (c) If you proceed with the Tenancy after the Commencement Date, the licence fee payable from the Possession Date to the Commencement Date shall be waived ("Rent-Free Period"). Should you fail to so proceed, you shall: (i) remove everything installed by you.; (ii) reinstate the Premises to its original state and condition; and (iii) pay us a sum equal to the prevailing market rent payable for the period from the Possession Date up to the date the installations are removed and reinstatement completed to our satisfaction, without prejudice to any other rights and remedies we may have against you under the Tenancy or at law. 1.11 Preparation and Submission of Plans: (a) No alteration, addition, improvement, erection, installation or interference to or in the Promises or the fixtures and fittings therein is permitted without Building Control Unit [BCU(JTC)] prior written consent. Your attention is drawn to clauses 2.10 to 2.19 and 2.34 of die Memorandum of Tenancy- (b) You will be required to prepare and submit floor layout plans of your factory and plans of the air-conditioning works in accordance with the terms of the tenancy and the 'Guide' attached. It is important that you should proceed with the preparation and submission of the plans in accordance with the procedures set out in the said 'Guide'. (c) Should there be alteration of existing automatic fire alarm and sprinkler system installation, alteration plans shall be submitted to Building Control Unit [BCU(ITC)] for approval on fire safety aspects. All air-conditioning, fire alarm & sprinkler system plans must be signed by a relevant Professional Engineer, registered with the Professional Engineers Board of Singapore. (d) Upon due acceptance of the Offer, a copy of the floor and elevation plans (transparencies) will be issued to you to assist in the preparation of the plans required herein. (e) No work shall commence until the plans have been approved by Building Control Unit (BCU(JTC)]. 1.12 Final inspection: You shall ensure that final inspection by us of all installations is carried out and our approval of the same is obtained before any operations in the Premises may he commenced. 5 Jurong Town Corporation 1.13 Special Conditions: 1 You shall comply and ensure compliance with the following restrictions- (a) maximum loading capacity of the goods lifts in the Building,; and (b) maximum floor loading capacity of 15.00 kiloNewtons per square metre of the Premises on the 3rd storey of the Building PROVIDED THAT any such permitted load shall be evenly distributed. We shall not be liable for any loss or damage that you may suffer from any subsidence or cracking of the ground floor slabs and aprons of the Building. 2 Option for renewal of tenancy: ------------------------------ (a) You may within 3 months before the expiry of the Term make a written request to us for a further term of tenancy. (b) We may grant you a further term of tenancy of the Premises upon mutual terms to be agreed between you and us subject to the following: (i) there shall be no breach of your obligations at the time you make your request for a further term; (ii) our determination of revised rent, having regard to the market rent of the Premises at the time of granting the further term, shall be final; (ii) we shall have absolute discretion to determine such covenants, terms and conditions, but excluding a covenant for renewal of tenancy; and (iv) there shall not be any breach of your obligations at the expiry of the Term. 2. Mode of Acceptance: The Offer shall lapse if we do not receive the following by 07 January 2000:- . Duly signed letter of acceptance (in duuplicate) of all the covenants, terms and conditions in the Tenancy in the form enclosed at the Appendix. (Please date as required in the Appendix) . Payment of the sum set out in clause 4. . Duly completed GIRO authorization form. 6 Jurong Town Corporation 3. Please note that payments made prior to your giving us the other items listed above may be cleared by and credited by us upon receipt. However, if the said other items are not forthcoming from you within the time stipulated herein, the Offer shall lapse and there shall be no contact between you and us arising hereunder. Any payments received shall then be refunded to you without interest and you shall have no claim of whatsoever nature against us. 4 The total amount payable is as follows:
-------------------------------------------------------------------------------------------- AMOUNT +3% GST -------------------------------------------------------------------------------------------- Rent: Rent at $12.03 psm per month on 682.40 sqm for period 01 March 2000 to $8,209.27 31 March 2000 Less-- 6.6% Property tax rebate on rental value (01/07/1998 to 30/06/2000) $ 541.91 --------- $7,667.46 -------------------------------------------------------------------------------------------- Service Charge: Service Charge at $2,10 psm per month on 682.40 sqm for period 01 March 2000 to 31 March 2000 $1,431.04 $ 9,100.50 $273.02 --------- -------------------------------------------------------------------------------------------- Deposit equivalent to three months' rent and service charge (or Banker's Guarantee provided in accordance witb sub-paragraph 1.06 above) $28,926.94 -------------------------------------------------------------------------------------------- Stamp fee payable on Letter of Acceptance, which will be stamped by JTC on your behalf $ 922.00 -------------------------------------------------------------------------------------------- Sub-Total Payable $38,949,44 $273.02 -------------------------------------------------------------------------------------------- Add- 3 % GST $ 273.02 ---------- -------------------------------------------------------------------------------------------- Total Amount Payable $39,222.46 ---------- --------------------------------------------------------------------------------------------
7 Jurong Town Corporation 5. Rent-Free Period: As the Commencement Date will not be deferred, we advise you to accept the 0ffer as soon as possible and to collect the keys to the Premises on the scheduled date in order to maximize the Rent-Free Period referred to in clause 1.10(c) of this letter. 6. Variation to the Tenancy This letter and the Memorandum of Tenancy constitute the full terms and conditions governing the Offer and no terms or representation or otherwise, whether express or implied, shall form part of the Offer other than what is contained herein. Any variation, modification, amendment, deletion, addition or otherwise of the covenants, terms and conditions of the Offer shall not be enforceable unless agreed, by both parties and reduced in writing by us. 7. Car-Parking Scheme: (a) The car park for Blk 1008 is currently managed by a Tenants' Committee and you will: (i) have to contribute towards all the operational and management costs, if any, incurred in connection with the car parks; (ii) observe and be bound by all the rules and regulations governing the use and operation of the car park. A copy of the Tenant Committees current rules and regulations is obtainable from the ------------------ Tenants& Committee. You are required to contact: Ms Susan Ng Wilson Parking (S) Pte Ltd 32 Sultan Centre Singapore 198480 Tel No: 2966600 a member of the Committee, on your use of the car park. (b) The Corporation shall not be liable for any loss, damage, injury, liabilities, claim or action you may sustain or suffer in the use of the car park and the tenants shall fully indemnify the Corporation against any loss, claims, penalties, demands, damage arising from the private management and operations of the car park by the tenants. 8 Jurong Town Corporation 8. Application for Approvals, Utilities etc. Upon your acceptance of the covenants, terms and conditions of the Offer, you are advised to proceed expeditiously as follows: 8.01 Preliminary Clearance: Comply with the requirements of the Chief Engineer (Central Building Plan Unit); Pollution Control Department and/or other departments pursuant to your application/s for preliminary clearance. (Please note that we have referred your application to the relevant department/s) 8.02 Discharge of Trade Effluence: Complete the attached Application for Permission to Discharge Trade Effluent into Public Sewer and return the application form direct to the Read, Pollution Control Department Ministry of Environment, Environment Building, 40 Scotts Road Singapore 229231 (Telephone No. 7327733). 8.03 Electricity: Engage a registered electrical consultant or competent contractor to submit three sets of electrical single-line diagrams to and in accordance with the requirements of our Property Support Department (PSD), Customer Services Group, ITC East Zone Office for endorsement before an application is made to the Power Supply Pte Ltd to open an account for electricity connection. Please contact our Property Support Department (PSD) at Blk 25 Kallang Avenue #05-01 Kallang Basin Industrial Estate Singapore 339416 direct for their requirements. 8.04 Water: Submit four copies of sketch plans, prepared by a licensed plumber, showing the section and layout of the plumbing, to our Building Control Unit [BCU(JTC)] for approval prior to the issue of a letter to Water Conservation Department Public Utilities Board to assist you in your application for a water sub-meter. 8.05 Telephone: Apply direct to Singapore Telecommunications Ltd for all connections. 9 Jurong Town Corporation 8.06 Automatic Fire Alarm System (Incorporating Heat Detector) Engage a registered electrical consultant/professional engineer to submit two sets of fire alarm drawings, indicating the existing fixtures if any, the proposed modifications of the fire alarm and the layout of machinery, etc to and in accordance with the requirements of our Building Control Unit [BCU(JTC)]. Please contact our Building Control Unit (BCU(JTC)] at 301 Jurong Town Hall Road (3rd level) Singapore 609431 direct for further requirements. 8.07 Factory Inspectorate Complete and return direct to Chief Inspector of Factories the attached form, "Particulars to be submitted by occupiers or Intending Occupiers of Factories". Yours faithfully By: /s/ Lai Get Luan LAI GET LUAN (Ms) MARKETING & SALES DEPARTMENT INDUSTRIAL PARKS DEVELOPMENT GROUP JURONG TOWN CORPORATION Attd EX-10.18 9 dex1018.txt REAL ESTATE LEASE DATED OCT 13, 1999 BLOCK 1008 EXHIBIT 10.18 TRIO-TECH 25 November 1999 Marketing & Sales Department [STAMP] BY HAND ------- Jurong Town Corporation Jurong Town Hall 301 Town Hall Road Singapore 609431 Dear Ms Lai Get Luan ACCEPTANCE OF OFFER OF TENANCY FOR THE PREMISES AT BLK 1008 TOA PAYOH NORTH #03- 09 TO #03-18 TOA PAYOH INDUSTRIAL ESTATE SINGAPORE 318996 1. We refer to your letter of dated 13 October 1999 and a letter of amendment dated 19 November 1999 for the Tenancy and hereby confirm our acceptance of all the covenants, terms and conditions stipulated therein. 