万马控股(06928) - 2019 - 年度财报

Company Information Board of Directors and Committees The Board of Directors, comprising executive and independent non-executive members, ensures sound governance through its audit, nomination, remuneration, and corporate governance committees - The Board of Directors includes 4 executive directors and 3 independent non-executive directors[7] - The company has an audit committee, a nomination committee, a remuneration committee, and a corporate governance committee[7] Key Contact and Registration Information The company is registered in the Cayman Islands, with its headquarters in Singapore and a principal place of business in Central, Hong Kong, listing on the HKEX under stock code 6928 - The company's registered office is in the Cayman Islands, with its headquarters and principal place of business in Singapore at Bedok North Street 5[7] - The principal place of business in Hong Kong is located on the 57th floor of The Center, 99 Queen's Road Central[7] - Key banking relationships include DBS Bank Ltd and DBS Bank (Hong Kong) Limited[10] Share and Listing Information The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited, with stock code 6928 - The company's shares are listed on The Stock Exchange of Hong Kong Limited, with stock code 6928[10] Chairman's Statement Chairman's Statement 2019 was a challenging year for TOMO Holdings Limited, marked by a shrinking Singapore passenger car market, the US-China trade war, and COVID-19 uncertainties, yet the Group successfully transferred its listing to the HKEX Main Board - On December 23, 2019, the Group successfully transferred its listing to the Main Board of The Stock Exchange of Hong Kong Limited[13] - The Singapore passenger car market experienced contraction, with fewer Certificates of Entitlement issued, and the US-China trade war negatively impacted the economy[13] 2019 Key Financial Performance | Indicator | 2019 (SGD) | 2018 (SGD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 16,487,000 | 17,818,000 | -7.5% | | Profit attributable to shareholders (after deducting transfer of listing expenses) | 3,761,000 | 4,242,000 | -11.3% | | Decrease in passenger car leather segment revenue | -19.1% | - | - | | Increase in selling and distribution costs | 443,000 | 422,000 | 4.98% | | Foreign exchange (loss)/gain | Recorded loss | Recorded gain | - | - The future will present greater challenges due to geopolitical uncertainties, global tensions, and the COVID-19 pandemic[14] - The Group will remain focused on its business objectives, delivering innovative products and quality services to customers, and advancing through market promotion strategies[14] Management Discussion and Analysis Business Review and Outlook The Group primarily supplies and installs passenger car leather upholstery and electronic accessories in Singapore, achieving satisfactory results and a successful Main Board transfer in 2019 despite economic downturns and reduced COE quotas, with future plans to maintain market leadership amid the COVID-19 pandemic - The Group's principal business involves the supply and installation of passenger car leather upholstery and electronic accessories, as well as the sale of electronic accessories[17] - The company's shares were transferred from GEM to the Main Board of the Stock Exchange for listing on December 23, 2019[17] - In 2019, the number of new passenger cars registered in Singapore decreased by approximately 9.9% to 72,300 units, primarily due to fewer Certificates of Entitlement expiring[17] - In 2019, revenue decreased by 7.5% to approximately SGD 16.487 million, and profit attributable to shareholders (after deducting transfer of listing expenses) decreased by 11.3% to approximately SGD 3.761 million[18] - The COVID-19 pandemic has impacted Singapore's business environment since January 2020, and the Group will strive to achieve its business objectives, maintain market leadership, and expand its products and services[18] Financial Review In FY2019, the Group's total revenue declined by 7.5% to SGD 16.487 million, primarily due to reduced demand for leather interiors and electronic accessories, leading to a 12.8% decrease in gross profit and a 39.9% gross margin, while administrative expenses significantly increased due to one-off listing costs, resulting in a 47.2% drop in profit for the year Comparison of Financial Performance 2019 vs 2018 | Thousand SGD | 2019 | 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 16,487 | 17,818 | -7.5% | | Gross Profit | 6,580 | 7,547 | -12.8% | | Gross Margin | 39.9% | 42.4% | -2.5% | | Profit for the year | 2,239 | 4,242 | -47.2% | | Profit for the year (after deducting transfer of listing expenses) | 3,761 | 4,242 | -11.3% | - The decrease in revenue was primarily due to a reduction in demand for leather interiors, navigation and multimedia accessories, and security accessories by approximately 19.1%, 7.0%, and 0.5%, respectively[23] - The decline in gross margin was mainly due to lower selling prices, partially offset by a decrease in warranty costs[24] - Other income increased by SGD 88 thousand to SGD 160 thousand, primarily from investment property rental income[25] - Net other (losses)/gains shifted from a SGD 65 thousand gain in 2018 to a SGD 38 thousand loss in 2019, mainly due to foreign exchange losses[26] - Administrative expenses increased by SGD 1.468 million to SGD 3.337 million, primarily due to one-off transfer of listing expenses of approximately SGD 1.522 million in 2019[28] Key Risks, Uncertainties, and Risk Management The Group faces various business risks, including reliance on its largest customer, reputation maintenance, technician supply, supplier dependency, and a single market strategy, with Certificate of Entitlement restrictions significantly impacting operations, underscoring the importance of risk management for its success - Key business risks include: reduced or lost business with the largest customer, maintaining reputation and customer service, supply of technicians and foreign workers, reliance on suppliers, and a single market business strategy[32] - Revenue is highly dependent on sales to the largest customer, and any reduction or loss of business could have a significant adverse impact[32] - Business is significantly affected by Singapore's Certificate of Entitlement restrictions[32] Capital Structure, Liquidity, and Financial Resources As of December 31, 2019, the Group's net current assets were approximately SGD 21.147 million, with a current ratio of about 9.7 times, indicating strong liquidity, and its operations are primarily funded by business revenue and cash, with no debt Liquidity and Financial Resources Comparison | Indicator | December 31, 2019 (SGD) | December 31, 2018 (SGD) | | :--- | :--- | :--- | | Net Current Assets | 21,147,000 | 18,696,000 | | Cash and Bank Balances | 19,536,000 | 16,472,000 | | Current Ratio | 9.7 times | 8.4 times | | Debt | None | None | - The increase in the current ratio was primarily due to higher cash and bank balances[33] - The Group's operations are primarily funded by revenue generated from business operations and available cash and bank balances[33] Comparison of Business Objectives with Actual Progress For the year ended December 31, 2019, the Group made varying progress in upgrading facilities, enhancing sales and marketing, expanding product offerings, and upgrading IT systems, with some goals achieved while others remain under discussion or review - New machinery and tools have been purchased, and new operating premises for showrooms, workshops, and warehouses have been acquired, though some premises are not yet fully operational due to lease agreements[36] - Consultants have been engaged to renovate existing showrooms and warehouses, with renovation plans currently under discussion and review[36] - A logistics management consultant has been engaged, and the system is currently under discussion, review, and testing[36] - The Group is exploring and identifying suitable branding consultants to redefine its B2C market brand positioning and promote products[39] - Consultants have been engaged to improve and refine website content and create an e-commerce platform, with the website currently under discussion, review, and testing[39] - The Group actively procures the latest innovative products and conducts product testing to stay ahead of market trends[43] - Customer service officers, marketing assistants, and sales managers have been hired, and the Group is actively seeking more experienced individuals to expand its team[44] - Existing servers have been upgraded, and a new Enterprise Resource Planning system and cloud backup storage have been implemented[48] - Accounting records have been migrated to the new ERP system, and an automated payroll system has been implemented, but point-of-sale and fixed asset management systems are still under discussion and plan review[49][50] Use of Proceeds As of December 31, 2019, of the SGD 10.3 million net proceeds from the share offer, SGD 7.48 million was utilized, with the remaining SGD 2.82 million deposited in interest-bearing bank accounts in Hong Kong, primarily for facility upgrades, product expansion, and working capital, while sales and marketing and IT system upgrades saw slower utilization Use of Proceeds from Share Offer (as of December 31, 2019) | Purpose | Planned Use (SGD) | Actual Amount Utilized (SGD) | Remaining Total (SGD) | | :--- | :--- | :--- | :--- | | Upgrade existing facilities, purchase new machinery and facilities | 5,160,000 | 4,010,000 | 1,150,000 | | Enhance sales and marketing efforts | 1,760,000 | 730,000 | 1,030,000 | | Expand our product offerings | 1,430,000 | 1,430,000 | – | | Upgrade and integrate information technology systems | 920,000 | 280,000 | 640,000 | | Working capital and general corporate purposes | 1,030,000 | 1,030,000 | – | | Total | 10,300,000 | 7,480,000 | 2,820,000 | - As of December 31, 2019, the remaining net proceeds were deposited in interest-bearing bank accounts in Hong Kong[54] - The Board anticipates no changes to the planned use of proceeds[55] Employee Information As of December 31, 2019, the Group maintained a total of 57 employees, consistent with 2018, with compensation based on roles and responsibilities, technicians receiving incentives in addition to salaries, and all employees eligible for bonuses upon satisfactory performance, with a total staff cost of approximately SGD 2.939 million in 2019 Employee Headcount Comparison | Category | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Executive Directors | 4 | 4 | | Senior Management | 2 | 2 | | Administrative Employees | 9 | 9 | | Technicians | 42 | 42 | | Total | 57 | 57 | - The Group provides bonuses to all employees upon satisfactory performance and promotes internal promotions to enhance satisfaction and reduce turnover[56] - For the year ended December 31, 2019, total staff costs (including directors' emoluments) were approximately SGD 2.939 million, slightly lower than SGD 2.962 million in 2018[56] Significant Acquisitions or Disposals of Subsidiaries and Associates During the year, the Group did not undertake any significant acquisition or disposal activities involving subsidiaries and associates - During the year, there were no significant acquisitions or disposals of subsidiaries and associates[59] Pledge of Group Assets As of December 31, 2019, leasehold properties with a total carrying amount of SGD 545,285 were pledged as security for the Group's bank facilities - As of December 31, 2019, leasehold properties with a total carrying amount of SGD 545,285 were pledged as security for the Group's bank facilities[60] Foreign Exchange Risk The Group's revenue and costs are primarily denominated in Singapore Dollars, but it faces foreign exchange risk from purchases and balance sheet items denominated in Hong Kong Dollars, US Dollars, and Malaysian Ringgit, with a 10% currency fluctuation potentially impacting 2019 after-tax profit by SGD 86 thousand - The Group faces foreign exchange risk from purchases denominated in currencies other than Singapore Dollars and from assets and liabilities recognized in currencies other than Singapore Dollars[61] - The primary foreign currencies are Hong Kong Dollars, US Dollars, and Malaysian Ringgit[61] - As of December 31, 2019, a 10% weakening or strengthening of foreign currencies against the Singapore Dollar would decrease/increase the 2019 after-tax profit by SGD 86 thousand (2018: SGD 315 thousand), mainly due to exchange losses/gains on Hong Kong Dollar-denominated cash and bank balances[61] Significant Investments Held by the Group For the year ended December 31, 2019, the Group did not hold any significant investments - For the year ended December 31, 2019, the Group held no significant investments[62] Contingent Liabilities During the year, the directors were not aware of any significant contingent liabilities - During the year, the directors were not aware of any significant contingent liabilities[63] Dividends The Board of Directors does not recommend the payment of a final dividend for the year ended December 31, 2019 - The Board of Directors does not recommend the payment of a final dividend for the year ended December 31, 2019 (2018: nil)[64] Events After Reporting Period Details of events after the reporting period are provided in Note 31 to the consolidated financial statements - Details of events after the reporting period are provided in Note 31 to the consolidated financial statements[65] Directors and Senior Management Executive Directors Executive Directors include Mr. Siew Yew Meng (Chairman and CEO), Ms. Lee Lai Fong (CFO and Administrative Director), Mr. Siew Yew Wai (Sales and Marketing Director), and Mr. Cha Jianping, all possessing extensive entrepreneurial and management experience in automotive