Internet Tomei Annual Report 1 - Malaysiastock.biz In 2013, it became an exclusive distributor of De Beers, reinforcing its stature as among the top jeweller in the market. In addition,

VISION愿景

CORE VALUES核心价值

MISSION使命

To be theNo 1

PROFITABLE&

EFFICIENTJewellery Company

inMalaysia

by2020

Pioneering in productsuperiority and designcreativity are our leads.

Making sustained effortstowards brand significanceto gain customers’ trust are

our priority.

Service excellence is ourpassion.

Developing a progressiveorganization with dignity is

our ultimate goal.

优质的产品，创新的设计，卓越的服务，杰出的企业。

ACCOUNTABILITY承担责任Akauntabiliti

INTEGRITY诚信

Integriti

PASSION热忱

Sepenuh Hati

TEAMWORK团队精神

Semangat Berpasukan

TABLE OFCONTENTS

121025

Table of Contents

Financial HighlightsCorporate Information

Corporate StructureCorporate Profile

Profile of the Board of Directors

Chairman’s StatementProfile of Senior Management

Management Discussionand Analysis

Corporate GovernanceOverview Statement

Sustainability StatementCalendar of Events

Audit Committee Report

Nomination Committee StatementStatement on Risk Management& Internal ControlAdditional ComplianceInformation

Directors' ResponsibilityStatement

Financial StatementsList of PropertyShareholdings Analysis

Notice of Annual General MeetingStatement Accompanying Noticeof Annual General MeetingProxy Form

03040607

1519

333940

425051

121

44

48

118119

129

131

5 YEARS FINANCIALHIGHLIGHTS

Revenue (RM '000)

Profit Before Tax (RM '000)

Profit/(Loss) Attributable to Owners

of the Parent (RM '000)

Total Shareholders' Fund (RM '000)

Net Earnings/(Loss) Per Share (Sen)

Net Tangible Assets Per Share (RM)

Gross Dividend Per Share (Sen)

2018564,024

6,687

4,745206,862

3.421.491.00

2014564,799

5,513

1,124

184,674

0.81

1.33

1.00

2015499,341

2,067

(1,722)

185,773

(1.24)

1.34

-

2016472,209

8,053

4,687

190,006

3.38

1.37

-

2017617,020

21,282

16,045

203,566

11.58

1.47

1.00

Sen

Net Earnings/(Loss)Per Share

2014 2015 2016 2017 2018 Year

14.00

12.00

10.00

8.00

6.00

4.00

2.00

0.00

(2.00)

2014 2015 2016 2017 2018 Year

Total Shareholders'Fund

210,000

205,000

200,000

195,000

190,000

185,000

180,000

175,000

170,000 RM

'000

1.20

1.00

0.80

0.60

0.40

0.20

0.00 Sen

Gross DividendPer Share

2014 2015 2016 2017 2018 Year

2014 Year

2015 2016 2017 2018

RM

'000

Revenue

200,000

400,000

600,000

100,000

300,000

500,000

700,000

0

(5,000)

5,000

10,000

15,000

20,000

RM

'000

2014 2015 2016 2017 2018 Year

Profit/(Loss) Attributableto Owners of the Parent

0

RM

'000

Year 2014 2015 2016 2017 2018

ProfitBefore Tax

5,000

0

10,000

15,000

20,000

25,000

RM

Net Tangible AssetsPer Share

2014 2015 2016 2017 2018 Year

1.50

1.55

1.45

1.40

1.35

1.30

1.25

1.20

Page 2

TOMEI CONSOLIDATED BERHAD (692959-W)ANNUAL REPORT 2018

CORPORATEINFORMATION

BOARD OF DIRECTORS

Tan Sri Datuk Dr Ng Teck FongGroup Executive Chairman

Yang Mulia Raja Tan Sri Dato’ Seri AmanBin Raja Haji AhmadSenior Independent Non-Executive Director

Datuk Ng Yih PyngGroup Managing Director

Datin Nonadiah Binti AbdullahIndependent Non-Executive Director

Datuk M Chareon Sae Tang @ Tan Whye AunIndependent Non-Executive Director

Mr Lau Tiang HuaIndependent Non-Executive Director

Datin Choong Chow MooiGroup Executive Director

Mr Ng Yih ChenGroup Executive Director

Ms Ng Sheau ChynGroup Executive Director

Ms Ng Sheau YuenGroup Executive Director

AUDIT COMMITTEE

Mr Lau Tiang HuaChairman, Independent Non-Executive Director



RISK MANAGEMENT COMMITTEE

Mr Lau Tiang HuaChairman, Independent Non-Executive Director



Datuk Ng Yih PyngGroup Managing Director

REMUNERATION COMMITTEE

Datuk M Chareon Sae Tang @ Tan Whye AunChairman, Independent Non-Executive Director




NOMINATION COMMITTEE

Datuk M Chareon Sae Tang @ Tan Whye AunChairman, Independent Non-Executive Director




COMPANY SECRETARY

Ms Teoh Kok Jong (LS 04719)

REGISTERED OFFICE

SO-26-02, Menara 1,No 3, Jalan Bangsar,KL Eco City,59200 Kuala Lumpur.Tel: 03-2381 2188Fax: 03-2201 5608

PRINCIPAL PLACE OF BUSINESS

8-1, Jalan 2/131A,Project Jaya Industrial Estate,Batu 6, Jalan Kelang Lama,58200 Kuala Lumpur.Tel: 03-7784 8136Fax: 03-7784 8140Website: www.tomei.com.my

AUDITOR

BDO PLT (LLP0018825 - LCA & AF 0206)Level 8,BDO @ Menara CenTARa,360, Jalan Tuanku Abdul Rahman,50100 Kuala Lumpur.

PRINCIPAL BANKERS

United Overseas Bank (M) Berhad (271809-K)Level 2, Menara UOB,Jalan Raja Laut,50350 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.

Bank of China (Malaysia) Berhad (511251-V)Grd, Mezz. & 1st Floor, Plaza OSK,25, Jalan Ampang,50450 Kuala Lumpur.

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: 7230Stock Name: TOMEI

Page 3


CORPORATESTRUCTURE

TOMEI CONSOLIDATED BERHAD (692959-W)

100% Tomei Gold & Jewellery Manufacturing Sdn. Bhd. (184348-V)100% Tomei Gold & Jewellery Holdings (M) Sdn. Bhd. (33551-H)100% Tomei Retail Sdn. Bhd. (701040-P)100% Tomei Marketing Sdn. Bhd. (16772-K)100% Yi Xing Goldsmith Sdn. Bhd. (164963-M)100% Gemas Precious Metals Industries Sdn. Bhd. (426096-W)100% Flawless Skin Care Sdn. Bhd. (1105496-D)100% Emas Assayer Sdn. Bhd. (513267-X) 55% O M Design Sdn. Bhd. (925204-T)

TOMEI RETAIL SDN. BHD. (701040-P)

100% Tomei Signature Sdn. Bhd. (480795-A)100% My Diamond Sdn. Bhd. (555881-V)100% Goldheart Collections Sdn. Bhd. (590949-K)100% Le Lumiere Sdn. Bhd. (758734-W)100% De Beers Diamond Jewellers Sdn. Bhd. (1026561-M)100% MyTomei Sdn. Bhd. (597346-T)100% YX Bullion Sdn. Bhd. (Formerly Known As Cindai Permata Sdn. Bhd.) (586915-X)100% Tomei Worldwide Franchise Sdn. Bhd. (649283-T)

TOMEI GOLD & JEWELLERY HOLDINGS (M) SDN. BHD. (33551-H)

100% Tomei (Vietnam) Company Limited (473042000013)

TOMEI GOLD & JEWELLERY MANUFACTURING SDN. BHD. (184348-V)

100% Lumiere 2006 Limited (1068733)

Page 4


CORPORATEPROFILE

Listed on the main board of Bursa Malaysia, Tomei dominates a sizable portion of the Malaysian jewellery market with more than 50 retail outlets under five different brands. These are Tomei, My Diamond, Goldheart, Le Lumiere and De Beers. In addition, Tomei also wholesales its products to other jewellery stores. Tomei’s products are also exported to countries like Singapore, Indonesia, Thailand and Vietnam as well as in the European markets.

In 2013, it became an exclusive distributor of De Beers, reinforcing its stature as among the top jeweller in the market. In addition, it also holds the rights to franchise the De Beers brand for retailing in Singapore, Indonesia, Thailand and Vietnam.

The Group constantly introduces new design of jewellery to the market. It has been prolific in launching new products, unveiling ample of new designs every year which include its signature products such as the Ana-stasia and Chomel for gold jewellery and Eternal Binding for diamond jewellery. The Group also secures the exclusive distributorship of “Xifu Jewellery” and “Batar Jewellery”, both from China and Thailand’s “Prima Gold” for the 24k gold segment. For the children market, the Group holds license from Warner Bros. Consumer Products and Sanrio to manufacture and sell gold jewellery in Malaysia based on characters from the Looney Tunes and DC Super Heroes, and Hello Kitty respectively. In order to tap the online segment, the Group introduces www.etomei.com.my. In addition to its jewellery, the Group also sells investment precious metal from the marque of Suisse Pamp, the Maple Leaf and the Australian Kangaroo.

During the financial year 2018, the Group launched its ASHOKA® diamond collections, exhibiting exquisite collections from the renowned William Goldberg. The Group also partners Visconti, a world-renowned Italian pen maker to offer the world first Visconti-Le Lumiere diamond pen.

As part of the Group’s continuous effort and commitment to quality, the Group is accredited with ISO in the Quality Management System for its retailing in jewellery from Lloyd’s Register since year 2003.

Due to the Group outstanding achievement in the industries, Tomei has received various accolades of awards year after year. Tomei is the only company in Malaysia that has attained the status of the “World Diamond Mark” Authorized Diamond Dealer, an accreditation programme given to recognize the superiority of the Group’s diamond offering. The Group is proud to be the only jeweller in Malaysia to be given the accreditation of the National Mark for “Malaysian Brand” certification by the SMECorp in Malaysia since 2010.

Tomei was founded in 1968 as a jewellery designer and manufacturer. It then set up its own first retail outlet under the brand name TOMEI in Campbell Shopping Complex in Kuala Lumpur in the early seventies and subsequently it transformed into an integrated jewellery manufacturer and retailer of gold and jewelleries.