2. We enclose herewith a cheque for the amount of $13,403.90 and the Banker's guarantee as security deposit as confirmation of our acceptance. 3. In addition, we also enclose herewith a duly completed GIRO authorization form as requested by you for your information and record. By: /s/ Yong Siew Wai -------------------------------------------------------------------------------- Name of authorized signatory : Mr.Yong Siew Wai Designation President : Chief Executive Officer For and on behalf of TRIO-TECH INTERNATIONAL PTE LTD In the presence of: By: /s/ Betty Ang -------------------------------------------------------------------------------- Name of witness : Ms. Betty Ang NRIC No. : S6945849A JTC(L)3601/2506/LGL/SN DID: 5688574 FAX: 5688593 Email: getluan@jtc.gov.sgw 19 November, 1999 J T C Trio-Tech International Pte Ltd 5 Kian Teck Rd Singapore 628765 BY FAX @ 264 2235 & BY LUM -------------------------- (Attn: Mrs Lee Siew Kuan/Ms Betty Ang) Dear Sirs AMENDMENT TO LETTER OF OFFER OF TENANCY IN RESPECT OF THE PREMISES AT BLK 1008 TOA PAYOH NORTH #03-09 TO #03-18 TOA PAYOH INDUSTRIAL ESTATE 1 We refer to your letter dated 15 November 1999 and our letter of offer dated 13 October 1999. 2 We are agreeable to your request to defer the commencement date of the said tenancy from 01 January 1999 to 16 January 2000. Hence, our letter of offer dated 13 October 1999 shall be amended as follows:- Sub-Paragraph 1.02: ------------------- Term of Tenancy: ---------------- 3 years ("the Term") with effect from 16 January 2000 ("the Commencement Date"). Sub-Paragraph 1.05: ------------------- Rent and Service Charge: ------------------------ Standard Rent: -------------- (a) Discounted rate of $12.03 per square metres for so long as the Tenant shall occupy by way of tenancy an aggregate floor area of not less than 1,000 square metres in the Building or in the various flatted factories belonging to the Landlord, and 2 Jurong Town Corporation (b) Normal rate of $12.40 per square metres with effect from the date the said aggregate floor area occupied is reduced to below 1,000 square metres (i.e. when the discount shall be totally withdrawn), ("Rent") to be paid without demand and in advance without deduction on the 1st day of each month of the year (i.e. 1st of January, February, March, etc.). The next payment shall be made on 01 February 2000. Service charge: $2.10 per square metre per month, ("Service Charge") as charges for services rendered by us, payable without demand on the same date and in the same manner as the Rent, subject to our revision from time to time. Sub-Paragraph 1.06: ------------------- Security Deposit/Banker's Guarantee: ------------------------------------ You will at the time of acceptance of the Offer be required to place with us a deposit of $37,667.75 equivalent to 3 months' Rent (at the discounted rate) and Service Charge ("Security Deposit") as security against any breach of the covenants, terms and conditions in the Tenancy. The Security Deposit may be in the form of cash and/or acceptable Banker's Guarantee in the form attached (effective from 16 November 1999 to 15 July 2003) and/or such other form of security as we may in our absolute discretion permit or accept. The Security Deposit must be maintained at the same sum throughout the Term and shall be repayable to you without interest or returned to you for cancellation, after the termination of the Term (by expiry or otherwise) or expiry of the Banker's Guarantee, as the case may be, subject to appropriate deductions or payment to us for damages or other sums due under the Tenancy. If the Rent at the discounted rate is increased to the normal rate or Service Charge is increased or any deductions are made from the Security Deposit, you are to immediately pay the amount of such increase or make good the deductions so that the Security Deposit shall at all times be equal to 3 months' Rent and Service Charge. Paragraph 2: ------------ Mode of Acceptance ------------------ The Offer shall lapse if we do not receive the following by 22 November 1999:- . Duly signed letter of acceptance (in duplicate) of all the covenants, terms and conditions in the Tenancy in the form enclosed at the Appendix. (Please date as required in the Appendix) . Payment of the sum set out in clause 4. . Duly completed GIRO authorization form. 3 Jurong Town Corporation 3 The Statement of Account in paragraph 4 of our offer is adjusted accordingly as follows:-
-------------------------------------------------------------------------------------------------- AMOUNT +3% GST -------------------------------------------------------------------------------------------------- Rent: ----- Rent at $12.03 psm per month on 888.60 sqm for period 16 January 2000 to 15 February 2000 $10,689.86 Less: 6.6% Property tax rebate on rental value (01/07/1998 to 30/06/2000) $ 705.53 ---------- $ 9,984.33 -------------------------------------------------------------------------------------------------- Service Charge: --------------- Service Charge at $2.10 psm per month on 888.60 sqm for period 16 January 2000 to I5 February 2000 $ 1,866.06 $11,850.39 $355.51 ---------- -------------------------------------------------------------------------------------------------- Deposit equivalent to three months' rent and service charge (or Banker's Guarantee provided in accordance with sub-paragraph 1.06 above) $37,667.75 -------------------------------------------------------------------------------------------------- Stamp fee payable on Letter of Acceptant which will be stamped by JTC on your behalf $ 1,198.00 -------------------------------------------------------------------------------------------------- Sub-Total Payable $50,716.14 $355.51 -------------------------------------------------------------------------------------------------- Add: 3 % GST $ 355.51 ---------- -------------------------------------------------------------------------------------------------- Total Amount Payable $51,071.65 ---------- --------------------------------------------------------------------------------------------------
4 Jurong Town Corporation 4 All other terms and conditions stipulated in our letter of offer dated 13 October 1999 remain unchanged. 5 Please let us have your letter of acceptance of the terms and conditions stipulated in our letter of offer dated 13 October 1999 and the above amendments together with your remittance amounting to $51,071.65. (Alternatively, you may wish to produce a cheque of $13,403.90 together with a Banker's Guarantee in lieu of the cash deposit of $37,667.75) by 22 November 1999. 6 We enclose herewith a draft of the letter of acceptance and the Banker's Guarantee format for your use/reference. Yours faithfully By: /s/ Lai Get Luan LAI GET LUAN (Ms) MARKETING & SALES DEPARTMENT INDUSTRIAL PARKS DEVELOPMENT GROUP JURONG TOWN CORPORATION Attd: Draft of letter of acceptance Banker's Guarantee format JTC(L)3601/2506/LGL1SN DID: 5688574 FAX: 5688593 Email: getluan@jtc.gov.sg 13 October 1999 Trio-Tech International Pte Ltd 5 Kian Teck Rd BY FAX @ 264 2235 ----------------- Singapore 628765 & BY LUM -------- (Attn: Mrs Lee Siew Kuan/Ms Betty Ang) Dear Sirs, OFFER OF TENANCY FOR FLATTED FACTORY SPACE 1. We are pleased to offer a tenancy of the Premises subject to the following covenants. terms and conditions in this letter and in the annexed Memorandum of Tenancy ("the Offer"): 1.01 Location: Pte Lot A19597, Blk 1008 (the Building"), Toa Payoh North 403-09 to #03-18 Toa Payoh Industrial Estate Singapore 318996 ("the Premises') as delineated and edged ill red on the plan attached to the Offer. 1.02 Term of Tenancy: 3 years ("the Term") with effect from 01 January 2000 (the Commencement Date"). 1.03 Tenancy Agreement: Upon due acceptance of the Offer in accordance with clause 2 of this letter, you shall have entered into a tenancy agreement with US ("the Tenancy") and will be bound by the covenants, terms and conditions thereof. In the event of any inconsistency or conflict between any covenant, term or condition of this letter and the Memorandum of Tenancy, the relevant covenant, term or condition in this letter shall prevail. 1.04 Area: Approximately 888.60 square metres (subject to survey). 2 Jurong Town Corporation 1.05 Rent and Service Charge: (a) Discounted rate of $12.03 per square metres for so long as the Tenant shall occupy by way of tenancy an aggregate floor am of not less than 1,000 square metres in the Building or in the various flatted factories belonging to the Landlord, and (b) Normal rate of $12.40 per square metres with effect from the date the said aggregate floor area occupied is reduced to below 1,000 square metres (ie. when the discount shall be totally withdrawn), ("Rent") to be paid without demand and in advance without deduction on the 1st day of each month of the year (i.e. 1st of January, February, Much, etc.). The next payment shall be made on 01 February 1999. Service charge: $2.10 per square metre per month, ("Service Charge") as charges for services rendered by us, payable without demand on the same date and in the same manner as the Rent, subject to our revision from time to time. 1.06 Security Deposit/Banker's Guarantee: You will at the time of acceptance of the Offer be required to place with us a deposit of $37,667.75 equivalent to 3 months' Rent (at the. discounted rate) and Service Charge ("Security Deposit") as security against any breach of the covenants, terms and conditions in the Tenancy. The Security Deposit may be in the form of cash and/or acceptable Banker's Guarantee in the form attached (effective from 01 November 1999 to 30 June 2003) and/or such other form of security as we may in our absolute discretion permit or accept. The Security Deposit must be maintained at the same sum throughout the Term and shall be repayable to you without interest or returned to you for cancellation, after the termination of the Term (by expiry or otherwise) or expiry of the Banker's Guarantee, as the case may be, subject to appropriate deductions or payment to us for damages or other sums due under the Tenancy. If the Rent at the discounted rate is increased to the normal rate or Service Charge is increased or any deductions are made from the Security Deposit, you are to immediately pay the amount of such increase or make good the deductions so that the Security Deposit shall at all times be equal to 3 months' Rent and Service Charge. 3 Jurong Town Corporation 1.07 Mode of Payment: Except for the payment to be made with your letter of acceptance pursuant to clause 2 of this letter, during the Term, you shall pay Rent, Service Charge and GST by Interbank GIRO or any other mode to be determined by us. Accordingly, you we to provide us with the duly completed GIRO authorization form enclosed herewith. However, pending firialisation for the CIRO arrangement, you shall pay Rent, Service Charge and GST as they fall due by cheque. 