accessories, leather interiors, electronic accessories, financial management, and information technology - Mr. Siew Yew Meng is the co-founder, Chairman, and CEO of the Group, with over 38 years of entrepreneurial and business operations experience, responsible for overseeing all aspects of the Group's operations[68] - Ms. Lee Lai Fong is the co-founder, Executive Director, and CFO and Administrative Director of the Group, with over 32 years of entrepreneurial and business operations experience, responsible for the Group's financial, treasury, and administrative matters[70] - Mr. Siew Yew Wai is an Executive Director and Sales and Marketing Director, with extensive experience in information technology, joining the Group in 2015 to assist in business expansion[73] - Mr. Cha Jianping was appointed as an Executive Director on April 1, 2018, holding a Bachelor's degree in Accounting and a Senior Accountant qualification, with various management positions in the automotive industry[74][75] Independent Non-Executive Directors Independent Non-Executive Directors, including Mr. Chan Kam Wah, Mr. Chan Ka Leung, and Mr. Wong Chi Kwan, bring extensive professional knowledge and management experience in telecommunications, fintech, private equity investment, accounting, and financial management, providing independent advice to the Board - Mr. Chan Kam Wah was appointed as an Independent Non-Executive Director on June 23, 2017, possessing extensive experience in the telecommunications industry, having served as CEO of GlobalRoam Group Ltd[78] - Mr. Chan Ka Leung was appointed as an Independent Non-Executive Director on June 23, 2017, an experienced financial executive and entrepreneur, having worked at KPMG, Deloitte, and Goldman Sachs[83][84] - Mr. Wong Chi Kwan was appointed as an Independent Non-Executive Director on June 1, 2019, with over 17 years of experience in accounting, financial management, human resources, and business administration, and holds a Singapore Chartered Accountant qualification[87][88] Senior Management Senior management includes Mr. Ong Kim Hai (Business Development Manager) and Mr. Ho Chan Ming (Financial Controller), who possess extensive professional experience in product development, evaluation, quality control, sales, marketing, financial planning, accounting operations, and internal control systems - Mr. Ong Kim Hai has served as Business Development Manager since December 2011, responsible for product development, evaluation, testing, and quality control, and assisting the marketing team[89] - Mr. Ho Chan Ming joined the Group in December 2016 as Financial Controller, responsible for financial planning and control, accounting operations, and internal control systems, and is a member of the Institute of Singapore Chartered Accountants[93][94] Corporate Governance Report Corporate Governance Practices The company has adopted and complied with all code provisions of the Corporate Governance Code set out in Appendix 14 of the HKEX Listing Rules for the year ended December 31, 2019, with the Board responsible for overseeing and managing overall risks and driving the Group's success - The company has adopted the Corporate Governance Code set out in Appendix 14 of the Listing Rules of the Stock Exchange and complied with all code provisions for the year ended December 31, 2019[98] - The Board of Directors is responsible for overseeing and managing the overall risks associated with the Group's business and driving the Group's success[98] Compliance with Directors' Securities Dealing Code The company has adopted a code of conduct for directors' securities transactions that is no less stringent than the Model Code under the Listing Rules, and all directors confirmed compliance for the year ended December 31, 2019 - The company has adopted a code of conduct for directors' securities transactions, with terms no less stringent than the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix 10 of the Listing Rules[99] - Following specific inquiries to all directors, all directors confirmed their compliance with the adopted standards for dealing and the code of conduct for directors' securities transactions for the year ended December 31, 2019[99] Board of Directors The Board of Directors, comprising 4 executive and 3 independent non-executive directors, meets Listing Rule requirements, with the Chairman and CEO roles combined by Mr. Siew Yew Meng, an arrangement deemed beneficial to the Group, and directors are subject to regular rotation and provided with timely information for informed decision-making - For the year ended December 31, 2019, the Board of Directors comprised 4 executive directors and 3 independent non-executive directors, meeting the requirements of Listing Rule 3.10[99] - The roles of Chairman and Chief Executive Officer are combined by Mr. Siew Yew Meng, an arrangement the Board believes is beneficial for the Group's overall strategic planning and business management[103] - Each executive director has entered into a service contract with the company for an initial term of three years, while independent non-executive directors have appointment letters for an initial term of one year[104] - At each annual general meeting, one-third of the directors shall retire by rotation, and each director must retire at least once every three years[104] 2019 Board Meeting Attendance Record | Director Name | Meetings Attended/Held | | :--- | :--- | | Mr. Siew Yew Meng | 4/4 | | Ms. Lee Lai Fong | 4/4 | | Mr. Siew Yew Wai | 4/4 | | Mr. Cha Jianping | 4/4 | | Mr. Chan Kam Wah | 4/4 | | Mr. Chan Ka Leung | 4/4 | | Mr. Au Kai Lun (resigned on June 1, 2019) | 2/2 | | Mr. Wong Chi Kwan (appointed on June 1, 2019) | 2/2 | Corporate Governance Functions The Board is responsible for fulfilling the functions outlined in Code Provision D.3.1 of the Corporate Governance Code, including reviewing corporate governance policies, director and senior management training, legal and regulatory compliance, Model Code adherence, and corporate governance report disclosures - The Board of Directors is responsible for fulfilling the functions set out in Code Provision D.3.1 of the Corporate Governance Code[111] - The scope of review includes corporate governance policies and practices, training for directors and senior management, compliance with legal and regulatory requirements, compliance with the Model Code and written guidelines for employees, and disclosure in the Corporate Governance Report[111] Directors' Training In accordance with Code Provision A.6.5, the company provides continuous professional development for all directors to update their knowledge and skills, ensuring their informed and relevant contributions to the Board, and will continue to provide updates on Listing Rules and other applicable regulatory developments - All directors should participate in continuous professional development to develop and update their