Page 6


PROFILE OF THE BOARD OFDIRECTORS

Tan Sri Datuk Dr Ng Teck Fong (Malaysian/Male, 81 years)

Tan Sri Datuk Dr Ng was appointed as Executive Chairman of the Company on 21 April 2006. He graduated with a Bachelor of Science degree in Chemistry from the Taiwan National Cheng Kung University, Taiwan and was conferred the Honorary Doctorate degree in Science by the same university in 2017 in recognition of his extensive contribution to the Malaysian Chinese community. He also received the Honorary Professor title from the Yunnan University of Finance and Economics in the year 2008.

As the founder and Executive Chairman, he has been instrumental in the growth and development of the Group and is responsible for its overall strategic business direction. He brings with him more than 50 years of experience in the jewellery industry including precious metals 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 Dr 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 ensuring compliance 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 various capacities. Tan Sri Datuk Dr Ng received the recognition of a Lifetime Achievement presented by the Sin Chew Business Excellence Award 2013 in recognition to his extensive contribution to the business and society. In year 2016, he has won the Malaysia’s highest book award for his work on an encyclopedia titled A Journey Through History: The Chinese and Nation-Building in Malaysia.

Tan Sri Datuk Dr Ng does not have directorship in other public companies and listed issuers. 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.

Datuk Ng Yih Pyng (Malaysian/Male, 47 years)

Datuk Ng was appointed as Managing Director of the Company on 21 April 2006. He holds a Bachelor of Business Administration degree in Finance in 1990 from Iowa State University in the United States of America (“USA”) and received a Master in Business Administration in Corporate Finance in 1991 from the same University. Upon graduation, he joined the Group as a Director and is responsible for the overall management and business development of the Group.

Datuk Ng is currently the Advisor for the Federation of Goldsmiths and Jewellers Association of Malaysia. He is also the council member of the Chinese Chamber of Commerce & Industry of Kuala Lumpur & Selangor and holds the position of Deputy Honorary Secretary General. In addition, he is also elected the national council member of The Associated Chinese Chamber of Commerce & Industry Malaysia and serves as the Chairman of its Branding Strategy and Membership Drive Consultative Committee. He is currently the advisor to the Young Entrepreneurs Committee of the chamber.

Yang Mulia Raja Tan Sri Dato’ Seri Aman Bin Raja Haji Ahmad (Malaysian/Male, 73 years)Yang Mulia Raja Tan Sri Dato’ Seri Aman was appointed as Independent Non-Executive Director of the Company on 21 April 2006. He is a member of the Malaysian Institute of Accountants (“MIA”), a Certified Public Accountant and Fellow of the Institute of Chartered Accountant in England and Wales. He is also a Fellow of the Institute of Bankers Malaysia. He held various positions in Maybank Group from 1974 to 1985 prior to joining Affin Bank Berhad in 1985 as an Executive Director/Chief Executive Officer (“CEO”). He left Affin Bank Berhad in 1992 to join Perbadanan Usahawan Nasional Berhad as the CEO for one year. He was reappointed as CEO of Affin Bank Berhad in 1995 and retired in 2003.

Yang Mulia Raja Tan Sri Dato’ Seri Aman also sits on the board of Ahmad Zaki Resources Berhad as Chairman and a board member of Affin Investment Bank Berhad. He is also the Chairman of the Investment Panel of Lembaga Tabung Angkatan Tentera. He does not have any family relationship with any director and/or major shareholder of the Company.

Datuk Ng does not have any directorship in other public companies and listed issuers. He is the son to Tan Sri Datuk Dr Ng Teck Fong. His siblings, Mr Ng Yih Chen, Ms Ng Sheau Chyn and Ms Ng Sheau Yuen and spouse Datin Choong Chow Mooi are also members of the Board.

Datin Nonadiah Binti Abdullah (Malaysian/Female, 61 years)Datin Nonadiah was appointed as Independent Non-Executive Director of the Company on 21 April 2006. She graduated with a Bachelor of Business (Administration) from the Royal Melbourne Institute of Technology in Australia in 1981 and thereafter obtained a Diploma in Montessori Method of Education, St. Nicholas, London, United Kingdom. She began her career in 1980 with the Public Works Department, Melbourne, Australia as an Accounts Executive. She has also served Bumiputra-Commerce Bank Berhad from 1982 to 1989 and her last position was Manager in Corporate Banking Division. In 1991, she became a licensed Dealer’s Representative and was attached to a stockbroking firm until 1997.

Datin Nonadiah does not have directorship in other public companies and listed issuers. She also does not have any family relationship with any director and/or major shareholder of the Company.

Page 7


Mr Lau Tiang Hua (Malaysian/Male, 66 years)Mr Lau was appointed as Independent Non-Executive Director of the Company on 21 April 2006. He is a member of the Malaysian Institute of Certified Public Accountants, MIA and Chartered Tax Institute of Malaysia. He articled with Peat Marwick, Mitchell & Co and later served as an Audit Manager with Arthur Young & Co. Thereafter, Mr Lau joined a major newspaper company as its Accountant and was subsequently promoted to the position of General Manager for Finance and Administration. In the year 1985, he established his own accounting practice, JB Lau & Associates, which has since become a member firm of Grant Thornton International Ltd. Mr Lau does not have any directorship in other public companies and listed issuers. He also does not have any family relationship with any other director and/or major shareholder of the Company.

Datuk M Chareon Sae Tang @ Tan Whye Aun (Malaysian/Male, 80 years)Datuk Tang was appointed as Independent Non-Executive Director of the Company on 21 April 2006. He obtained his Bachelor of Law degree from King’s College, University of London and is a Barrister-at-law of the Inner Temple London. He has been in the legal practice since 1968, first as a Legal Assistant in Messrs Shearn & Delamore and later as a Partner at Messrs Chye, Chow Chung & Tang until 1976. At present, he manages his own legal practice, Messrs C.S. Tang & Co. Datuk Tang also sits on the board of ACB Resources Berhad and Lion Corporation Berhad. He does not have any family relationship with any director and/or major shareholder of the Company.

Ms Ng Sheau Yuen (Malaysian/Female, 45 years)Ms Ng was appointed as Executive Director of the Company on 21 April 2006. In 1991, she obtained her Bachelor of Business Administration degree from Iowa State University in the USA and subsequently obtained her Master of Business Administration from the same university in 1993. In 2005, she has also obtained a Diploma in Diamond Grading from the Gemological Institute of America. Upon graduation in 1993, she started her career as lecturer in Sunway College. In 1996, she joined textile dyeing and finishing company, PT Safilindo Permata in Bandung, Indonesia as Assistant Manager. In 2003, she joined the Group as Director in the gold division. Since 2011 her portfolio in licensed Brands has extended from Batar Gold (China), Prima Gold (Thailand) and Warner Bros. (Australia), to include De Beers Diamond (London).Ms Ng does not have any directorship in other public companies and listed issuers. She is the daughter to Tan Sri Datuk Dr Ng Teck Fong. Her siblings, Datuk Ng Yih Pyng, Mr Ng Yih Chen and Ms Ng Sheau Chyn and sister-in-law, Datin Choong Chow Mooi are also members of the Board.

Mr Ng Yih Chen (Malaysian/Male, 52 years)Mr Ng was appointed as Executive Director of the Company on 21 April 2006. He obtained a Bachelor of Business Administration degree in Marketing from Iowa State University in the USA in 1988 and further pursued with Gemology at the Gemological Institute of America in 1990 before receiving a Master of Business Administration (Finance) from the University of Hull, United Kingdom in 1996. Upon graduation in 1988, he joined the Group as Director and is currently responsible for specialized sales of the Group. Mr Ng was the organizing chairman for the AEC+6 Gems & Jewellery Association 4th President Summit. He was the Vice President for the Federation of Goldsmiths and Jewellers Association of Malaysia and the President for the Goldsmiths & Jewellers Association of Wilayah Persekutuan, Selangor, Negeri Sembilan and Pahang. Mr Ng is also the Founding President for both the GIA Alumni Association Malaysia and the Gemologist Society of Malaysia, In addition, he also serves several other associations, both local and international in various capacities.Mr Ng does not have any directorship in other public companies and listed issuers. He is the son to Tan Sri Datuk Dr Ng Teck Fong. His siblings, Datuk Ng Yih Pyng, Ms Ng Sheau Chyn and Ms Ng Sheau Yuen and sister-in-law, Datin Choong Chow Mooi are also members of the Board.

Ms Ng Sheau Chyn (Malaysian/Female, 48 years)Ms Ng was appointed as Executive Director of the Company on 21 April 2006. She obtained a Bachelor of Science degree in Computer Engineering as well as a Master degree in Computer Engineering from Iowa State University in the USA in 1990 and 1991 respectively.She also served as a Research Assistant in the Department of Electrical and Computer Engineering at the same university from 1990 to 1991. Since her return to Malaysia in 1992, she joined the Group as Director and has been responsible for the wholesale and manufacturing operations of the Group.Ms Ng does not have any directorship in other public companies and listed issuers. She is the daughter to Tan Sri Datuk Dr Ng Teck Fong. Her siblings, Datuk Ng Yih Pyng, Mr Ng Yih Chen and Ms Ng Sheau Yuen and sister-in-law, Datin Choong Chow Mooi are also members of the Board. Mr Ong Kee Liang, the spouse of Ms Ng is a shareholder of Ong Tiong Yee & Sons Sdn. Bhd. (“OTY”). OTY is involved in retailing of gold and jewelleries.

Datin Choong Chow Mooi (Malaysian/Female, 50 years)Datin Choong was appointed as Executive Director of the Company on 21 April 2006. She graduated with a Bachelor of Business Administration degree from Iowa State University in the USA in 1989 and received a degree in Gemology from the Gemological Institute of America, Santa Monica California in 1991. Since her return to Malaysia, she joined the Group in 1995 as General Manager. She is a trained gemologist and currently responsible for the jewellery division of the Group. In addition, Datin Choong is also overseeing the general administrative issues of the Group and assists in the management of the Group’s retail operation.Datin Choong does not have any directorship in other public companies and listed issuers. She is the spouse to Datuk Ng Yih Pyng. Her father-in-law, Tan Sri Datuk Dr Ng Teck Fong, brother-in-law, Mr Ng Yih Chen, and sisters-in-law Ms Ng Sheau Chyn and Ms Ng Sheau Yuen are also members of the Board.

Notes:-1. Save as disclosed above and in pages 48-49, none of the Directors have:- (a) any conflict of interest with the Company; (b) any conviction of offences (other than traffic offences) within the past five (5) years; (c) any sanctions and penalty imposed on them by relevant regulatory bodies during the financial year.

