Page 44 - ar2012

TEHO INTERNATIONAL INC LTD Annual Report 2012 42
Notes to the
Financial Statements
30 June 2012
4. Financial Information by Operating Segments
4A. Information about Reportable Segment Proft or Loss, Assets and Liabilities
FRS 108 requires the disclosure of information about operating segments, products and
services, the geographical areas, and the major customers. This disclosure standard
has no impact on the reported results or financial position of the group.
For management purposes, the group is organised into three major operating divisions –
Marine, Offshore Oil & Gas and Others. The group sells rigging and mooring equipment
and offshore oil and gas equipment. The three major divisions are determined by the
customers’ nature of businesses that may reflect the risks and returns associated with
each business segment. It represents the basis on which the management reports the
primary segment information. They are managed separately because each business
requires different strategies.
The segments are as follows:
Marine – customers who are mainly ship chandlers, ship owners, shipyards, port
operators and ship management companies.
Offshore Oil & Gas – customers involved in the construction and repair of drilling and
offshore platforms.
Others – customers in construction, defence, logistics and other industries including
trading.
Inter-segment sales are measured on the basis that the entity actually used to price the
transfers. Internal transfer pricing policies of the group are as far as practicable based
on market prices. The accounting policies of the operating segments are the same as
those described in the summary of significant accounting policies.
The management reporting system evaluates performances based on a number
of factors. However the primary profitability measurement to evaluate segment’s
operating results comprises a major financial indicator: earnings from operations before
depreciation, interests and income taxes (called “Recurring EBITDA”).
4. Financial Information by Operating Segments (Continued)
4B. Proft or Loss from Continuing Operations and Reconciliations
Marine
Offshore
Oil & Gas Others Unallocated Group
$ $ $ $ $
Continuing
Operations 2012
Revenue
by Segment
Total revenue by
segment 27,920,314 2,683,569 6,762,572 – 37,366,455
Total revenue 27,920,314 2,683,569 6,762,572 – 37,366,455
Recurring EBITDA 7,627,958 842,099 2,659,111 – 11,129,168
Amortisation – (216,000) – – (216,000)
Finance costs – – – (359,922) (359,922)
Depreciation – – – (748,971) (748,971)
Unallocated items – – – (6,899,846) (6,899,846)
Share of proft from
equity-accounted
associate – – – 5,133 5,133
Proft before tax
from continuing
operations 2,909,562
Income tax expense (670,585)
Proft from
continuing
operations 2,238,977