tomei annualreport2013
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Tomei Consolidated Berhad Annual Report 2013
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TABLE OF
CONTENTS
1
2
7
15
Table of Contents
Financial Highlights
Corporate Information
Corporate Structure
Corporate Profile
Profile of the Board of Directors
Chairmans Statement
Statement on Corporate
Governance
Statement on Corporate
Social Responsibilities
Audit Committee Report
Statement on Risk Management
& Internal Control
Additional Compliance Information
Directors' Responsibility Statement
Financial Statements
List of PropertiesShareholdings Analysis
Notice of Annual General Meeting
Statement Accompanying Notice
of Annual General Meeting
Proxy Form
03
04
06
09
21
22
25
30
31
123
28
120121
127
129
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5 YEARS FINANCIAL
HIGHLIGHTS
5 Years Financial Highlights
Revenue (RM ' 000)
Profit / (Loss) Before Tax (RM ' 000)
Profit / (Loss) Attributable to Owners
of the Parent (RM ' 000)
Total Shareholders' Fund (RM ' 000)
Net Tangible Assets Per Share (RM)
Net Earnings / (Loss) Per Share (Sen)
Gross Dividend Per Share (Sen)
2009
300,890
26,318
18,239
128,712
1.02
14.48
3.00
2010
356,286
30,446
21,381
152,312
1.10
15.63
3.30
2011
505,387
45,705
31,198
183,131
1.32
22.51
3.50
2012
583,157
21,669
14,242
192,397
1.39
10.28
2.00
2013
701,907
(3,736)
(4,405)
186,490
1.35
(3.18)
1.00
TOMEI CONSOLIDATED BERHAD (692959-W)
ANNUAL REPORT 2013
Page2
RM'
00
0
2009Year
2010 2011 2012 2013(10,000)
-
10,000
20,000
30,000
40,000
50,000
Profit / (Loss)
Before Tax
(5.00)
-
5.00
10.00
15.00
20.00
25.00
Sen
Net Earnings / (Loss)Per Share
2009 2010 2011 2012 2013Year
(5,000)
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
RM'
00
0
2009 2010 2011 2012 2013Year
Profit / (Loss) Attributableto Owners of the Parent
-
200,000
400,000
600,000
800,000
2009Year
2010 2011 2012 2013
RM'
000
Revenue
2009 2010 2011 2012 2013Year
Total Shareholders'Fund
-
50,000
100,000
150,000
200,000
RM'
000
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
RM
Net Tangible AssetsPer Share
2009 2010 2011 2012 2013Year
2009 2010 2011 2012 2013Year
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Sen
Gross DividendPer Share
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CORPORATE
INFORMATIONBOARD OF DIRECTORS
Tan Sri Datuk Ng Teck FongGroup Executive Chairman
Datuk Ng Yih PyngGroup Managing Director
Raja Dato Seri Aman Bin Raja Haji AhmadSenior Independent Non-Executive Director
Datin Nonadiah Binti Abdullah
Independent Non-Executive Director
M Chareon Sae Tang @ Tan Whye AunIndependent Non-Executive Director
Lau Tiang HuaIndependent Non-Executive Director
Datin Choong Chow MooiGroup Executive Director
Ng Yih ChenGroup Executive Director
Ng Sheau Chyn
Group Executive Director
Ng Sheau YuenGroup Executive Director
AUDIT COMMITTEE
Lau Tiang HuaChairman, Independent Non-Executive Director
Raja Dato Seri Aman Bin Raja Haji AhmadSenior Independent Non-Executive Director
M Chareon Sae Tang @ Tan Whye AunIndependent Non-Executive Director
RISK MANAGEMENT COMMITTEE
Lau Tiang HuaChairman, Independent Non-Executive Director
Raja Dato Seri Aman Bin Raja Haji AhmadSenior Independent Non-Executive Director
M Chareon Sae Tang @ Tan Whye AunIndependent Non-Executive Director
Datuk Ng Yih PyngGroup Managing Director
REMUNERATION COMMITTEE
M Chareon Sae Tang @ Tan Whye AunChairman, Independent Non-Executive Director
Lau Tiang HuaIndependent Non-Executive Director
Datuk Ng Yih PyngGroup Managing Director
NOMINATION COMMITTEE
M Chareon Sae Tang @ Tan Whye AunChairman, Independent Non-Executive Director
Datin Nonadiah Binti AbdullahIndependent Non-Executive Director
Lau Tiang HuaIndependent Non-Executive Director
COMPANY SECRETARY
Teoh Kok Jong (LS 04719)
REGISTERED OFFICE
Suite B13A-4, Tower B, Level 13A,
Northpoint Offices, Mid Valley City,
No. 1, Medan Syed Putra Utara,
59200 Kuala Lumpur.
Tel: 03-2287 1608
Fax: 03-2287 6608
PRINCIPAL PLACE OF BUSINESS
8-1, Jalan 2/131A,
Project Jaya Industrial Estate,
Batu 6, Jalan Kelang Lama,
58200 Kuala Lumpur.Tel: 03-7784 8136
Fax: 03-7784 8140
Website: www.tomei.com.my
AUDITOR
BDO (AF 0206)
12th Floor, Menara Uni.Asia,
1008, Jalan Sultan Ismail,
50250 Kuala Lumpur.
PRINCIPAL BANKERS
United Overseas Bank (M) Berhad (271809-K)
Level 2, Menara UOB,
Jalan Raja Laut,50350 Kuala Lumpur.
HSBC Bank Malaysia Berhad (127776-V)
3rdFloor, North Tower,
No 2, Jalan Ampang,
50100 Kuala Lumpur.
RHB Bank Berhad (6171-M)
Level 7, Tower 3, RHB Centre,
Jalan Tun Razak,
50400 Kuala Lumpur.
Ambank (M) Berhad (8515-D)
Level 12A, Menara Dion,
Jalan Sultan Ismail,
50250 Kuala Lumpur.
Hong Leong Bank Berhad (97141-X)
Ground Floor, Tower A,
PJ City Development,
15A, Jalan 219, Section 51A,
46100 Petaling Jaya,
Selangor.
SHARE REGISTRAR
Bina Management (M) Sdn. Bhd. (50164-V)
Lot 10, The Highway Centre,Jalan 51/205,
46050 Petaling Jaya,
Selangor.
STOCK EXCHANGE LISTING
Main Market,
Bursa Malaysia Securities Berhad (30632-P)
Stock Code: 7230
Stock Name: TOMEI
TOMEI CONSOLIDATED BERHAD (692959-W)
ANNUAL REPORT 2013
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CORPORATE
STRUCTURE
TOMEI CONSOLIDATED BERHAD (692959-W)
ANNUAL REPORT 2013
TOMEI CONSOLIDATED BERHAD (692959-W)
100% Tomei Gold & Jewellery Manufacturing Sdn. Bhd. (184348-V)
100% Yi Xing Goldsmith Sdn. Bhd. (164963-M)
100% Tomei Marketing Sdn. Bhd. (16772-K)
100% Tomei Retail Sdn. Bhd. (701040-P)
100% Emas Assayer Sdn. Bhd. (513267-X)
100% Tomei International Limited (1069099)
100% Wealthy Concept Limited (1159171)
61% Gemas Precious Metals Industries Sdn. Bhd. (426096-W)
55% O M Design Sdn. Bhd. (925204-T)70% Tomei TI Sdn. Bhd. (763238-K)(under members voluntary winding up)
TOMEI RETAIL SDN. BHD. (701040-P)
100% My Diamond Sdn. Bhd. (555881-V)
100% TH Jewelry Sdn. Bhd. (590949-K)
100% Le Lumiere Sdn. Bhd. (758734-W)
100% De Beers Diamond Jewellers Sdn. Bhd. (1026561-M)
100% Cindai Permata Sdn. Bhd. (586915-X)
100% Tomei Gold & Jewellery Holdings (M) Sdn. Bhd. (33551-H)
100% Tomei Gold & Jewellery (MJ) Sdn. Bhd. (477070-V)
100% MyTomei Sdn. Bhd. (597346-T)100% Tomei Worldwide Franchise Sdn. Bhd. (649283-T)
100% Goldheart Jewelry (M) Sdn. Bhd. (924359-X)
100% Goldheart (M) Sdn. Bhd. (924360-H)
100% J & G Collections Sdn. Bhd. (380123-X)
100% Tomei Gold & Jewellery (WM) Sdn. Bhd. (526519-X) (under members voluntary winding up)
TOMEI GOLD & JEWELLERY HOLDINGS (M) SDN. BHD. (33551-H)
100% Tomei Gold & Jewellery (M.V.) Sdn. Bhd. (480795-A)
100% Tomei (Vietnam) Company Limited (473042000013)
100% Tomei Gold & Jewellery (K.P.) Sdn. Bhd. (559613-P) (under members voluntary winding up)
100% Tomei Gold & Jewellery (Klang) Sdn. Bhd. (176665-W)(under members voluntary winding up)
TOMEI GOLD & JEWELLERY (MJ) SDN. BHD. (477070-V)
100% Tomei Gold & Jewellery (S.A.) Sdn. Bhd. (180429-D) (under members voluntary winding up)
TOMEI GOLD & JEWELLERY MANUFACTURING SDN. BHD. (184348-V)
100% Lumiere 2006 Limited (1068733)
WEALTHY CONCEPT LIMITED (1159171)
100% Wealthy Concept Jewellery (Shenzhen) Company Limited (440301503321095)
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CORPORATE
PROFILE
Today, Tomei Group is an Integrated
Manufacturer and Retailer of Gold &
Jewellery. The needs to cater for the
demand of young and trendy lifestyle
propelled the Group to introduce My
Diamond, specializing in trendy white gold
and diamond collections to the market in
year 2002. The following year, the Group
set up its own boutique under the name
T.H. Jewelry to display its high end range
of collections. Following the successful
acquisition of Le Lumiere, a renownedinternational brand for Hearts & Arrows
Diamond in year 2007, the Group set up its
first Le Lumiere boutique in 2008. In 2011,
the Group further added on another brand
into its fold with the acquisition of
Goldheart displaying unique jewellery
series for wedding collections. In 2013, the
first De Beers Diamond retail outlet in
Malaysia was opened to the public and
managed exclusively by the Group.
