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INVESTMENT PROPERTIES

3 Months Ended

Sep. 30, 2013

INVESTMENT PROPERTIES (IN THOUSANDS, EXCEPT EARNINGS PER SHARE AND NUMBER OF SHARES)

The following table presents the Company’s investment in properties in China and Malaysia as of September 30, 2013. The exchange rate is based on the exchange rate as of September 30, 2013 published by the Monetary Authority of Singapore.

		Investment Amount			Investment Amount
	Investment Date	(RMB)			(U.S. Dollars)
Purchase of rental property – Property I - MaoYe	01/04/2008		5,554			907
Purchase of rental property – Property II - JiangHuai	01/06/2010		3,600			588
Purchase of rental property – Property III - Fu Li	01/06/2010		4,025			658
Gross investment in rental property			13,179			2,153
Accumulated depreciation on rental property			(2,464	)		(402	)
Net investment in property – China			10,715			1,751

		Investment Amount			Investment Amount
	Investment Date	(RM)			(U.S. Dollars)
Purchase of rental property – Penang Property I	31/12/2012		681			209
Gross investment in rental property			681			209
Accumulated depreciation on rental property			(292	)		(90	)
Net investment in property – Malaysia			389			119

The following table presents the Company’s investment in properties in China and Malaysia as of June 30, 2013. The exchange rate is based on the exchange rate as of June 30, 2013 published by the Monetary Authority of Singapore.

		Investment Amount			Investment Amount
	Investment Date	(RMB)			(U.S. Dollars)
Purchase of rental property – Property I - MaoYe	01/04/2008		5,554			904
Purchase of rental property – Property II - JiangHuai	01/06/2010		3,600			586
Purchase of rental property – Property III - Fu Li	01/06/2010		4,025			655
Gross investment in rental property			13,179			2,145
Accumulated depreciation on rental property			(2,302	)		(375	)
Net investment in property – China			10,877			1,770

		Investment Amount			Investment Amount
	Investment Date	(RM)			(U.S. Dollars)
Purchase of rental property – Penang Property I	31/12/2012		681			214
Gross investment in rental property			681			214
Accumulated depreciation on rental property			(294	)		(91	)
Net investment in property – Malaysia			387			123

Rental Property I – Mao Ye

In fiscal 2008, Trio-Tech (Chongqing) Co. Ltd. (“TTCQ”) purchased an office in Chongqing, China from MaoYe Property Ltd. (“MaoYe”), for a total cash purchase price of RMB 5,554, or approximately $907 based on the exchange rate as of September 30, 2013 published by the Monetary Authority of Singapore. TTCQ rented this property to a third party on July 13, 2008. The term of the rental agreement was five years. The rental agreement was renewed on July 16, 2013 for a further period of five years. The rental agreement provides for a rent increase of 8% every year after July 15, 2015. The renewed agreement expires on July 15, 2018.

Property purchased from MaoYe generated a rental income of $28, for the three months ended September 30, 2013, and $21 for the same period in the last fiscal year.

Rental Property II - JiangHuai

In fiscal 2010, TTCQ purchased eight units of commercial property in Chongqing, China from Chongqing JiangHuai Real Estate Development Co., Ltd (“JiangHuai”) for a total purchase price of RMB 3,600, or approximately $588 based on the exchange rate as of September 30, 2013 published by the Monetary Authority of Singapore. TTCQ rented all of these commercial units to a third party until the agreement expired in January 2012. TTCQ then rented three of the eight commercial units to another party during the fourth quarter of fiscal 2013 under a rental agreement that expires on March 31, 2014. TTCQ is actively looking for suitable tenants for the remaining five commercial units.

Property purchased from JiangHuai generated a rental income of $4 for the three months ended September 30, 2013, and did not generate rental income for the same period in the last fiscal year, since the earlier lease agreement expired in January 2012.

Other Properties III – Fu Li

In fiscal 2010, TTCQ entered into a Memorandum Agreement with Chongqing Fu Li Real Estate Development Co. Ltd. (“FuLi”) to purchase two commercial properties totaling 311.99 square meters (“office space”) located in Jiang Bei District Chongqing. The total purchase price committed and paid was RMB 4,025, or approximately $658 based on the exchange rate as of September 30, 2013 published by the Monetary Authority of Singapore. The development was completed and the property was handed over during April 2012 and the title deed was received during the third quarter of fiscal 2013. One of the two rental agreements expires in April 2014 and the other in August 2014.

Property purchased from Fu Li was rented to a third party effective fourth quarter of fiscal 2012 and generated a rental income of $12 for the three months ended September 30, 2013, and $9 for the same period in the last fiscal year.

Penang Property I

In the fourth quarter of fiscal 2013, Trio-Tech Malaysia Sdn. Bhd. (“TTM”) determined to sell the factory building in Penang. However as the government authorities did not approve the transaction, the sale did not take place. Because the market value was increasing during the second quarter of fiscal 2013, TTM decided to hold the factory building in Penang as an investment rental property. Hence TTM reclassified the factory building as investment property at the end of the second quarter of fiscal 2013, which had a net book value of $119. In the first quarter of fiscal 2014 the depreciation expenses were $1. There were no such depreciation expenses for the same period in the last fiscal year, since the asset was classified as “Assets held for sale”.

Summary

Total rental income for all investment properties in China was $44 for the three months ended September 30, 2013, and was $30 for the same period in the last fiscal year.

Depreciation expenses for all investment properties in China were $27 for the three months ended September 30, 2013, and were $26 for the same period in the last fiscal year.