1.08 Permitted Use: (a) Subject to clause 1.12 of this letter, you shall commence full operations within four (4) months of the Commencement Date for the purpose of IC testing, services and packing for semi- conductor industry only and for no other purpose whatsoever (the Authorised Use"). (b) Thereafter, you shall maintain full and continuous operations and use and occupy the whole of the Premises for the Authorised Use. (c) Subject to clauses (a) and (b) above, you shall use and occupy at least sixty percent (60%) of the gross floor area of the Premises for industrial activities and ancillary stores, and use and occupy the remaining gross floor area, if any, for off-ices, neutral areas, communal facilities and such other uses as may be approved in writing by us and the relevant governmental and statutory authorities PROVIDED THAT you shall not use and occupy the Premises for the purpose of commercial office and storage unrelated to the Authorised Use, 1.09 Approvals The Tenancy is subject to approvals being obtained from the relevant government and statutory authorities. 1.10 Possession of Premises: (a) Keys to the Promises will be given to you two (2) months prior to the Commencement Date subject to due acceptance of the offer ("Possession Date"). (b) From the Possession Date until the Commencement Date, you shall be deemed a licensee upon the same terms and conditions in the Tenancy. 4 Jurong Town Corporation (c) If you proceed with the Tenancy after the Commencement Date, the licence fee payable from the, Possession Date to the Commencement Date shall be waived ("Rent-Free Period"). Should you fail to so proceed, you shall: (i) remove everything installed by you; (ii) reinstate the Premises to its original state and condition; and (iii) pay us a sum equal to the prevailing market rent payable for the period from the Possession Date up to the date the installations are removed and reinstatement completed to our satisfaction, without prejudice to any other rights and remedies we may have against you under the Tenancy or at law. 1.11 Preparation and Submission of Plans: (a) No alteration, addition, improvement, erection, installation or interference to or in the Premises or the fixtures and fittings therein is permitted without Building Control Unit [BCU(JTC)] prior written consent. Your attention is drawn to clauses 2. 10 to 2.19 and 2.34 of the Memorandum of Tenancy. (b) You will be required to prepare and submit floor layout plans of your factory and plans of the air-conditioning works in accordance with the terms of the tenancy and the 'Guide' attached. It is important that you should proceed with the preparation and submission of the plans in accordance with the procedures set out in the said 'Guide'. (c) Should there be alteration of existing automatic fire alarm and sprinkler system installation, alteration plans shall be submitted to Building Control Unit [BCU(JTC)] for approval on fire safety aspects. All air-conditioning, fire alarm & sprinkler system plans must be signed by a relevant Professional Engineer, registered with the Professional Engineers Board of Singapore. (d) Upon due acceptance of the Offer, a copy of the floor and elevation plans (transparencies) will be issued to you to assist in the preparation of the plans required herein, (e) No work shall commence until the plans have been approved by Building Control Unit [BCU(JTC)]. 1.12 Final inspection: You shall ensure that final inspection by us of all installations is carried out and our approval of the same is obtained before any operations in the Premises may be commenced. 5 Jurong Town Corporation 1.13 Special Conditions: 1 You shall comply and ensure compliance with the following restrictions: (a) maximum loading capacity of the goods lifts in the Building; and (b) maximum floor loading capacity of 15.00 kiloNewtons per square metre of the Premises on the 3rd storey of the Building PROVIDED THAT any such permitted load shall be evenly distributed. We shall not be liable for any loss or damage that you may suffer from any subsidence or cracking of the ground floor slabs and aprons of the Building. 2 Option for renewal of tenancy ----------------------------- (a) You may within 3 months before the expiry of the Term make a written request to us for a further term of tenancy. (b) We may grant you a further term of tenancy of the Premises upon mutual terms to be agreed between you and us subject to the following: (i) there shall be no breach of your obligations at the time you make your request for a further term; (ii) our determination of revised rent, having regard to the market rent of the Premises at the time of granting the further term, shall be final; (iii) we shall have absolute discretion to determine such covenants, terms and conditions, but excluding a covenant for renewal of tenancy, and (iv) there shall not be any breach of your obligations at the expiry of the Term. 2. Mode of Acceptance: The Offer shall lapse if we do not receive the following by 27 October 1999:- . Duly signed letter of acceptance (in duplicate) of all the covenants, terms and conditions in the Tenancy in the form enclosed at the Appendix. (Please date as required in the Appendix) . Payment of the sum set out in clause 4. . Duly completed GIRO authorization form. 6 Jurong Town Corporation 3. Please note that payments made prior to your giving us the other items listed above may be cleared by and credited by us upon receipt- However, if the said other items are not forthcoming from you within the time stipulated herein, the Offer shall lapse and there shall be no contract between you and us arising hereunder. Any payments rcmived shall then be refunded to you without interest and you shall have no claim of whatsoever nature against us. 4. The total amount payable is as follows:
---------------------------------------------------------------------------------------------------------------------------------- AMOUNT +3 % GST ---------------------------------------------------------------------------------------------------------------------------------- Rent: ---- Rent at $12.03 psm per month on 888.60 sqm for period 01 January 2000 to 31 January 2000 $10,689.86 Less: 6.6% Property tax rebate on rental value (01/07/1998 to 30/06/2000) $ 705.53 ---------- $ 9,984.33 ---------------------------------------------------------------------------------------------------------------------------------- Service Charge: -------------- Service Charge at $2.10 psm per month on 888.60 sqrn for period 01 January 2000 to 31 January 2000 $ 1,866.06 $11,850.39 $355.51 ---------- ---------------------------------------------------------------------------------------------------------------------------------- Deposit equivalent to three months' rcat and service charge (or Banker's Guarantee provided in accordance with sub- paragraph 1.06 above) $37,667.75 ---------------------------------------------------------------------------------------------------------------------------------- Stamp fee payable on Letter of Acceptane which will be stamped by JTC on your behalf $ 1,198.00 ---------------------------------------------------------------------------------------------------------------------------------- Sub-Total Payable $50,716.14 $355.51 ---------------------------------------------------------------------------------------------------------------------------------- Add: 3 % GST $ 355.51 ---------- ---------------------------------------------------------------------------------------------------------------------------------- Total Amount Payable $51,071.65 ========== ----------------------------------------------------------------------------------------------------------------------------------
5. Rent-Free Period: As the Commencement Date will not be deferred, we advise you to accept the Offer as soon as possible and to collect the keys to the Premises on the scheduled date in order to maximize the Rent-free Period referred to in clause 1.10(c) of this letter. 6. Variation to the Tenancy This letter and the Memorandtun of Tenancy constitute the full terms and conditions goveming the Offer and no terms or representation or otherwise, whether express or implied, shall form part of the Offer other thmi what is contained herein. Any variation, modification, amondment, deletion, addition or otherwise of the covenants, terms and conditions of the Offer shall not be enforceable unless agreed by both parties and reduced in writing by us. 7. Car-Parldmg Scheme: (a) The car park for Blk 1008 is currently managed by a Tenants' Committee and you will: (i) have to contribute towards all the operational and management costs, if any, incurred in connection with the car parks; (ii) observe and be bound by all the rules and regulations governing the uso and operation of the car park. A copy of the Tenant Committee's current rules and regulations is obtainable from the ------------------ Tenants' Committee. You are required to contact: Ms Susan Ng Wilson Parking (S) Pte Ltd 32 Sultan Centre Singapore 198480 Tel No: 2966600 a member of the Committee on your use of the car park, (b) The Corporation shall not be liable -for any loss, damage, injury, liabilities, claim or action you may sustain or suft in the use of the car park and the tenants shall fully indemnify the Corporation against any loss, claims, penalties, demands, damage arising from the private management and operations of the car park by the tenants. Jurong Town Corporation 8. Application for Approvals, Utilities etc. Upon your acceptance of the covenants, terms and conditions of the Offer, you are advised to proceed expeditiously as follows: 8.01 Preliminary Clearance: Comply with the requirements of the Chief Engineer (Central Building Plan Unit), Pollution Control Department and/or other departments pursuant to your application/s for preliminary clearance. (Please note that we have referred your application to the relevant departmout/s) 8.02 Discharge of Trade Effluence: Complete the attached Application for Permission to Discharge Trade Effluent into into Public Sewer and return the application form direct to the Head, Pollution Control Depaitment, Ministry of Environment Environment Building, 40 Scotts Road. Singapore 228231 (Telephone No. 7327733). 8.03 Electricity: Engage a registered electrical consultant or competent contractor to submit three sets of electrical single-line diagrams to and in accordance with the requirements of our Property Support Department (PSD), Customer Service Group, JTC East Zone Office for endorsement before an application is made to the Power Supply Pte Ltd to open an account for electricity connection. Please contact our Property Support Department (PSO) at Blk 25 Kallang Avenue #05-01 Kallang Basin Industrial Estate Singaporc 339416 direct for their requirements. 