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Internal Controls Review

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Dec 02, 2009

The Board of Directors of Teho International Inc Ltd. (the "Company") refers to the Company's Offer Document dated 25 May 2009 ("Offer Document") in relation to the initial public offering of the Company's shares on the Catalist.

The Board wishes to provide an update where the Audit Committee (the "AC") will, for at least the first two years after our Company's listing, (i) commission the external auditors or a suitable accounting firm to review the adequacy of our Group's system of internal controls; (ii) ensure that all internal control weaknesses are satisfactorily and properly rectified; and (iii) update the SGX-ST on any findings of the external auditors or accounting firm and any follow-up action taken by our Audit Committee.

In this regard, on 30 June 2009, the Board through the recommendation of the AC had appointed Ernst & Young Risk Advisory Services Pte Ltd ("Ernst & Young") to review, recommend and subsequent rectifications follow-up on the Group's internal controls system, and to expand and enhance on its policies and procedures manual.

Ernst & Young has recently completed the first review which covered the following processes:

(a) Inventory management
(b) Purchase, payables and payments
(c) Financial close reporting

A number of areas for improvement were identified relating to internal controls. The AC at its meeting on 26 November 2009 had reviewed the findings and noted that rectification actions have been agreed between Ernst & Young and the Company's management (the "management") to address the areas for improvements, and the management has already implemented and/or will implement such actions by 31 March 2010.

The second review will cover the following processes:

(d) Sales, receivables and collections
(e) Treasury and cash management
(f) Human resources and payroll

An appropriate announcement will be made when the second review is completed.

BY ORDER OF THE BOARD
TEHO INTERNATIONAL INC LTD.


Kwah Thiam Hock
Independent Director and Chairman of the Audit Committee
Date: 2 December 2009



This announcement has been prepared by the Company and reviewed by the Company's Sponsor, Collins Stewart Pte. Limited. The Company's Sponsor assumes no responsibility for the contents of this announcement.

This announcement has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this announcement, including the correctness of any of the statements or opinions made or reports contained in this announcement.

The contact person for the Sponsor is Mr. Alex Tan Tiong Huat, Managing Director, Corporate Finance, Collins Stewart Pte. Limited at 77 Robinson Road #21-02 Singapore 068896, telephone (65) 6854 6160.