77
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
NOTES
TO THE FINANCIAL STATEMENTS
Year ended 30 June 2016
16 LOANSAND BORROWINGS (CONT’D)
The details of the guarantees and securities charged over the secured bank loans are
as follows:
Term loans U
- The loans are covered by a corporate guarantee
by the Company amounting to $36,350,000
and secured by legal charges over the leasehold
buildings of a subsidiary.
Term loan E
- The loan is covered by a corporate guarantee by
the Company.
Revolving credit facilities
- The facilities are covered by corporate guarantees
by the Company. In addition, revolving credit
facilities amounting to $7,500,000 are secured
by legal charges over a leasehold building of a
subsidiary.
Property development loans - The loans are secured by legal mortgages on the
development properties of certain subsidiaries,
and sales proceeds from these development
properties.
Property term loans
- The loans are covered by corporate guarantees by
the Company and secured by legal mortgages over
the leasehold buildings of certain subsidiaries.
Breach of loan covenant
2016
The Group has a secured bank loan and short-term facilities with carrying amounts of
$2,000,000 and $178,647 at 30 June 2016 respectively.
16 LOANSAND BORROWINGS (CONT’D)
The secured bank loan contains a covenant requiring the tangible networth of a subsidiary
to be not less than $10,000,000 at all times. However, the tangible net worth of the
subsidiarywas less than $10,000,000 at 30 June 2016. Accordingly, the loan was recalled
and is repayable by October 2016, January 2017 and April 2017. The said outstanding loan
of $2,000,000 has been classified as current liabilities at 30 June 2016.
The short-term facilities contain a covenant requiring the total liabilities of a subsidiary to
be not more than 175% of its tangible net worth at all times. However, the total liabilities of
the subsidiarywas more than 175% of its tangible net worth at 30 June 2016. Accordingly,
the short-term facilities have been classified as current liabilities at 30 June 2016.
2015
The Group had a secured bank loan with a carrying amount of $2,000,000 at 30 June
2015. The loan was repayable on 29 September 2015. The loan contained a covenant
requiring the tangible net worth of a subsidiary to be not less than $10,000,000 at all
times. However, the tangible net worth of the subsidiarywas less than $10,000,000 at 30
June 2015. Accordingly, the loan became repayable on demand. The subsidiary obtained a
waiver in relation to the breach in August 2015.
Finance lease liabilities
Finance leases are payable as follows:
Present value
Future minimum
of minimum
lease payments Interest lease payments
$
$
$
Group
2016
Within 1 year
18,828
(2,133)
16,695
Between 1 and 5 years
42,351
(2,005)
40,346
61,179
(4,138)
57,041