As part of the Group continuous effort and
commitment to quality, the Group is
accredited with ISO in Quality
Management System for its retailing in
jewellery from Lloyds Register Quality
Assurance Kuala Lumpur since year 2003.
In the year 2003, the Group was awarded
with the status Superbrands Malaysia
2003/2004, being the first jeweller in
Malaysia to receive the award. Since year
2004, the Group has been consistently
awarded with the Fair Price Shop Awards
by the Ministry of Domestic Trade and
Consumer Affairs, Malaysia for its
excellent customer service at its retail
outlets. In 2010, the Group acclaimed its
position as a reputable brand in Malaysia
when it clinched the title Malaysian Brand
Certification awarded by SIRIM QAS
International Sdn. Bhd. and later the
Enterprise 50 awards in the year 2011. The
Groups reputation as among the most
trusted business enterprise was further
reinforced with the awarding of the 11thAsia Pacific International Honesty
Enterprise-Keris Award 2012. In 2013, the
Group won several awards under the Sin
Chew Business Excellence Awards 2013
including the much coveted Lifetime
Achievement Awards. During the same
year, it won the Eminent Eagle category for
the Golden Eagle Award 2013 and
managed to clinch both the MBA Industry
Excellence Awards (Retail) 2013 and the
Top 10 Asian Icon Award 2013.
Currently, the Group holds the exclusive
distribution right to sell 24k gold jewellery
under the brand Prima Gold and Batar
Jewellery in Malaysia. In line with the
increasing demand for gold investment
products and general acceptance to the
concept of e-commerce, the Group
introduces GoldSilver2u.com, an e-portal
specializing in gold and silver investment
since 2011. Tomei also has the licence to
manufacture, distribute and sell gold
products under Baby Looney Tunes and
Super Heroes copyright character in
Malaysia from Warner Bros. Consumer
Product Inc., USA.
Year 2006 opened up a new chapter in the
Groups history with the quotation of Tomei
Consolidated Berhad on the Main Market,
Bursa Malaysia Securities Berhad.
The Group was granted an Investment
licence to set up its manufacturing
activities in Socialist Republic of Vietnamin the year 2006, marking its maiden
overseas venture and currently has 1 retail
outlet and 5 retail kiosks in Vietnam
located in various shopping complexes.
The Group manufacturing facilities in
Vietnam produces jewellery for local
consumption as well as for export.
In the year 2008, the Group was granted a
Certificate of Approval to establish an
Enterprise in Peoples Republic of China
by Shenzhen Registrar of Trading and
Industries. Following the approval, the
Group commenced its own Tomei retail
kiosks, retailing various type of jewellery
and currently has 7 retail kiosks in China.
To date, the Group has 71 jewellery retail
outlets in Malaysia and 13 jewellery retail
presence overseas within 6 major umbrella
brands namely Tomei, My Diamond, T.H.
Jewelry, Le Lumiere, Goldheart and De
Beers.
Tomei was founded way back in 1968 with the commencement of business
in design and manufacturing of jewellery, supplying to local jewellers. As
the business grew, Tomei ventured into the establishment of first retail
outlet under the brand name TOMEI in Campbell Shopping Complex in
Kuala Lumpur in the early seventies and subsequently commenced the
business of wholesale and distribution of jewellery.
TOMEI CONSOLIDATED BERHAD (692959-W)
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PROFILE OF THE BOARD OF
DIRECTORSTan Sri Datuk Ng Teck Fong
Malaysian, 76 years of age, was appointed as Executive Chairman on 21 April 2006. He graduated with a Bachelor of Science degree inChemistry from the Taiwan National Cheng Kung University, Taiwan and was conferred the Honorary Professor title by the YunnanUniversity of Finance and Economics in 2008.
As the founder and Executive Chairman, he has been instrumental in the growth and development of the Group and is responsible for itsoverall strategic business direction. He brings with him more than 40 years of experience in the jewellery industry including preciousmetals and gemstones and is a respected authority in gold, silver, platinum and their alloys as well as other precious stones.
In his dedication to assure products of the highest quality, Tan Sri Datuk Ng assisted the establishment of the Fedmas Assay Office Sdn.Bhd. in Penang, Kuala Lumpur and Johor Bahru for the sole purpose of testing the precious metal content of jewellery and ensuringcompliance with national and international standards. He was the President of the Federation of Goldsmiths and Jewellers Association
for six years since 1996 and continues to serve as an advisor till now. He is also currently serving several other associations in variouscapacities. Tan Sri Datuk Ng received the recognition of a Lifetime Achievement presented by the Sin Chew Business Excellence Award2013 in recognition to his extensive contribution to the business and society.
Tan Sri Datuk Ng does not have any directorship in other public companies. His sons, Datuk Ng Yih Pyng and Mr Ng Yih Chen,daughters, Ms Ng Sheau Chyn and Ms Ng Sheau Yuen and daughter-in-law, Datin Choong Chow Mooi are also members of the Board.
Datin Nonadiah Binti Abdullah
Malaysian, 56 years of age, was appointedas Independent Non-Executive Director on21 April 2006. She graduated with aBachelor of Business (Administration) fromthe Royal Melbourne Institute ofTechnology in Australia in 1981 and
thereafter obtained a Diploma inMontessori Method of Education, St.Nicholas, London, United Kingdom. Shebegan her career in 1980 with the PublicWorks Department, Melbourne, Australiaas an Accounts Executive. She has alsoserved Bumiputra-Commerce BankBerhad from 1982 to 1989 and her lastposition was Manager in CorporateBanking Division. In 1991, she became alicensed Dealers Representative and wasattached to a stockbroking firm until 1997.
Datin Nonadiah does not have anydirectorship in other public companies.
She also does not have any familyrelationship with any director of theCompany.
Datuk Ng Yih Pyng
Malaysian, 42 years of age, was appointedas Managing Director on 21 April 2006. Heholds a Bachelor of Business
Administration degree in Finance in 1990from Iowa State University in the UnitedStates of America (USA) and received a
Master in Business Administration inCorporate Finance in 1991 from Iowa StateUniversity in the USA. Upon graduation, he
joined the Group as a Director and isresponsible for the overall managementand business development of the Group. Inaddition to his role as Director, he iselected as the President of Federation ofGoldsmiths and Jewellers Association ofMalaysia and Chairman of the Fedmas
Assay Office. Datuk Ng is the councilmember of The Associated ChineseChamber of Commerce & IndustryMalaysia and serves as the Chairman of itsYoung Entrepreneurs Committee. In
addition he is also elected the councilmember of the Chinese Chamber ofCommerce & Industry of Kuala Lumpur &Selangor and holds the position of YouthChairman. Datuk Ng also serves as thecommittee member for the SMECorpYoung Entrepreneurship panel.
Datuk Ng does not have any directorship inother public companies. He is the son toTan Sri Datuk Ng Teck Fong. His siblings,Mr Ng Yih Chen, Ms Ng Sheau Chyn andMs Ng Sheau Yuen and spouse DatinChoong Chow Mooi are also members ofthe Board.
Raja Dato Seri Aman Bin Raja Haji Ahmad
Malaysian, 68 years of age, was appointedas Independent Non-Executive Director on21 April 2006. He is a member of theMalaysian Institute of Accountants (MIA),a Certified Public Accountant and Fellow ofthe Institute of Chartered Accountant
England and Wales. He is also a Fellow ofthe Institute of Bankers Malaysia. He heldvarious positions in Maybank Group from1974 to 1985 prior to joining Affin BankBerhad in 1985 as an ExecutiveDirector/Chief Executive Officer (CEO).He left Affin Bank Berhad in 1992 to joinPerbadanan Usahawan Nasional Berhadas the CEO for one year. He wasreappointed as CEO of Affin Bank Berhadin 1995 and retired in 2003.
Raja Dato Seri Aman also sits on theboard of Ahmad Zaki Resources Berhad,
Affin Holdings Berhad and Affin Investment
Bank Berhad and sit on the governmentconsultative committee, Pemudah. Hedoes not have any family relationship withany director of the Company.
TOMEI CONSOLIDATED BERHAD (692959-W)
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TAN SRI DATUK NG TECK FONG
GROUP EXECUTIVE CHAIRMAN
TOMEI CONSOLIDATED BERHAD (692959-W)
ANNUAL REPORT 2013
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On behalf of the Board of Directors of Tomei Consolidated Berhad, it is my pleasure topresent you the Annual Report and Audited Financial Statements of our Group and of ourCompany for the financial year ended 31 December 2013.