2. The respective Director’s interests in the Company are detailed in page 119 of the Annual Report.

PROFILE OF THE BOARD OF DIRECTORS (continued)Page 8


TAN SRI DATUK DR NG TECK FONGGROUP EXECUTIVE CHAIRMAN


Page 9


On behalf of the Board of Directors of Tomei Consolidated Berhad, it is my pleasure to present to you our Annual Report and Audited Financial Statements for the financial year ended 31 December 2018.

REVIEW OF 2018 FINANCIAL YEAR PERFORMANCE

During the year under review, the performance of the Group was affected by many external factors both locally as well as international development. The much uncertainties created has posed a great challenge to the Group. Despite all the uncertainties, the Group continues to take steps in harnessing value for its shareholders and towards building a stronger branding to meet our customers’ expectation.

Malaysian economy still very much depending on commodities such as the petroleum and palm oil. The impact of weak commodity prices coupled with declining of the Ringgit against the USD has triggered down and affected consumer’s propensity to spend. The ongoing trade war between the US and China also has created much uncertainties and many business decisions was delayed pending the outcome of the negotiation. As a result, the market has stayed cautious. The volatility of international gold price further dampened consumers’ sentiment.

The Group has taken various steps towards addressing these unfavourable market conditions and sets its priority on a softer approach to consolidate, rationalize, transform and rejuvenate its operation. This includes rationalizing its business operations and at the same time containing its operating cost, introducing more new products offering in line with changing customer’s preference and holding more events to build closer customer relationship and building stronger customer loyalty.

The Group has been untiredly serving its customers from all walks of lives bringing cheers to everyone up to every occasion for the past 50 years. Our 56 retail outlets which span almost every state in Malaysia has made Tomei one of the most assessible jeweller in town. In line with our commitment to always listen and put our customer first, the Group has offered various rewards and lucky prices to all its customers all year long. One of our lucky customer has recently driven home a BMW X-5 series after being picked as the grand prize winner for our “Gold to Drive” campaign.

Despite the adversity, Tomei managed to report total revenue and profit before tax of RM564.024 million and RM6.687 million respectively for the financial year 2018.

CHAIRMAN’SSTATEMENT

Page 10


BUSINESS RATIONALIZATION

Retail environment in Malaysia has not been very favourable since the past few years. The escalated cost of living has put some pressure to the consumer’s pocket and their spending habit. The availability of higher speed connectivity and growing awareness among general public has spur the preference towards online shopping. This has changed the total retail landscape in Malaysia. As a retailer, one must evolves fast and quick to adapt to this changing environment. The Group has since several years back put in place a business rationalization strategy to counter measure this changing phenomenon.

Retail outlets that has not performed up to expectation are rebranded while those with slim chance of turnaround has been closed or relocated. As a result, total retail outlets in Malaysia has been reduced from more than 70 outlets few years ago to 56 outlets now. This consolidation is important especially in the challenging time in order for the Group to find its right footing for its next wave of expansion. Brand positioning is strengthened through a series of marketing activities and awareness while steps has been taken to contain operating cost. As part of our initiative to complement the bricks and mortar retail business and to target the millennials, Tomei has set up its own webstore to sell its products via online. We have our own customer loyalty programme that enable us to understand our customers’ need and able to serve them better.

During the financial year, the Group has disposed off its retailing of skincare business and raising a proceed of approximately RM8.9 million. The Group also has divested its investment in China while its operation in Vietnam has been scaled down to only manufacturing activities. These divestments have enabled the Group to fully concentrate and focus on its gold and jewellery business in Malaysia.

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 2018 for shareholders’ approval at the forthcoming Annual General Meeting.

OUTLOOK

The recovery of the local economy will be very much dependent on the recovery of commodity prices. In this context, the Group will adopt a more cautious and conservative approach to its business by reducing operating costs and increasing revenue through aggressive promotion and marketing of its products.

Your Board will vigilantly monitor the Group’s performance and will take necessary actions to overcome any externalities and challenges that may rise from time to time.

APPRECIATION

I am very glad that Tomei has been able to enjoy a great support from all stakeholders. This has enabled the Group to grow by leaps and bounds for the past 50 years. In the year 2018, Tomei celebrated its golden jubilee. It is very nostalgic to witness the Company from its humble beginning bracing through every challenge encountered and rising above the occasion. It is my aspiration to see and bring the Company to the next level of growth. We must dream big and believe that nothing is impossible. Your continuous support is vital to ensure the success of the Company in the future.

On behalf of the Board of Directors, I would like to express my 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 our management and staff for your utmost commitment, dedication and hard work to ensure another successful year.

Last but not least, to my fellow Directors, I thank you for your invaluable advice and support.


CHAIRMAN’S STATEMENT (continued) Page 11


本人谨代表多美集团（ T o m e i Consolidated Berhad）董事部，欣然为股东们提呈本集团截至2018年12月31日的财务年报和已审计的财务报告。

回顾2018年财政年的表现

回顾2018年，本集团的表现备受海内外因素扰动影响。尽管市场充斥着许多不确定性，因而使本集团面临巨大的挑战，但是本集团积极采取一系列的举措来提升股东的价值，并继续巩固更强大的品牌，以符合客户的期望。

马来西亚经济仍然极度依赖原产品，如石油和棕油。当原产品价格走低，以及令吉兑美元疲软之际，将影响消费者的购买欲。随着中美贸易战持续升温，将为市场带来更多的不确定性，许多商业的决策也被延缓。因此，整个市场也料将继续保持谨慎静观。另外，国际黄金价格剧烈波动也进一步打击消费者情绪。

面对市场充斥着种种隐忧，本集团已采取多方面措施来应对。在营运方面，本集团采取较为温和的策略来进行内部整合和改革，为集团注入新活力。这包括业务合理化、降低营运成本的同时，也推出更多崭新的产品以符合客户多变的需求喜好，以及举办更多活动，以加强和客户之间的关系及巩固客户忠诚度。

本集团在过去的50载尽心尽力为每一位客户带来温暖和喜乐。我们的56间零售分店，几乎遍布在全马的每个州属，也让多美成为城中最贴近大家的珠宝店。为了兑现我们时刻聆听客户及把客户放在第一位的承诺，本集团在过去一年，为客户带来许多优惠奖赏和幸运抽奖活动。我们其中一位幸运的客户更在“Gold to Drive”竞赛中被抽中大奖，成功赢取一部宝马X5轿车。

尽管大环境充满挑战，多美仍然在2018财政年录得年营业额5亿6402万4000令吉，以及税前盈利668万7000令吉。

业务经营合理化

过去数年，马来西亚的零售领域欠缺活力，因为生活成本不断上涨导致消费者谨慎消费，并让他们的消费习惯带来一定的压力。另外，随着网络使用率普及化以及网络速度增加，促使大众趋向网购，进而让整个马来西亚的零售领域面对巨大的改变。身为零售业者，我们必须更加速改革以融入这个多变的大环境。本集团在多年前已开始实行业务经营合理化的策略，以便更快速适应市场的新气象。

表现不达标准的零售分店必须重塑形象，至于重塑形象后仍然无法转亏为盈的分店则被逼关闭或搬迁重新安置。因此，在马来西亚的零售分店从数年前的逾70家，到目前减少至56家。此番整合措施非常重要，尤其是在挑战重重的时期，因为这有助于本集团在下一波的扩展计划中找到正确的方向。除此之外，在谨慎控制营运成本的同时，我们透过一系列的市场行销和宣传活动，进一步强化品牌定位。为了加强零售业务，以及吸引年轻的千禧世代（millennials）客户，多美成立本身的网店，在网络上售卖产品。我们拥有自己的客户忠诚计划，让本集团更了解我们的客户，进而得以为他们提供更佳的服务。

在本财政年，集团以约890万令吉脱售护肤零售业务。同时也撤离在中国的投资及缩小在越南的营运，目前越南仅负责生产事宜。脱售以上业务将让本集团更能全力专注在马来西亚的黄金和珠宝业务。

股息

截至2018年12月31日，董事局建议派发每股1仙的单层终期股息，并将在来临的股东常年大会中提呈与寻求批准。

展望

我国的经济复苏进度将极度依赖原产品价格的回升。因此本集团将继续采取更谨慎和保守的措施，以确保降低营运成本，并积极透过产品促销和行销活动来提高集团的营业额。

董事局将密切关注本集团的表现，并将采取必要的策略，以应对可能不时出现的任何挑战。

鸣谢

我很高兴多美在这些年来获得众股东的大力支持，使多美能扎实走过50年，茁壮成长。在2018年，多美迎来50金禧年庆，见证着多美从一家小企业，接受种种挑战和磨练，终于走过50载的岁月，实在感触良多。我更期待公司能继续成长，迈向新的里程碑。我们必须勇敢追梦，要相信凡事皆有可能。您对公司的支持，将为多美的未来铸造更大成就。

本人谨代表董事局向尊贵的客户、银行家、供应商、政府机构、商业伙伴和股东们表达真诚的谢意，感谢大家继续给予的支持和信任。

本人也要衷心感谢本集团的管理层及雇员，为了确保本集团在新的一年里再铸辉煌所作出的承诺、奉献和奋斗。

最后，本人要感谢诸位董事提供的宝贵意见和支持。

丹斯里拿督吴德芳博士集团执行董事主席

主席献词Page 12


Bagi pihak Lembaga Pengarah Tomei Consolidated Berhad, saya dengan sukacitanya ingin membentangkan Laporan Tahunan dan Penyata Kewangan telah diaudit bagi tahun kewangan berakhir 31 Disember 2018.

ULASAN PRESTASI KEWANGAN TAHUN 2018

Bagi tahun kewangan yang ditinjau, prestasi Kumpulan telah terjejas oleh faktor luaran antaranya perkembangan semasa nasional dan antarabangsa. Keadaan ketidaktentuan yang berlaku telah memberikan cabaran yang hebat terhadap Kumpulan. Namun demikian, Kumpulan tetap mengambil langkah untuk menjana nilai kepada para pemegang saham dan ke arah membina jenama yang lebih kukuh demi memenuhi jangkaan pelanggan kami.

Ekonomi Malaysia masih bergantung kuat pada pasaran komoditi khususnya petroleum dan minyak sawit. Kelemahan harga komoditi serta penurunan nilai Ringgit berbanding Dolar AS telah memberi impak terhadap kecenderungan pengguna untuk berbelanja. Perang perdagangan antara AS dan China juga menimbulkan ketidaktentuan dan banyak keputusan perniagaan terpaksa ditunda sementara menunggu kesimpulan daripada perbincangan tersebut. Akibatnya, pasaran kekal berhati-hati. Ketidaktentuan harga emas dunia turut melembabkan sentimen konsumer.