8.04 Water: Submit four copies of sketch plans, prepared by a licensed plumber, showing the, section and layout of the plumbing, to our Building Control Unit [BCU(JTC)] for approval prior to the issue of a letter to Water Conservation Department, Public Utilities Board to assist you in your application for a water sub-meter. 8.05 Telephone: Apply direct to Singapore Telecommunications Ltd for all connections. 8.06 Automatic Fire Alarm System (Incorporating Heat Detector) Engage a registered electrical consultant/professional engincer to submit two sets of fire alarm drawings, indicating the existing fixtures if any, the proposed modifications of the fire alarm and the layout of machinery, etc to and in accordance with the requirements of our Building Control Unit [BCU(JTC)]. Please contact our Building Control Unit [BCU(JTC)] at 301 Jurong Town Hall Road (3rd level) Singapore 609431 direct for further requirements. 8.07 Factory Inspectorate Complete and return direct to Chief Inspector of Factories the attached form, "Particulars to be submitted by occupiers or Intending Occupiers of Factories". Yours faithfully By:/s/ Lai Get Luan LAI GET LUAN (Ms) MARKETING & SALES DEPARTMENT INDUSTRIAL PARKS DEVELOPNENT GROUP JURONG TOWN CORPORATION Attd EX-10.19 10 dex1019.txt REAL ESTATE LEASE DATED MAY 2, 2000 EXHIBIT 10.19 TRIO-TECH --------- INTERNATIONAL 15 May 2000 Marketing & Sales Department [STAMP] BY HAND ------- Jurong Town Corporation Jurong Town Hall 301 Town Hall Road Singapore 609431 Attn: Mr Gerard Lien ACCEPTANCE OF OFFER OF TENANCY FOR THE PREMISES AT BLK 1008 TOA PAYOH NORTH #01- 08 TOA PAYOH INDUSTRIAL ESTATE SINGAPORE 318996 1. We refer to your letter of offer dated 2 May 2000 for the Tenancy and hereby confirm our acceptance of all the covenants, terms and conditions stipulated therein. 2. We enclose herewith a cheque for the sum of the amount of S$4,226.31 as confirmation of our acceptance. 3. In addition, we also enclose herewith a duly completed GIRO authorization form as requested by you for your information and record. 4. Please be informed that we are taking over the fittings and fixtures from the existing tenant Poh Hin Paper Box Co and undertake to reinstate the Premises to its original condition and to the satisfaction of the Corporation upon termination of the Term (by expiry or otherwise). By: /s/ Lee Siew Kuan ----------------------------------------------------------- Name of ,Authorised signatory : Mrs Lee Siew Kuan Designation : Director of Logistics For and/on behalf of TRIO-TECH INTERNATIONAL PTE LTD In the presence of By: /s/ Betty Ang ----------------------------------------------------------- Name of witness : Miss Betty Ang NRIC No. : S6945849A JTC(L)3601/2506/TEMP/GL/SN 02 May,2000 Trio-Tech International Pte Ltd BY- FAX @ 259 6355 & BY LUM --------------------------- Blk 1008 Toa. Payoh North #03-09 Toa Payoh Industrial Estate Singapore 318996 (Attn, Ms Betty Ang) Dear Sirs, OFFER OF TENANCY FOR FLATTED FACTORY SPACE 1. We are pleased to offer a tenancy of the Premises subject to the following covenants, terms and conditions in this letter and in the annexed Memorandum of Tenancy ("the Offer") - 1.01 Location: Pte Lot A 195 97(c), Blk 1008 ("the Building'), Toa Payoh North #01- 08 Toa Payoh Industrial Estate Singapore 318996 ("The Premises") as delineated and edged in red on the plan attached to the Offer. 1.02 Term of Tenancy: 3 years ("the Term") with effect from 01 July 2000 ("the Commencement Date")- 1.03 Tenancy Agreement: Upon due acceptance of the Offer in accordance with clause 2 of this letter, you shall have entered into a tenancy agreement with US ("the Tenancy") and will be bound by the covenants, terms and conditions thereof In the event of any inconsistency or conflict between any covenant, term or condition of this letter and the Memorandum of Tenancy, the relevant covenant, term or condition in this letter shall prevail, 1,04 Area: Approximately 56.0 square metres (subject to survey). 1.05 Rent and Service Charge: (a) Discounted rate of $16.30 per square metre for so long as the Tenant shall occupy by way of tenancy an aggregate floor area of not less than 1,000 square metres in the Building or in the various flatted factories belonging to the Landlord, and (b) Normal rate of $16.30 per square metres with effect from the date the said aggregate floor area occupied is reduced to below 1,000 square metres (ie. when the discount shall be totally withdraft), ("Rent") to be paid without demand and in advance without deduction on the 1st day of each month of the year (i.e. 1st of January, February, March, etc.). The next payment shall be made on 01 August 2000. Service charge: $2.10 per square metre per month, ("Service Charge") as charges for services rendered by us, payable without demand on the same date and in the same manner as the Rent, subject to our revision from time to time. 1.06 Security Deposit/Banker's Guarantee; You will at the time of acceptance of the Offer be requited to place with us a deposit of $3,091.20 equivalent to 3 months' Rent (at the discounted rate) and Service Charge ("Security Deposit") as security against any breach of the covenants, terms and conditions in the Tenancy. The Security Deposit may be in the form of cash and/or acceptable Banker's Guarantee in the form attached (effective from 01 May 2000 to 31 December 2003) and/or such other form of security as we may in our absolute discretion permit or accept. The security Deposit must be maintained at the same sum throughout the Term and shall be repayable to you without interest or returned to you for cancellation, after the termination of the Term (by expiry or otherwise) or expiry of the Banker's Guarantee, as the case may be, subject to appropriate deductions or payment to us for damages or other sums due under the Tenancy. If the Rent at the discounted rate is increased to the normal rate or Service Charge is increased or any deductions are made from the Security Deposit, you arc to immediately pay the amount of such increase or make good the deductions so that the Security Deposit shall at all times be equal to 3 months' Rent and Service Charge. 1.07 Made of Payment: Except for the payment to be made with your letter of acceptance pursuant to clause 2 of this letter, during the Term, you shall pay Rent, Service Charge and CTST by Interbank GIRO or any other mode to be determined by us, Accordingly, you are to provide us with the duly completed GIRO authorization form enclosed herewith. However, pending finalisation for the GIRO arrangement, you shall pay Rent, Service Charge and GST as they fall due by cheque. 1.08 Permitted Use: (a) Subject to clause 1. 12 of this letter, you shall commence full operation within four (4) months of the Commencement Date for the purpose of storage and operation of transformer and switchboards only and for no other purpose whatsoever ("the Authorised Use"). (b) Thereafter, you shall maintain full and continuous operations and use and occupy the whole of the Premises for the Authorised Use. (c) Subject to clauses (a) and (b) above, you shall use and occupy at least sixty percent (60%) of the gross floor area of the Premises for industrial activities and ancillary stores, and use and occupy the remaining grow floor area, if any, for offices, neutral areas, communal facilities and such other uses may be approved in writing by us and the relevant government and statutory authorities PROVIDIED THAT you shall not use and occupy the Premises for the purpose of commercial office and storage unrelated to the Authorised Use. 1.09 Approvals The Tenancy is subject to approvals being obtained from the relevant government and Statutory authorities. 1.10 Possession of Premises: (a) Keys to the Premises will be given to you two (2) months prior to the Commencement Date subject to due acceptance of the Offer ("Possession Date"). (b) From the Possession Date until the Commencement Date, you shall be deemed a licensee upon the same terms and conditions in the Tenancy. (c) If you proceed with the Tenancy after the Commencement Date, the licence fee payable from the Possession Date to the Commencement Date shall be waived ("Rent-Free Period"). Should you fail to so proceed, you shall: (i) remove everything installed by you; (ii) reinstate the Premises to its original state and condition, and (iii) pay us a sum equal to the prevailing market rent payable for the period from the Possession Date up to the date the installations are removed and reinstatement completed to our satisfaction, without prejudice to any other rights and remedies we may have against you wider the Tenancy or at law. 1.11 Preparation and Submission of Plans: (a) No alteration, addition, improvement, erection, installation or interference to or in the Premises or the fixtures and fittings therein is permitted without Building Control Unit [BCU(JTC)] prior written consent. Your attention is drawn to clauses 2.10 to 2.19 and 2.34 of the Memorandum of Tenancy. (b) You will be required to prepare and submit floor layout plans of your factory and plans of the air-conditioning works in accordance with the terms of the tenancy and the 'Guide' attached. It is important that you should proceed with the preparation and submission of the plans in accordance with the procedures set out in the said 'Guide'. (c) Should there be alteration of existing automatic fire alarm and sprinkler system installation, alteration plans shall be submitted to Building Control Unit [BCU(JTC)] for approval on fire safety aspects. All air-conditioning, fire alarm & sprinkler system plans must be signed by a relevant Professional Engineer, registered with the Professional Engineers Board of Singapore. (d) Upon due acceptance of the Offer, a copy of the floor and elevation plans (transparencies) will be issued to you to assist in the preparation of the plans requited herein. (e) No work shall commence until the plans have been approved by Building Control Unit [BCU(JTC)]. 1.12 Final Inspection: You shall ensure that final inspection by us of all installations is carried out and our approval of the same is obtained before any operations in the Premises may be commenced. 1.13 Special Conditions: 1. You shall comply and ensure compliance with the following restrictions: (a) maximum loading capacity of the goods lifts in the Building; and (b) maximum floor loading capacity of 12.50 kiloNewtons per square metre of the Premises on the 1st storey of the Building PROVIDED THAT any such permitted load shall be evenly distributed. We shall not be liable for any loss or damage that you may suffer from any subsidence or cracking of the ground floor slabs and aprons of the Building. 