knowledge and skills[112] - The company will continue to provide directors with updates on the latest developments in the Listing Rules and other applicable regulatory requirements to ensure compliance and enhance directors' awareness of good corporate governance practices[112] Board Committees The Board has established four committees—Audit, Nomination, Remuneration, and Corporate Governance—each with written terms of reference, adequate resources, and delegated authority to operate, playing crucial roles in reviewing financial statements, recommending directors, formulating remuneration policies, and maintaining the effectiveness of the corporate governance system - The Board of Directors has established an Audit Committee, a Remuneration Committee, a Nomination Committee, and a Corporate Governance Committee[114] - Each committee has written terms of reference and is provided with adequate resources and delegated authority to operate within its terms of reference[114] - The primary responsibilities of the Audit Committee are to provide recommendations on the appointment and removal of external auditors, review financial statements, and oversee internal control procedures[115] - The primary responsibilities of the Nomination Committee are to review the Board structure, identify suitable director candidates, assess the independence of independent non-executive directors, and provide recommendations on director appointments[116] - The primary function of the Remuneration Committee is to make recommendations to the Board on the remuneration policy and structure for directors and senior management, ensuring that no director or their associates participate in determining their own remuneration[121] - The primary responsibilities of the Corporate Governance Committee are to maintain the effectiveness of the Group's corporate governance and internal control systems and to formulate corporate governance policies[123] Accountability and Audit The Board affirms its responsibility to prepare financial statements on a going concern basis, accurately and fairly reflecting the Group's position, with the auditor's responsibilities detailed in the Independent Auditor's Report - The Board of Directors confirms its responsibility to prepare financial statements for each financial year on a going concern basis, truly and fairly reflecting the Group's position[126] - The responsibilities of the company's auditor, PricewaterhouseCoopers, are set out in the "Independent Auditor's Report" section of this report[126] Risk Management and Internal Control The Board is responsible for overseeing and managing the Group's business-related risks and has established an internal control system covering corporate governance, financial reporting, operations, and compliance, regularly reviewing its effectiveness, ensuring management adherence to procedures, and understanding insider information handling requirements - The Board of Directors is responsible for overseeing and managing the overall risks associated with the Group's business[127] - The Group has established an internal control system covering corporate governance, financial reporting, revenue, expense management, human resources, finance, and general computer controls[128] - The Board has reviewed the effectiveness of the Group's internal control and risk management systems and believes the current systems are suitable for business operations[128] - Directors understand the requirements of applicable regulations, Part XIVA of the Securities and Futures Ordinance, and the Listing Rules regarding the handling and dissemination of inside information[128] Compliance Officer Ms. Lee Lai Fong has been appointed as the company's Compliance Officer, with her biographical details provided in the "Directors and Senior Management" section - Ms. Lee Lai Fong has been appointed as the company's Compliance Officer[129] Company Secretary Mr. Man Yun Wah has served as Company Secretary since February 1, 2017, meeting Listing Rule requirements and directly liaising with the Board, with all directors entitled to his advice and services on corporate governance matters - Mr. Man Yun Wah has served as the company's Company Secretary since February 1, 2017, in compliance with Listing Rule 3.29[130] - All directors are entitled to the advice and services of the Company Secretary on corporate governance and Board practices and matters[131] Auditor's Remuneration For the year ended December 31, 2019, remuneration paid to PricewaterhouseCoopers for audit services was approximately SGD 155 thousand, and for non-audit services, approximately SGD 145.886 thousand, with the latter primarily related to the transfer of listing Auditor's Remuneration (2019) | Service Type | Amount (SGD) | | :--- | :--- | | Audit Services | 155,000 | | Non-Audit Services | 145,886 | - Remuneration for non-audit services includes professional fees related to the transfer of listing[133] Communication with Shareholders The company is committed to effective and continuous communication with shareholders and potential investors, timely disclosing financial performance and business developments through annual general meetings, annual/interim/quarterly reports, announcements, and circulars, while adhering to notice period requirements for general meetings - The company is committed to effective and continuous communication with its shareholders and potential investors, timely disclosing practical information[136] - Communication with shareholders is conducted through annual general meetings, annual, interim, and quarterly reports, announcements, and circulars[136][140] - The company complies with the Corporate Governance Code's requirement to issue notice for annual general meetings at least 20 full business days prior to the meeting[136] Shareholders' Rights Shareholders have the right to requisition an extraordinary general meeting in accordance with the company's articles of association, though Cayman Islands company law does not provide for shareholders to propose resolutions at general meetings, and shareholders can inquire about their rights through the Company Secretary or the Hong Kong share registrar - Any one or more shareholders holding not less than one-tenth of the company's paid-up share capital have the right to request the Board to convene an extraordinary general meeting[137] - Cayman Islands company law does not contain provisions for shareholders to propose resolutions at general meetings[138] - Shareholders may inquire about their shareholding and dividend rights with the Company Secretary or the Hong Kong share registrar[139] Investor Relations The company establishes various communication channels with its shareholders, including annual general meetings and the publication and distribution of annual, interim, and quarterly reports, announcements, and circulars on the Stock Exchange and the company's website - The company establishes