A Stronger <strong>Leeden</strong> in Asia.Chairman’sStatementDear Shareholders,The year <strong>2010</strong> has been a challenging year for companies inthe oil and gas industries. Despite the uncertain environment,I am pleased to report that the Group’s turnover grew by2.9% to S$191.5 million for FY<strong>2010</strong>. Net profit attributableto shareholders, however, declined by 14.4% to S$7.6million mainly due to lower contribution from the Propertydivision and increase in operating expenses as the Groupexpands its regional footprints.The Group has attained consecutive record revenue everyyear with no exception in <strong>2010</strong>. Registering a compoundannual growth rate in revenue of 21.3% over the past 10years was made possible with good management foresightto focus on the Group’s core business in Welding, Gas andSafety then. Going forward, we will be consolidating ourpresence in the region and expand our product offerings tocapture more market share.Regional MarketSingapore has been the traditional market of the Group. TheGroup has focused on growing its regional businesses overthe past 5 years and has to date, established presence inThailand, Vietnam, Indonesia, China and the Philippines. Ourgeographical expansion efforts has paid off with revenuecontribution from Malaysia exceeding that of Singapore forthe first time in FY<strong>2010</strong>. Turnover from Malaysia improvedfrom 38% to 43% of total revenue for FY<strong>2010</strong>, which wasmarginally higher than the 42% revenue contribution fromSingapore. We have also witnessed increasing revenuecontribution from Indonesia.Increase Product OfferingWe intend to work more closely with our principals toextend our product offerings to our customers in the region.Many of our principals have indicated that they will supportus in our regional growth. In <strong>2010</strong>, the Group receivednumerous awards and accolades from our principals for<strong>Leeden</strong>’s Group Sales turnover over the last 10 years (S$’000)200,000157,239186,148191,585150,000100,00073,30786,066102,89250,00033,80827,75328,58839,935002001 2002 2003 2004 2005 2006 2007 2008 2009 <strong>2010</strong>
<strong>Leeden</strong> <strong>Limited</strong> <strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>outstanding sales performances. Awards include CRC-Evans - 32 Years of Association, E.H. Wachs – 30 Years ofSuperior Performance, ITW Group – Outstanding Distributorfor 25 Years, Nederman – 30 Years of Success, Red WingShoe Company – <strong>2010</strong> Distributor of the Year/32 Yearsof Progressive Partnership, Thermadyne – <strong>2010</strong> SalesAchievement Award, UVEX - Platinum Partner Southeast Asiaand Wescol – 30 Years of Co-operation and Friendship.During the year, we have also gained many importantnew agencies to expand our product range to support ourcustomers in the provision of total integrated welding, gasand safety solutions. We were offered the agencies of EGAMaster, Snap-On Tools, Stanley Proto, Western Enterprises,GfG and Louisville Ladder.In the countries where we are not agents for the products,we introduced our own brand “Auweld”, with the slogan of“All You Need For Welding”. This completes the productofferings to our customers.Expand Manufacturing CapabilitiesRevenue contribution from our manufacturing arm hasexceeded 45% of the Group’s revenue in FY<strong>2010</strong>. To bettercater to the needs of our customers, we are expandingour manufacturing capabilities and infrastructure so as toenhance capacity and product offerings. Construction ofthe Group’s third welding consumables factory in Malacca,Malaysia is expected to be completed this year and willcommence production by the 3rd quarter of 2011. Withthe Eversafe factory in Malaysia running at full capacity,we have expanded into Jiangyan, China to set up a newplant for the manufacturing of fire-fighting equipment. Theplant was completed in <strong>2010</strong> and is presently undergoingproduct testing to obtain certifications to qualify for exportsto various countries.The Group entered into a joint venture with Wescol, a UKcompany with over 30 years of track record in oxy/fuelcutting, welding and heating products, to manufacturegas-cutting apparatus in <strong>2010</strong>. Wescol will be marketingthe end products in the European market while we will bemarketing under our “Auweld” brand in Asia market.Build “<strong>Leeden</strong>” BrandThe Group continues to consolidate its brand equity tocreate long-term sustainable growth. The Group completedits rebranding exercise in <strong>2010</strong> with the consolidationof its Welding and Safety business under the “<strong>Leeden</strong>”umbrella by transferring the trading activities of the weldingdivision under American Dynamics to <strong>Leeden</strong> DistributionPte Ltd. The Industrial Gas business, on the other hand,will continue to be operated under the NIG brand. This is abig step towards building a stronger brand identity as theGroup’s advertising and promotional collaterals can now bemarketed as one “<strong>Leeden</strong>” brand.Business School, Department of Accounting, supervisedby Assoc Prof Mak Yuen Teen. This project has identifiedareas of improvement for the Group to further enhance ourcorporate governance standard.Risk ManagementA Risk Management Committee was formed in April <strong>2010</strong>for the purpose of identifying and mitigating risk for theGroup. The Committee will assess and evaluate risks atboth macro and operational level.Both the COO and myself had attended courses in bizSAFEand obtained certification in Level 1 for <strong>Leeden</strong> <strong>Limited</strong>,<strong>Leeden</strong> Distribution Pte Ltd and National Industrial GasesPte Ltd. Following this, the Group has successfully attainedLevel 2 of the bizSAFE certification in February 2011. Weare working towards obtaining bizSAFE certification Level 3for the Group.Social ResponsibilityCorporate Social Responsibility is increasingly being seenas an important and integral part of normal businessoperations. At <strong>Leeden</strong>, we embrace the socially responsiblebusiness practices and fair operations by giving back to thesociety. We were involved in voluntary activities at SunshineWelfare Action Mission (“SWAMI”) in April <strong>2010</strong>. To initiatea healthy living and work-life balance for our employees,we kick-started the Healthy Lifestyle Program in January2011.Build <strong>Leeden</strong> TalentFor succession planning and to support our regional growth,the Group pays considerable attention to Human ResourceManagement. Apart from upgrading the skills of existingtalent pool through our in-house training facility, we alsowelcome new “blood” to join the Group at all levels. TheGroup continues with its university recruitment programboth in Singapore and Malaysia and has recruited severalnew graduates with excellent potential.AppreciationIn appreciation of the support of the shareholders, theBoard has recommended a final dividend of 0.50 Singaporecent per share, subject to shareholders approval, which isin addition to the interim dividend of 1.0 Singapore centper share declared and paid on 2 September <strong>2010</strong>. Thismarks the highest level of dividend paid by the Companyin the past 10 years with a record dividend payout ratio of34.3%.Last but not least, I would like to convey my appreciationand thanks to our shareholders, business associates,customers, suppliers, our board of directors and staff fortheir support to the management and to <strong>Leeden</strong>.Corporate GovernanceAs a listed company, we need to continuously work onupgrading our standard of corporate governance. In <strong>2010</strong>,we embarked on a governance review project with a teamof students from the National University of SingaporeSteven ThamChairman & Chief Executive Officer15 March 20110
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