2 The Offer is subject to Poh Hin Paper Box Co returning vacant possession of the Promises by 30/04/2000 3 If you are taking over the Premises In Its existing state and condition, including oil the fixtures and fittings installed by or belonging to Poh Hin Paper Box Co ("the Said Installations") then:- (a) You shall accept the Premises including the Said Installations in its condition existing at the Commencement Date or the earlier acceptance of the keys to the Premises by the Tenant, whichever is the earlier ('the Control Date'). (b) You are to immediately or within such period stipulated in writing by us, at your own cost and expense, ensure:- (i) that the Said Installations have been approved in writing by us and that plans on The Said installations have been submitted to and approved in writing by us; (ii) that the Said Installations comply fully with all guidelines and requirements of the Building Control Unit [BCU(JTC)] and other Authorities prevailing at the Control Date; (iii) that such or all of the Said installations not approved by us under (i) or which have failed to comply with (ii) are demolished and removed, subject to clauses 2.12, 2.13 and 2.14 of the Memorandum of Tenancy; and (c) at the termination of the Term, by expiry or otherwise, you shall remove the Said Installations, and reinstate the Premises in accordance with clause 2.32 of the Memorandum of Tenancy, 4 Qption for renewal of tenancy- ----------------------------- (a) You may within 3 months before the expiry of the Term make a written request to us for a further term of tenancy. (b) We may grant you a further term of tenancy of the Premises upon mutual terms to be agreed between you and us subject to the following: (i) there shall be no breach of your obligations at the time you make your request for a further term; (ii) our determination of revised rent, having regard to the market rent of the Premises at the time of granting the further term, shall be final; (iii) we shall have absolute discretion to determine such covenants, terms and conditions, but excluding a covenant for renewal of tenancy; and (iv) there shall not be any breach of your obligations at the expiry of the Term. 5 You shall ensure that the operations of the transformers do not affect the neighboring units' (inclusive of the upstairs units) normal operations. 6 You shall erect a wall separating units #01-07 and #01 -08 that conform to the relevant authorities' requirements for the transformer room. 2. Mode of Acceptance: The Offer shall lapse if we do not receive the following by 06 May 2000:- . Duly signed letter of acceptance (in duplicate) of all the covenants, terms and conditions in the Tenancy in the, form enclosed at the Appendix. (Please date is required in the Appendix) . Payment of the sum set out in clause 4, . Duly completed GIRO authorization form. 3. Please note that payments made prior to your giving us the other items listed above may be cleared by and credited by us upon receipt. However, if the said other items are not forthcoming from you within the time stipulated herein. the Offer shall lapse and there shall be no contract between you and us arising hereunder. Any payments received shall then be refunded to you without interest and you shall have no claim of whatsoever nature against 4 The total amount payable is as follows:
---------------------------------------------------------------------------------------------------------------------- AMOUNT +3 % GST ---------------------------------------------------------------------------------------------------------------------- Rent: ---- Rent at $16.30 psm per month on 56,0 sqm for period 01 July 2000 to 31 July 2000 $912.80 Less: ----- 3% property tax rebate on rental value (01/07/2000 $ 27.38 to 30/06/2001) ------- $885.42 ---------------------------------------------------------------------------------------------------------------------- Service Charge.- -------------- Service Charge at $2.10 psm per month on 56.0 sqm for period $ 117.6 $1,003.02 $ 30.09 01 July 2000 to 31 July 2000 ------- ---------------------------------------------------------------------------------------------------------------------- Deposit equivalent to three months' rent and service charge (or Banker's Guarantee provided in accordance with sub-paragraph 1.06 above) $3,091.20 ---------------------------------------------------------------------------------------------------------------------- Stamp fee payable on Letter of Acceptance which will be stamped by JTC on your behalf $ 102.00 ---------------------------------------------------------------------------------------------------------------------- Sub-Total Payable $4,196.22 $330.09 ---------------------------------------------------------------------------------------------------------------------- Add: 3 % GST $ 30.09 --- --------- ---------------------------------------------------------------------------------------------------------------------- Total Amount Payable $4,226.31 --------- ----------------------------------------------------------------------------------------------------------------------
5 Rent-Free Period: As the Commencement Date will not be deferred, we advise you to accept the Offer as soon as possible and to collect the keys to the Premises on the scheduled date in order to maximize -the Rent-Free Period referred to in clause 1.10(c) of this letter. 6. Variation to The Tenancy This letter and the Memorandum of Tenancy constitute the full terms and conditions governing the Offer and no terms or representation or otherwise, whether express or implied, shall form part of the Offer other than what is contained herein. Any variation, modification, amendment, deletion, addition or otherwise of the covenants, terms and conditions of the Offer shall not be enforceable unless agreed by both parties and reduced in writing by us. 7. Car-Parking Scheme; (a) The car park for Blk 1008 is currently managed by a Tenants' Committee and You will: (i) have to contribute towards all the operational and management costs, if any, incurred in connection with the car parks, (ii) observe and be bound by all the rules and regulations governing the use and operation of the car park. A copy of the Tenant Committee's current rules and regulations is obtainable from the Tenants' Committee. You are required to contact: Ms Susan Ng Wilson Parking (S) Pte Ltd 32 Sultan Centre Singapore 198480 Tel No - 2966600 a member of the Committee, on your use of the car park. (b) The Corporation shall not be liable for any loss, damage, injury, liabilities claim or action you may sustain or suffer in the use of the car park and the tenants shall fully indemnify the Corporation against any loss, claims, penalties, demands, and damage arising from the private management and operations of the car park by the tenants. 8. Application for Approvals, Utilities etc. Upon your acceptance of the covenants, terms and conditions of the Offer, you are advised to proceed expeditiously as follows: 8.01 Preliminary Clearance: Comply with the requirements of the Chief Engineer (Central Building Plan Unit), Pollution Control Department and/or other departments pursuant to your application/s for preliminary clearance. (Please note that we have referred your application to the relevant department/s) 8.02 Discharge of Trade Effluence: Complete the attached Application for Permission to Discharge Trade Effluent into Public Sewer and return the application form direct to the Head, Pollution Control Department, Ministry of Environment; Environment Building, 40 Scotts Road. Singapore 228231 (Telephone No. 7327 733). 8.03 Electricity: Engage a Registered electrical consultant or competent contractor to submit three sets of electrical single-line diagrams to and in accordance with the requirements of our Property Support Department (FSD), Customer Services Group, M East Zone Office for endorsement before on application is Made to the Power Supply Pte Ltd to open an account for electricity connection. Please contact our Pro" Support Department (PSD) at Blk 25 Kallang Avenue #05-01 Kallang Ruin Industrial Estate Singapore 339416 direct for their requirements. 8.04 Water: Submit four copies of sketch plans, prepared by a licensed plumber, showing the section and layout of the plumbing, to our Building Control Unit [BCU(JTC)] for approval prior to the issue of a letter to Water Conservation Department, Public Utilities Board to assist you in your application for a water sub-meter. 8.05 Telephone: Apply direct to Singapore Telecommunications Ltd for all connections. 8.06 Automatic Fire Alarm System (Incorporating Heat Detector) Engage a registered electrical consultant/professional engineer to submit two sets of fire alarm drawings, indicating the existing fixtures if any, the proposal modifications of the fn alarm and the layout of machinery, etc to and in accordance with the requirements of our Building Control Unit [BCU(JTC)]. Please contact our Building Control Unit (BCU(JTQ)] at 301 Jurong Town Hall. Road (3rd level) Singapore 609431 direct for further requirements. 8.07 Factory Inspectorate Complete and return direct to Chief Inspector of Factories the attached Form, "Particulars to be submitted by occupiers or Intending Occupiers of Factories". Yours faithfully By: /s/ Gerard Lien ---------------------------------- GERARD LIEN MARKEKTING & SALES DEPARTMENT INDUSTRIAL PARKS DEVELOPMENT GROUP JURONG TOWN CORPORTION Attd EX-10.20 11 dex1020.txt REAL ESTATE LEASE DATED SEPT 12, 2000 EXHIBIT 10.20 TRIO-TECH --------- 22 September 2000 [SAMP] BY HAND ------- Marketing & Sales Department Jurong Town Corporation The JTC Summit 8 Jurong Town Hal Road Singapore 609434 Attn: Mss Jenny Lim ACCEPTANCE OF OFFER OF TENANCY FOR THE PREMISES AT BLK 1008 TOA PAYOH NORTH #07- 17 TO #07-18 TOA PAYOH INDUSTRIAL ESTATE SINGAPORE 318996 1. We refer to your letter of offer dated 12 September 2000 for the Tenancy and hereby confirm our acceptance of all the covenants, terms and conditions stipulated therein. 2. We enclose herewith a cheque for the amount of S$6,015.37 and the Banker's Guarantee as security deposit as confirmation of our acceptance. 3. In addition, we also enclose herewith a duly completed GIRO authorization form. By: /s/ Yong Siew Wai -------------------------------------------------------------------------------- Name of authorised signatory : Mr. Yong Siew Wai Designation : President/CEO For and on behalf of TRIO-TECH INTERNATIONAL PTE LTD In the presence of By:/s/ Betty Ang -------------------------------------------------------------------------------- Name of witness : Ms. Betty Ang NRIC No. : S6945849A JTC(L)3601/2506 Temp DID: 8833427 12 September 2000 FAX: 8855899 Email: chenwan@jtc.gov.sgv TRIO-TECH INTERNATIONAL PTE LTD J T C Blk 1008 Toa Payoh North #03-09/18 Singapore 318996 BY LUM ------ (Attn: Mr Yong Siew Wai) Dear Sirs, OFFER OF TENANCY FOR FLATTED FACTORY SPACE 1 . We are pleased to offer a tenancy of the Premises subject to the following covenants, terms and conditions in this letter and in the annexed Memorandum of Tenancy ("the Offer"): 1.01 Location: Pte Lot A19597(d), Blk 1008 ("the Building") Toa Payoh North #07-17 to #07-18, Toa Payoh Industrial Estate Singapore 318996 ("the Premises") as delineated and edged in red on the plan attached to the Offer. 