various communication channels with its shareholders, including but not limited to convening annual general meetings, and publishing and distributing annual, interim, and quarterly reports, announcements, and circulars on the Stock Exchange and the company's website, and to shareholders[140] Articles of Association For the year ended December 31, 2019, there were no significant changes to the company's Articles of Association - For the year ended December 31, 2019, there were no significant changes to the company's Articles of Association[141] Directors' Report Principal Activities The company's principal activity is investment holding, with the principal activities of its major subsidiaries detailed in Note 1 to the consolidated financial statements - The company's principal activity is investment holding, while the principal activities of its major subsidiaries are set out in Note 1 to the consolidated financial statements[145] Segment Information An analysis of the Group's performance by operating segment for the year is provided in Note 5 to the consolidated financial statements - An analysis of the Group's performance by operating segment for the year is provided in Note 5 to the consolidated financial statements[146] Business Review The Group's business review for the year, along with future business developments, is presented in the "Management Discussion and Analysis" section on pages 5 to 12 of this annual report, forming part of the Directors' Report - The Group's business review for the year, along with future business developments, is presented in the "Management Discussion and Analysis" section on pages 5 to 12 of this annual report[147] Results and Appropriations The Group's results for the year are presented in the consolidated statement of comprehensive income on page 58, and the directors do not recommend a final dividend payment for the year - The Group's results for the year are presented in the consolidated statement of comprehensive income on page 58[148] - The directors do not recommend the payment of a final dividend to the company's shareholders for the year (2018: not applicable)[149] Donations During the year, the Group's charitable and other donations amounted to SGD 12,950, an increase from 2018 Charitable and Other Donations | Year | Amount (SGD) | | :--- | :--- | | 2019 | 12,950 | | 2018 | 6,310 | Property, Plant and Equipment Details of changes in the Group's property, plant and equipment during the year are provided in Note 15 to the consolidated financial statements - Details of changes in the Group's property, plant and equipment during the year are provided in Note 15 to the consolidated financial statements[151] Share Capital Details of changes in the company's share capital for the year ended December 31, 2019, are provided in Note 23 to the consolidated financial statements - Details of changes in the company's share capital for the year ended December 31, 2019, are provided in Note 23 to the consolidated financial statements[152] Distributable Reserves As of December 31, 2019, the company's distributable reserves, calculated under Cayman Islands company law, were approximately SGD 6.514 million, a decrease from 2018 Distributable Reserves | Year | Amount (SGD) | | :--- | :--- | | 2019 | 6,514,000 | | 2018 | 8,432,000 | Dividend Policy The company's dividend distribution policy outlines the principles for determining dividend amounts, which will be based on available financial resources, investment needs, and optimal shareholder returns, with the Board considering factors such as cash flow, earnings stability, long-term investments, future cash requirements, economic environment, industry outlook, government policies, and regulatory provisions - The company's dividend distribution policy outlines the principles for determining the amount that can be distributed as dividends to its shareholders[155] - The Board will consider factors such as cash flow position, earnings stability, long-term investments, future cash requirements for development, economic environment, industry outlook for future years, government policies, industry-specific rules, and regulatory provisions[156] Share Option Scheme Except for the company's share option scheme, no equity-linked agreements that would or could result in the issuance of company shares were entered into or existed during or at the end of the year - Except for the company's share option scheme, no equity-linked agreements that would or could result in the issuance of company shares were entered into or existed during or at the end of the year[156] Pre-emptive Rights Neither the company's Articles of Association nor Cayman Islands law contains provisions for pre-emptive rights requiring the company to offer new shares proportionally to existing shareholders - Neither the company's Articles of Association nor Cayman Islands law contains provisions for pre-emptive rights requiring the company to offer new shares proportionally to existing shareholders[157] Directors' Rights to Acquire Shares or Debentures At no time during the year ended December 31, 2019, were any rights to acquire benefits by acquiring shares or debentures of the company granted to any director or their respective spouses or children under 18, nor were any such rights exercised by them - At no time during the year ended December 31, 2019, were any rights to acquire benefits by acquiring shares or debentures of the company granted to any director or their respective spouses or children under 18, nor were any such rights exercised by them[158] Five-Year Financial Summary A summary of the Group's published results, assets, and liabilities for the past five financial years is presented on page 108, which does not form part of the consolidated financial statements - A summary of the Group's published results, assets, and liabilities for the past five financial years is presented on page 108[160] - This summary does not form part of the consolidated financial statements[160] Purchase, Sale or Redemption of Listed Securities The company's shares were listed on GEM on July 13, 2017, and transferred to the Main Board of the Stock Exchange on December 23, 2019, with no purchase, sale, or redemption of any listed securities by the company or its subsidiaries since listing until the date of this report - The company's shares were listed on GEM, operated by the Stock Exchange, on July 13, 2017, and transferred to the Main Board of the Stock Exchange for listing on December 23, 2019[161] - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities from the date of listing until the date of this report[161] Share Option Scheme The company adopted a share option scheme on June 23, 2017, to attract and retain talent and promote business development, valid for 10 years, with a maximum of 10% of issued shares available for grant and an individual allocation limit of 1%, and an exercise period of