Tomei celebrated its 45th year anniversary in the year 2013. It is a significant milestone forthe Group as during this period, it managed to transform itself from a small jewellerymanufacturer into a major player in the jewellery industry. Over these years, the Group has
come across and survived many turbulence such as the oil crisis in the 70s, the worldrecession in the 80s, the Asian financial crisis in the 90s and the recently sub-prime crisis inthe US to the sovereign debt problem in the European countries. The Group has beenprudence in managing its business affairs and emerged stronger from all those difficult time.It also served as a valuable lesson for the Group to continue and grow in its businessdealings. In the year 2013, the gold and jewellery industry suffered yet from anothersetback, this time come from an unprecedented drop in gold price by almost 30% within theyear. Tomei being a leading player in the gold and jewellery industry is no exception andsuccumbed to this volatility.
The sudden drop in gold price especially during the first half of the year has triggered a goldrush among consumers to purchase gold and gold related items creating a healthy demandfor the Groups sales. However as the euphoria died off and the retail market softenedtowards the year end, demand started to dwindle. The volatility of gold price on the otherhand has resulted the Group to report lower profit margin on its business. This challengingenvironment has dictated the performance of the Group for financial year 2013. During thecurrent financial year, the Group reported total revenue of RM701.907 million and a lossbefore tax of RM3.736 million.
and raising proceed of RM6.095 million.
We also wound up a few subsidiary
companies which were dormant to create a
much leaner corporate structure.
Recognizing on the changing consumer
buying pattern, the Group also introduces
alternative channel in delivering sales to its
customers. The introduction of
GoldSilver2u.com, the first e-portal of its
kind in Malaysia continues to reach out to
customers using web base services in
securing sales. Tomeis Jewel Club, the
Groups customer loyalty programme
which was introduced in 2011 has
managed to register a large number of
membership while Tomeis Facebook page
managed to garnered a large group of
followers.
The Group took cognizance of the present
market condition and continues to vigilantly
monitor its situation. It also took steps to
restructure and rebalance its portfolio
including closing certain retail outlets that
is not performing up to expectation while
certain non-core assets are being
disposed of. During the year, the Group
disposed of its subsidiary company, Tomei
Gold & Jewellery (Subang) Sdn. Bhd.
which is a property management company
TOMEI CONSOLIDATED BERHAD (692959-W)
ANNUAL REPORT 2013
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CHAIRMANSSTATEMENT
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Tomei continues to innovate and offer
various offerings and designs to
customers. The introduction of
Ana-stasia, our very own gold jewellery
master piece design adds on the glitter to
our existing collections. In complementing
these collections, Tomei also has the
exclusive distributorship rights for therenowned Batar Jewellery from China
and Prima Gold from Thailand. The
Group also has the licence to manufacture
and sell Baby Looney Tunes and Super
Heroes gold character in Malaysia from
Warner Bros. Consumer Products Inc.,
USA.
In February 2013, the first De Beers
diamond retail outlets in Malaysia opened
its door to the public and exclusively
managed by the Group. This marked a
significant achievement for the Group as
De Beers is always synonymous with the
best diamond in the world. It also
reinforces the Group standing as among
the best in its league in the diamond and
jewellery industry. In addition, the Group is
also granted the option for the franchise
right to set up and operate De Beers retail
outlets in Singapore, Indonesia, Thailand
and Vietnam.
The Group is committed to improve on its
retail business in Malaysia by continueupgrading and refurbishing its retail stores
to provide a fresh and condusive shopping
experience for its customers. Despite the
challenging environment, the Group is still
discussing with mall operators to set up
new stores in the new prominent and
upcoming retail locations. In addition to De
Beers, the Group is currently operating
another 70 retail outlets in Malaysia under
various brand, namely Tomei, My
Diamond, Le Lumiere, Goldheart and T.H.
Jewelry.
Tomei continues to build its branding in
both the Peoples Republic of China and
the Socialist Republic of Vietnam.
Currently Tomei has 7 retail kiosks in
China while in Vietnam, it has 1 retail outlet
and 5 retail kiosks. It also has a
manufacturing facilitiy in the AMATA
Industrial Park, Vietnam which produces
jewellery for its own consumption as well
as for export.
AWARDS
In recognition of our excellent
achievements and contribution to the
industry, our Group has received
numerous accolades and recognitions.
During the year 2013, the Group receivedmultiple recognitions from the Sin Chew
Business Excellence Awards 2013 ranging
from the prestigious Lifetime Achievement
Award to the Retail Excellence Award and
Products and Service Quality Excellence
Award. It won the Eminent Eagle category
for the Golden Eagle Award 2013
presented to Malaysia 100 Excellent
Enterprise. The Group also received the
MBA Industry Excellence Awards (Retail)
2013 from the ASEAN BAC and Top 10
Asian Icon Award 2013 in recognition of
the Group excellent achievement in the
retail business.
Tomei is also among the few in Malaysia to
clinch the Malaysian Brand Certification
awarded by SIRIM QAS International Sdn.
Bhd. since year 2010. In line with our
Groups emphasis and commitment on
quality, our Group is certified with the ISO
accreditations in quality management
system for our retailing in gold and
jewellery products from the Lloyds
Register Quality Assurance, KualaLumpur.
CORPORATE SOCIAL RESPONSIBILITY
Tomei always committed to play its role as
a responsible corporate citizen. Every
year, the Group takes initiative to launch
various programmes to assist different
targeted groups irrespective of their
colours, creeds and beliefs.
During the year 2013, the Group in itsbelief to advance the cause of education
has contributed RM30,000 to The Star
Step Up School Sponsorship Programme
2013.
DIVIDEND
Your Board is pleased to recommend a
first and final single tier dividend of 1.0 sen
per ordinary share for the financial year
ended 31 December 2013 for
shareholders approval at the forthcoming
Annual General Meeting.
OUTLOOK
With the stable Malaysian economy, the
recent recovery in gold price and theongoing cost rationalization exercise, the
Group is cautiously optimistic that it will
perform better in the year 2014.
APPRECIATION
On behalf of the Board of Directors, I would
like to express our sincere appreciation
and thanks to all our invaluable customers,
bankers, suppliers, government
authorities, business associates and
shareholders for your continuous support.
My thanks also go to the management and
staff of the Group for your utmost
commitment, dedication and hard work in
ensuring our success.
Last but not least, to my fellow Directors, I
thank you for your invaluable advice and
support.
TAN SRI DATUK NG TECK FONG
GROUP EXECUTIVE CHAIRMAN
CHAIRMANS STATEMENT (continued)
TOMEI CONSOLIDATED BERHAD (692959-W)
ANNUAL REPORT 2013
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TOMEI CONSOLIDATED BERHAD (692959-W)
ANNUAL REPORT 2013
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20131231
201345708090
2013
2013719073736
6095
-GoldSilver2u.com2011- Tomei Jewel Club
Ana-stasiaPrima GoldWarnerBros. Consumer Products Inc.Baby Looney TunesSuper Heroes
20132De BeersDe Beers
De Beers
De Beers
70TomeiMy DiamondLe LumiereGoldheartT.H. Jewelry
751AMATA
20132013100
-Top10
2010 - SIRIM QASInternational Sdn. Bhd.
Lloyds Register QualityAssuranceISO
20133The Star StepUp School Sponsorship Programme
201312311
2014
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TOMEI CONSOLIDATED BERHAD (692959-W)
ANNUAL REPORT 2013
Page 13
Bagi pihak Lembaga Pengarah Tomei Consolidated Berhad, saya dengan sukacitanyamembentangkan Laporan Tahunan dan Penyata-penyata Kewangan Teraudit Kumpulandan Syarikat kami bagi tahun kewangan yang berakhir pada 31 Disember 2013.
Tomei merayakan ulang tahun penubuhannya yang ke-45 pada tahun 2013. Ini merupakansatu perkembangan yang amat penting bagi Kumpulan kerana dalam tempoh yang sama,ia berjaya mentransformasi dari sebuah pengeluar barangan kemas secara kecil-kecilankepada pemain utama dalam industri barangan kemas. Dalam jangka masa ini, Kumpulan
telah melalui dan berjaya menangani pelbagai pergolakan, antaranya termasuklah krisisbekalan minyak pada tahun 70-an, kemelesetan ekonomi dunia pada tahun 80-an, krisiskewangan Asia pada tahun 90-an, dan baru-baru ini, krisis sub prima yang berlaku diAmerika Syarikat, dan krisis hutang kerajaan di negara-negara Eropah. Melalui pengurusanperniagaan yang berhemah, prestasi Kumpulan kian mantap melalui detik-detik gentingtersebut. Ia turut memberi satu pengajaran yang amat berharga kepada Kumpulan untukterus berkembang di dalam perniagaannya. Pada tahun 2013, industri emas dan barangankemas mengalami satu lagi kemunduran akibat kemerosotan harga emas sebanyak 30% didalam tempoh satu tahun. Tomei sebagai pemain utama di industri emas dan barangan
kemas juga tidak terkecuali dan turut mengalami ketidaktentuan ini.
Penurunan harga emas secara mendadak terutamanya pada separuh tahun pertama telahmencetuskan permintaan tinggi pengguna terhadap emas serta barangan berkaitan emasdan menghasilkan permintaan sihat terhadap penjualan Kumpulan. Walaubagaimanapun,sejak keghairahan itu hilang dan pasaran runcit merosot menjelang hujung tahun,permintaan mula menyusut. Ketidaktentuan harga emas juga menyebabkan Kumpulanmencatat margin keuntungan perniagaan yang lebih rendah. Suasana mencabar ini telahmempengaruhi pencapaian Kumpulan untuk tahun kewangan 2013. Dalam tahun
kewangan semasa, Kumpulan mencatat jumlah jualan sebanyak RM701.907 juta dan rugisebelum cukai sebanyak RM3.736 juta.
