14
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
OPERATIONS
& BUSINESS REVIEW
to the full twelve months of expenses.
The increase was mainly due to the
following:
• Impairment
loss
in
respect
of
goodwill attributable to ECG, goodwill
attributable to property development
projects in Singapore, and property,
plant and equipment amounted to
$16.4 million, representing an increase
of $13.6 million compared to the
impairment loss on goodwill and fair
value of development properties of
$2.8 million incurred by the Property
Development segment in FY2015.
In the best interests of the Group’s “The
Other income
Other income increased by $2.2 million from
$0.8 million in FY2015 to $3.0 million in
FY2016. The increase is mainly due to the
following (the amounts below do not add up
due to rounding):
• The Group recorded a gain on disposal
of property, plant and equipment of
$1.5 million, mainly arising from the
disposal of one of the Marine & Offshore
segment’s property at 47 Tuas Avenue 9.
• Fair value gain on derivatives increased
by $0.3 million.
• Grants received increased by $0.1 million.
• Foreign exchange gains increased by
$0.2 million.
Other items of expense
Distribution expenses increased by $0.4
million or 13.6% in FY2016 to $3.3 million
from $2.9 million in FY2015. The increase is
mainly due to the following:
• The Marine & Offshore segment incurred
an increase of $0.2 million in distribution
costs mainly as a result of an increase in
commission expenses, handling charges
and delivery expenses.
• The Property Development segment’s
distribution costs increased by $0.2
million in FY2016 mainly due to an
increase in air fares and accommodation
costs,
exhibition
expenses
and
commission expenses.
Administrative expenses increased by $1.9
million or 16.2% from $12.2 million in FY2015
to $14.1 million in FY2016. The increase is
mainly due to:
• The Marine & Offshore segment’s
administrative
expenses
increased
by $1.4 million. Director and staff
remuneration increased by $1.1 million as
a result of an increase in headcount and
an increase in average salaries pay-out.
The segment also incurred professional
fees and agent commission relating to
the disposal of its leasehold property
at 47 Tuas Avenue 9 amounting to
$0.3 million.
• The Property Development segment’s
administrative
expenses
increased
by $1.4 million mainly because ECG
contributed seven months of expenses
to the results in FY2015, whereas in
FY2016, ECG contributed twelve months
of expenses. The Property Development
segment’s administrative expenses of
$4.0 million in FY2016 consists mainly of
director and staff remuneration of $3.5
million, and legal and professional fees of
$0.2 million.
The increase was partially offset by:
• Legal and professional fees incurred by
the Group’s head office reduced by $0.9
million. In FY2015, the Group had incurred
legal and professional fees relating to the
acquisition and exploration of business
opportunities in the region, including the
acquisition of ECG on 28 November 2014,
and of “Liha” Shipservice B.V. and Store
Rijnmond B.V. on 31 December 2014. The
Group did not incur legal and professional
fees relating to acquisitions in FY2016.
Other operating expenses increased
by $14.8 million from $11.0 million in
FY2015 to $25.8 million in FY2016.
The increase of $13.8 million in other
operating expenses is attributable to the
Property Development segment, arising
from the newly acquired subsidiaries of
ECG in HY2015 which now contributes