up to 10 years at a subscription price not less than the higher of specific market prices or par value - The share option scheme was adopted on June 23, 2017, to attract and retain top talent and provide additional incentives to the Group's employees, directors, and consultants[162][163] - The share option scheme will remain in effect for a period of 10 years from its adoption date[162] - The maximum number of shares involved in share options shall not exceed 10% of all issued shares on the listing date (i.e., not more than 45,000,000 shares)[165] - The total number of shares issued and to be issued upon exercise of share options in any twelve-month period up to the grant date shall not exceed 1% of the issued shares[166] - Grantees may exercise share options during a period determined by the Board, provided that such period does not exceed ten years from the grant date[168] - Grantees of share options are required to pay HKD 1.00 to the company for each option granted upon acceptance of the offer[170] - The subscription price for shares is determined solely by the Board but shall not be less than the highest of the closing price on the Stock Exchange, the average closing price for five trading days, and the par value of the shares[171] Directors As of the date of this report, the Board of Directors includes Mr. Siew Yew Meng (Chairman and CEO), Ms. Lee Lai Fong (Compliance Officer), Mr. Siew Yew Wai, Mr. Cha Jianping (Executive Directors), and Mr. Chan Kam Wah, Mr. Chan Ka Leung, Mr. Wong Chi Kwan (Independent Non-Executive Directors), with some directors retiring at the upcoming Annual General Meeting and eligible for re-election, and executive directors having initial three-year service contracts while independent non-executive directors have initial one-year appointment letters - As of the year and the date of this report, the Board of Directors includes Mr. Siew Yew Meng, Ms. Lee Lai Fong, Mr. Siew Yew Wai, Mr. Cha Jianping (Executive Directors), and Mr. Chan Kam Wah, Mr. Chan Ka Leung, Mr. Wong Chi Kwan (Independent Non-Executive Directors)[172] - In accordance with the Articles of Association, Mr. Siew Yew Meng, Mr. Siew Yew Wai, Mr. Cha Jianping, and Mr. Wong Chi Kwan will retire at the company's upcoming Annual General Meeting and are eligible and willing to stand for re-election[172] - Each executive director has entered into a service agreement with the company for an initial term of three (3) years from the listing date[174] - Each independent non-executive director has entered into an appointment letter with the company for an initial term of one (1) year from the listing date[174] - Directors' remuneration is determined by the Board with reference to the recommendations of the Remuneration Committee, directors' duties, responsibilities, and performance, and the Group's results[175] Directors' Material Interests in Significant Transactions, Arrangements, and Contracts At the end of or at any time during the year, there were no significant transactions, arrangements, or contracts entered into by the company's subsidiaries, fellow subsidiaries, or its parent company, in which the company's directors had a direct or indirect material interest, that were material to the Group's business - At the end of or at any time during the year, there were no significant transactions, arrangements, or contracts entered into by the company's subsidiaries, fellow subsidiaries, or its parent company, in which the company's directors had a direct or indirect material interest, that were material to the Group's business[176] Controlling Shareholders' Interests in Significant Contracts Except for related party transactions disclosed in Note 28 to the consolidated financial statements, as of December 31, 2019, the company's controlling shareholders had no direct or indirect material interests in any contracts significant to the Group's business in which the company or any of its subsidiaries participated - Except for related party transactions disclosed in Note 28 to the consolidated financial statements in this report, as of December 31, 2019, the company's controlling shareholders had no direct or indirect material interests in any contracts significant to the Group's business in which the company or any of its subsidiaries participated[177] Biographical Details of Directors and Senior Management The biographical details of the directors and senior management are provided on pages 13 to 18 of this report - The biographical details of the directors and senior management are provided on pages 13 to 18 of this report[178] Directors' and Chief Executive's Interests and/or Short Positions in Shares, Underlying Shares, and Debentures of the Company or any Associated Corporation As of the date of this report, Mr. Siew Yew Meng and Ms. Lee Lai Fong (who are spouses) jointly held 230 million shares of the company through their controlled corporation, TOMO Ventures Limited, representing approximately 51.11% of the company's equity, and no arrangements were entered into during the year that would allow directors to benefit from acquiring shares or debentures of the company or its subsidiaries Directors' Interests in Company Shares | Director Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Company's Equity | | :--- | :--- | :--- | :--- | | Mr. Siew Yew Meng | Interest in controlled corporation | 230,000,000 (L) | 51.11% | | Ms. Lee Lai Fong | Interest in controlled corporation | 230,000,000 (L) | 51.11% | - The entire issued share capital of TOMO Ventures Limited is legally and beneficially owned by Ms. Lee Lai Fong and Mr. Siew Yew Meng, with 51% and 49% interests, respectively[181] - Ms. Lee Lai Fong and Mr. Siew Yew Meng are spouses, and under the Securities and Futures Ordinance, they are deemed to have an interest in all shares held by each other[181] - For the year ended December 31, 2019, neither the company nor any of its subsidiaries entered into any arrangements that would allow directors to benefit from acquiring shares or debentures of the company or any other body corporate[181] Substantial Shareholders' Interests and/or Short Positions in Shares and Underlying Shares of the Company As of the date of this report, Mr. Siew Yew Meng, Ms. Lee Lai Fong, and TOMO Ventures Limited were disclosed as substantial shareholders, each holding 230 million shares of the company, representing approximately 51.11% of the company's equity Substantial Shareholders' Interests in Company Shares | Name/Company Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Company's Equity | | :--- | :--- | :--- | :--- | | Mr. Siew Yew Meng | Interest in controlled corporation | 230,000,000 (L) | 51.11% | | Ms. Lee Lai Fong | Interest in controlled corporation | 230,000,000 (L) | 51.11% | | TOMO Ventures | Beneficial owner | 230,000,000 (L) | 51.11% | - The entire issued share capital of TOMO Ventures Limited is legally and beneficially owned by Ms. Lee Lai