16. COMMITMENTS AND CONTINGENCIES

12 Months Ended

Jun. 30, 2015

Notes to Financial Statements

COMMITMENTS AND CONTINGENCIES (IN THOUSANDS, EXCEPT EARNINGS PER SHARE AND NUMBER OF SHARES)

16. COMMITMENTS AND CONTINGENCIES

The Company leases certain of its facilities and equipment under long-term agreements expiring at various dates through fiscal year 2015 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, 2015 were as follows:

	Capital		Operating		Sub-lease			Net
For the Year Ending June 30,	Leases		Leases		Rental (Income)			Operating Leases
2016	$	197	$	803	$	(128	)	$	675
2017		199		671		(41	)		630
2018		169		279		(24	)		255
Thereafter		107		2,060		-			2,060
Total future minimum lease payments	$	672	$	3,813	$	(193	)	$	3,620
Less: amount representing interest		-
Present value of net minimum lease payments		672
Less: current portion of capital lease obligations		197
Long-term obligations under capital leases		475

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, 2014 were as follows:

	Capital			Operating		Sub-lease			Net
For the Year Ending June 30,	Leases			Leases		Rental (Income)			Operating Leases
2015	$	81		$	710	$	(111	)	$	599
2016		85			795		(130	)		665
2017		83			600		(42	)		558
Thereafter		32			3,001		(18	)		2,983
Total future minimum lease payments	$	281		$	5,106	$	(301	)	$	4,805
Less: amount representing interest		-
Present value of net minimum lease payments		281
Less: current portion of capital lease obligations		(81	)
Long-term obligations under capital leases		200

The Company purchased equipment under the capital lease agreements with rates ranging from 1.9% to 7.5%. These agreements mature ranging from July 2015 to May 2020.

Total rental expense on all operating leases, cancelable and non-cancelable, amounted to $784 and $687 in fiscal years 2015 and 2014 respectively.

Trio-Tech (Malaysia) Sdn. Bhd. has capital lease for the purchase of equipment and other related infrastructure costs amounting to RM 33, or approximately $9 based on the exchange rate on June 30, 2015 published by the Monetary Authority of Singapore, as compared to last year capital lease for the purchase of equipment and other related expenses amounting to RM 601, or approximately $184.

Trio-Tech (Tianjin) Co. Ltd has no capital commitments for the year ended June 30, 2015 as compared to the prior fiscal year during which the capital commitments for the purchase of equipment and other related infrastructure costs was RMB 2,199, or approximately $353.

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.