Kumpulan mengambil perhatian keadaan
pasaran semasa dan sentiasa mengawal
situasi dengan teliti. Kami turut mengambil
langkah untuk menstruktur dan
menyeimbang semula portfolio, antaranya
termasuk menutup kedai jualan runcit yang
gagal menunjukkan prestasi yang dijangka
manakala sesetengah aset bukan teras
dilupuskan. Pada tahun semasa,
Kumpulan melupuskan syarikat
subsidiarinya, Tomei Gold & Jewellery
(Subang) Sdn. Bhd., sebuah syarikat
pengurusan hartanah dan berjaya
mengumpul dana sebanyak RM6.095 juta.
Kami juga menggulung beberapa syarikat
subsidiari yang tidak aktif demi membina
struktur korporat yang lebih mantap.
Menyedari akan perubahan corak
pembelian pengguna, Kumpulan telah
memperkenalkan saluran jualan alternatif
kepada pelanggan. GoldSilver2u.com,
sebuah e-portal penjualan barangan
kemas yang pertama di Malaysia terus
menghubungkan pelanggan yang
menggunakan perkhidmatan jualan atas
talian dalam menempah jualan.
PENYATA
PENGERUSI
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Tomei Jewel Club, program loyalti
pelanggan Kumpulan yang diperkenalkan
pada tahun 2011 telah menunjukkan
peningkatan keahlian yang ramai
manakala laman Facebook Tomei berjaya
menarik ramai pengikut.
Tomei terus berinovasi dan menawarkanpelbagai tawaran dan rekaan kepada
pelanggan. Pengenalan Ana-stasia,
rekaan barangan kemas emas kami
tersendiri telah menyerikan lagi koleksi
kami yang sedia ada. Demi melengkapkan
koleksi ini, Tomei turut mendapat hak
pengedaran eksklusif untuk Batar
Jewellery yang terkemuka dari China dan
Prima Gold dari Thailand. Kumpulan
kami juga mempunyai lesen untuk
mengilang dan menjual watak barangan
emas Baby Looney Tunes dan Super
Heroes di Malaysia dari Warner Bros.
Consumer Products Inc., USA.
Pada Februari 2013, kedai jualan runcit
berlian De Beers yang pertama di Malaysia
membuka pintu kepada pelanggan dan
diurus secara eksklusif oleh Kumpulan. Ini
menandakan pencapaian ketara untuk
Kumpulan kerana jenama De Beers
adalah sinonim dengan berlian terbaik di
dunia. Pengiktirafan ini turut mengukuhkan
kedudukan Kumpulan sebagai antara yang
terbaik di dalam industri berlian danbarangan kemas. Tambahan pula,
Kumpulan juga diberi opsyen hak francais
untuk memula dan menjalankan operasi
kedai jualan runcit De Beers di Singapura,
Indonesia, Thailand dan Vietnam.
Kumpulan komited untuk terus memajukan
perniagaan jualan runcit di Malaysia
dengan meningkat taraf dan
mengubahsuai semula kedai jualan runcit
demi menyediakan pengalaman
membeli-belah yang segar dan kondusifuntuk pelanggan. Walaupun berada dalam
suasana yang mencabar, Kumpulan masih
berbincang dengan pengendali pusat
membeli-belah untuk membuka kedai
jualan runcit yang baru di lokasi jualan
yang lebih prominen. Selain daripada De
Beers, kini Kumpulan beroperasi 70 lagi
rangkaian kedai jualan runcit di bawah
aneka jenama, khususnya Tomei, My
Diamond, Le Lumiere, Goldheart dan T.H.
Jewelry.
Tomei terus membina jenamanya di
kedua-dua Republik Rakyat China dan
Republik Socialis Vietnam. Kini Tomei
mempunyai 7 kiosk jualan runcit di China,
manakala di Vietnam ia mempunyai 1
kedai jualan runcit dan 5 kiosk jualan
runcit. Tomei juga mempunyai kemudahan
pengilangan di AMATA Industrial Park,Vietnam yang mengeluarkan barangan
kemas untuk kegunaan sendiri mahupun
untuk diekspot.
ANUGERAH-ANUGERAH
Sebagai pengiktirafan kepada pencapaian
yang cemerlang dan sumbangan kepada
industri, Kumpulan kami telah merangkul
aneka anugerah dan pengiktirafan.
Pada tahun 2013, Kumpulan telah
dianugerahkan dengan Anugerah Lifetime
Achievement Award, Retail Excellence
Award dan Products and Service Quality
Excellence Award daripada Sin Chew
Business Excellence Awards 2013.
Kumpulan juga merupakan pemenang
kategori Eminent Eagle untuk Golden
Eagle Award 2013 yang dianugerahkan
kepada 100 syarikat terulung di Malaysia.
Kumpulan turut mendapat Anugerah MBA
Industry Excellence Awards (Retail) 2013
daripada ASEAN BAC dan Top 10 Asian
Icon Award 2013 untuk pengiktirafanpencapaian cemerlang dalam perniagaan
runcit.
Tomei juga merupakan salah satu syarikat
yang dianugerah dengan Malaysian
Brand Certification daripada SIRIM QAS
International Sdn. Bhd. sejak tahun 2010.
Seiring dengan penekanan dan komitmen
terhadap kualiti, Kumpulan kami telah
ditauliah dengan akreditasi ISO dalam
sistem pengurusan kualiti untuk penjualan
runcit produk emas dan barangan kemasdaripada Lloyds Register Quality
Assurance, Kuala Lumpur.
TANGGUNGJAWAB SOSIAL KORPORAT
Tomei sentiasa komited dalam memainkan
peranannya sebagai warga korporat yang
bertanggungjawab. Setiap tahun,
Kumpulan memperkenalkan aneka
program untuk membantu mereka yang
memerlukannya tanpa mengira warna
kulit, perbezaan agama dan kepercayaan.
Pada tahun 2013, Kumpulan dengan
berpaksikan pegangannya untuk
memperkembangkan pendidikan, telah
menyumbang RM30,000 kepada The Star
Step Up School Sponsorship Programme
2013.
DIVIDEN
Lembaga Pengarah dengan sukacitanya
mencadangkan dividen pertama dan akhir
single tier sebanyak 1.0 sen sesaham
bagi tahun kewangan yang berakhir pada
31 Disember 2013 untuk persetujuan
pemegang-pemegang saham dalam
Mesyuarat Agung Tahunan akan datang.
PROSPEK MASA DEPAN
Dengan kestabilan ekonomi Malaysia,
pemulihan harga emas dan rasionalisasi
kos yang berterusan, Kumpulan
berwaspada dan beroptimistik untuk
pencapaian yang lebih baik pada tahun
2014.
PENGHARGAAN
Bagi pihak Lembaga Pengarah, saya ingin
merakamkan penghargaan ikhlas dan
ucapan terima kasih kepada kesemua
pelanggan, jurubank, pembekal, badankerajaan, rakan niaga dan pemegang
saham atas sokongan berterusan anda.
Saya juga berterima kasih kepada pihak
pengurusan dan kakitangan Kumpulan
atas komitmen, dedikasi, dan ketekunan
anda dalam memastikan kejayaan
bersama.
Akhir kata, saya ingin merakamkan terima
kasih kepada rakan-rakan pengarah atas
nasihat dan sokongan mereka.
TAN SRI DATUK NG TECK FONG
PENGERUSI EKSEKUTIF KUMPULAN
PENYATA PENGERUSI (sambungan)
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STATEMENT ON
CORPORATEGOVERNANCE
Your Board of Directors recognizes the importance of sound corporate governance and willcontinue to enhance its role in ensuring that the highest standard of corporate governanceis practised throughout the Group. The principles and best practices set out in the MalaysianCode on Corporate Governance 2012 (Code) have been complied by the Group whereverpossible in observing the highest standard of transparency, accountability and integrity
unless otherwise stated.Your Board is pleased to report on the application of the Code by the Group during theperiod under review.
1. BOARD OF DIRECTORS
1.1 Composition and Balance
1.2 Board Responsibilities and Duties
The Group is led by your Board of Directors which comprises of ten (10) members, of whom six (6) are Executive Directors and four(4) are Independent Non-Executive Directors. None of the Independent Directors has held office for a period of more than nine (9)years. Your Board consists of members from a wide range of discipline and background, providing an in-depth and diversity inexperience to the Groups operation. All Independent Non-Executive Directors are free from any material business dealings and
other relationship with the Group and therefore play a crucial role in corporate accountability with their independent, unbiasedviews, advice and judgement in the decision making process. The present Board includes four (4) female directors. None of theDirectors hold more than 5 directorships in listed issuer in Malaysia.
The profiles of the members of your Board are set out on page 7 to 8 of the Annual Report.
Tan Sri Datuk Ng Teck Fong, the Executive Chairman, plays a crucial role in providing overall business direction while theimplementation falls under the leadership and responsibility of your Group Managing Director.
This segregation of role is vital to ensure a balance of power and authority.