Fong and Mr. Siew Yew Meng, with 51% and 49% interests, respectively[184] Management Contracts During the year, no management and administration contracts relating to the whole or any substantial part of the company's business were entered into or existed - During the year, no management and administration contracts relating to the whole or any substantial part of the company's business were entered into or existed[185] Major Customers and Suppliers During the year, the Group's largest supplier accounted for 28.9% of purchases, with the top five suppliers collectively accounting for 77.7%, while the largest customer accounted for 66.2% of sales, and the top five customers collectively accounted for 94.4%, with no beneficial interests held by directors, their associates, or shareholders holding over 5% of the company's issued share capital in any of the top five customers or suppliers Major Suppliers and Customers Proportion (2019) | Category | Proportion (%) | | :--- | :--- | | Largest Supplier | 28.9% | | Top Five Suppliers (total) | 77.7% | | Largest Customer | 66.2% | | Top Five Customers (total) | 94.4% | - To the best of the directors' knowledge, during the year, no director, their associates, or any shareholder holding over 5% of the company's issued share capital had any beneficial interest in any of the Group's top five customers or suppliers[187] Connected Transactions For the year ended December 31, 2019, the Group had no connected transactions requiring disclosure under the Listing Rules - For the year ended December 31, 2019, the Group had no transactions requiring disclosure as connected transactions under the Listing Rules[188] Financial Assistance and Guarantees to Affiliated Companies As of December 31, 2019, the Group had not provided any financial assistance or guarantees - As of December 31, 2019, the Group had not provided any financial assistance or guarantees[189] Sufficiency of Public Float Based on available public information and to the best of the directors' knowledge, the company's issued shares maintained a sufficient public float of at least 25% from the listing date to December 31, 2019, and up to the date of this report - Based on the company's available public information and to the best of the directors' knowledge, it is confirmed that the company's issued shares maintained a sufficient public float of at least 25% from the listing date to December 31, 2019, and up to the date of this report[190] Tax Relief The company is not aware of any tax relief enjoyed by its shareholders due to their holding of company shares - The company is not aware of any tax relief enjoyed by its shareholders due to their holding of company shares[191] Compliance with Non-Competition Undertakings The company's controlling shareholders (Mr. Siew Yew Meng, Ms. Lee Lai Fong, and TOMO Ventures Limited) entered into a non-competition deed on June 23, 2017, and during the year, the independent non-executive directors reviewed and confirmed full compliance with no breaches - The company's controlling shareholders entered into a non-competition deed on June 23, 2017, providing certain non-competition undertakings to the company[192] - During the year, the independent non-executive directors reviewed the implementation of the non-competition deed and confirmed that the covenantors had fully complied with it, with no breaches by any covenantor[192] Competing Business During the year and up to the date of this report, no director or controlling shareholder of the company or their respective associates had any interest in any business that competes or may compete with the Group - During the year and up to the date of this report, no director or controlling shareholder of the company or their respective associates had any interest in any business that competes or may compete with the Group[195] Subsequent Events Details of subsequent events are provided in Note 31 to the consolidated financial statements - Details of subsequent events are provided in Note 31 to the consolidated financial statements[196] Corporate Governance Report For details on the Group's corporate governance practices, please refer to the Corporate Governance Report on pages 19 to 25 of this annual report - For details on the Group's corporate governance practices, please refer to the Corporate Governance Report on pages 19 to 25 of this annual report[197] Loans and Borrowings As of December 31, 2019, the Group had no bank loans or other borrowings - As of December 31, 2019, the Group had no bank loans or other borrowings[198] Permitted Indemnity Provisions At no time during the financial year and up to the date of this Directors' Report has there been, or is there currently in force, any permitted indemnity provision benefiting any director of the company or any associated company - At no time during the financial year and up to the date of this Directors' Report has there been, or is there currently in force, any permitted indemnity provision benefiting any director of the company or any associated company[199] Annual General Meeting The Annual General Meeting will be held on Tuesday, June 2, 2020, and the company will dispatch a notice to shareholders in accordance with the articles, Listing Rules, and other applicable laws and regulations - The Annual General Meeting will be held on Tuesday, June 2, 2020[200] - The company will dispatch a notice to shareholders in compliance with the articles, Listing Rules, and other applicable laws and regulations[200] Closure of Register of Members To determine eligibility to attend and vote at the upcoming Annual General Meeting, the company will close its register of members from Thursday, May 28, 2020, to Tuesday, June 2, 2020, inclusive, with all transfer documents to be lodged by 4:30 p.m. on Wednesday, May 27, 2020 - To determine eligibility to attend and vote at the upcoming Annual General Meeting, the company will close its register of members from Thursday, May 28, 2020, to Tuesday, June 2, 2020 (both days inclusive)[202] - All share transfer documents, together with the relevant share certificates, must be lodged with the company's Hong Kong share registrar, Tricor Investor Services Limited, by 4:30 p.m. on Wednesday, May 27, 2020[202] Auditor The consolidated financial statements have been audited by PricewaterhouseCoopers, who will retire and are eligible and willing to be re-appointed, and the company will propose a resolution at the upcoming Annual General Meeting for their re-appointment as auditor - The consolidated financial statements have been audited by PricewaterhouseCoopers, who will retire and are eligible and willing to be re-appointed[203] - The company will propose a resolution at the upcoming Annual General Meeting for the re-appointment of PricewaterhouseCoopers as the company's auditor[203] Environmental, Social and Governance Report Overview TOMO Holdings Limited, primarily engaged in