1.02 Term of Tenancy: 3 years ("the Term") with effect from 1 December 2000 ("the Commencement Date"). 1.03 Tenancy Agreement: Upon due acceptance of the Offer in accordance with clause 2 of this letter, you shall have entered into a tenancy agreement with US ("the Tenancy") and will be bound by the covenants, terms and conditions thereof. In the event of any inconsistency or conflict between any covenant, term or condition of this letter and the Memorandum of Tenancy, the relevant covenant, term or condition in this letter shall prevail. 1.04 Area: Approximately 400.90 square metres (subject to survey). 2 Jurong Town Corporation 1.05 Rent and Service Charge: Rent: ----- (a) Discounted rate of Dollars $11.54 per square metre per month for so long as the Tenant shall occupy by way of tenancy an aggregate floor area of 1000 square metres in the Building or in the various flatted factories belonging to the Landlord, and (b) Normal rate of Dollars $11.90 per square metre per month in the event that the said aggregate floor area occupied is at any time reduced to below 1000 square metre (when the discount shall be totally withdrawn) with effect from the date of reduction in the said aggregate floor, ("Rent" ) to be paid without demand and in advance without deduction on the 1st day of each month of the year (i.e. 1st of January, February, March, etc.). The next payment shall be made on 1 January 2001. Service charge: --------------- $2.10 per square metre per month, ("Service Charge") as charges for services rendered by us, payable without demand on the same date and in the same manner as the Rent, subject to our revision from time to time. 1.06 Security Deposit/Banker's Guarantee: You will at the time of acceptance of the Offer be required to place with us a deposit of Dollars $16,404.83 equivalent to 3 months' Rent (at the discounted rate) and Service Charge ("Security Deposit") as security against any breach of the covenants, terms and conditions in the Tenancy. The Security Deposit may be in the form of cash and/or acceptable Banker's Guarantee in the form attached (effective from 1 October 2000 to 31 May 2004 ) and/or such other form of security as we may in our absolute discretion permit or accept. The Security Deposit must be maintained at the same sum throughout the Term and shall be repayable to you without interest or returned to you for cancellation, after the termination of the Term (by expiry or otherwise) or expiry of the Banker's Guarantee, as the case may be, subject to appropriate deductions or payment to us for damages or other sums due under the Tenancy. If the Rent at the discounted rate is increased to the normal rate or Service Charge is increased or any deductions are made from the Security Deposit, you are to immediately pay the amount of such increase or make good the deductions so that the Security Deposit shall at all times be equal to 3 months' Rent and Service Charge. 1.07 Mode of Payment: Except for the payment to be made with your letter of acceptance pursuant to clause 2 of this letter, during the Term, you shall pay Rent, Service Charge and GST by Interbank GIRO or any other mode to be determined by us. [Note:Accordingly, you are to provide us with the duly completed GIRO ----- authorization form enclosed herewith. # However, pending finalisation for the GIRO arrangement, you shall pay Rent, Service Charge and GST as they fall due by cheque.] 1.08 Permitted Use: (a) Subject to clause 1.12 of this letter, you shall commence full operations within four (4) months of the Commencement Date for the purpose of IC testing only and for no other purpose whatsoever ("the Authorised Use"). (b) Thereafter, you shall maintain full and continuous operations and use and occupy the whole of the Premises for the Authorised Use. (c) Subject to clauses (a) and (b) above, you shall use and occupy at least sixty percent (60%) of the gross floor area of the Premises for industrial activities and ancillary stores, and use and occupy the remaining gross floor area, if any, for offices, neutral areas, communal facilities and such other uses as may be approved in writing by us and the relevant governmental and statutory authorities PROVIDED THAT you shall not use and occupy the Premises for the purpose of commercial office and storage unrelated to the Authorised Use. 1.09 Approvals The Tenancy is subject to approvals being obtained from the relevant government and statutory authorities. 4 Jurong Town Corporation 1.10 Possession of Premises: (a) Keys to the Premises will be given to you two (2) months prior to the Commencement Date subject to due acceptance of the Offer ("Possession Date"). (b) From the Possession Date until the Commencement Date, you shall be deemed a licensee upon the same terms and conditions in the Tenancy. (c) if you proceed with the Tenancy after the Commencement Date, the licence fee payable from the Possession Date to the Commencement Date shall be waived ("Rent-Free Period"). Should you fail to so proceed, you shall: (i) remove everything installed by you; (ii) reinstate the Premises to its original state and condition; and (iii) pay us a sum equal to the prevailing market rent payable for the period from the Possession Date up to the date the installations are removed and reinstatement completed to our satisfaction, without prejudice to any other rights and remedies we may have against you under the enancy or at law. 1.11 Preparation and Submission of Plans: (a) No alteration, addition, improvement, erection, installation or interference to or in the Premises or the fixtures and fittings therein is permitted without Building Control Unit [BCU(JTC)] prior written consent. Your attention is drawn to clauses 2.10 to 2.19 and 2.34 of the Memorandum of Tenancy. (b) You will be required to prepare and submit floor layout plans of your factory and plans of the air-conditioning works in accordance with the terms of the tenancy and the 'Guide' attached. It is important that you should proceed with the preparation and submission of the plans in accordance with the procedures set out in the said 'Guide'. (c) Should there be alteration of existing automatic fire alarm and sprinkler system installation, alteration plans shall be submitted to Building Control Unit [BCU(JTC)] for approval on fire safety aspects. All air-conditioning, fire alarm & sprinkler system plans must be signed by a relevant Professional Engineer, registered with the Professional Engineers Board of Singapore. 5 Jurong Town Corporation (d) Upon due acceptance of the Offer, a copy of the floor and elevation plans (transparencies) will be issued to you to assist in the preparation of the plans required herein. (e) No work shall commence until the plans have been approved by Building Control Unit [BCU(JTC)]. 1.12 Final inspection: You shall ensure that final inspection by us of all installations is carried out and our approval of the same is obtained before any operations in the Premises may be commenced. 1.13 Special Conditions: (1) Normal (Ground & Non-ground) Floor Premises ------------------------------------------- You shall comply and ensure compliance with the following restrictions: (a) maximum loading capacity of the goods lifts in the Building; and (b) maximum floor loading capacity of 10.00 kiloNewtons per square metre of the Premises on the 7th storey of the Building PROVIDED THAT any such permitted load shall be evenly distributed. We shall not be liable for any loss or damage that you may suffer from any subsidence or cracking of the ground floor slabs and aprons of the Building. (2) Option for renewal of tenancy ----------------------------- (a) You may within 3 months before the expiry of the Term make a written request to us for a further term of tenancy. (b) We may grant you a further term of tenancy of the Premises upon mutual terms to be agreed between you and us subject to the following: (i) there shall be no breach of your obligations at the time you make your request for a further term; (ii) our determination of revised rent, having regard to the market rent of the Premises at the time of granting the further term, shall be final; 6 Jurong Town Corporation (iii) we shall have absolute discretion to determine such covenants, terms and conditions, but excluding a covenant for renewal of tenancy; and (iv) there shall not be any breach of your obligations at the expiry of the Term. 2. Mode of Acceptance: The Offer shall lapse if we do not receive the following by 26 September 2000:- . Duly signed letter of acceptance (in duplicate) of all the covenants, terms and conditions in the Tenancy in the form enclosed at the Appendix. (Please date as required in the Appendix) . Payment of the sum set out in clause 4. . Duly completed GIRO authorization form. 3. Please note that payments made prior to your giving us the other items listed above may be cleared by and credited by us upon receipt. However, if the said other items are not forthcoming from you within the time stipulated herein, the Offer shall lapse and there shall be no contract between you and us arising hereunder. Any payments received shall then be refunded to you without interest and you shall have no claim of whatsoever nature against us. 7 Jurong Town Corporation 4. The total amount payable is as follows:
-------------------------------------------------------------------------------------------------- Amount +3 % GST -------------------------------------------------------------------------------------------------- Rent at $11.54 psm per month on 400.90 sq m for the period 1 December 2000 to 31 December 2000 $4,626.39 -------------------------------------------------------------------------------------------------- Less: -------------------------------------------------------------------------------------------------- 3% property tax rebate on rental value $ 138.79 --------- $4,487.60 -------------------------------------------------------------------------------------------------- Service Charge at $2.10 psm per month on400.90sq m for the period 1 December 2000 to 31 December 2000 $ 841.89 $ 5,329.49 $159.88 --------- -------------------------------------------------------------------------------------------------- Deposit equivalent to three months' rent and service charge (or Banker's Guarantee provided in accordance with sub-paragraph 1.06 above) $16,404.83 -------------------------------------------------------------------------------------------------- Stamp fee payable on Letter of Acceptance which will be stamped by JTC on your behalf $ 526.00 -------------------------------------------------------------------------------------------------- Sub-Total Payable $22,260.32 $159.88 -------------------------------------------------------------------------------------------------- Add: GST + 3% $ 159.88 ---------- -------------------------------------------------------------------------------------------------- Total Amount Payable $22,420.20 ========== --------------------------------------------------------------------------------------------------