When the Chaiman of the Board is not an independent director, the Board must comprise a majority of independent directors.However in our case, we have Tan Sri Datuk Ng Teck Fong as our Executive Chairman. Your Independent Directors haveconsidered this anomaly and are of the opinion that it will not disadvantage your Company as Tan Sri Datuk Ng Teck Fong being
its founder and the single largest shareholder will continue to bring the vision and aspirations to your group of companies. Furtheryour Board is comfortable that there is no undue risk involved as all related party transactions are diligently reviewed by the AuditCommittee in accordance with the Listing Requirements of Bursa Securities before they are tabled to the Board for approval basedon the Audit Committees recommendation.
During the period under review, your Board took full responsibility and retained full and effective control over the affairs of theGroup. The Boards functions are laid out in a Board Charter which is made public through the Groups website to guide your Boardin discharging its duties and responsibilities effectively. Your Boards primary focus is on the overall strategic planning includingbusiness plan and annual budget, performing quarterly review of business and financial performance, reviewing risk management,ensuring effective internal controls are in place as well as ensuring legal and statutory compliance.
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The Independent Non-Executive Directors further strengthen your Board in providing unbiased and independent view, advice andjudgement. They also contribute to the formulation of policies and decision making through their expertise and experience.
In addition to the above, your Boards more specific responsibilities include the followings:-
a)b)
c)d)e)f)
g)h)
4. BOARD COMMITTEES
In order to ensure the effectiveness in the periodic monitoring, deliberating and safeguarding of shareholders interest, your Board has
delegated certain of its responsibilities to the Board Committees which operates within clearly defined terms of reference to carry out
these responsibilities in a supporting role to your Board.
These Committees comprising members of your Board are empowered to deliberate and examine issues delegated to them and report
back to your Board with their recommendations and comments.
Reviewing and approving the strategic business plan of the Group;Monitoring corporate performance and the conduct of the Groups business and ensuring compliance to best practices andprinciples of corporate governance through the Audit Committee;
Identifying and implementing appropriate systems to manage principal risks through the Risk Management Committee;Ensuring succession planning for top management;Ensuring a transparent Board nomination and remuneration process;Reviewing the adequacy and integrity of the Groups internal control system and management information system forcompliance with applicable standards and laws and regulations;Developing and implementing an investor relation program or shareholders communications policy for the Company; andDeveloping an ethical standard for the Group through a Code of Conduct and ensure its compliance.
2. BOARD MEETINGS
3. SUPPLY OF INFORMATION
Your Board meets regularly at least four (4) times a year at quarterly intervals with additional meetings to be convened as and whenrequired. Prior to each meeting, every Director is given the complete agenda and a set of Board Papers for each agenda item well inadvance so that your Directors have ample time to review matters to be deliberated at the meeting and to facilitate informed decisionmaking by your Directors.
During the financial year ended 31 December 2013, there were five (5) Board Meetings held and the details of attendance are asfollows:-
Executive Directors AttendanceTan Sri Datuk Ng Teck Fong 5/5Datuk Ng Yih Pyng 5/5Datin Choong Chow Mooi 5/5Ng Yih Chen 4/5Ng Sheau Chyn 5/5Ng Sheau Yuen 4/5
Independent Non-Executive Directors
Raja Dato Seri Aman Bin Raja Haji Ahmad 5/5Datin Nonadiah Binti Abdullah 5/5M Chareon Sae Tang @ Tan Whye Aun 5/5Lau Tiang Hua 5/5
In addition, the Executive Directors meet regularly to discuss the corporate strategy, the business operations and the results of thebusiness units within the Group.
Your Board has full and unrestricted access to information concerning the Group from the senior management, the external auditorsand services of the Company Secretary to enable them to discharge their duties effectively. Your Board may also seek advice ofexternal independent professionals at the Groups expense.
All information on meetings is disseminated to your Board at least 7 days before the date of meeting to enable your Board to make aninformed decision. Relevant personnel of the Group could be summoned to the Board Meeting to further brief your Board as and whenrequired.
STATEMENT ON CORPORATE GOVERNANCE (continued)
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At present, your Board is assisted by four (4) Board Committees with their respective term of reference as provided below:-
4.1 Audit Committee
4.2 Remuneration Committee
4.3 Nomination Committee
In accordance with the Best Practices under the Code, the Audit Committee comprises three (3) members made up of IndependentNon-Executive Directors:-
Name Designation
Lau Tiang Hua ChairmanRaja Dato Seri Aman Bin Raja Haji Ahmad MemberM Chareon Sae Tang @ Tan Whye Aun Member
The principal function of the Audit Committee is to assist your Board in the effective discharge of its fiduciary responsibilities inrelation to corporate governance, ensure timely and accurate financial reporting, proper implementation of risk managementpolicies and strategies in relation to the Groups business strategies and the development of sound internal control system andeffective risk management framework.
In accordance with the best practices of corporate governance, the Audit Committee presents its report set out on pages 22 to 24of this Annual Report.
In accordance with the Best Practices under the Code, the Remuneration Committee comprises three (3) members, majority ofwhom are independent and have the following term of reference as provided below:-
Name DesignationM Chareon Sae Tang @ Tan Whye Aun ChairmanLau Tiang Hua MemberDatuk Ng Yih Pyng Member
The Committees duties and responsibilities are:-a)
b)
c)
In accordance with the Best Practices under the Code, the Nomination Committee comprises three (3) members made up ofIndependent Non-Executive Directors and have the following term of reference as provided below:-
Name DesignationM Chareon Sae Tang @ Tan Whye Aun ChairmanLau Tiang Hua MemberDatin Nonadiah Binti Abdullah Member (appointed on 21 November 2013)Datuk Ng Yih Pyng Member (resigned on 21 November 2013)
In line with the recommendation by the Code which advocates for the Nomination Committee to consist exclusively of only
non-executive directors, a majority of whom must be independent, Datuk Ng Yih Pyng, your Group Managing Director, has resignedas a member on 21 November 2013 and was replaced by Datin Nonadiah Binti Abdullah, an Independent Non-Executive Director,on the same date.
The Committees duties and responsibilities are:-a)
b)
c)
d)e)f)
To ensure that a transparent and formal procedure is established in the development and assessment of the level ofcompensation that would be sufficient to attract and retain good caliber Directors;To review the composition of the various types of components of remuneration package such as fees, allowances, basicsalaries, bonuses and other benefits-in-kind for Directors; andTo ensure that the components of the Directors remuneration package are linked to performance, responsibility levels and
is comparable with market norm.
To assist your Board in reviewing on an annual basis, or as required, the correct mix of skills, business and professionalexperiences that should be added to your Board;To identify core competencies, skills and other qualities required by Independent Non-Executive Directors that is essentialto contribute towards the effectiveness and balance of your Board;To review and evaluate on an annual basis, the effectiveness of the Board functions and its Committees based on thecorporate governance principles and practices of your Board;To review and evaluate the contributions made by each member of your Board;To assess on annual basis or as and when required, the independence of each independent director; andTo assist and when required by your Board in the review and evaluation of succession planning of top management.
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The Nomination Committee assesses and evaluates the Directors individually to determine on their status of independence, mix setof skills and experience before deciding on the selection and nomination of directors for their respective re-election orre-appointment. The Committee also evaluates on the needs to establish separate Board Committee to assist the Board on itsdecision making and continue to evaluate the effectiveness of such committee.
In accordance with the Best Practices under the Code, the Risk Management Committee comprises four (4) members and have
the following term of reference as provided below:-
Name DesignationLau Tiang Hua ChairmanRaja Dato Seri Aman Bin Raja Haji Ahmad MemberM Chareon Sae Tang @ Tan Whye Aun MemberDatuk Ng Yih Pyng Member
The Committees duties and responsibilities are:-a) To review periodic management report on risk exposure, risk portfolio and management strategies;b) To ensure adequacy of infrastructure, resources and systems for effective risk management;c) To assess adequacy of policies and framework for identifying, measuring, monitoring and controlling risks; andd) To review the extent to which these measures are operating effectively.
The Risk Management Committee shall hold at least 2 meetings in each financial year.
4.4 Risk Management Committee
All Directors of the Group have attended the Mandatory Accreditation Program prescribed by Bursa Securities. In addition, your Boardis regularly being briefed on the Groups operation and takes proactive steps to visit both manufacturing and retailing operation to gainin depth understanding of the business.
Your Board through the Nomination Committee assesses the training needs of all the Directors. The Directors are encouraged to attendtalks, seminars, workshops and conferences to update and enhance their skills and knowledge to enable them to carry out their rolesas director effectively, more specifically in discharging their responsibilities towards corporate governance and regulatory compliances.
On 25 February 2014, your Board together with the senior management team of the Group on the recommendation of the Nomination
Committee has attended a seminar titled Board Leadership and Value Systems The Tone at the Top.
5. DIRECTORS TRAINING
According to the Companys Articles of Association, at least one third of the directors shall retire from office at the Annual GeneralMeeting (AGM), and eligible for re-election provided that each Director shall retire once in every three (3) years.
The Articles also provide that all Directors who are appointed by your Board may only hold office until the next AGM subsequent to theirappointment and shall then be eligible for re-election but shall not be taken into account in determining the Directors who are to retireby rotation at that AGM.
In accordance with Section 129(2) of the Companies Act, 1965, any Directors who have attained the age of seventy (70) years andabove are required to submit themselves for re-appointment by the shareholders annually.
