Note 6 – Debt

Debt consists of the following:

	March 31, 2015		June 30, 2014
	(Unaudited)		(Audited)
Term loan 1	$	-	$	293,460
Term loan 2		-		293,495
Term loan 3		-		234,551
Term loan 4		-		825,267
Term loan 5		-		280,516
Term loan 6		-		68,884
Term loan 7		1,210,310		1,256,744
Term loan 10		3,385,648		-
Short term loan		226,170		-
Trust receipts		2,022,455		3,375,036
Total debt		6,844,583		6,627,953
Less: current portion		(4,576,199)		(4,912,397)
Long-term portion of debt	$	2,268,384	$	1,715,556

Term Loans

All term loans were originally denominated in SGD currency.

Term loan 1 is repayable by 96 months with monthly installment 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 installment 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 installment 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 installment 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 installment 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 installments of $10,741. Interest rate per annum is chargeable at 7.50%.

Term loan 7 is repayable by 15 monthly installments or by such other installments 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 10 is repayable by 35 monthly installments of $70,674 and a final installment of $2,250,390 or such other amount as notified by the Lender to the Borrower from time to time. The interest rate shall be payable at 2.0% above the IFS S$ Prime Rate per annum on the date of the first drawdown & thereafter on each Repayment Date or 2.0% above IFS S$ Costs of Fund per annum, whichever is higher on monthly rate. This loan was collateralized by the property of the Company. Term loan10 is used to refinance term loan 1, term loan 2, term loan 3, term loan 4 and term loan 5.

Short term loan is a straight due on demand loan from an unrelated individual. This loan bears simple interest at the rate of 4% monthly.

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 March 31, 2015:

Year ending March 31,
2016	$	4,576,199
2017		1,117,264
2018		1,151,120
2019		-
2020		-
Thereafter		-
	$	6,844,583

Interest expense of $54,640 and $112,752 was included in finance cost in the statements of operations for the three months period ended March 31, 2015 and 2014, respectively. For the nine months period ended March 31, 2015 and 2014, interest expense of $79,671 and $139,912 respectively, were included in finance costs in the statements of operations.

During the three months period ended March 31, 2015, the Company had a net total gain of $124,397 on foreign currency exchange, none of which resulted from trust receipts or from the term loan. During the three months period ended March 31, 2014, the Company had a net total gain of $58,042 on foreign currency exchange, none of which resulted from trust receipts or from the term loan.

During the nine months period ended March 31, 2015, the Company had a net total of $105,514 gain on foreign currency exchange none of which resulted from trust receipts or resulted from the term loan. During the nine months period ended March 31, 2014, the Company had a net total of $44,966 gain on foreign currency exchange none of which resulted from trust receipts or resulted from the term loan.