COMMITMENTS AND CONTINGENCIES

12 Months Ended

Jun. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Note 13. COMMITMENTS AND CONTINGENCIES (In Thousands)

The Company leases certain of its facilities and equipment under long-term agreements expiring at various dates through fiscal 2014 and thereafter. 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 non-cancelable operating leases and net rental income under non-cancelable sub-leased properties as of June 30, 2012 were as follows:

For the Year Ending June 30,	Capital Leases			Operating Leases		Sub-lease Rental Income		Net Operating Leases
2013	$	175		$	1,263	$	65	$	1,198
2014		85			545		-		545
2015		44			443		-		443
Thereafter		92			1,146		-		1,146
Total future minimum lease payments	$	396		$	3,397	$	65	$	3,332
Less amount representing interest		-
Present value of net minimum lease payments		396
Less current portion of capital lease obligations		(175	)
Long-term obligations under capital leases	$	221

The Company purchased equipment under the capital lease agreements with rates ranging from 1.88% to 4.30%. These agreements mature ranging from July 2013 to September 2017.

The Company has two sublease agreements with third parties to rent out the properties in Malaysia. The sublease agreement of Penang’s property expired in November 2010 and was not renewed due to the fact that the operation in Malaysia planned to sell the factory building. The sublease agreement of Petaling Jaya’s property will expire in November 2012. Total rental income from subleases amounted to $82 in fiscal 2012 and $139 in fiscal 2011.

Total rental expense on all operating leases, cancelable and non-cancelable, amounted to $1,393 in fiscal 2012 and $1,400 in fiscal 2011.

Trio-Tech (Malaysia) Sdn Bhd has expansion plans to meet the increasing specific requirements and demand of a major customer in Malaysia, as the existing facility is inadequate to meet the demands of that customer. The Company has capital commitments for the purchase of equipment and other related infrastructure costs amounting to Malaysia ringgit 402, or approximately $131 based on the exchange rate on June 30, 2012 published by the Monetary Authority of Singapore.

Trio-Tech International Pte. Ltd. in the fourth quarter of fiscal 2010 registered a new 100% wholly owned subsidiary, Trio-Tech (Tianjin) Co. Ltd., located in the Xiqing Economic Development Area (XEDA) International Industrial Park in Tianjin City, People's Republic of China. The Company has capital commitments for the purchase of equipment and other related infrastructure costs amounting to RMB 2,851, or approximately $448 based on the exchange rate as of June 30, 2012 published by the Monetary Authority of Singapore. It started the operation in the third quarter of fiscal 2012 after completion of the operations facilities process audit by the customer.

Deposits with banks in China are not insured by the local government or agency, and are consequently exposed to risk of loss. The Company believes the probability of a bank failure, causing loss to the Company, is remote.

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.