COMMITMENTS AND CONTINGENCIES

12 Months Ended

Jun. 30, 2013

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, 2013 were as follows:

	Capital			Operating		Sub-lease Rental		Net Operating
For the Year Ending June 30,	Leases			Leases		Income		Leases
2014	$	105		$	723	$	32	$	691
2015		68			639		--		639
2016		72			666		--		666
Thereafter		88			1,057		--		1,057
Total future minimum lease payments	$	333		$	3,085	$	32	$	3,053
Less amount representing interest		-
Present value of net minimum lease payments		333
Less current portion of capital lease obligations		(105	)
Long-term obligations under capital leases	$	228

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 the Penang property expired in November 2012 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 Plant II property will expire in November 2013. However, the lease of Petaling Jaya Plant II property was terminated on July 31, 2013 without any penalties or cost to the Company. Total rental income from subleases amounted to $9 in fiscal 2013 and $82 in fiscal 2012.

Total rental expense on all operating leases, cancelable and non-cancelable, amounted to $941 in fiscal 2013 and $1,393 in fiscal 2012.

Trio-Tech (Malaysia) Sdn. Bhd. has capital commitments for the purchase of equipment and other related infrastructure costs amounting to Malaysia ringgit 365, or approximately $118 based on the exchange rate on June 30, 2013 published by the Monetary Authority of Singapore.

Trio-Tech (Tianjin) Co. Ltd has capital commitments for the purchase of equipment and other related infrastructure costs amounting to RMB 3,617, or approximately $506 based on the exchange rate as of June 30, 2013 published by the Monetary Authority of Singapore.

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.