OUR STRENGTH ANNUAL REPORT 2017 South Korea
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SOUTH KOREA HONG KONG / CHINA MALAYSIA INDONESIA THAILAND SINGAPORE AUSTRALIA GLOBAL BRANDS OUR STRENGTH ANNUAL REPORT 2017 South Korea Hong Kong / China Thailand Malaysia Singapore Indonesia Australia DISTRIBUTION EXCELLENCE 1 TYE SOON LIMITED Annual Report 2017 Established in 1933, the Group is the most prominent independent automotive parts distributor in Southeast Asia. Partnering its principals mostly from Europe, Japan and Korea, the Group has one of the largest portfolio of top-tier global brands of automotive parts. The Group’s main markets in Asia Pacific are currently served by operations in Singapore, Malaysia, Thailand, Indonesia, Hong Kong/China, South Korea and Australia. CONTENTS 2 Corporate Information 2 Corporate Group 3 5-Year Financial Summary 6 Chairman’s Statement 8 Business Review 10 Board of Directors 11 Group Management Team 12 Financial Contents TYE SOON LIMITED 2 Annual Report 2017 CORPORATE INFORMATION Board Of Directors Audit Committee Registered Office Ong Hock Siang @ Tham Khuan Heng (Chairperson) 3C Toh Guan Road East #01-03 Ong Huat Seong (Chairman) Hee Theng Fong Singapore 608832 Ong Huat Kee Lim Lee Meng Tel: 6567 8601 Ong Huat Yew Peter Chen Timothy Teck Leng @ Fax: 6567 8884 Ong Huat Choo Chen Teck Leng David Chong Tek Yew Registrar And Share Transfer Ong Lay May Apple Nominating Committee Office Ong Eng Chian Kelvin Hee Theng Fong (Chairman) M&C Services Private Limited Ong Eng Waey Abel Lim Lee Meng 112 Robinson Road #05-01 Ong Eng Mien Malcolm Tham Khuan Heng Singapore 068902 Hee Theng Fong Ong Hock Siang @ Tel: 6227 6660 Lim Lee Meng Ong Huat Seong Tham Khuan Heng Ong Huat Kee Auditors Chen Timothy Teck Leng @ Chen Timothy Teck Leng @ KPMG LLP Chen Teck Leng Chen Teck Leng Public Accountants and Chartered Accountants Enterprise Risk Management Remuneration Committee Singapore Committee Lim Lee Meng (Chairman) Partner-in-Charge appointed Ong Huat Yew Peter (Chairman) Hee Theng Fong since the financial year ended Ong Hock Siang @ Tham Khuan Heng 31 December 2014 Ong Huat Seong Chen Timothy Teck Leng @ – Tan Yek Lee Doreen David Chong Tek Yew Chen Teck Leng Ong Eng Chian Kelvin Main Bankers Ong Huat Kee Company Secretary DBS Bank Ong Huat Choo Evelyn Wee Kim Lin KBC Bank N.V. Ong Lay May Apple Maybank United Overseas Bank CORPORATE GROUP Subsidiaries Naga Jaya Automotive Sdn Bhd Associated Corporation Imparts Holdings Pte Ltd Edaran PAL Sdn Bhd Lintrex (Australia) Pty Ltd Filsound Enterprise Pte Ltd PAL Everts Co., Ltd. TS Motorsport Pte. Ltd. TSC Enterprise (HK) Limited TSC Comparts Pte. Ltd. TSC Trading (Shenzhen) Company Everts Pte. Ltd. Limited Joining Enterprise Pte. Ltd. Sejong Parts Plus Limited Liability Tokyo Motor Pte. Ltd. Company Imparts Automotive Pty Ltd PT Palindo Makmur Imparts Distribution Pty Ltd Automotive Partners Asia Pty Ltd 3 TYE SOON LIMITED Annual Report 2017 5-YEAR FINANCIAL SUMMARY Results $’000 2013 2014 2015 2016 2017 Revenue 193,637 201,052 201,414 210,904 216,623 Profit before tax 7,581 4,011 1,102 7,373 1,694 Tax expense (1,432) (1,345) (571) (594) (900) Profit for the year 6,149 2,666 531 6,779 794 Non-controlling interests (43) (45) (73) (57) (69) Attributable profit 6,106 2,621 458 6,722 725 Earnings per share (cents) 7.00 3.00 0.53 7.70 0.83 Financial Position $’000 2013 2014 2015 2016 2017 Property, plant and equipment 4,966 5,141 2,485 2,362 1,987 Goodwill on consolidation 113 109 104 105 104 Other non-current tangible assets 2,444 2,392 2,451 2,391 2,359 Current assets 140,712 142,124 155,075 157,963 154,796 Total assets 148,235 149,766 160,115 162,821 159,246 Equity attributable to owners of the Company Share capital 38,057 38,057 38,057 38,057 38,057 Reserves 21,063 19,728 15,512 17,090 17,722 Share capital and reserves 59,120 57,785 53,569 55,147 55,779 Non-controlling interests 100 146 203 258 322 Total equity 59,220 57,931 53,772 55,405 56,101 Current liabilities 87,696 90,596 104,842 106,633 102,255 Non-current liabilities 1,319 1,239 1,501 783 890 Total liabilities 89,015 91,835 106,343 107,416 103,145 Total equity and liabilities 148,235 149,766 160,115 162,821 159,246 Net tangible assets per share 67.70 66.20 61.40 63.20 63.90 (cents) TYE SOON LIMITED 4 Annual Report 2017 THE MOST PROMINENT INDEPENDENT AUTOMOTIVE PARTS DISTRIBUTOR IN SOUTHEAST ASIA 5 TYE SOON LIMITED Annual Report 2017 FOCUSING MAINLY ON MAINTENANCE AND REPLACEMENT AUTOMOTIVE PARTS FOR THE REGION’S VEHICLES TYE SOON LIMITED 6 Annual Report 2017 CHAIRMAN’S STATEMENT Review of Performance Turnover grew 2.7% or $5.7 million to $216.6 million against a generally