Annual Report 2010 - Leeden Limited

Leeden Limited Annual Report 2010outstanding 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 – 2010 Distributor of the Year/32 Yearsof Progressive Partnership, Thermadyne – 2010 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 FY2010. 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 2010 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 2010. Wescol will be marketingthe end products in the European market while we will bemarketing under our “Auweld” brand in Asia market.Build “Leeden” BrandThe Group continues to consolidate its brand equity tocreate long-term sustainable growth. The Group completedits rebranding exercise in 2010 with the consolidationof its Welding and Safety business under the “Leeden”umbrella by transferring the trading activities of the weldingdivision under American Dynamics to Leeden 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 “Leeden” 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 2010for 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 Leeden Limited,Leeden 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 Leeden, 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 2010. To initiatea healthy living and work-life balance for our employees,we kick-started the Healthy Lifestyle Program in January2011.Build Leeden 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 2010. 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 Leeden.Corporate GovernanceAs a listed company, we need to continuously work onupgrading our standard of corporate governance. In 2010,we embarked on a governance review project with a teamof students from the National University of SingaporeSteven ThamChairman & Chief Executive Officer15 March 20110