Note 7 – Debt

Debt consists of the following:

	December 31, 2014		June 30, 2014
	(Unaudited)		(Audited)
Term loan 1	$	289,431	$	293,460
Term loan 2		289,467		293,495
Term loan 3		231,161		234,551
Term loan 4		822,203		825,267
Term loan 5		276,295		280,516
Term loan 6		19,694		68,884
Term loan 7		1,186,924		1,256,744
Term loan 8		-		-
Term loan 9		-		-
Trust receipts		2,267,705		3,375,036
Total debt		5,382,880		6,627,953
Less: current portion		(3,683,606)		(4,912,397)
Long-term portion of debt	$	1,699,274	$	1,715,556

Term Loans

All term loans were originally denominated in SGD currency.

Term loan 1 is repayable by 96 months with monthly instalment of $4,207 for the first year. Interest rate for the first year is fixed at 1.88% per annum; second year is fixed at 1.98% per annum and for the third year is fixed at Singapore Lending Rate (SLR) at 3.25% per annum. Thereafter, interest rate is at 0.75% above Singapore Lending Rate (SLR).

Term loan 2 is repayable by 96 months with monthly instalment of $4,207 for the first year. Interest rate for the first year is fixed at 1.88% per annum; second year is fixed at 1.98% per annum and for the third year is fixed at Singapore Lending Rate (SLR) at 3.25% per annum. Thereafter, interest rate is at 0.25% above Singapore Lending Rate (SLR).

Term loan 3 is repayable by 96 months with monthly instalment of $3,362 for the first year. Interest rate for the first year is fixed at 1.88% per annum; second year is fixed at 1.98% per annum and for the third year is fixed at Singapore Lending Rate (SLR) at 3.25% per annum. Thereafter, interest rate is at 0.25% above Singapore Lending Rate (SLR).

Term loan 4 is repayable by 168 months with monthly instalment of $6,222. Interest rate for the first year is fixed at 1.68% per annum; second year is fixed at 1.98% per annum and for the third year is fixed at Singapore Lending Rate (SLR) at 3.25% per annum. Thereafter, interest rate is at 0.2% above Singapore Lending Rate (SLR).

Term loan 5 is repayable by 96 months with monthly instalment of $3,790. Interest rate is fixed at 1.98% per annum for the first year; second year and third year are fixed at Singapore Lending Rate (SLR) at 3.25% per annum. Thereafter, interest rate is at 0.25% above Singapore Lending Rate (SLR).

Term loan 6 is repayable by 24 monthly equal instalments of $10,741. Interest rate per annum is chargeable at 7.50%.

Term loan 7 is repayable by 15 monthly instalments or by such other instalments as may be specified or fixed by the Bank. The interest rate is at 2% per annum above the Bank’s Prime Lending Rate.

Term loan 8 is repayable by 48 monthly instalments of such amount will be notified by the Bank, the Company or by such other instalments as may be fixed by SPRING Singapore (described in more detail below) and the Bank from time to time. The interest rate is chargeable at 5.00% by such other instalments as may be specified or fixed by SPRING Singapore and the Bank from time to time. The loan was settled in full during the fiscal year. SPRING Singapore is an agency under the Ministry of Trade and Industry responsible for helping Singapore enterprises grow and building trust in Singapore products and services. As the enterprise development agency, SPRING Singapore works with partners to help enterprises in financing, capability and management development, technology and innovation, and access to markets.

Term loan 9 is business loan of $152,122 and is repayable by 48 monthly equal instalments of $3,503. Interest rate per annum is chargeable at 5.00%. The loan was settled in full during the fiscal year ended June 30, 2014.

Trust Receipts

Trust receipts are originally denominated in USD currency.

The Company renewed its trust receipt agreement with Standard Chartered Bank (the “Bank”) in February of 2013.

The interest rate of trust receipts per annum is chargeable at 0.50% above the interest at Singapore Base Finance Rates (local transactions) and 2.75% above the interest of Singapore Base Finance Rates (foreign transactions). The term of the settlement is 90 days from the release of merchandise to the Company from the Bank.

The term loan and trust receipts are collateralized by way of:

Properties of the Company;

Properties of Directors;

Fixed deposits of the Directors; and

Joint and several guarantees by the Directors

Future contractual maturities of debt are as follows, as of December 31, 2014:

Six months ending December 31,
2015	$	3,683,606
2016		205,309
2017		211,339
2018		218,856
2019		226,640
Thereafter		837,130
	$	5,382,880

Interest expense of $13,899 and $13,152 was included in finance cost in the statements of operations for the three months period ended December 31, 2014 and 2013, respectively. For the six months period ended December 31, 2014 and 2013, interest expense of $25,031 and $26,160, respectively, were included in finance costs in the statements of operations.

During the three months period ended December 31, 2014, the Company had a net total loss of $7,776 on foreign currency exchange, none of which resulted from trust receipts or from the term loan. During the three months period ended December 31, 2013, the Company had a net total gain of $72,356 on foreign currency exchange, none of which resulted from trust receipts or from term the loan.

During the six months period ended December 31, 2014, the Company had a net total of $18,883 loss on foreign currency exchange none of which resulted from trust receipts or resulted from the term loan. During the six months period ended December 31, 2013, the Company had a net total of $13,076 gain on foreign currency exchange none of which resulted from trust receipts or resulted from the term loan.