The re-election of Directors provides shareholders an opportunity to reassess the composition of your Board. The NominationCommittee assesses and evaluates Directors individually before recommending for their re-election.
6. RE-ELECTION OF DIRECTORS
The Companys remuneration policy for Directors is tailored towards attracting and retaining Directors with relevant experience andexpertise needed to assist in managing the Group effectively. The Remuneration Committee carries out the annual review of the overallremuneration for Directors and key Senior Management Officers whereupon recommendations are submitted to your Board forapproval.
7. DIRECTORS REMUNERATION
STATEMENT ON CORPORATE GOVERNANCE (continued)
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Remuneration Non-Executive Director Executive Director RM RMSalaries - 2,468,610Fees 203,000 71,000Benefits-in-Kind - 145,250
Remuneration Non-Executive Director Executive DirectorBelow RM 100,000 4 -RM 100,001 - RM 150,000 - -RM 150,001 - RM 200,000 - -RM 200,001 - RM 250,000 - -RM 250,001 - RM 300,000 - -RM 300,001 - RM 350,000 - 1RM 350,001 RM 400,000 - 3RM 400,001 RM 450,000 - -RM 450,001 RM 500,000 - -RM 500,001 RM 550,000 - 1RM 550,001 RM 600,000 - -RM 600,001 RM 650,000 - -RM 650,001 RM 700,000 - -RM 700,001 RM 750,000 - -RM 750,001 RM 800,000 - 1
The Directors fees payable is subject to the approval of the shareholders at the forthcoming AGM of the Company.
Your Board recognizes its role and responsibility to ensure that the Groups and the Companys financial statements present a trueand fair view of the financial positions and of the financial performance and cash flows and are prepared in accordance withMalaysian Financial Reporting Standards (MFRS), International Financial Reporting Standards (IFRS) and the provisions of the
Companies Act, 1965 in Malaysia.
Your Board is also committed to provide the highest possible level of disclosure to ensure integrity and consistency of the financialreports.
The Group publishes full financial statements annually and condensed financial statements quarterly as required by BursaMalaysias Listing Requirements.
The Audit Committee assists your Board in scrutinizing the information for disclosure to ensure its accuracy, adequacy andcompleteness.
8.1 Financial Reporting
8. ACCOUNTABILITY AND AUDIT
Your Board acknowledges its overall responsibility for maintaining a sound system of internal control and risk management to
safeguard shareholders investment and the Groups and the Companys assets.
The Audit Committee through the Internal Audit Department reviews the effectiveness of the system of internal control and of theGroup periodically. The review covers the financial, operational and compliance controls as well as risk management.
The Statement on Risk Management & Internal Control as set out on pages 25 to 27 in this Annual Report provides an overview ofthe risk management and state of internal control within the Group.
8.2 Internal Control and Risk Management
8.3 Relationship with Auditors
The Companys external auditors continue to provide the independent opinion to shareholders on the Groups and the Companysfinancial statements. Your Board maintains a formal and transparent relationship with the auditors to meet their professionalrequirements.
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The details of your Directors remuneration paid/payable to all Directors of the Company for the financial year ended 31 December 2013are set out as follows:-
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Your Board recognises the importance of maintaining transparency and accountability to its shareholders and investors.
Your Board keeps shareholders informed via announcements, timely release of quarterly financial results, press releases, annualreports and circulars to shareholders. Your Board also takes effort to meet up with investors on regular basis to provide up to dateinformation about the Group.
Information of the Group is also accessible through the Companys website at www.tomei.com.my which is updated on regular basisand the Directors welcome feedback channeled through this website. Information available in the website includes among others theGroups Annual Reports, quarterly financial announcements, major and significant announcements and press releases on latestcorporate development of the Group. As there may be instances where investors and shareholders may prefer to express theirconcerns to an independent director, the Board has appointed Raja Dato Seri Aman Bin Raja Haji Ahmad as the Senior IndependentNon-Executive Director on 25 February 2014 to whom concerns may be directed.
The AGM serves as the principal forum for dialogue and communication between your Directors and the shareholders. At the AGM,shareholders are given direct access to your Board and are encouraged to participate in its proceedings and seek clarification on theperformance of the Group.
9. COMMUNICATION WITH SHAREHOLDERS AND INVESTORS
Your Board is responsible for ensuring that the financial statements for the financial year which have been drawn up in accordancewith the MFRS, IFRS and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financialposition of the Group and of the Company as at 31 December 2013 and of the financial performance and cash flows of the Groupand of the Company for the financial year then ended.
In preparing the financial statements, your Board has used appropriate and relevant accounting policies that are consistently usedand supported by reasonable as well as prudent judgements and estimates, and that all applicable approved MFRS and IFRS havebeen complied with.
Your Board is responsible for ensuring that the Group and the Company keep proper accounting records which disclose withreasonable accuracy the financial position of the Group and of the Company and which enable them to ensure that the financialstatements comply with MFRS, IFRS and the provisions of the Companies Act, 1965 in Malaysia.
Your Board also has the general responsibility for taking such steps as are reasonably opened to them to safeguard the assets ofthe Group, to detect and prevent fraud and other irregularities.
The Directors Responsibility Statement in relation of the Audited Financial Statements for the year ended 31 December 2013 is setout on page 30 of this Annual Report.
The Board is committed to promote sustainability in its business operation which are aligned and embedded into the Groups day today business activities. In promoting the sustainability, the Group integrates good practices in the area of environmental, social andgovernance into its business culture. Details of programmes in promoting sustainability are provided in the Statement on CorporateSocial Responsibilities on page 21 of this Annual Report.
10. STRATEGIES IN PROMOTING SUSTAINABILITY
11. STATEMENT ON COMPLIANCE WITH THE BEST PRACTICES OF THE MALAYSIAN CODE ON CORPORATE GOVERNANCE
Having reviewed the governance structure and practices of the Group, your Board considers that it has complied with the bestpractices as set out in the Code unless otherwise stated as well as the items set out in Part A of Appendix 9C of the ListingRequirements of Bursa Securities in relation to the requirement of a separate disclosure in the Annual Report.
This Statement on Corporate Governance is made in accordance with the resolution of the Board of Directors dated 9 April 2014.
2012
8.4 Directors Responsibility Statement
The Audit Committee meets up with the external auditors at least two (2) times a year without the presence of the Management todiscuss and obtain feedback on sensitive audit issues. The external auditors are also invited to attend the Companys AnnualGeneral Meeting and are available to take questions from the shareholders on issues pertaining to their audit report.
The detailed role of the Audit Committee in relation to the internal and external auditors is described in the Audit Committee Reportsection on pages 22 to 24 of this Annual Report.
STATEMENT ON CORPORATE GOVERNANCE (continued)
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STATEMENT ON
CORPORATE
SOCIAL
RESPONSIBILITIESThe Group believes in its effort in playing its role as a responsible corporate citizen. With thatin mind, the Group has undertaken various corporate social responsibilities initiativestowards its stakeholders.
1. ENVIRONMENT
1.11.2
2. SOCIAL
2.1
2.2
2.3
3. EMPLOYEE
3.13.2
3.3
4. CUSTOMER
4.1
4.24.3
The Group has been using LED lights in all its retail outlets as an effort to continue conserving and saving energy and electricity.The Group is committed on its stringent measure to ensure that its production waste are properly disposed of and in an orderlymanner as required by the law.
The Group in its belief to advance the cause of education has contributed RM30,000 to The Star Step Up School SponsorshipProgramme 2013.The Group in promoting employment opportunities has provided employment to Malaysians covering almost all states in the countryregardless of colour, creed and gender.The Group has met all minimum wages requirement as required by the law.
The Group provides staff training to its staff to promote ongoing learning and improve efficiency in their day to day work.The Group provides a safe and condusive working environment to its staffs where front liners are provided with appropriate uniformto improve staff appearance and confidence in dealing with customers.The Group provides insurance coverage to its staffs to protect them from any mishap and unforeseen eventuality.
The Group provides its customers ample of product selection through continue introduction of new design and brand into themarket.The Groups ISO accreditation gives assurance of the best customer service in its retail services.The Groups recognition through the Fair Price Shop Award and Malaysian Brand certification attests our commitment to providethe most affordable pricing and quality products to customers.
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1. COMPOSITION
2. OBJECTIVES
3. FUNCTIONS
AUDIT
COMMITTEEREPORT
The Audit Committee shall comprise at least 3 directors.
The alternate directors shall not be appointed as members of the Audit Committee.
All the Audit Committee members must be non-executive directors, with majority of them being independent directors.
At least one member of the Audit Committee:-
(i)
(ii)
(iii)
Members of the Audit Committee shall elect a Chairman, who shall be an Independent Non-Executive Director from among their
members.
Members of the Audit Committee shall be appointed for a period of 3 years and shall be eligible for re-appointment.
In the event of any vacancy in the Audit Committee resulting in the number of members being reduced to below 3, the vacancy
must be filled within 3 months.
The Audit Committee is to serve as a focal point for communication between your Directors, the external auditors, internal
auditors and the Management on matters in connection with accounting, reporting and controls.The Audit Committee is to assist your Board in fulfilling its fiduciary responsibilities for ensuring quality, integrity and reliability
of the practices of the Group.
The Audit Committee will reinforce the independence of the Groups external and internal auditors.
Must be a member of the Malaysian Institute of Accountants; or
If he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years working experience;
and
-
-
Fulfils such other requirements as prescribed or approved by Bursa Securities.