5. Rent-Free Period: As the Commencement Date will not be deferred, we advise you to accept the Offer as soon as possible and to collect the keys to the Premises on the scheduled date in order to maximize the Rent-Free Period referred to in clause 1.10(c) of this letter. 6. Variation to the Tenancy This letter and the Memorandum of Tenancy constitute the full terms and conditions governing the Offer and no terms or representation or otherwise, whether express or implied, shall form part of the Offer other than what is contained herein, Any variation, modification, amendment, deletion, addition or otherwise of the covenants, terms and conditions of the Offer shall not be enforceable unless agreed by both parties and reduced in writing by us. 8 Jurong Town Corporation 7. Car-Parking Scheme: (a) The car park for Blk 1008 Toa Payoh North is currently managed by a Tenants' Committee and you will: (i) have to contribute towards all the operational and management costs, if any, incurred in connection with the car parks; (ii) observe and be bound by all the rules and regulations governing the use and operation of the car park. A copy of the Tenant Committee's current rules and regulations is obtainable from ------------------ the Tenants' Committee. You are required to contact: --- Miss Susan Ng Wilson Parking (S) Pte Ltd 32 Sultan Centre Singapore 198480 TelNo:2966600 a member of the Committee, on your use of the car park. (b) The Corporation shall not be liable for any loss, damage, injury, liabilities, claim or action you may sustain or suffer in the use of the car park and the tenants shall fully indemnify the Corporation against any loss, claims, penalties, demands, damage arising from the private management and operations of the car park by the tenants. 8. Application for Approvals, Utilities etc. Upon your acceptance of the covenants, terms and conditions of the Offer, you are advised to proceed expeditiously as follows: 8.01 Preliminary Clearance: Comply with the requirements of the Chief Engineer (Central Building Plan Unit), Pollution Control Department and/or other departments pursuant to your application/s for preliminary clearance. (Please note that we have referred your application to the relevant department/s) 8.02 Discharge of Trade Effluence: Complete the attached Application for Permission to Discharge Trade Effluent into Public Sewer and return the application form direct to the Head, Pollution Control Department, Ministry of Environment, Environment Building, 40 Scotts Road. Singapore 228231 (Telephone No. 7327733). 9 Jurong Town Corporation 8.03 Electricity: Engage a registered electrical consultant or competent contractor to submit three sets of electrical single-line diagrams to and in accordance with the requirements of our Property Support Department (PSD), Customer Services Group, JTC East Zone Office for endorsement before an application is made to the Power Supply Pte Ltd to open an account for electricity connection. Please contact our Property Support Department (PSD) at Blk 25 Kallang Avenue #05-01 Kallang Basin Industrial Estate Singapore 339416 direct for their requirements. 8.04 Water: Submit four copies of sketch plans, prepared by a licensed plumber, showing the section and layout of the plumbing, to our Building Control Unit [BCU(JTC)] for approval prior to the issue of a letter to Water Conservation Department, Public Utilities Board to assist you in your application for a water sub-meter. 8.05 Telephone: Apply direct to Singapore Telecommunications Ltd for all connections. 8.06 Automatic Fire Alarm System ( Incorporating Heat Detector) Engage a registered electrical consultant/professional engineer to submit two sets of fire alarm drawings, indicating the existing fixtures if any, the proposed modifications of the fire alarm and the layout of machinery, etc to and in accordance with the requirements of our Building Control Unit [BCU(JTC)]. Please contact our Building Control Unit [BCU(JTC)] at The JTC Summit, Customer Service Centre (1st level) 8 Jurong Town Hall Road Singapore 609434 direct for further requirements. 10 Jurong Town Corporation 8.07 Factory Inspectorate Complete and return direct to Chief Inspector of Factories the attached form, "Particulars to be submitted by occupiers or Intending Occupiers of Factories". Yours faithfully By:/s/ Jenny Lim JENNY LIM (Ms) MARKETING & SALES DEPARTMENT INDUSTRIAL PARKS DEVELOPMENT GROUP JURONG TOWN CORPORATION Encl EX-10.21 12 dex1021.txt REAL ESTATE LEASE DATED 10/30/2000 Exhibit 10.21 [LOGO] TRIO-TECH INTERNATIONAL LOS ANGELES SINGAPORE DUBLIN PENANG KUALA LUMPUR BANGKOK 10 November 2000 Mr Teo Soon Siang BY HAND Marketing & Sales Department ------- Jurong Town Corporation The JTC Summit 8 Jurong Town Hall Road Singapore 609434 Dear Mr Teo Soon Siang ACCEPTANCE OF OFFER OF TENANCY FOR THE PREMISES AT BILK 1008 TOA PAYOH NORTH #07-01 TOA PAYOH INDUSTRIAL ESTATE SINGAPORE 318996 1. We refer to your letter of offer dated 30 October 2000 for the Tenancy and hereby confirm our acceptance of all the covenants, terms and conditions stipulated therein. 2. We enclose herewith a cheque for the amount of S$4831.02 and the Banker's Guarantee as security deposit as confirmation of our acceptance. 3. In addition, we also enclose herewith a duly completed GIRO authorisation form. By: /s/ Lee Siew Kuan ----------------------------------------------------------------------------- Name of authorised signatory : Mrs Lee Siew Kuan Designation : Director of Logistics For and-On behalf of : Trio-Tech International Pte Ltd In the presence of By: /s/ Betty Ang ----------------------------------------------------------------------------- Name of witness : Miss Betty Ang NRIC No. : S6945849A JTC(L)3601/2606 Temp 3 DID: 8833427 FAX:8855899 Email: chenwan@jtc.gov.sg 30 October 2000 JTC TRIO-TECH INTERNATIONAL PTE LTD Blk 1008 Toa Payoh North #03-09/15 Singapore 318996 BY LUM ------ (Attn: Ms Betty Ang) Dear Sirs, OFFER OF TENANCY FOR FLATTED FACTORY SPACE 1. We are pleased to offer a tenancy of the Premises subject to the following covenants, terms and conditions in this letter and in the annexed Memorandum of Tenancy ("the Offer"): 1.01 Location: Pte Lot A19597(f), Blk 1008 ("the Building") Toa Payoh North #07-01, Toa Payoh Industrial Estate Singapore 318996 ("the Premises") as delineated and edged in red on the plan attached to the Offer. 1.02 Term of Tenancy: 3 years ("the Term") with effect from 16 January 2001 ("the Commencement Date"). 1.03 Tenancy Agreement: Upon due acceptance of the Offer in accordance with clause 2 of this letter, you shall have entered into a tenancy agreement with US ("the Tenancy") and will be bound by the covenants, terms and conditions thereof. In the event of any inconsistency or conflict between any covenant, term or condition of this letter and the Memorandum of Tenancy, the relevant covenant, term or condition in this letter shall prevail. 1.04 Area: Approximately 322.00 square metres (subject to survey). Jurong Town Corporation 1.05 Rent and Service Charge: Rent: ---- (a) Discounted rate of Dollars $11.54 per square metre per month for so long as the Tenant shall occupy by way of tenancy an aggregate floor area of 1000 square metres in the Building or in the various flatted factories belonging to the Landlord, and (b) Normal rate of Dollars $11.90 per square metre per month in the event that the said aggregate floor area occupied is at any time reduced to below 1000 square metre (when the discount shall be totally withdrawn) with effect from the date of reduction in the said aggregate floor, ("Rent") to be paid without demand and in advance without deduction on the 1st day of each month of the year (i.e. 1st of January, February, March, etc.). The next payment shall be made on 1 February 2001. Service charge: --------------- $2.10 per square metre per month, ("Service Charge") as charges for services rendered by us, payable without demand on the same date and in the same manner as the Rent, subject to our revision from time to time. 1.06 Security Deposit/Banker's Guarantee: You will at the time of acceptance of the Offer be required to place with us a deposit of Dollars $13,176.24 equivalent to 3 months' Rent (at the discounted rate) and Service Charge ("Security Deposit") as security against any breach of the covenants, terms and conditions in the Tenancy. The Security Deposit may be in the form of cash and/or acceptable Banker's Guarantee in the form attached (effective from 16 November 2000 to 15 July 2004 ) and/or such other form of security as we may in our absolute discretion permit or accept. The Security Deposit must be maintained at the same sum throughout the Term and shall be repayable to you without interest or returned to you for cancellation, after the termination of the Term (by expiry or otherwise) or expiry of the Banker's Guarantee, as the case may be, subject to appropriate deductions or payment to us for damages or other sums due under the Tenancy. Jurong Town Corporation If the Rent at the discounted rate is increased to the normal rate or Service Charge is increased or any deductions are made from the Security Deposit, you are to immediately pay the amount of such increase or make good the deductions so that the Security Deposit shall at all times be equal to 3 months' Rent and Service Charge. 1.07 Mode of Payment: [Note: You have an existing account with us from which we will deduct ------- the aforesaid payments. You are therefore not required to submit a duly completed GIRO form as part of the Mode of Acceptance herein unless you wish to have a separate GIRO account to meet the aforesaid payments.] 1.08 Permitted Use: (a) Subject to clause 1.12 of this letter, you shall commence full operations within four (4) months of the Commencement Date for the purpose of IC testing only and for no other purpose whatsoever ("the Authorised Use"). (b) Thereafter, you shall maintain full and continuous operations and use and occupy the whole of the Premises for the Authorised Use. (c) Subject to clauses (a) and (b) above, you shall use and occupy at least sixty percent (60%) of the gross floor area of the Premises for industrial activities and ancillary stores, and use and occupy the remaining gross floor area, if any, for offices, neutral areas, communal facilities and such other uses as may be approved in writing by us and the relevant governmental and statutory authorities PROVIDED THAT you shall not use and occupy the Premises for the purpose of commercial office and storage unrelated to the Authorised Use. 1.09 Approvals The Tenancy is subject to approvals being obtained from the relevant government and statutory authorities. 