Kumpulan telah mengambil beberapa langkah bagi menempuh keadaan pasaran yang tidak memberangsangkan ini dan mengetengahkan pendekatan yang sesuai termasuk langkah-langkah penyatuan, rasionalisasi, transformasi serta memberi nafas baru dalam pengendalian operasinya. Ini termasuk merasionalisasikan operasi perniagaan dan pada masa yang sama mengawal kos operasi, memperkenalkan produk baharu sejajar dengan pilihan pelanggan yang berubah serta mengadakan lebih banyak acara untuk merapatkan hubungan dengan pelanggan dan membina kesetiaan pelanggan yang lebih kukuh.

Kumpulan telah berkhidmat tanpa lelah kepada pelanggannya dari semua peringkat masyarakat, membawa keceriaan kepada semua selama 50 tahun. Sebanyak 56 cawangan kami merangkumi hampir setiap negeri di Malaysia, telah menjadikan Tomei salah satu kedai emas yang paling mudah diakses. Selari dengan komitmen kami untuk sentiasa mendengar dan mengutamakan pelanggan, Kumpulan telah menawarkan pelbagai ganjaran dan hadiah cabutan bertuah kepada para pelanggan sepanjang tahun. Salah seorang pelanggan bertuah kami telah berjaya memandu pulang sebuah BMW Siri X-5 selepas dipilih sebagai pemenang utama Kempen ‘Gold to Drive’.

Walaupun berhadapan dengan cabaran, Tomei berjaya melaporkan perolehan dan keuntungan sebelum cukai sebanyak RM564.024 juta dan RM6.687 juta bagi tahun kewangan 2018.

PENYATAPENGERUSI

Page 13


RASIONALISASI PERNIAGAAN

Pasaran peruncitan di Malaysia tidak begitu memberangsangkan sejak beberapa tahun kebelakangan ini. Peningkatan kos sara hidup telah memberikan tekanan kepada keupayaan pelanggan untuk berbelanja. Kewujudan ‘internet’ atau sambungan berkelajuan tinggi dan peningkatan kesedaran di kalangan orang awam telah memacu kepada pemilihan untuk membeli-belah atas talian. Ini telah mengubah landskap peruncitan secara keseluruhan di Malaysia. Sebagai peruncit, kami perlu cepat berevolusi dan pantas dalam mengadaptasi terhadap perubahan ini. Kumpulan sejak beberapa tahun lalu telah memperkenalkan strategi rasionalisasi perniagaan untuk menghadapi perubahan fenomena ini.

Cawangan peruncitan kami yang tidak memenuhi jangkaan pencapaian telah diberi penjenamaan semula, manakala cawangan yang sukar untuk dipulihkan telah ditutup atau ditempatkan semula di lokasi lain. Hasilnya, jumlah keseluruhan cawangan peruncitan kami di Malaysia telah dikurangkan daripada lebih 70 cawangan sejak beberapa tahun lalu kepada 56 cawangan kini. Penyatuan ini penting terutamanya dalam masa yang mencabar ini dan Kumpulan perlu mencari kedudukan terbaik demi menghadapi gelombang pertumbuhan akan datang. Kedudukan jenama diperkukuhkan melalui beberapa siri aktiviti pemasaran dan kesedaran, sementara langkah-langkah diambil untuk mengawal kos operasi. Antara sebahagian daripada inisiatif kami dalam melengkapkan perniagaan peruncitan utama kami serta menarik minat golongan milenial, Tomei telahpun membangunkan ‘webstor’ kami untuk menjual produk secara atas talian.

Dalam tahun kewangan semasa, Kumpulan telah melupuskan perniagaan peruncitan kosmetik dan menjana perolehan hampir RM8.9 juta, Kumpulan juga telah melupuskan pelaburannya di China, manakala operasi di Vietnam telah diperkecilkan kepada hanya aktiviti pembuatan. Pelupusan tersebut membolehkan Kumpulan memberi fokus penuh kepada perniagaan emas dan barang kemas di Malaysia.

DIVIDEN

Bagi tahun kewangan berakhir 31 Disember 2018, Lembaga Pengarah dengan sukacitanya mencadangkan pengagihan dividen pertama dan akhir ‘single-tier’ sebanyak 1.0 sen untuk sesaham biasa untuk kelulusan para pemegang sahan di Mesyuarat Agung Tahunan yang akan datang.

PROSPEK MASA HADAPAN

Pemulihan ekonomi tempatan amat bergantung kepada pemulihan harga komoditi. Dalam konteks ini, Kumpulan akan mengambil pendekatan berhati-hati dan konservatif dalam perniagaan dengan mengawal kos operasi dan meningkatkan perolehan melalui promosi dan pemasaran produk dengan lebih agresif.

Pihak Lembaga Pengarah akan memantau prestasi Kumpulan dengan lebih berhati-hati dan akan memastikan langkah sewajarnya diambil untuk menangani cabaran dan faktor luaran yang bakal menimpa dari masa ke semasa.

PENGHARGAAN

Saya sangat bersyukur kerana Tomei mampu mendapat sokongan hebat dari para pemegang kepentingan. Ini membolehkan Kumpulan berkembang maju sejak 50 tahun lalu. Pada tahun 2018, Tomei telah menyambut ulang tahun jubli emasnya. Ia amat nostalgia dalam menyaksikan Syarikat sejak permulaannya yang kecil telah mengharungi dan bangkit untuk mengatasi setiap cabaran. Ini telah memberi aspirasi bagi saya untuk membawa Syarikat ke peringkat pertumbuhan seterusnya. Kita perlukan impian yang besar dan percaya bahawa tiada yang mustahil untuk dicapai. Sokongan berterusan anda adalah sangat penting dalam memastikan kejayaan Syarikat pada masa hadapan.

Saya mewakili pihak Lembaga Pengarah ingin menyatakan penghargaan ikhlas dan terima kasih kepada para pelanggan, pihak bank, pihak pembekal, pihak berkuasa, rakan niaga dan pemegang saham di atas sokongan berterusan anda.

Saya juga ingin mengucapkan terima kasih kepada pihak pengurusan dan kakitangan Tomei atas komitmen, dedikasi dan ketekunan anda untuk memastikan satu lagi tahun yang cemerlang.

Akhir sekali, saya ingin mengucapkan terima kasih atas nasihat dan sokongan yang tidak ternilai yang diberikan oleh rakan-rakan pengarah.

TAN SRI DATUK DR NG TECK FONGPENGERUSI KUMPULAN EKSEKUTIF

PENYATA PENGERUSI (sambungan)Page 14


PROFILE OFSENIOR MANAGEMENT

Tan Syn Wooi (Malaysian/Male, 46 years) Group Financial ControllerMr Tan joined the Group in the year 2005 and was appointed as the Group Financial Controller for the Group on 21 April 2006. He graduated with a Bachelor of Accounting (Hons) from Universiti Malaya in 1996. He is also a member of Malaysian Institute of Certified Public Accountants and Malaysian Institute of Accountants. Mr Tan is responsible for the overall financial management and reporting of the Group. Currently he is also overseeing the implementation of a business intelligence unit within the Group. Mr Tan has more than twenty (20) years of working experience in the accounting profession. Prior to joining the Group, Mr Tan was the Group Accountant for the Lion Group of Companies and was subsequently attached to a telecommunication company as Finance Manager.Lu Bee Lee (Malaysian/Female, 58 years) General Manager, Retail OperationMs Lu joined the Group in the year 1991 and has been tasked to facilitate the daily retail operation of Tomei before being subsequently promoted to the position of Retail Operation and Personnel Manager and then as the Assistant General Manager, Retail Operation. In the year 2014, she was again promoted as the General Manager, Retail Operation and has been responsible in formulating strategy for the total retail operation of the Group in Malaysia. Prior to joining the Group, Ms Lu was the Marketing Manager for Wayrex Sdn Bhd, a fashion boutique in Malaysia.Hiew Fui Lin (Malaysian/Female, 45 years) Assistant General Manager, Corporate PlanningMs Hiew joined the Group in the year 2006 as a Senior Manager in Business Development Department, handling the outlet expansion in local and oversea market. She is currently holding the position of Assistant General Manager in Corporate Planning Department since 2015. Her role is to formulate and implement Business Strategies for Tomei Group, manages the Project Management Office to continuously review and enhance the Group’s infrastructure and work processes.She holds a Master of Business Administration (MBA) – Entrepreneurship/ Entrepreneurial Studies from Asia e University (AeU) in 2015. Prior to joining Tomei Group, she was the Franchise Development Manager in Focus Point Vision Care Group handling the recruitment of franchisees and franchise outlet operations.Leau Lee Meng (Malaysian/Female, 49 years) Assistant General Manager, Group Risk & Internal AuditMs Leau obtained her Diploma in Management (majoring in internal auditing) with Merit from Malaysian Institute of Management. She is a Professional/Chartered Member of The Institute of Internal Auditors Malaysia. She started her career with Kassim Chan as an external auditor before moving on to Branch Operations and Group Internal Audit Department of PacificMas Berhad (formerly known as The Pacific Bank Berhad). In 2004, she was managing the Group Internal Audit Department of PacificMas Berhad. She joined the Group in year 2006 as Senior Manager, Internal Audit. In 2012, she spearheaded the risk management function of the Group within the ambit of the Risk Management Framework approved by the Risk Management Committee. In 2016, she also facilitated the process enhancement on various operations within the Group to improve on its efficiency, effectiveness and productivity.Cheong Ngat Ching (Malaysian/Female, 49 years) Assistant General Manager, Learning and DevelopmentMs Cheong joined the Group in 2005 as the Senior Manager - Human Resources and was responsible for setting up and overseeing the Human Resources functions for Malaysia, China and Vietnam. She left in 2015 to take up a role in the Human Resources functions for a British Pharmaceutical Company before rejoined the Group in 2017 as the Head of Learning and Development. Ms Cheong is responsible for the people’s transformation in the organization specifically in the development and implementation of Learning and Development Roadmap and programmes. Her roles entailed talent and leadership development and the introduction of in-house E-learning. Ms Cheong’s past experience as Human Resources practitioner includes being in service for more than 10 years in various industries including the Sunway Group and Sony Video (M) Sdn. Bhd.. Ms Cheong graduated from Tunku Abdul Rahman College in 1992, with Diploma in Commerce and Diploma in Human Resources Management in 1998 from University Malaya CCE. She is also an ICSA(UK) graduate and is an ACIS with MAICSA. In 2017, she was certified with the Australian, Cert IV in Workplace and Business Coaching.

