XML 66 R15.htm IDEA: XBRL DOCUMENT

INVESTMENT PROPERTIES

3 Months Ended

Dec. 31, 2012

Note 9 - 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 December 31, 2012. The exchange rate is based on the exchange rate as of December 31, 2012 published by the Monetary Authority of Singapore.

	Investment Date	Investment Amount			Investment Amount
		(RMB)			(U.S. Dollars)
Purchase of rental property – Property I - MaoYe	01/04/2008		5,554			891
Purchase of rental property – Property II - JiangHuai	01/06/2010		3,600			577
Purchase of rental property – Property III - Fu Li	01/06/2010		4,025			646
Gross investment in rental property			13,179			2,114
Accumulated depreciation on rental property	31/12/2011		(1,972	)		(316	)
Net investment in property – China			11,207			1,798

	Investment Date	Investment Amount			Investment Amount
		(RM)			(U.S. Dollars)
Purchase of rental property – Penang Property I	31/12/2012		681			223
Gross investment in rental property			681			223
Accumulated depreciation on rental property	31/12/2012		(267	)		(88	)
Net investment in property – Malaysia			414			135

Rental Property I

In fiscal 2008, Trio-Tech (Chongqing) Co. Ltd. (“TTCQ”) entered into a Memorandum Agreement with MaoYe Property Ltd. to purchase an office space in Chongqing, China, for a total cash purchase price of RMB 5,554. TTCQ rented this property to a third party on July 13, 2008. The term of the rental agreement was five years. For the first three years the monthly rental income was at RMB 39 or approximately $6 based on the average exchange rate for the period six months ended December 31, 2012. In the fourth year, commencing in July 2011, the rental increased by 8%, resulting in a monthly rental income of RMB 41, or approximately $7 based on the average exchange rate for the six month period ended December 31, 2012. In the fifth year, commencing in July 2012 the rental increased by another 8%, resulting in a monthly rental income of RMB 45, or approximately $7 based on the average rate for the six month period ended December 31, 2012.

Property purchased from Mao Ye generated a rental income of RMB 135, or approximately $22 and RMB 269, or approximately $43 for the three and six months ended December 31, 2012, respectively, and RMB 124, or approximately $19, and RMB 249, or approximately $39 respectively for the same periods in the last fiscal year, respectively.

Rental Property II

In fiscal 2010, TTCQ purchased eight units of commercial property in Chonqing, China, from Chongqing JiangHuai Real Estate Development Co., Ltd, for a total purchase price of RMB 3,600. TTCQ rented these commercial units to a third party and renewed the rental agreement of this property on January 8, 2011. The rental agreement provided for a one-year renewable term with an annual rental income of RMB 720, or approximately $115 based on the average rate for the period six month period ended December 31, 2012.

The lease agreement for the property purchased from JuangHuai expired in January 2012 and did not generate any rental income for the three and six months ended December 31, 2012. However it generated a rental income of RMB 180, or approximately $28 and RMB 360, or approximately $56 for the same periods in the last fiscal year. Management reviewed this asset for impairment and, based on the market value of the property as compared to the carrying value, concluded that there was no need to impair the property.

Other Properties III – Fu Li

In fiscal 2010, TTCQ entered into a Memorandum Agreement with Chongqing Fu Li Real Estate Development Co. Ltd., to purchase two commercial properties totaling 311.99 square meters (“office space”) located in Jiang Bei District Chongqing. Although TTCQ currently rents its office premises from a third party, it intends to use the office space as its office premises. The total purchase price committed and paid was RMB 4,025, or approximately $646 based on the exchange rate as of December 31, 2012. The construction was completed and the property was handed over during April 2012 and the documentation of the change of title is in process.

Property purchased from Fu Li generated a rental income of RMB 70, or approximately $11 and RMB 127, or approximately $20 for the three and six months ended December 31, 2012, respectively, and RMB 180, or approximately $28 and RMB 360, or approximately $56, respectively for the same period in the last fiscal year.

Penang Property I

Since the market value of the factory building in Penang, Malaysia is increasing significantly, during the second quarter of fiscal 2013 Trio-Tech Malaysia (TTM) changed the plans of sale and concluded to hold the factory building in Penang and is looking for tenant to rent the factory building. Hence,, TTM has re-classified the factory building as investment property, which has a net book value of $135.

Summary

Total rental income for all investment properties (Property I, II and III) in China was $33 and $63 for the three and six months ended December 31, 2012 respectively and was $47 and $95 respectively for the same period in the last fiscal year.