patchy global macroeconomic backdrop. Leveraging on the Group’s geographically diversified customer base, greater focus was targeted at markets where the Group felt had a more positive outlook. Total margins increased by $2.2 million due to the higher turnover and an improvement in the gross margin rate. The absence of two items incurred in FY16, a foreign exchange loss and a profit share for the directors in connection with the gain made from the sale of the properties at Waterloo Centre in Singapore, helped to lower the increase in overall operating expenses to $1.7 million for the year. Other income increased by $0.9 million mainly due to a foreign exchange gain of $0.7 million. Profit from operations (PBIT), as shown on the face of the Consolidated Income Statement, decreased from $10.0 million to $4.4 million. However, on a like-for-like basis excluding the effects from the gain from the sale of property, PBIT increased from $2.5 million to $4.4 million. Profit before and after tax for the period were at $1.7 million and $0.8 million respectively. Details relating to the performance of the business are set out in the Business Review section of this Annual Report. Current Year Prospects The strength and resilience of the Group’s distribution network consisting of the Group’s own overseas operations and its global external customer base will be the main factor underpinning the Group’s business. The Group aims to further improve operational profitability by attaining a better level of efficiency and economies of scale. The continuing restraint from expanding the network of Group-operated warehouse facilities in a significant way will allow the Group to build up revenues without increasing operating cost levels significantly. Barring unforeseen circumstances, the Group is expected to remain profitable in the current financial year. 7 TYE SOON LIMITED Annual Report 2017 The Way Forward The Group remains focused in pursuing its strategic business direction in expanding its geographical footprint in Asia. Partnering principals mostly from Europe, Japan and Korea, a key element of the Group’s strategy would be to make available one of the largest portfolio of top-tier global brands of automotive parts to customers located throughout Asia. Board Changes This will be the last time I will be signing off the Chairman’s Statement for the Annual Report as I intend to step down as Executive Chairman and hand over stewardship to Hee Theng Fong. Upon my stepping down, Mr Hee will be appointed Chairman and I will remain as Executive Director. Mr Hee will remain an independent non-executive director as well as Chairman of the Nominating Committee of the Company. This intended change is made in compliance with guidelines set out in the Code of Corporate Governance and is expected to take place upon the completion of the necessary procedures by the date of the next Annual General Meeting, scheduled to be held on 27 April 2018. It has not been an easy decision for me as I had assumed the Chairman’s role after taking over from my late father, the founder of this business. I have had the privilege of having this role for over 20 years. During this period, the Group became listed on the stock exchange and embarked on a strategy to create an Asian footprint for the business. It has been an eventful and enjoyable journey. Dividend The Board of Directors announced a final ordinary dividend amounting to $0.5 million on 27 February 2018. No interim dividend was declared during the year. Although the dividend for the year ended 31 December 2017 was lower than the average ordinary dividend paid out in recent years, the Group has now maintained paying a dividend for 9 years running. Ong Hock Siang Chairman 23 March 2018 TYE SOON LIMITED 8 Annual Report 2017 BUSINESS REVIEW Sydney Seoul Jakarta The export-based business in Singapore declined turnover during the year. Of the Group’s larger overseas 5.3%. There were some positives but amidst the patchy operations, South Korea continued to advance and macroeconomic environment, a number of export Australia continued to make steady progress against markets were more tentative in FY17 with Thailand and a backdrop in which both the KRW and AUD gained certain overseas non-ASEAN countries registering the ground against the SGD. Malaysia regained some pace most significant decline. Besides business sentiment, with underlying turnover in MYR growing 9.9%. MYR the Group’s self-restraint with a more conservative depreciation over the recent past continued to be a stance on credit and stock deliveries was a factor as factor as turnover in SGD registered a slower growth well. rate of 5.8%.