Notes:1. Save as disclosed above, none of the Senior Management have:- (a) any conflict of interest with the Company; (b) any conviction of offences (other than traffic offences) within the past five (5) years; (c) any sanctions and penalty imposed on them by relevant regulatory bodies during the financial year; (d) any relationship with any of the directors and/or major shareholders of the Company; and (e) any directorship in other public companies and/or listed issuers.

Page 15


OVERVIEW

Our Group is an integrated manufacturer and retailer of gold, jewellery and diamonds. Our operations are principally located in Malaysia. We also have manufacturing operations in the Socialist Republic of Vietnam. Our products are marketed under various brands namely Tomei, Le Lumiere, My Diamond and Goldheart. We are the authorized distributor for De Beers diamond products in Malaysia. We also sell investment precious metals. As of today, we have 56 retail jewellery outlets in Malaysia catering to the needs of our different group of customers.

Besides retailing, we also sell our manufactured products to other retailers both in Malaysia and overseas including Singapore, Vietnam, Indonesia, Thailand and Germany.

OBJECTIVES & STRATEGIES

Our Group aspires to pioneer in product superiority and design creativity while making sustained efforts towards building brand significance in gaining customers’ trust. Our goal is to develop a progressive organization with integrity and dignity and passionately delivering excellent service to customers.

The Group working towards maintaining its market leadership and brand positioning in the jewellery industry in Malaysia. Realizing on the needs to continue reinventing itself to stay relevant and meeting customer’s changing preference, the Group has embarked on a transformation strategy including identifying new area of growth while at the same time rationalizing its operation procedure and containing of cost. This effort has assisted the Group to cushion itself from the onslaught of dampening retail environment that we are currently experiencing.

The retail industry has experienced dramatic change especially in the wake of digital age where information has become seamless. As customer is more aware of what they are buying, customer retail experience has become the differentiating factor when come to decision to shop. We continue to reinvent ourselves through creating of the feel-good factor to enhance customer’s shopping experience. This is carried out through a well-planned personalized customer service. A well refurbished ambience that continue to revolve on its visual merchandize display provides fresh shopping experience to customers. Our sales personnel have to go through a series of trainings including products knowledge and customer service to ensure that customer needs are met at their highest expectation at all time.

Product selections and combination plays an important factor to ignite customer’s interest. We have introduced many new design of jewellery tailored specifically for each seasonal promotions in line with local festivities. Our jewellery with design inspired by both the European trend and the Asian culture and incorporating into the local taste have provided a wide selection for customers.

We have introduced the award winning Xifu wedding jewellery collections, a product that is endorsed by the World Gold Council which offers jewellery from the customary Chinese wedding series. Tomei also carries Batar jewellery collections from China which features the Chinese classical icons and auspicious symbols.

MANAGEMENTDISCUSSION

AND ANALYSIS

Page 19


OBJECTIVES & STRATEGIES (continued)

Prima Gold which features exotic design with handmade signature silk line technique with delicately crafted workmanship from Thailand offers customer the ultimate value of jewellery choices.

Our Le Lumiere diamond which offers no less than the ideal proportions, perfect hearts and arrows symmetry with GIA triple excellent grading delivers the most optimum display of scintillating brilliance any diamond enthusiast could ask for. We collaborate with Italian pen maker, Visconti to bring the world first Le Lumiere Visconti diamond pen featuring our super ideal cut diamond, a combination that reflects the superiority in quality and excellence.

The trendy lifestyle has led to the creation of Chomel which allows customers to mix and match their jewelleries and tailored to their preference while Ana-stasia collections bring back the aura of classical beauty and elegant much cherished by Malaysian especially the urban modern Malay.

Chomel jewellery collection

Xifu wedding jewellery collection Batar Jewellery collection

Prima Gold jewellery collection Le Lumiere Visconti diamond pen

MANAGEMENT DISCUSSION AND ANALYSIS (continued)Page 20



During the year, the Group has introduced ASHOKA® diamond, a collection by William Goldberg which is much revered by celebrities all around the world. ASHOKA® diamond comes with 62 facets distinctive cut that makes it 30% larger than any emerald cut diamond of the same carat size. Tomei also brings in Roberto Bravo, an Italian contemporary jewellery design which offers daring and creative approach in line with today’s trendy and elegant customer’s preference.

In line with our direction to provide more product selection, Tomei also introduced various jewellery collections that centered on various gemstones such as jade, sapphire, ruby, emerald and pearl.

We are licensed by Warner Bros’ for the retailing of Looney Tunes and DC Super Heroes jewellery character in Malaysia while Sanrio provides us the right to retail gold jewellery based on the character of Hello Kitty. These range which targets mainly the younger customer profile has enabled us to widen the scope of our customer base. For the investment fraternity, we offer investment precious metals such as the Icon of Malaysia, a co-branding products between Tomei and Suisse Pamp, SA featuring distinctive landmarks of Malaysia and various other marques such as the Maple Leaf and Australian Kangaroo. Tomei also mints its own numismatic collections especially for the lunar new year.

ASHOKA® diamond collection

Jade jewellery collection

DC Super Heroes collection

Baby Looney Tunes collection

Hello Kitty collection

Le Lumiere jewellery collection

MANAGEMENT DISCUSSION AND ANALYSIS (continued) Page 21



The availability of data connectivity at a higher speed has spur the growth of online transaction in Malaysia. We noted that the rise of online sales has managed to take away some of the traditional sales channel especially among the millennials. The Group has set up its own webstore, www.etomei.com in addition to selling on 3rd party marketplace such as Lazada in order to serve this segment of the market. Despite the growth of online sales, we noted that the conventional bricks and mortar store concept especially in the jewellery industry is still in great demand as customer still prefer to enjoy and feel the retail experience.

CORPORATE DEVELOPMENT

During the financial year, the Group has disposed of its retailing of skincare and cosmetic business in Malaysia for a consideration of RM8.97 million. The disposal is not expected to affect the operation and profitability of the Group as its contribution is relatively very immaterial. The proceeds generated from the disposal will be used to reduce the Group’s borrowing which will ultimately reduce its gearing and financing cost. Upon the disposal, the Group now focuses and concentrates solely on its core business of gold and jewellery.

KEY PERFORMANCE INDICATORS

Summary of key financial performance indicators are provided in the section titled “5 years financial highlights” in this Annual Report.

Tomei is the only company in Malaysia to be accredited with the status “World Diamond Mark” Authorized Diamond Dealer. The accreditation is given for our excellent record for customer services in the diamond industry and for our effort to continue promoting and educating the public on diamond in addition to the recognition of our responsible sourcing of diamond from only legitimate suppliers.

Our retailing operation has also been accredited with ISO in the Quality Management System for the retailing business from Llyod’s Register in recognition of our commitment to quality and services.

Tomei is also the only jeweller in Malaysia to have obtained the status of National Mark for the “Malaysian Brand” certification from SMECorp in recognition of its product superiority and significant branding.

TOMEI own webstore, www.etomei.com webpage

TOMEI on Lazada



REVENUE & PROFITABILITY

The Group reported total revenue of RM564.024 million during the financial year. This represents 8.59% drop compared to last year’s revenue of RM617.020 million mainly due to lower sales volume. As a result, it reported a lower profit before tax of RM6.687 million compared to RM21.282 million reported last year due to lower sales volume and gross profit margin attained mitigated by the gain on disposal of the skincare business.

Retail division

Our retail division reported total revenue of RM419.660 million during the financial year. This represent 6.81% drop compared to last year’s revenue of RM450.336 million. The drop in revenue was mainly due to the weak retail environment in Malaysia as a result of many uncertainties in both the local and international developments. As a result, the retail division reported lower profit before tax of RM8.928 million during the financial year.

Manufacturing & Wholesale division

Our manufacturing & wholesale division reported total revenue of RM144.364 million during the financial year. This represent a drop of 13.39% compared to last year revenue of RM166.684 million. As a result of lower sales volume and declining gold price, the manufacturing & wholesales division reported loss before taxation of RM0.743 million for the financial year.

GROSS PROFIT & GROSS MARGIN

The Group reported a gross profit of RM128.120 million for the financial year. This represents a drop of 12.90% compared to last year gross profit of RM147.097 million following a drop in current year’s revenue. Its gross margin stood at 22.72% compared to 23.84% last year mainly due to the declining gold price.

OPERATING EXPENSES

Operating expenses for the financial year under review of RM122.206 million approximates that of last financial year. Most of the Group’s operating cost such as the staff costs and rental are fixed in nature and does not change materially despite the drop in revenue.

FINANCE COST

Finance cost for the financial year under review of RM11.457 million approximates that of last financial year. The finance cost incurred mainly on borrowings taken by the Group to finance its working capital and purchase of assets.

CAPITAL EXPENDITURE

During the financial year under review, we have incurred capital expenditure of RM8.112 million mainly for the renovation and refurbishment of retail outlets in order to provide a fresh and conducive shopping ambience for our customers.

LIQUIDITY AND FINANCIAL RESOURCES

During the financial year under review, we reported a surplus cash flows of RM8.341 million mainly attributable to the positive operating cash flows of RM19.116 million. The positive operating cash flows are mainly derived from the current year profitability and reduction in stockholding of the Group. It reported a net cash outflow of RM6.422 million from investing activities mainly due to purchase of property, plant and equipment while its net cash outflow of RM4.353 million from financing activities are mainly due to repayment of borrowings and payment of dividend.

As at the end of the financial year under review, the Group has a total cash and bank balances of RM11.645 million while the utilization of bank overdrafts stood at RM28.272 million.

MANAGEMENT DISCUSSION AND ANALYSIS (continued) Page 23


BORROWINGS & GEARING

Our borrowings are mainly used for working capital especially in purchasing of stocks. Most of our borrowings are in the form of trade lines, bank overdrafts and revolving credits. Longer term financing such as term loans and hire purchases are used to finance capital expenditure. As at the end of the financial year under review, total borrowings stood at RM169.681 million reduced from RM180.063 million as at the end of last financial year following its continuous loan repayment and lower utilization of bank overdraft.