1.10 Possession of Premises: (a) Keys to the Premises will be given to you two (2) months prior to the Commencement Date subject to due acceptance of the Offer ("Possession Date"). (b) From the Possession Date until the Commencement Date, you shall be deemed a licensee upon the same terms and conditions in the Tenancy. Jurong Town Corporation (c) if you proceed with the Tenancy after the Commencement Date, the licence fee payable from the Possession Date to the Commencement Date shall be waived ("Rent-Free Period"). Should you fail to so proceed, you shall (i) remove everything installed by you; (ii) reinstate the Premises to its original state and condition; and (iii) pay us a sum equal to the prevailing market rent payable for the period from the Possession Date up to the date the installations are removed and reinstatement completed to our satisfaction, without prejudice to any other rights and remedies we may have against you under the Tenancy or at law. 1.11 Preparation and Submission of Plans: (a) No alteration, addition, improvement, erection, installation or interference to or in the Premises or the fixtures and fittings therein is permitted without Building Control Unit [BCU(JTC)] prior written consent. Your attention is drawn to clauses 2.10 to 2.19 and 2.34 of the Memorandum of Tenancy. (b) You will be required to prepare and submit floor layout plans of your factory and plans of the air-conditioning works in accordance with the terms of the tenancy and the 'Guide' attached. It is important that you should proceed with the preparation and submission of the plans in accordance with the procedures set out in the said 'Guide. (c) Should there be alteration of existing automatic fire alarm and sprinkler system installation, alteration plans shall be submitted to Building Control Unit [BCU(JTC)] for approval on fire safety aspects. All air-conditioning, fire alarm & sprinkler system plans must be signed by a relevant Professional Engineer, registered with the Professional Engineers Board of Singapore. (d) Upon due acceptance of the Offer, a copy of the floor and elevation plans (transparencies) will be issued to you to assist in the preparation of the plans required herein. (e) No work shall commence until the plans have been approved by Building Control Unit [BCU(JTC)]. Jurong Town Corporation 1.12 Final inspection: You shall ensure that final inspection by us of all installations is carried out and our approval of the same is obtained before any operations in the Premises may be commenced. 1.13 Special Conditions: (1) Normal (Ground & Non-ground) Floor Premises ------------------------------------------- You shall comply and ensure compliance with the following restrictions: (a) maximum loading capacity of the goods lifts in the Building; and (b) maximum floor loading capacity of 10.00 kiloNewtons per square metre of the Premises on the 7th storey of the Building PROVIDED THAT any such permitted load shall be evenly distributed. We shall not be liable for any loss or damage that you may suffer from any subsidence or cracking of the ground floor slabs and aprons of the Building. (2) Option for renewal of tenancy ----------------------------- (a) You may within 3 months before the expiry of the Term make a written requet to us for a further term of tenancy. (b) We may grant you a further term of tenancy of the Premises upon mutual terms to be agreed between you and us subject to the following: (i) there shall be no breach of your obligations at the you make your request for a further term; time (ii) our determination of revised rent, having regard to market rent of the Premises at the time of the granting the further term, shall be final; (iii) we shall have absolute discretion to determine such covenants, terms and conditions, but excluding a covenant for renewal of tenancy; and (iv) there shall not be any breach of your obligations expiry of the Term. Jurong Town Corporation 2. Mode of Acceptance: The Offer shall lapse if we do not receive the following by 13 November 2000:- . Duly signed letter of acceptance (in duplicate) of all the covenants, terms and conditions in the Tenancy in the form enclosed at the Appendix. (Please date as required in the Appendix) . Payment of the sum set out in clause 4. . Duly completed GIRO authorization form. 3. Please note that payments made prior to your giving us the other items listed above may be cleared by and credited by us upon receipt. However, if the said other items are not forthcoming from you within the time stipulated herein, the Offer shall lapse and there shall be no contract between you and us arising hereunder. Any payments received shall then be refunded to you without interest and you shall have no claim of whatsoever nature against us. 4. The total amount payable is as follows: -------------------------------------------------------------------------------- Amount +3 % GST -------------------------------------------------------------------------------- Rent at $11.54 psm per month on 322.00 sq m for the period 16 January 2001 to 15 February 2001 $3,715.88 -------------------------------------------------------------------------------- Less: -------------------------------------------------------------------------------- 3% property tax rebate on rental value $ 111.48 --------- $3,604.40 -------------------------------------------------------------------------------- Service Charge at $2.10 psm per month on 322.00 sq m for the period 16 January 2001 to 15 February 2001 $ 676.20 $ 4,280.60 $128.42 --------- -------------------------------------------------------------------------------- Deposit equivalent to three months' rent and service charge (or Banker's Guarantee provided in accordance with sub-paragraph 1.06 above) $13,176.24 -------------------------------------------------------------------------------- Stamp fee payable on Letter of Acceptance which will be stamped by JTC on your behalf $ 422.00 -------------------------------------------------------------------------------- Sub-Total Payable $17,878.84 $128.42 -------------------------------------------------------------------------------- Add: GST + 3% $ 128.42 -------------------------------------------------------------------------------- Total Amount Payable $18,007.26 -------------------------------------------------------------------------------- Jurong Town Corporation 5. Rent-Free Period: As the Commencement Date will not be deferred, we advise you to accept the Offer as soon as possible and to collect the keys to the Premises on the scheduled date in order to maximize the Rent-Free Period referred to in clause 1.10(c) of this letter. 6. Variation to the Tenancy This letter and the Memorandum of Tenancy constitute the full terms and conditions governing the Offer and no terms or representation or otherwise, whether express or implied, shall form part of the Offer other than what is contained herein. Any variation, modification, amendment, deletion, addition or otherwise of the covenants, terms and conditions of the Offer shall not be enforceable unless agreed by both parties and reduced in writing by us. 7. Car-Parking Scheme: (a) The car park for Blk 1008 Toa Payoh North is currently managed by Wilson Parking (S) Pte Ltd and you will have to observe and be bound by all the rules and regulations governing the use and operation of the car park. You are requested to contact the following person on the use of the car park: Ms Susan Ng Wilson Parking (S) Pte Ltd 32 Sultan Gate Singapore 198480 Tel No:2966600 a member of the Committee, on your use of the car park. (b) The Corporation shall not be liable for any loss, damage, injury, liability, claim or action you may sustain or suffer in the use of the car park and the tenants shall fully indemnify the Corporation against any loss, claims, penalties, demands, damage arising from the private management and operations of the car park by the tenants. 8. Application for Approvals, Utilities etc. Upon your acceptance of the covenants, terms and conditions of the Offer, you are advised to proceed expeditiously as follows: Jurong Town Corporation 8.01 Preliminary Clearance: Comply with the requirements of the Chief Engineer (Central Building Plan Unit), Pollution Control Department and/or other departments pursuant to your application/s for preliminary clearance. (Please note that we have referred your application to the relevant department/s) 8.02 Discharge of Trade Effluence: Complete the attached Application for Permission to Discharge Trade Effluent into Public Sewer and return the application form direct to the Head, Pollution Control Department, Ministry of Environment, Environment Building, 40 Scotts Road. Singapore 228231 (Telephone No. 7327733). 8.03 Electricity: Engage a registered electrical consultant or competent contractor to submit three sets of electrical single-line diagrams to and in accordance with the requirements of our Property Support Department (PSD), Customer Services Group, JTC East Zone Office for endorsement before an application is made to the Power Supply Pte Ltd to open an account for electricity connection. Please contact our Property Support Department (PSD) at Blk 25 Kallang Avenue #05-01 Kallang Basin Industrial Estate Singapore 339416 direct for their requirements. 8.04 Water: Submit four copies of sketch plans, prepared by a licensed plumber, showing the section and layout of the plumbing, to our Building Control Unit [BCU(JTC)] for approval prior to the issue of a letter to Water Conservation Department, Public Utilities Board to assist you in your application for a water sub-meter. 8.05 Telephone: Apply direct to Singapore Telecommunications Ltd for all connections. 8.06 Automatic Fire Alarm System ( Incorporating Heat Detector) Engage a registered electrical consultant/professional engineer to submit two sets of fire alarm drawings, indicating the existing fixtures if any, the proposed modifications of the fire alarm and the layout of machinery, etc to and in accordance with the requirements of our Building Control Unit [BCU(JTC)I. Please contact our Building Control Unit [BCU(JTC)] at The JTC Summit, Customer Service Centre (1st level) 8 Jurong Town Hall Road Singapore 609434 direct for further requirements. Jurong Town Corporation 8.07 Factory Inspectorate Complete and return direct to Chief Inspector of Factories the attached form, "Particulars to be submitted by occupiers or Intending Occupiers of Factories". Yours faithfully By: /s/ Jenny Lim JENNY LIM (Ms) MARKETING & SALES DEPARTMENT INDUSTRIAL PARKS DEVELOPMENT GROUP JURONG TOWN CORPORATION Encl EX-23.1 13 dex231.txt INDEPENDENT AUDITORS CONSENT EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 333- 38082 on Form S-3 and No. 333-40102 on Form S-8 of Trio-Tech International of our report dated September 7, 2001, appearing in this Annual Report on Form 10-K of Trio-Tech International for the year ended June 30, 2001. /s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP Los Angeles, California September 17, 2001