He must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or
He must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the
Accountants Act 1967; or
The Audit Committee is appointed by your Board of Directors from amongst its members. The Audit Committee comprised the
following three (3) members:-
Name DesignationLau Tiang Hua Chairman
Raja Dato Seri Aman Bin Raja Haji Ahmad Member
M Chareon Sae Tang @ Tan Whye Aun Member
a)
b)
c)
d)
e)
f )
g)
a)
b)
c)
The key functions of the Audit Committee are to review the interim quarterly results and the annual audited financial statements and
making the appropriate recommendations to the Board of Directors. In addition, the Audit Committee will review the reports of the
internal auditors as well as those of the external auditors and to instruct management to take the appropriate actions to rectify
whatever shortcomings reported. All significant breaches especially those in contravention of existing rules and regulations and laws
will be reported to the Board of Directors and the regulatory authorities where appropriate.
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The Audit Committee will review related party transactions on a quarterly basis to ensure that such transactions are not at a
disadvantage to the Group and where appropriate, have the prior approval of the disinterested shareholders at a general meeting.
The Audit Committee will also review the adequacy of the internal controls and identified risks to ensure that inadequacies of internal
controls and risks are rectified or mitigated.
The Audit Committee will meet with the external auditors at least twice a year without the presence of the Management.
The Audit Committee shall regulate its procedures as follows:-
a)
b)
c)
d)
e)
f )
The Audit Committee held five (5) meetings during the financial year ended 31 December 2013 and the attendance of each member
is as follows:-
Name Attendance
Lau Tiang Hua 5/5
Raja Dato Seri Aman Bin Raja Haji Ahmad 5/5
M Chareon Sae Tang @ Tan Whye Aun 4/5
The following is a summary of the activities carried out by the Audit Committee during the financial year ended 31 December 2013:-
a)b)
c)
d)
e)
f )
g)
h)
i )
j )
The main role of the internal audit is to review the effectiveness of the Groups system of internal controls and this is performed with
impartiality, proficiency and due professional care. Internal audit adopts a risk based auditing approach by focusing on reviewing
identified high risk areas for compliance with control policies and procedures, identifying business risk which have not been
appropriately addressed and evaluating the adequacy and integrity of controls.
The Audit Committee shall hold at least 4 meetings in each financial year;
A member of the Audit Committee may at any time summon a meeting of the Audit Committee;
Notice calling for a meeting of the Audit Committee shall be given to its members at least 14 days before the meeting or at
shorter notice as the Audit Committee members shall determine or agree;
The quorum necessary for the transaction of business at an Audit Committee meeting shall be two and the majority of members
present must be independent directors;
Questions arising at any Audit Committee meeting shall be decided by the majority vote of its members present. In case of an
equality of votes, the Chairman of the meeting shall have a second or casting vote; and
Minutes of each Audit Committee meeting shall be kept by the Company Secretary.
Reviewed the quarterly results and recommended to your Board for approval and announcement to Bursa Securities;Reviewed the audit findings and recommendations made by the external auditors and the Managements response and follow
up actions where appropriate and report the same to your Board;
Reviewed the annual audited financial statements and recommended to your Board for approval;
Reviewed and approved the internal audit plan as well as the internal audit reports and the recommended actions to be taken
by the Management;
Reviewed the adequacy of the resources of the internal audit function and suggested prioritized audit areas if necessary;
Reported to your Board of Directors significant matters deliberated at the Audit Committee meetings;
Held 2 private meetings with the external auditors without the presence of the Management for the purpose of obtaining
feedback on sensitive audit issues;
Reviewed the impact of new or proposed changes in accounting standards and regulatory requirements to the Group;
Reviewed related party transactions and conflict of interest situation to ensure such transactions/situation did not disadvantage
the Group; andReviewed the risk register compiled by the Head of Risk Management and deliberated on the controls in place to mitigate the
risks identified.
4. PROCEDURES
5. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE
6. INTERNAL AUDIT FUNCTION AND SUMMARY OF ACTIVITIES
AUDIT COMMITTEE REPORT (continued)
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The Group has in place an internal audit function and is independent of the activities it reviews. The Head of the Internal Audit
Department reports directly to the Audit Committee. The internal audit activities are guided by a detailed annual Audit Plan. The
annual Audit Plan is approved by the Audit Committee and thereafter updated as and when necessary after prior approval of the Audit
Committee.
During the period under review, the Internal Audit Department had undertaken the following activities:-
a)
b)
c)
d)
This Audit Committee Report is made in accordance with the resolution of your Board of Directors dated 25 February 2014.
Physical verification of inventory and cash maintained at the branches (located in Malaysia and Vietnam) and Head Office
Departments (located in Malaysia) which were selected by adopting risk based methodology, reviewing the compliance of laiddown inventory and cash handling procedures, and to check for strict compliance to business processes, risk management
systems, internal controls and statutory requirements at branches and Head Office Departments;
Performed ad hoc reviews of selected internal control system and procedures as requested by top Management;
Discussed audit findings and audit recommendations with Management for resolution and action; and
Tabled the internal audit reports at the Audit Committee meetings for the deliberation by its members, and to follow up on any
suggested actions.
AUDIT COMMITTEE REPORT (continued)
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STATEMENT ON
RISK MANAGEMENT &
INTERNAL
CONTROL
Your Board is pleased to present the Statement on Risk Management & Internal Control (SRMIC) as required by paragraph 15.26(b) ofthe Listing Requirements of Bursa Securities, which outlines the nature and scope of risk management and internal control of the Group
during the period under review. The SRMIC is prepared in accordance to the Statement on Risk Management & Internal Control:
Guidelines for Directors of Listed Issuers issued by Bursa Securities (Guidelines). Pursuant to the Guidelines, your Board is committed
to establish a sound risk management framework and internal control system.
The internal control system is designed to manage rather than to eliminate the risk of failure to meet the Groups business objectives.
Therefore, it can only provide reasonable, but not absolute assurance against material misstatement, operational failures, fraud or loss.
1. ROLES AND RESPONSIBILITIES FOR RISK MANAGEMENT AND INTERNAL CONTROL
1.1 Board responsibilities
1.2 Management responsibilities
1.3 Internal Audit responsibilities
Your Boards responsibilities for the governance of risk and controls include:-
a)
b)
c)
Your Board has delegated the reviewing process to the Audit Committee and the Risk Management Committee which includes
periodic review of the effectiveness of prevailing risk management and internal control in place to mitigate the risks identified,
testing of the effectiveness and efficiency of the internal control procedures to ensure the system is viable and robust and identifying
new risks and the proposed controls to counter such risks identified.
Management responsibilities for the governance of risk and control include:-
a)
b)
c)
The Head of the Internal Audit Department reports directly to the Audit Committee. Your Board, however, is still responsible for
ensuring the adherence of the scope of the internal audit function.
Embedding risk management in all aspects of the Groups activities;
Approving the boards acceptable risk appetite; and
Reviewing the risk management framework, processes, responsibilities and assessing whether they provide reasonable
assurance that risks are managed within tolerable ranges.
Identifying risk relevant to the business of the Group and the achievement of its objectives and strategies;
Designing, implementing and monitoring the risk management framework in accordance with the Groups strategic vision and
overall risk appetite; and
Identifying changes to risk or emerging risk, taking action as appropriate and promptly bringing up these to the attention of
your Board.
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Your Board puts paramount importance in ensuring that an appropriate risk management and internal control system is established
within the organization to govern the conduct within the Group to manage risk and increase the likelihood that its established goals will
be achieved and the significant adverse impact from any future event or situation is at an acceptable level. The main key elements and
features of risk management and internal control systems are:-
2. ELEMENTS AND FEATURES OF RISK MANAGEMENT AND INTERNAL CONTROL
The functions and responsibilities of the internal audit are in accordance with the Guidelines on Internal Audit Function issued by
The Institute of Internal Auditors, Malaysia and the Listing Requirements of Bursa Securities. The internal audit activities are guided
by a detailed annual Audit Plan which is approved by the Audit Committee and revised as and when necessary.
The internal audit function provides assessments as to whether risks, which may hinder the Group from achieving its objectives are
being adequately evaluated, managed and controlled. It further evaluates and enhances the effectiveness of the governance, risk
management and internal control framework.
The Audit Committee comprises only Independent Non-Executive Directors in order to ensure that it is able to carry out its duty
without any interference from the Executive Directors and to provide an unbiased view. The Audit Committee members who bring
with them a wide variety of experience and expertise in various disciplines reinforce the effectiveness of their role. The Audit
Committee meets on a regular basis and has full and unrestricted access to both the internal and external auditors. The Audit
Committee operates within its Terms of Reference and ensures that there are effective risk management and compliance to control
procedures in order to provide the level of assurance required by your Board.
The Audit Committee will deliberate on the Internal Audits reports issued by the Internal Audit Department at every quarter and
focus on those major findings to ensure corrective actions are taken by Management.
The Audit Committee meets with the external auditors at least twice a year without the presence of the Management and Executive
Directors to provide an opportunity for the external auditors to highlight sensitive issues arising from the interim and final audits.
The Audit Committee will brief your Board on the significant findings raised by internal and external auditors and instruct the
Management to take the appropriate actions to rectify any shortcomings reported.
