14
TEHO INTERNATIONAL INC LTD.
Annual Report 2015
OPERATIONS &
BUSINESS REVIEW
Administrative expenses increased by $4.0
million or 48.9% from $8.2 million in FY2014 to
$12.2 million in FY2015. The increase is mainly
due to the following:
• Legal and professional fees incurred by
the Group’s head office increased by $0.8
million. The increase is mainly attributable
to the Group’s acquisition and exploration
of business opportunities in the region.
The Group successfully completed the
acquisition of ECG on 28 November
2014, and of “Liha” Shipservice B.V. and
Store Rijnmond B.V. (collectively “Liha”)
on 31 December 2014. Some of the
overseas projects under exploration did not
materialise.
• Head office staff remuneration increased
by $0.2 million as a result of an increase in
average salaries pay-out and an increase in
head office headcount.
• Staff remuneration for the Marine, Offshore
Oil & Gas segment increased by $0.4 million
as a result of an increase in headcount.
• The Property Development segment
incurred administrative expenses of $2.6
million in FY2015, which includes staff and
director remuneration of $1.9 million, and
legal and professional fees of $0.6 million.
The legal and professional fees were incurred
in relation to The Bay project in Cambodia.
Other operating expenses increased by $6.2
million from $4.9 million in FY2014 to $11.0
million in FY2015. The increase of $4.5 million
in other operating expenses is attributable to
the Property Development segment, arising
from the newly acquired subsidiaries of ECG.
These expenses comprise mainly of the
following items:
• Impairment loss in respect of goodwill
attributable to the Property Development
segment’s property development projects
in Singapore and foreseeable losses on
those development properties amounting
to $3.0 million.
• Commission expense of $0.6 million.
• Rental expense of $0.4 million.
• Depreciation expense, entertainment
expense and telephone charges of
$0.3 million.
• Impairment loss on an associated
company, allowance for doubtful debts and
loss on disposal of plant and equipment
amounting to $0.2 million.
The remaining $1.7 million increase in other
operating expenses is mainly attributable to
the following items in the Marine, Offshore Oil
& Gas segment:
• Foreign exchange losses increased by
$0.6 million.
• Depreciation expense increased by
$0.4 million mainly resulting from the
upward revaluation of the warehouses.
• Allowance for doubtful debts increased
by $0.3 million.
• Staff welfare expenses increased by
$0.1 million.
Finance costs increased from $0.4 million in
FY2014 to $0.8 million in FY2015. This is partly
because loans and borrowings increased by
$13.4 million from $49.1 million in FY2014 to
$62.5 million in FY2015. In addition, interest
rates have increased during the year.