The Group monitors its capital management on the basis of the net gearing ratio. The ratio is calculated as the total debt net of cash and cash equivalents to total equity. The Group reported net gearing ratio of 0.76 as at the end of the financial year under review, a decrease by 0.07 as compared to 0.83 as at last financial year.

RISKS AND CHALLENGES

Our retail segment currently contributed approximately 74% of the total Group’s revenue. As a result, the Group’s revenue is very sensitive towards the general retail market sentiment. We view the market condition as among the major risk faced by the Group as consumers tend to be more cautious and change their spending pattern in anticipation of any changes to the economy outlook. Our financial performance may be significantly impacted by the fluctuation of international gold price. This fluctuation poses a risk to our profitability as any adverse movement could affect our profit margin. We are also exposed to the risk of fluctuation in foreign currency as most of our raw materials are purchased in US Dollar while our retail sales are in Ringgit.

We view these risks as part of the challenges in managing our business. We will continue to execute a proactive strategy in addressing these risks including closer monitoring of the market situation and trends and putting in place selected hedging procedures to protect our financial position.

PROSPECT

The retail environment is expected to remain challenging in the coming one year in the wake of slower projected economic growth in Malaysia and around the world. Many uncertainties remained unresolved such as the ongoing trade war between the US and China and the outcome of the UK negotiation on Brexit. In view of these, many businesses have taken a more cautious approach in expanding their operations. This curtailment may further escalate down to end consumers and affect retailer like us.

In view of this conundrum, the Group will vigilantly revisit its strategy and revise it accordingly pending the outcome of those uncertainties and will take the necessary steps to ensure that its risk exposure towards the uncertainties is minimized. We are confident that our business plan put in place pending the outcome of the above is sufficient to address the Group’s concern and to sustain another profitable year.



CORPORATEGOVERNANCE

OVERVIEWSTATEMENT

Your Board of Directors recognizes the importance of sound corporate governance and will continue to enhance its role in ensuring that the highest standard of corporate governance is practised throughout the Group. The principles and best practices set out in the Malaysian Code on Corporate Governance 2017 (“Code”) and pursuant to para 15.25 of the Bursa Malaysia Listing Requirement have been complied by the Group wherever possible in observing the highest standard of transparency, accountability and integrity unless otherwise stated.

Your Board is pleased to provide an overview of the application of the Principles set out in the application of the Code by the Group during the period under review. Details of the application of the principles of the Code are found in the Corporate Governance Report which can be found at the Company's website at www.tomei.com.my.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

1. BOARD ROLES AND RESPONSIBILITIES

Board responsibilities

During the period under review, your Board took full responsibility and retained full and effective control over the affairs of the Group. Your Board’s primary focus is on the overall strategic planning including business 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.

The Independent Non-Executive Directors further strengthen your Board in providing unbiased and independent view, advice and judgement. They also contribute to the formulation of policies and decision making through their expertise and experience.

Page 25


In addition to the above, your Board’s more specific responsibilities include the following:-

Board Charter

Your Board’s functions are laid out in a Board Charter which is made public through the Group’s website at www.tomei.com.my to guide your Board in discharging its duties and responsibilities effectively. The Board Charter is reviewed periodically and amended when necessary to reflect the changes on conduct of your Board.

Code of Conduct

Your Board has developed an ethical standard for the Group through a code of conduct and ensures its compliance by your Board and all the employees within the Group. This includes a strategic vision statement and core values to guide the Company in its daily operation. Your Board reviews the code of conduct regularly to ensure that new requirements and suggestion of best practices are being updated and incorporated into the code.

Board meetings

Your Board meets regularly at least four (4) times a year at quarterly intervals with additional meetings to be convened as and when required. Prior to each meeting, every Director is given the complete agenda and a set of Board Papers for each agenda item well in advance so that your Directors have ample time to review matters to be deliberated at the meeting and to facilitate informed decision making by your Directors.

During the financial year ended 31 December 2018, there were five (5) Board Meetings held and the details of attendance are as follows:-

Executive Directors AttendanceTan Sri Datuk Dr Ng Teck Fong 5/5Datuk Ng Yih Pyng 5/5Datin Choong Chow Mooi 5/5Ng Yih Chen 5/5Ng Sheau Chyn 5/5Ng Sheau Yuen 5/5

Independent Non-Executive Directors AttendanceYang Mulia Raja Tan Sri Dato’ Seri Aman Bin Raja Haji Ahmad 5/5Datin Nonadiah Binti Abdullah 5/5Datuk M 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 the business units within the Group.

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.

a)b)

c)d)e)f)

g)h)

Reviewing and approving the strategic business plan of the Group;Monitoring corporate performance and the conduct of the Group’s business and ensuring compliance to best practices and principles 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 Group’s internal control system and management information system for compliance 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 code of conduct and ensure its compliance.

CORPORATE GOVERNANCE OVERVIEW STATEMENT (continued)Page 26


At present, your Board is assisted by four (4) Board Committees as provided below:-

1) Audit Committee 2) Nomination Committee 3) Remuneration Committee 4) Risk Management Committee

The term of reference of the respective Board Committees are being disclosed at Company’s website at www.tomei.com.my.

1. Audit Committee

In accordance with the Best Practices under the Code, the Audit Committee (“AC”) comprises three (3) members made up of Independent Non-Executive Directors:-

Name DesignationLau Tiang Hua ChairmanYang Mulia Raja Tan Sri Dato’ Seri Aman Bin Raja Haji Ahmad MemberDatuk M Chareon Sae Tang @ Tan Whye Aun Member

The principal function of the AC is to assist your Board in the effective discharge of its fiduciary responsibilities in relation to corporate governance, ensure timely and accurate financial reporting, proper implementation of risk management policies and strategies in relation to the Group’s business strategies and the development of sound internal control system and effective risk management framework.

In accordance with the best practices under the Code, the AC presents its report set out on pages 40 to 41 of this Annual Report.

2. Nomination Committee

The Nomination Committee comprises four (4) members made up of Independent Non-Executive Directors:-

Name DesignationDatuk M Chareon Sae Tang @ Tan Whye Aun ChairmanYang Mulia Raja Tan Sri Dato’ Seri Aman Bin Raja Haji Ahmad MemberDatin Nonadiah Binti Abdullah MemberLau Tiang Hua Member

The principal function of the Nomination Committee is to assist your Board in evaluating the effectiveness and composition of your Board members including assessing the performance of each board member, their independence, retirement and re-election.

In accordance with the best practices under the Code, the Nomination Committee Statement is presented on pages 42 to 43 of this Annual Report.

3. Remuneration Committee

The Remuneration Committee comprises four (4) members, made up of Independent Non-Executive Directors:-

Name DesignationDatuk M Chareon Sae Tang @ Tan Whye Aun ChairmanYang Mulia Raja Tan Sri Dato’ Seri Aman Bin Raja Haji Ahmad MemberDatin Nonadiah Binti Abdullah MemberLau Tiang Hua Member

The Committee’s duties and responsibilities are:-

a)

b)

c)

To ensure that a transparent and formal procedure is established in the development and assessment of the level of compensation 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, basic salaries, 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.

CORPORATE GOVERNANCE OVERVIEW STATEMENT (continued) Page 27


4. Risk Management Committee

The Risk Management Committee comprises four (4) members, majority of whom are Independent Non-Executive Directors:-

Name DesignationLau Tiang Hua ChairmanYang Mulia Raja Tan Sri Dato’ Seri Aman Bin Raja Haji Ahmad MemberDatuk M Chareon Sae Tang @ Tan Whye Aun MemberDatuk Ng Yih Pyng Member

The Committee’s duties and responsibilities are:-

a) b) c)d)

The Risk Management Committee shall hold at least one (1) meeting in each financial year.

Supply of information

Your Board has full and unrestricted access to information concerning the Group from the senior management and the external auditors to enable them to discharge their duties effectively. Your Board may also seek advice of external independent professionals at the Group’s expense.

All information on meetings is disseminated to your Board at least seven (7) days before the date of meeting to enable your Board to make an informed decision. Relevant personnel of the Group could be summoned to the Board meeting to further brief your Board as and when required.

Your Board has direct access to the advice and services of a Company Secretary who is responsible to advise your Board on matter concerning compliance and governance of the Company. The Company Secretary also ensures that all Board procedures are followed and that applicable laws and regulations are complied with. The appointment and removal of the Company Secretary lies within the power of the Board.

Directors’ training

All Directors of the Group have attended the Mandatory Accreditation Program prescribed by Bursa Malaysia Securities Berhad (“Bursa Securities”). In addition, your Board is regularly being briefed on the Group’s operation and takes proactive steps to visit both manufacturing and retailing operation to gain in depth understanding of the business at least once during their tenure in office.

Your Board through the Nomination Committee assesses the training needs of all the Directors. The Directors are encouraged to attend talks, seminars, workshops and conferences to update and enhance their skills and knowledge to enable them to carry out their roles as director effectively, more specifically in discharging their responsibilities towards corporate governance and regulatory compliances.

Details of trainings attended by the directors are provided in the Nomination Committee Statement.

2. BOARD COMPOSITION

Composition and diversity

The Group is led by your Board of Directors which comprises ten (10) members of whom six (6) are Executive Directors and four (4) are Independent Non-Executive Directors. Your Board consists of members from a wide range of discipline and background, providing an in-depth and diversity in experience to the Group’s 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, unbiased views, advice and judgement in the decision making process.

The profiles of the members of your Board are set out on page 7 to 9 of the Annual Report.

The Board does not have a specific policy on gender, ethnicity and age group for the appointment of its Board of Directors. Nevertheless, the current composition of the Board does reflect a mix diversity of gender, ethnicity and age among its Directors.

To review periodic management report on risk exposure, risk portfolio and management strategies;To ensure adequacy of infrastructure, resources and systems for effective risk management;To assess adequacy of policies and framework for identifying, measuring, monitoring and controlling risks; andTo review the extent to which these measures are operating effectively.



Board independence

The Nomination Committee assesses the independence of Directors annually in accordance to the criteria on independence set out in the Main Market Listing Requirements of Bursa Securities. Each director submits a declaration on their interest in the Company to the Nomination Committee on annual basis for its review before making recommendation to your Board.

The details of assessment of Directors are provided in the Nomination Committee Statement as set out on pages 42 to 43 on this Annual Report.

Board re-election and re-appointment

The Nomination Committee also assesses and evaluates the Directors individually to determine on their status of independence, mix set of skills and experience before deciding on the selection and nomination of directors for their respective re-election or re-appointment.

