16. COMMITMENTS AND CONTINGENCIES

12 Months Ended

Jun. 30, 2018

Notes to Financial Statements

COMMITMENTS AND CONTINGENCIES

The Company leases certain facilities and equipment under long-term agreements expiring at various dates through fiscal year 2018 and thereafter. Certain 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, 2018 were as follows:

						Sub-lease		Net
For the Year Ending June 30,		Capital Leases		Operating Leases		Rental (Income)		Operating Leases
2019	$	250	$	717	$	(26)	$	691
2020		249		531		(26)		505
2021		150		44		-		44
2022		102		-		-		-
2023		23		-		-		-
Total future minimum lease payments	$	774	$	1,292	$	(52)	$	1,240
Less: amount representing interest		-
Present value of net minimum lease payments		774
Less: current portion of capital lease obligations		250
Long-term obligations under capital leases		524

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, 2017 were as follows:

						Sub-lease			Net
For the Year Ending June 30,		Capital Leases		Operating Leases		Rental (Income)			Operating Leases
2018	$	228	$	536	$	(33)		$	503
2019		197		423		(25)			398
2020		193		224		(26)			198
2021		95		-		-			-
2022		46		-		-			-
Total future minimum lease payments	$	759	$	1,183	$	(84	)	$	1,099
Less: amount representing interest		-
Present value of net minimum lease payments		759
Less: current portion of capital lease obligations		228
Long-term obligations under capital leases		531

The Company purchased equipment under the capital lease agreements with rates ranging from 1.88% to 7.50% for fiscal years 2018 and 2017. These agreements mature ranging from July 2018 to May 2021.

Total rental expense on all operating leases, cancelable and non-cancelable, amounted to $703 and $747 in fiscal years 2018 and 2017, respectively.

Trio-Tech (Malaysia) Sdn. Bhd. has a capital lease for the purchase of equipment and other related infrastructure costs amounting to RM 62, or approximately $16 based on the exchange rate on June 30, 2018 as compared to RM 684, or approximately $159 for the last fiscal year.

Trio-Tech Tianjin Co. Ltd has a capital lease for the purchase of equipment and other related infrastructure costs amounting to RMB 3,927, or approximately $593 based on the exchange rate on June 30, 2018 as compared to RMB 1,260, or approximately $186 based on the exchange rate on June 30, 2017.

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.