15
Annual Report 2015
TEHO INTERNATIONAL INC LTD.
INCOME TAX CREDIT / (EXPENSES)
In FY2015, the Group recorded an income tax
expense of $0.2 million compared to a small
income tax credit in FY2014. The income
tax credit in FY2014 was attributable to an
adjustment for overprovision for deferred tax
expense of $0.1 million in prior years.
(LOSS) / PROFIT FOR THE YEAR
The Group recorded a loss for the year of $7.7
million compared to a profit of $3.4 million
in FY2014. The loss for the year was mainly
attributable to the following reasons:
i. The Property Development segment
had incurred substantial expenses on
marketing, advertising and promotional
activities relating to the joint venture in
Cambodia developing the residential
project “The Bay”. These marketing
and promotional activities are essential
and important to ensure success of the
project. However, such expenses have to
be expensed when incurred and cannot
be capitalised in FY2015. Further, in
accordance with revenue recognition
principles in the financial reporting
standards, the Property Development
segment has not recorded revenue arising
from the project in FY2015. In line with
the Group’s plan to grow the property
development and real estate business, the
Property Development segment has also
incurred professional fees for businesses
in Cambodia as well as expenses for
exploring business opportunities in the
region. Some of these projects did not
materialize. In addition, the Property
Development segment incurred increased
staff and director remuneration in FY2015;
and
ii. FY2015 was a challenging one for
the Singapore property market due to
lacklustre market momentum arising
from cooling measures implemented by
the Singapore government. The open
market value of the Group’s unsold units
of development property in Singapore
declined slightly compared to that in the
previous financial year. Consequently,
the Group made an impairment charge
in respect of the goodwill attributable
to the Property Development segment’s
property development projects in
Singapore and foreseeable losses on
those development properties.
FINANCIAL POSITION
NON-CURRENT ASSETS
Non-current assets increased by $16.8 million
or 40.2% to $58.7 million as at 30 June
2015 from $41.8 million as at 30 June 2014.
The increase is mainly due to the following:
• Intangible assets increased by $9.7million.
Based on preliminary purchase price
allocation exercises in relation to the
acquisition of ECG, the transaction has
given rise to intangible assets amounting to
$12.5million. This is offset by an impairment
loss on goodwill relating to the Property
Development segment amounting to
$2.2 million, and amortisation of intangible
assets relating to the Marine, Offshore Oil
& Gas segment amounting to $0.5 million.
• Property, plant and equipment increased
by $7.1 million. As part of the acquisition
of ECG and Liha, the Group acquired
plant and equipment of approximately
$0.5 million. In addition, the Group
acquired property, plant and equipment
of $5.3 million during the year. The Group
made a revaluation gain on the leasehold
properties, resulting in an increase in the
carrying value of $3.0 million. This was
offset by depreciation of $1.6 million.
Similar to FY2014, the majority of the
non-current assets are located in Singapore
in FY2015.