passenger car leather upholstery and electronic accessories in Singapore, transferred its listing to the HKEX Main Board on December 23, 2019, with this report covering the policies and regulatory compliance of its core Singaporean operations (TOMO-CSE Autotrim Pte Ltd) on significant ESG themes for FY2019 - TOMO Holdings Limited primarily operates in Singapore, engaging in passenger car leather upholstery and electronic accessories business[207] - The company transferred its listing to the Main Board of the Stock Exchange on December 23, 2019[208] - The report's scope covers the core business of TOMO-CSE Autotrim Pte Ltd, operating in Singapore, and complies with the Environmental, Social and Governance Reporting Guide set out in Appendix 27 of the Listing Rules of the Stock Exchange[209] Our Sustainability Approach The Group is committed to environmental and social responsibility, maintaining high standards of business ethics and corporate governance, with Standard Operating Procedures (SOPs) providing guidance on fraud risk management, whistleblowing, and gift/entertainment control, while regularly collaborating with stakeholders to enhance sustainability performance, prioritizing product quality, supply chain management, and occupational health and safety - The Group strictly adheres to environmental and social responsibilities and maintains high standards of business ethics and corporate governance in all aspects of its operations[212] - The Group's Standard Operating Procedures (SOPs) provide guidance on fraud risk management, whistleblowing procedures, and control over gifts and entertainment[212] - The Group regularly collaborates with internal and external stakeholders (customers, employees, government, shareholders, suppliers) to enhance its sustainability approach and performance[213] - Based on stakeholder engagement, the Group identifies product quality control and management, supply chain management, and occupational health and safety as the most material matters for the Group and its stakeholders[213] Environment The Group is committed to environmental protection, reducing its operational impact, with total greenhouse gas emissions increasing by 3.6% to 74.1 tonnes of CO2 equivalent in FY2019, primarily due to increased Scope 1 emissions, while complying with all relevant environmental laws and implementing internal policies to reduce energy, water, and paper consumption, and promoting energy efficiency and recycling - The Group recognizes the importance of environmental protection and continuously strives to reduce the environmental impact of its operations[217] 2019 Environmental Emissions Key Performance Indicators | Description | 2019 | 2018 | Unit | Performance Change | | :--- | :--- | :--- | :--- | :--- | | Greenhouse Gas Emissions (Scope 1) | 34.62 | 30.8 | tonnes CO2e | 12.4% increase | | Greenhouse Gas Emissions (Scope 2) | 39.48 | 40.7 | tonnes CO2e | 3.0% decrease | | Greenhouse Gas Emissions (Total) | 74.1 | 71.5 | tonnes CO2e | 3.6% increase | | Greenhouse Gas Emissions Intensity | 96.7 | 93.3 | tonnes CO2e/sqm | 3.6% increase | - The increase in Greenhouse Gas (Scope 1) emissions was primarily due to increased installation work at the Pandan Gardens workplace and higher diesel fuel consumption by technical support vehicles[220] - The Group has complied with all relevant environmental laws in Singapore and did not violate any laws or regulations related to emissions in FY2019[221] 2019 Resource Usage Key Performance Indicators | Description | 2019 | 2018 | Unit | Performance Change | | :--- | :--- | :--- | :--- | :--- | | Electricity Consumption | 63,474 | 65,408 | kWh | 3.0% decrease | | Electricity Intensity | 82.86 | 85.4 | kWh/sqm | 3.0% decrease | | Energy Consumption (Diesel) | 12,918 | 11,490 | MJ | 12.4% increase | | Energy Consumption Intensity | 16.86 | 15.0 | MJ/sqm | 12.4% increase | | Water Consumption | 305 | 386 | cubic meters | 21.0% decrease | | Water Intensity | 0.4 | 0.5 | cubic meters/sqm | 21.0% decrease | - The significant decrease in water consumption was due to increased installation work at customer workplaces, including water-intensive car wash value-added services[227] - The Group has established policies and procedures to reduce energy consumption in offices and workplaces, assess energy efficiency, and switch off appliances when not in use[230] - The Group encourages energy conservation by reducing vehicle emissions through regular maintenance[231] - The Group adopts various measures to improve water efficiency, such as placing "Save Water" posters, enhancing faucet inspection and maintenance, and using water-saving equipment[234] - The Group is committed to reducing paper waste at the source through practices like double-sided printing, using email, and recycling old single-sided documents[234] Society The Group is committed to corporate social responsibility, focusing on employee well-being, high service standards, external relations, and community contributions, with strict policies and compliance with relevant laws and regulations across employment, health and safety, development and training, labor standards, supply chain management, product responsibility, anti-corruption, and community investment - The Group is committed to fulfilling its social responsibilities as a corporate citizen and strives to build harmonious relationships with its employees, customers, and the community[238] - The Group's employment policies strictly comply with applicable employment laws and regulations in Singapore, including the Employment Act and the Employment of Foreign Manpower Act[240] - The Group is an equal opportunity employer, committed to providing a fair working environment for its employees, with recruitment, remuneration, promotion, and benefits handled based on objective assessment, equal opportunity, and non-discrimination[245] - The Group is committed to maintaining a healthy and safe working environment for its employees and has established policies compliant with ISO 9001:2008 and BizSAFE Level 3[248][250] - The Group provides adequate training for its employees, including internal and external vocational training courses, to enhance their knowledge and skills[252][253] - The Group strictly complies with Singaporean labor laws and regulations, prohibiting the employment of any child labor and/or forced labor[256] - The Group maintains and manages a sustainable and reliable supply chain, regularly monitors the quality of suppliers and supply chain practices, and prioritizes local suppliers[259] - The Group is committed to ensuring product quality and safety, complying with consumer protection laws, and has obtained ISO 9001:2008 and BizSAFE Level 3 certifications[261][263] - The Group is committed to protecting and enforcing its intellectual property rights and has registered the "Eurostyle" trademark in Singapore and Hong Kong[266] - The Group is committed to comply