The Risk Management Committee comprises Independent Non-Executive Directors and the Group Managing Director. The Risk
Management Committee supports your Board in the overall risk management oversight of the Company and the Group. The Risk
Management Committee discharges its functions by reviewing periodic management reports on risk exposure, risk portfolio and
management strategies; ensuring adequacy of infrastructure, resources and systems for effective risk management; assessing
adequacy of policies and framework for identifying, measuring, and monitoring and controlling risks; and reviewing the extent to
which these are operating effectively.
A Risk Management Framework has been approved by the Risk Management Committee that provides the foundations and
arrangements that will embed it throughout the Group. The Framework encompassed the mandate and commitment from the
management/line management, the design of Framework for managing risk, the implementation of Risk Management, themonitoring and review of the Framework and continual improvement of the Framework.
All risks identified in the Group are recorded in a Master Risk Register and they are reviewed on a periodic basis in order to ensure
that the Master Risk Register is continually seen as relevant and useful throughout the life of the risk management process.
Your Board took cognizance that the critical element of a sound risk management system is monitoring to ensure it is performing as
intended. Hence, monitoring are done through on-going activities as it is performed on real-time basis, reacting dynamically to
changing conditions and is ingrained in the Group; and by way of a separate evaluation by the Internal Audit Department.
2.1 The Audit Committee
2.2 The Risk Management Committee
STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL (continued)
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2.3 Other Key Areas of Risk Management and Internal Control
Your Board through the Audit Committee and the Risk Management Committee has reviewed on the adequacy and effectiveness of
the risk management processes and the internal control system on a periodic basis. In reviewing the above, your Board has identified,
evaluated and managed significant risk faced by the Group for the financial year under review up to the date of approval of this
statement to ensure that its objective and strategies are achieved. In view that all the steps are put in place, your Board is confident
that the risk management and internal control system of the Group are sufficient to address any significant failings or weaknesses
identified and necessary actions are taken to remedy them.
Your Board remains committed towards maintaining a sound risk management policy and system of internal control which continuously
evolves to support both the type of business and size of operation of the Group as well as to cater to the changing external
environment. As such, your Board will, when necessary put in place appropriate action plans to further enhance the Groups system of
internal control and ensure that its risk management policy is effective in managing the Groups risk.
The Chief Executive Officer and the Chief Financial Officer have given assurance to your Board that the Groups risk management and
internal control system is operating adequately and effectively, in all material aspects, based on the risk management framework
adopted by the Group.
As required by paragraph 15.23 of the Bursa Securities Listing Requirements, the external auditors have reviewed this Statement on
Risk Management & Internal Control. As set out in their terms of engagement, the procedures were performed in accordance with
Recommended Practice Guide 5 (Revised) issued by Malaysian Institute of Accountants. Based on their procedures performed, the
external auditor has reported to your Board that nothing has come to their attention that causes them to believe that this Statement is
not prepared in all material respects, in accordance with the disclosures required by paragraph 41 & 42 of the Guidelines
nor is itfactually inaccurate.
This statement is made in accordance with the resolution of the Board of Directors dated 9 April 2014.
The Group has a clearly defined organization structure with clear defined lines of responsibility and accountability aligned to the
current business and operations requirements. Each departmental head reports directly to the Group Managing Director who in turn
reports to your Board under a separate agenda at each Board Meeting. The Group Managing Directors Report will encompass
significant development in the Groups business operations as well as development in the industry as a whole.
The Group also has in place a set of Operation Manual which has been reviewed by the Audit Committee and approved by yourBoard to guide the operation of each business division. The Group maintains a proper and systematic record keeping for a
reasonable period of time to safeguard all information of the Group. All business transactions data are computerized to ensure the
accuracy and timeliness of information and in compliance with law and regulations.
Management is required to prepare its comprehensive business plan and annual budgets for tabling to your Board for its deliberation
and approval. The Audit Committee will monitor the Groups performance against the approved budgets through the review of
quarterly interim financial reports. In their review of quarterly interim financial reports, the Audit Committee will deliberate on all key
financial and operating performance. In addition, your Board may call for a review of the strategic planning, budgeting and
forecasting of revenue and expenses in the light of changes to the business environment.
3. BOARDS STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
4. ASSURANCE FROM MANAGEMENT
5. REVIEW OF STATEMENT BY EXTERNAL AUDITOR
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ADDITIONAL COMPLIANCE
INFORMATIONUTILIZATION OF PROCEEDSThere was no fund raising exercise implemented during the financial year.
SHARE BUYBACKSThe Company does not have a scheme to buy back its own shares.
OPTIONS, WARRANTS OR CONVERTIBLE SECURITIESThe Company has not issued any options, warrants or convertible securities for the financial year ended 31 December 2013.
DEPOSITORY RECEIPT PROGRAMMEThe Company did not sponsor any depository receipt programme for the financial year ended 31 December 2013.
IMPOSITION OF SANCTIONS AND/OR PENALTIESThere were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by relevant regulatory
bodies during the financial year ended 31 December 2013.
NONAUDIT FEEDuring the financial year ended 31 December 2013, RM 36,000 was paid to the external auditors, BDO, for non-audit services.
PROFIT GUARANTEEThe Company did not issue any profit guarantee.
VARIATION OF RESULTSDuring the financial year, there was no variation of results by more than 10% from any profit estimate, forecast or unaudited results thatwere announced.
MATERIAL CONTRACTSOn 2 December 2013, the Group disposed of its entire shareholding in Tomei Gold & Jewellery (Subang) Sdn. Bhd. (TGJ (Subang)) toTeck Fong Property Sdn. Bhd. for a total cash consideration of RM6,095,000. The consideration was based on the net assets value ofTGJ (Subang) as at 30 November 2013 and taking into consideration the market valuation of an investment property owned by TGJ
(Subang).Teck Fong Property Sdn. Bhd. is a company controlled by Tan Sri Datuk Ng Teck Fong and family.
Except for the above, there were no other material contract entered into by the Company and/or its subsidiaries during the financial yearended 31 December 2013, which involves the interest of Directors and/or major shareholders.
RECURRENT RELATED PARTY TRANSACTIONSThe aggregate value of the recurrent related party transactions conducted by the Company and/or its subsidiary companies with relatedparties during the financial year were as follows:-
Amount oftransactions(RM)
1,037,828
1,042,505
54,150
375,882
391,020
660,400
10,540
3,440
Nature ofrelationship
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Nature of transactions
Sales of jewellery
Sales of jewellery and purchase
of manufacturing toolsRental of premises
Rental of premises
Rental of premises
Rental of premises
Staff trainings
Purchase of manufacturing tools
Companies within the Group
YXG
GPM
YXG, GPM, OMD
TGJ (MV)
TGJ (MV)
YXG, GPM, TGJM, OMD,TGJ (MV), TGJH, TR
TGJM
GPM
Transacting parties
Ong Tiong Yee & Sons Sdn. Bhd.
Schofer Germany-The Chain
Company Gmbh & Co. KGUnique Avenue Sdn. Bhd.
Best Arcade Sdn. Bhd.
Teck Fong Property Sdn. Bhd.
Oasis Properties Sdn. Bhd.
Oasis College Sdn. Bhd.
Gexcel Asia Sdn. Bhd.
Yi Xing Goldsmith Sdn. Bhd. (YXG)
Gemas Precious Metals Industries Sdn. Bhd. (GPM)
Tomei Gold & Jewellery Manufacturing Sdn. Bhd. (TGJM)
O M Design Sdn. Bhd. (OMD)
Tomei Gold & Jewellery (M.V.) Sdn. Bhd. (TGJ (MV))
Tomei Gold & Jewellery Holdings (M) Sdn. Bhd. (TGJH)
Tomei Retail Sdn. Bhd. (TR)
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NOTE 1Tan Sri Datuk Ng Teck Fong, Datuk Ng Yih Pyng and Ng Yih Chen are directors and major shareholders of the Company. Ng SheauChyn and Ng Sheau Yuen are directors and shareholders of the Company. Ong Kee Liang, a director and shareholder of Ong Tiong Yee& Sons Sdn. Bhd.,is the spouse of Ng Sheau Chyn, who is a director and shareholder of the Company. Datin Choong Chow Mooi, adirector and a shareholder of the Company is the spouse of Datuk Ng Yih Pyng.
NOTE 2Schofer Germany-The Chain Company Gmbh & Co. KG is a major shareholder of Gemas Precious Metals Industries Sdn. Bhd.
NOTE 3Tan Sri Datuk Ng Teck Fong, Datuk Ng Yih Pyng and Ng Yih Chen are directors and major shareholders of the Company. Ng SheauChyn and Ng Sheau Yuen are directors and shareholders of the Company. Tan Sri Datuk Ng Teck Fong and Ng Sheau Chyn are
directors and major shareholders of Unique Avenue Sdn. Bhd..Datuk Ng Yih Pyng, Ng Yih Chen and Ng Sheau Yuen are directors ofUnique Avenue Sdn. Bhd. Ng Teck Fong Holdings Sdn. Bhd. is a major shareholder of Unique Avenue Sdn. Bhd.. Tan Sri Datuk Ng TeckFong, Datuk Ng Yih Pyng, Ng Yih Chen, Ng Sheau Chyn and Ng Sheau Yuen are directors and major shareholders of Ng Teck FongHoldings Sdn. Bhd.. Datin Choong Chow Mooi, a director and a shareholder of the Company is the spouse of Datuk Ng Yih Pyng.
NOTE 4Tan Sri Datuk Ng Teck Fong, Datuk Ng Yih Pyng and Ng Yih Chen are direc