Page 6 - ar2012

of TEHO Engineering has brought along a different set
of customers as it serves mainly the offshore oil & gas
market. The Group is now in a better position to cross-
sell its products to these new customers and provides
wider solution packages to better serve our customers’
needs. Notably, this has attributed to the increase in
revenue contribution from the offshore oil & gas business
segment, rising from S$1.6 million in FY2011 to S$2.7
million in FY2012.
The Group has also incorporated a wholly-owned
subsidiary, TEHO Offshore Pte Ltd, during the year with
a view towards expanding its offshore oil & gas segment.
This reiterates the Group’s commitment in scaling up its
operations through increased exposure in new markets.
Business Updates
As the Group continues to expand its operations and
product offerings, we are mindful of the importance of
putting in place a structured and robust system that will
facilitate the Group’s growth. In this respect, the Group
is committed to continually review and improve its
organizational processes so that we can achieve a leaner
and optimal cost structure. I believe these processes will
gradually translate into higher effciency and productivity
for the Group.
Building up a team of competent and dynamic workforce
is of paramount importance as well. Our employees
are the primary contact points for our customers. A
knowledgeable and skilled workforce will improve
Chairman’s Statement
and enhance the Group’s effciency, productivity,
competitiveness and industry reputation on the whole,
and will also enhance the executional capabilities to
recommend appropriate products and solutions for
our customers. In this respect, the Group has actively
enrolled its employees in regular courses and seminars
to upgrade their skills and knowledge through accredited
and qualifed agencies.
Cashfow management is also high on the Group’s
priority list. In this respect the Group has implemented
various cost control measures with a view to achieve
better management of its working capital. The Group
assesses and reviews its debtors’ aging days regularly
and constantly evaluates its credit policy to minimize
collection risks. The Group has also taken up credit
insurance coverage to mitigate the potential credit default
risk in view of the challenging global economic outlook.
Outlook & Strategies
We continue to adopt a cautious stance towards the
general marine and offshore industries. The operating
environment is expected to remain demanding and
competitive going forward. Nonetheless, the Group takes
this opportunity to strengthen its business foundations
through organic expansions into new markets and to
provide a more comprehensive products range. Moving
ahead, the Group plans to set up more logistics points at
major ports around the world. These logistics points will be
strategically located in Asia, Europe and Middle Eastern
regions to provide our customers with greater access to
our Group’s products and services, and also enables the
Group to attend and respond to our customers’ needs on
a timely basis.
We will continually review and evaluate our business
strategies so as to stay relevant and competitive in this
challenging market and economic environment.
Dividend
I am pleased to report that the Board has recommended
a frst and fnal one-tier tax exempt cash dividend of
0.8 Singapore cent per ordinary share for FY2012. This
is consistent with what we paid out in FY2011. This
translates to a dividend payout ratio of 40.2% and a
dividend yield of about 4.8% on the share price as at 6
September 2012.
Appreciation
I would like to take this opportunity to express my
sincere thanks to my fellow Directors for their guidance
and advice, and, to the management and staff for their
dedication and commitment to the Group. My heartfelt
appreciation and gratitude also goes to the Group’s
business associates, bankers, suppliers and customers
for their unwavering support, and to the shareholders for
their support and confdence in the Group.
I look forward to meeting all our shareholders at the
forthcoming Annual General Meeting.
Lim See Hoe
Executive Chairman and CEO
TEHO INTERNATIONAL INC LTD Annual Report 2012 4