In accordance to the recommendation of the Code, all independent directors shall not hold office for a tenure of more than nine (9) years. However, the said independent director may continue to serve as a non-independent director subject to the approval by the Company’s shareholders at the Annual General Meeting (“AGM”). All the four (4) independent directors of the Company have exceeded the tenure of ninth (9) years of service with the Company. The Board through the Nomination Committee has assessed and satisfied with the independence of the independent directors and has recommended for them to continue serving in their current capacity. Therefore they will submit themselves for re-appointment by the shareholders in the coming AGM.

None of the Directors hold more than 5 directorships in listed issuer in Malaysia.

Segregation of role

Tan Sri Datuk Dr Ng Teck Fong, the Group Executive Chairman, plays a crucial role in providing overall business direction while the implementation falls under the leadership and responsibility of your Group Managing Director, Datuk Ng Yih Pyng. This segregation of role is vital to ensure a balance of power and authority.

In accordance to the best practice, at least half of the Board members must comprise of independent directors. However in our case, more than half of our Board members are made up of non- independent executive directors. Your Independent Directors have considered this anomaly and are of the opinion that there is no undue risk involved as all related party transactions are diligently reviewed by the AC in accordance with the Main Market Listing Requirements of Bursa Securities before they are tabled to your Board for approval based on the AC’s recommendation.



3. DIRECTORS AND SENIOR MANAGEMENT REMUNERATION

The Company’s remuneration policy for Directors and senior management is tailored towards attracting and retaining Directors and senior management with relevant experience and expertise needed to assist in managing the Group effectively. The Remuneration Committee carries out the annual review of the overall remuneration for Directors and key senior management officers whereupon recommendations are submitted to your Board for approval.

The details of your Directors’ remuneration paid/payable to all Directors of the Company and the Group for the financial year ended 31 December 2018 are set out as follows:-

The Directors’ fees payable is subject to the approval of the shareholders at the forthcoming AGM of the Company.

The remuneration paid to the top five senior management officers of the Group for the financial year ended 31 December 2018 are RM1,308,222.

Company level2018EXECUTIVE DIRECTORTan Sri Datuk Dr Ng Teck Fong Datuk Ng Yih Pyng Datin Choong Chow MooiNg Yih Chen Ng Sheau Chyn Ng Sheau Yuen Sub-total NON-EXECUTIVE DIRECTORYang Mulia Raja Tan Sri Dato’ Seri Aman Bin Raja Haji AhmadDatin Nonadiah Binti AbdullahDatuk M Chareon Sae Tang @ Tan Whye AunLau Tiang HuaSub-totalGrand Total

Fees

22,500

10,800

10,800

10,800

10,800

10,800

76,500

54,000

45,000

54,000

63,000

216,000 292,500

Group Level2018EXECUTIVE DIRECTORTan Sri Datuk Dr Ng Teck FongDatuk Ng Yih Pyng Datin Choong Chow MooiNg Yih Chen Ng Sheau Chyn Ng Sheau Yuen Sub-total

NON-EXECUTIVE DIRECTORYang Mulia Raja Tan Sri Dato’ Seri Aman Bin Raja Haji AhmadDatin Nonadiah Binti AbdullahDatuk M Chareon Sae Tang @ Tan Whye AunLau Tiang HuaSub-totalTotal

Remuneration

884,400606,144502,656458,304458,304458,304

3,368,112

3,368,112

Fees

22,50010,80010,80010,80010,80010,80076,500

54,00045,00054,00063,000

216,000292,500

Total

930,850

644,944

537,406493,054

493,054

486,504

3,585,812

54,000

45,000

54,000

63,000

216,0003,801,812

Benefits-in-kind

23,950 28,000

23,95023,950

23,950 17,400141,200

141,200



PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

1. FINANCIAL REPORTING

Your Board is responsible for ensuring that the financial statements for the financial year which have been drawn up in accordance with the Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the provisions of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2018 and of their financial performance and cash flows of the Group and 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 used and supported by reasonable as well as prudent judgements and estimates and that all applicable approved MFRSs and IFRSs have been complied with.

Your Board is responsible for ensuring that the Group and the Company keep proper accounting records which disclose with reasonable accuracy the financial position of the Group and of the Company which enable them to ensure that the financial statements comply with MFRSs, IFRSs and the provisions of the Companies Act 2016 in Malaysia.

Your Board also has the general responsibility for taking such steps as are reasonably opened to them to safeguard the assets of the Group, to detect and prevent fraud and other irregularities.

The Directors’ Responsibility Statement made pursuant to paragraph 15.26(a) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad of in relation to the Financial Statements is presented on page 50 of this Annual Report.

2. AUDIT COMMITTEE AND EXTERNAL AUDITORS

The AC assists your Board in scrutinizing the information for disclosure to ensure its accuracy, adequacy and completeness.

The Company’s external auditors continue to provide their independent opinion to shareholders on the Group’s and the Company’s financial statements. Your Board maintains a formal and transparent relationship with the auditors to meet their professional requirements.

The AC discusses with the external auditors on both the audit plan and their scope of audit before the commencement of audit work. The AC is also being briefed by the auditor on their audit report upon the completion of audit. In addition, the AC meets up with the external auditors at least two (2) times a year without the presence of the Management to discuss and obtain feedback on sensitive audit issues.

In determining the independence of the external auditors, the AC has reviewed all aspects of relationships between the Group and the external auditors including the processes, policies and safeguards relating to audit independence and agreed on the audit strategy and the audit fee. The external auditors also declare their independence to the AC during their audit planning.

The AC has considered the non-audit services provided by the external auditors and its affiliated companies and is satisfied that the provision of those non-audit services during the year does not compromise the external auditors’ independence.

The external auditors are also invited to attend the Company’s AGM and are available to take questions from the shareholders on issues pertaining to their audit report.

The detailed role of the AC in relation to the external auditors is described in the AC Report section on pages 40 to 41 of this Annual Report.



3. RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK

Your Board acknowledges its overall responsibility for maintaining a sound system of internal control and risk management to safeguard shareholders’ investment and the Group’s and the Company’s assets.

The Group’s internal audit function is carried out by the in-house Internal Auditor which reports directly to the AC. Details of the internal audit function are provided in the AC Report set out on pages 40 to 41 of this Annual Report.

The Group has a whistle blowing policy which is implemented throughout the Group. The policy provides an avenue for its employees and other stakeholders including shareholders, suppliers and customers to report genuine concerns on acts committed by employees and/or directors arising from unethical behavior, malpractices, illegal acts or failure to comply with regulatory requirements without fear of reprisal provided they act in good faith when reporting such concerns.

The policy is made available on the Company’s website at www.tomei.com.my.

The Statement on Risk Management & Internal Control as set out on pages 44 to 47 of this Annual Report provides an overview of the risk management and state of internal control within the Group.

PRINCIPLE C: INTERGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

1. COMMUNICATION WITH STAKEHOLDERS

Your Board recognizes the importance of maintaining transparency and accountability to its stakeholders and is committed to provide the highest possible level of disclosure to ensure integrity and consistency of the financial reports.

Your Board keeps stakeholders informed via announcements, timely release of quarterly financial results, press releases, annual reports and circulars to shareholders.

As there may be instances where stakeholders may prefer to express their concerns to an independent director, your Board has appointed Yang Mulia Raja Tan Sri Dato’ Seri Aman Bin Raja Haji Ahmad as the Senior Independent Non-Executive Director to whom concerns may be directed.

Information of the Group is also accessible through the Company’s website at www.tomei.com.my which is updated on regular basis and the Directors welcome feedback channeled through this website. Information available on the website includes among others the Group’s Annual Reports, quarterly financial announcements, major and significant announcements and press releases on latest corporate development of the Group.

Your Board also takes effort to meet up with investors on regular basis to provide up to date information about the Group.

2. CONDUCT OF GENERAL MEETINGS

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 the performance of the Group.

The Company implements a poll voting for all the resolutions set out in the Notice of AGM via electronic means at the AGM to expedite verification and counting of votes. In addition, the Company appoints one (1) scrutineer to validate the votes casted at the AGM.

3. PROMOTES SUSTAINABILITY

Your Board is committed to promote sustainability of its business which are aligned and embedded into the Group’s day to day business activities. In promoting the sustainability, the Group integrates good practices in the area of economic, environmental and social into its business culture. Details on areas of sustainability are provided in the Sustainability Statement on pages 33 to 38 of this Annual Report.

STATEMENT ON COMPLIANCE WITH THE BEST PRACTICES OF THE MALAYSIAN CODE ON CORPORATE GOVERNANCE 2017

Having reviewed the governance structure and practices of the Group, your Board considers that it has complied with the best practices as set out in the Code unless otherwise stated as well as the items set out in Part A of Appendix 9C of the Listing Requirements of Bursa Securities in relation to the requirement of a separate disclosure in the Annual Report.

This Corporate Governance Overview Statement is made in accordance with the resolution of the Board of Directors dated 1 April 2019.



TOMEI is built upon its corporate vision of emphasizing on the sustainability of its products, branding, customers and progressive organization. While we drive our business forward in becoming the most efficient jewellery company, we never loose sight on what is fundamentally important to all our stakeholders. This is important in order to build a long lasting relationship which promotes a mutual wining situation. In line with our corporate vision, our commitment has been tailored in meeting and promoting sustainability of various aspects of our business including the economy, environment and social. It has been ingrained in our policy that all business decisions are evaluated after taking into consideration the interest of all stakeholders in order to promote a conducive and sustainable business environment. The Group has developed a Code of Conduct to guide the implementation of its business decision based on these principles.

We constantly engage with our stakeholders through various platforms in understanding their needs. Such engagement is important to ensure that we have a mutual understanding and better respond to each other requirements and interest.

Tomei’s sustainability pillars are focused on the following four areas:-1) Responsible business practices2) Meeting customers’ expectation3) Developing employees4) Well-being of employees and communities

MANAGING AREA OF SUSTAINABILITY

1. Responsible Business Practices

Quality product offerings

Tomei is the only jeweller in Malaysia with the accreditation of the National Mark for “Malaysian Brand” certification from the SMECorp. This accreditation is given in recognition of the quality of products offered by Tomei and the significant strength of its branding in the market.

Responsible sourcing

Tomei is accredited with the status of “World Diamond Mark” Authorized Diamond Dealer in Malaysia which represents the ultimate mark of “Confidence, Trust and Credibility” to influence customers’ diamond buying decision. This reinforces our commitment to provide the best service and product design to our customers. It also assures our customers that all diamonds purchased from Tomei are sourced from only legitimate source and ensure that all diamonds are natural (not laboratory made, synthetic, treated or conflicted diamond) without compromising on its quality.

Confidentiality of customer’s information

Tomei subscribes to the importance of data privacy of its customers and has taken steps to ensure that all customer’s information that come into its possession are managed strictly as required by the Personal Data Protection Act, 2010.

Pricing transparency

Tomei promotes transparency in its product pricing whereby all its products come with price tag attached. We adhere strictly to the Competition Act, 2010 and therefore do not subscribe to any form of price fixing mechanism. Tomei retail gold price is published in the local daily while in the shop front, the gold price is clearly and properly displayed to inform customers of the current selling price.

SUSTAINABILITYSTATEMENT

Page 33


Quality management system

As part of the Group’s continuous effort and commitment to quality, the Group is accredited with ISO 9001:2015 in the Quality Management System for its retailing in gold and jewellery products from Lloyd’s Register. This accreditation which has been given to the Group since the year 2003 speaks of the Group’s strategic decision to improve its overall performance and provides a sound basis for sustainable development initiatives.

Through the implementation of the International Standard, we are able to offer our customers the following benefits:- a)

b) c) d)

2. Meeting Customer’s Expectation

New product launch

As Malaysia leading jeweller, Tomei is instrumental in bringing new products to the market from time to time in line with its latest collection series. Every year, Tomei ensure that it introduces and brings to the market ample of new jewellery designs catering to different festivities and celebrations in Malaysia.

During the year, Tomei introduced ASHOKA® diamond into Malaysia. The ASHOKA® diamond which comes in emerald shape has a special cut that makes it look much larger compared to any other diamond of the same size. It also has brought in Roberto Bravo, a collection of contemporary Italian jewellery.

Wide distribution network

Tomei’s operation covers a wide spectrum of the market ranging from the retail, wholesale as well as the upcoming online channel. It also has a specialized and dedicated team to support its corporate customers in meeting their requirements.

In the retail segment, it has 56 stand-alone retail outlets all over Malaysia serving its customers from all walks of life in addition to the various fairs and exhibitions held. We are proud to be the most accessible jeweller in town that has our presence in almost every state in Malaysia. Its wholesale segment serves various jewellery retailers in Malaysia while some of its products are exported to Singapore, Vietnam, Thailand, Indonesia and European countries. In the online segment, customers can gain access to our products through our own webstore at www.etomei.com.my or marketplaces such as Lazada and Shopee.

the ability to consistently provide products and services that meet customer’s and applicable statutory and regulatory requirements;facilitating opportunities to enhance customer’s satisfaction;addressing risk and opportunities associated with its context and objectives; andthe ability to demonstrate conformity to specified quality management system requirements.

Brands

Tomei

My Diamond

Goldheart

Le Lumiere

De Beers

No. of Retail Outlets

45

6

3

1

1

No:KLR 0048189

SUSTAINABILITY STATEMENT (continued)Page 34


Extensive product range

Tomei carries a wide range of products from yellow gold jewelleries to diamond jewelleries. It also sells platinum, white gold, precious and semi precious stones. Its own in-house collections such as Le Lumiere, Eternal Binding, Ana-stasia and Chomel provide customer with ample of choice. In addition, it also offers various ranges of investment precious metals including the Tomei Pamp Suisse collaboration “Icon of Malaysia” gold bar collection, the Canadian Maple Leaf, the Australian Kangaroo and the China Panda. In addition to its existing collections, Tomei also features some famous international brands such as China’s Batar Jewellery and Thailand’s Prima Gold in Malaysia. Its wedding series’ collection of Xifu, provides a one-stop destination for all wedding jewelleries needs. Tomei is also the sole distributor of De Beers diamond products in Malaysia. For the baby’s and kid’s market, Tomei works with Warner Bros’ and Sanrio to manufacture and retail gold jewellery based on the characters from DC Super Heroes, Looney Tunes and Hello Kitty.

Enhance shopping experience

In order to provide a fresh shopping experience to our customers, we upgrade all our retail outlets on a periodic basis. Such improvement does uplift and elevate the “feel good” factor for our customers once they step into our premises. We have upgraded all our lightings into LED which not only increases the sparkling of our products but also saves more electricity. During the year we have refurbished 15 retail outlets among all our retail brands.

Visual merchandize display (“VMD”) plays a very important role in showcasing our products to customers. The VMD continues to go through constant evolution and fit to the different themes in line with various periodical festivities but at the same time maintain the uniformity of the Group’s concept and brand positioning. This allows customers to feel the mood of prevailing festival such as the Chinese New Year, Valentine’s Day, Deepavali, Hari Raya and Christmas.

Various visual merchandize display (“VMD”) fordifferent occasions

SUSTAINABILITY STATEMENT (continued) Page 35


3. Developing Employees

Employee’s training and education

The Group has set up the Learning & Development department to focus and identify the training needs of the Group. We believe training & development will help to nurture and promote individual success and sustainably increases the overall value to the organization.

Our Learning & Development Roadmap focusing the learning journey for both current staff as well as new recruits and is planned with the organization human capital needs and development in view. The journey starts with identifying of the current and future human resources needs for the organization and then set up the priorities to address its needs. Part of our development journey includes leadership development for the talent of the Group.

During the financial year, 85% of the Group’s employees has been selected to undergo various training modules to further improve and strengthen their skills.

Employee’s career advancement

When an employee first steps into TOMEI, we have already set up the career progression path for the staff. In order for the staff to get promoted, they need new and relevant skillset that fit into the new role. We provide the relevant training and opportunity to equip staff and preparing them to move up to the next level. Each training is followed by an assessment to ensure that staff has properly mastered the skillset.

The Group has a systematic appraisal system whereby employees are assessed on their skillset and capabilities. Such appraisal serves as an important tool in identifying employee’s needs and guide for promotion. During the year, 5% of our staff force from various skillset was promoted and given the trust to manage different portfolios and responsibilities. Such promotion does not only boost the self confidence of the promoted staff but also serves as role model for other staffs to work towards their career advancement in the future.

The Group also implements a mentorship system whereby senior staffs are required to provide guidance and hand held junior staffs in their daily responsibilities. Such system not only helps new staff to understand their new role better but also creates a stronger bonding and working relationship among the staffs.

4. Well-being of Employees and Communities

Safe and conducive working environment

The Group provides a safe and conducive working environment to its staffs where front liners are provided with Company’s uniform to 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. Our retail outlets are well guarded by qualified security guards and under the surveillance of CCTV at all time as a precaution to avoid or deter robbery and theft incidence.

SalesTechnique

23%Product

42%Self

Development18%

Others 17%

Areas of sta� training

TOMEI retail outlet with CCTV surveillance and armed security guard



Employee’s well-being and engagement

Engaging of employees is practiced at all levels of the business hierarchy and cultivated on a regular basis. When employees are engaged at work they feel better connected to the Company. In order to foster closer engagement between the Company and employee, Tomei has organized various activities during the year. Through these initiatives, we managed to foster a culture of inclusiveness which is also key in reducing turnover rates and boosting employee retention. Employee enthusiasm with the Group remained encouraging with half of our employees have been with the Group for more than 5 years.

Healthy and well-motivated employees can have an equally positive impact on the productivity and effectiveness of the business. Tomei has developed various wellness programs which aimed to provide a healthy and joyful working environment for its employees.

Tomei Excellent Education Award

The Group is encouraging and promoting education among its employees’ children by giving out Tomei Excellent Education Award to those who have performed well in their examinations. During the financial year, children of our staffs from all level were awarded RM50 to RM100 for their education excellence achieved. The amount may be small but it serves as a great motivation to the children to continue to strive towards better academic achievement.

Employment opportunity across wide spectrum

The Group in promoting employment opportunities has provided employment to Malaysians regardless of age, gender and ethnicity. Tomei employs more than 900 staffs to support its daily operations from almost every single state in Malaysia consisting of various ethnicity. The Group does not employ any child or force labour and has met all the minimum wages requirements as required by the law.

Tomei’s Dodgeball Tournament 2018Tomei’s Family Day 2018 in Eagle Ranch Resort Port Dickson

Gong Xi Fa Chai!.... Tomeian gets together toenjoy sumptuous lunch with their Directors

SUSTAINABILITY STATEMENT (continued) Page 37


Cherish diversity

Tomei subscribes to the idea of promoting gender equality and having at least 30% female participation in workforce as recommended by the Government. Currently, Tomei’s Board of Directors consists of 40% female while its female employees made up more than 60% of its total workforce.

Support charity programme

During the year, the Group has sent its employees to participate in various charity programme. Among those include cycling and running activities to promote carbon free environment and raising fund for various charitable organizations.

30 employees of the Group has taken part in the 2018 Lion Parkson Run held to raise fund for the disabled.

As part of Tomei care4community programme, employees of the Group together with their family members has put their hands together in beach cleaning activities at Pantai Tanjung Gemok, Port Dickson with the objective to promote a cleaner and safer environment. We also visited Rumah Charis Children Home regularly as part of our effort to promote and spread the concept of “Faith, Hope & Love” especially among those underprivileged children.

Tomei as a proud Malaysian citizen has contributed to Tabung Harapan Malaysia. One of our brand, Le Lumiere has made a donation of RM10,000 to the National Cancer Society of Malaysia which the aim to provide education, care and support services for cancer patients and general public.

Female,63%

Male,37%

Workforce gender350

300

250

200

150

100

50

018-20 Above

6020-30 30-40 40-50 50-60

Workforce Age

Le Lumiere donation to theNational Cancer Society of Malaysia

My Diamond donation to theHouse of Joy (Children’s Home)

Tomeian puts their hand together incleaning up Pantai Tanjung Gemok



TOMEI Golden Jubilee Oscar Nite 28 August 2018

15th Anniversary Charity Campaign Launch 20 July 2018 TOMEI Fashion Show 27 October 2018

A Glittering Christmas Launch Event(Jewellery Fashion Show by Miss Tourism International 2018/2019)

& Crowning of Miss Le Lumiere Elegance 15 Dec 2018

TOMEI Gold To Drive Contest Grand Prize Winnerof BMW X-5 Series 16 January 2019

Launch of ASHOKA® Diamond 1 August 2018

Internet Tomei Annual Report 1 - Malaysiastock.biz In 2013, it became an exclusive distributor of De Beers, reinforcing its stature as among the top jeweller in the market. In addition,

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