ANNUAL REPORT 2020 Index Living Mall Public Company Limited Annual Report 2020 Index Living Mall Public Company Limited Index Living Mall Public THAILAND’S NO.1 FURNITURE AND HOME FURNISHINGS COMPANY VISION MISSION TABLE OF CONTENTS Be top-of-mind for the 1. We are a manufacturer and distributor of furniture and home decor that has grown best furniture and home sustainably through a strong brand and a 012 064 furnishing business in Asia. professional management team. Message from the Chairman Organizational Chart 2. We are determined to be a leader in the furniture and home decor business by 014 065 expanding franchises to the Asian region Executive Committee Report Management Structure and developing continuously 016 80 3. We are the customers’ top-of-mind brand Audit Committee Report Corporate Governance CORE VALUE due to our quality and modern designed products and services that better meet 018 112 Speed Technology & Service: the customers' lifestyles. Nomination, Remuneration and Security Holdings of Company Company Limited Index Living Mall Public STS 4. We aim to provide good returns to Corporate Governance Report Directors and Executives employees, trade partners, and create good things in order to give back to 019 115 society. Risk Management Corporate Social Responsibility Committee Report 132 020 Risk Factors Index Living Mall Public Company Limited Index Living Mall Public Board of Directors 137 002 028 Risk Management and 003 Executives Profiles Internal Control Annual Report 2020 038 142 Business Goal Management Discussion and Analysis Annual Report 2020 040 153 General Information Connected Transactions 042 160 Major Developments and Awards Report on the Board of Directors’ Responsibilities for Financial Statements 048 161 Nature of Business Auditor’s Report 062 166 Securities and Financial Statements Shareholder Information 063 Dividend Policy 65TOTAL RETAIL STORES Maldives 1 Store Laos Thailand 1 Store Stores Nepal 44 Store 2 Company Limited Index Living Mall Public Cambodia Overseas 2 Store Stores Vietnam 21 3 Store Index Living Mall Public Company Limited Index Living Mall Public Indonesia Store 004 3 005 Pakistan Annual Report 2020 4 Store The Company was assessed for good corporate governance for the first Annual Report 2020 Myanmar year and was rated at 4 stars (very Store good) by the Thai Institute of Directors 5 Association (IOD). The assessment results of the first Annual General Meeting of shareholders (AGM Checklist) of the Company which is evaluated by Thai Investors Association. The Company was rated in the highest score category for the year 2020 with a full score of 100%. Index is a leading integrated home furnishing retail business in Thailand Rental & Services Revenue from other Financial Highlights sales and services 5.2% 3.8% STATEMENT OF INCOME (THB million) 2018 2019 2020 Revenue from Sale of Goods 9,174 9,236 7,657 Online Revenue from Rental and Rendering of Services 484 562 462 Cost of Sale of Goods 5,119 5,208 4,132 6.8% Cost of Rental and Rendering of Services 1/ 249 304 274 Project Selling and Distribution Expenses 2,400 2,347 1,981 Administrative Expenses 2/ 1,172 1,219 1,033 10.6% EBITDA 1,361 1,567 1,652 Depreciation and Amortization 700 743 874 EBIT 661 824 778 2020 Operating Net Profit 543 596 421 3/ Revenue by Company Limited Index Living Mall Public Earnings per Share (Baht) - 1.33 0.83 Retail Dividend per Share (Baht)3/ - 0.46 0.42 Business STATEMENT OF FINANCIAL POSITION (THB million) 2018 2019 2020 73.6% Total Assets 12,282 12,201 12,951 Total Liabilities 7,710 7,241 7,871 Paid-up Capital 2,000 2,525 2,525 Equity Attributable to Owners of the Parent 4,571 4,959 5,078 9,658 9,798 Book Value per Share (Baht) 3/ - 9.8 10.1 Index Living Mall Public Company Limited Index Living Mall Public Operating 484 562 8,119 Liquidity Ratios 2018 2019 2020 462 Revenue from rental and 006 Current Ratio (x) 0.7 1.1 1.0 Revenue rendering of services 007 (Unit: THB million) Revenue from sale of goods Annual Report 2020 Quick Ratio (x) 0.2 0.4 0.2 9,174 9,236 Leverage Ratios 2018 2019 2020 7,657 D/E (x) 1.7 1.5 1.5 IBD/E (x) 1.1 0.9 1.2 Annual Report 2020 Interest Coverage Ratio (x) 4/ 3.9 4.5 2.6 2018 2019 2020 Profitability Ratios 2018 2019 2020 %GPM from Sale of Goods 44.2% 43.6% 46.0% %GPM from Rental and Rendering of Services 1/ 48.6% 45.8% 40.7% 1/ Net Profit 596 %Overall GPM 44.4% 43.7% 45.7% (Unit: THB million) 543 EBIT Margin (%) 6.8% 8.3% 9.5% 421 Net Profit Margin (%) 5.6% 6.0% 12.7% EBITDA Margin (%) 13.9% 15.8% 20.2% ROA (%) 5.4% 6.7% 6.2% 2018 2019 2020 ROE (%) 11.9% 12.5% 8.4% Share Information 2018 2019 2020 Par value (Baht / share) 3/ - 5.0 5.0 Number of listed shares (mn shares) 3/ - 505.0 505.0 EBITDA 1,567 1,652 (Unit: THB million) 1,361 1/ Figures in 2018 and 2019 were after reclassification. Cost of rental and rendering of services before reclassification were Baht 276 million in 2018 and Baht 328 million 2/ in 2019. %GPM from rental and rendering of services were 43.0% in 2018 and 41.7% in 2019. %Overall GPM were 44.1% in 2018 and 43.5% in 2019 Figures in 2018 and 2019 were after reclassification. Administrative expenses before reclassification were Baht 1,145 million in 2018 and Baht 1,196 million in 2019. 3/ 4/ IILM was listed on the Stock Exchange of Thailand on 26 July 2019 Decreased Interest Coverage Ratio in 2020 was due to an impact of the adoption of Thai Financial Reporting Standards 16 Leases (TFRS 16) since 1 January 2020 which caused higher depreciation and interest expenses. If excluding the impact of TFRS 16, Interest Coverage Ratio in 2020 would increase to 6.5x. 2018 2019 2020 JOY PRICE Sell at a Lower Price JOY PRICE for pocket friendly A sincere price so you neither need to wait for a discount nor worry that our and happier prices are more expensive than elsewhere, nor check to see whether our shopping prices are actually less than other places because we are a manufacturer and a direct distributor that uses modern technology and a systematic management system. As a result, we are able to effectively control price factors at the highest level. SERVICE Company Limited Index Living Mall Public Economy of Scale Productivity JOY QUALITY As a leader in the home furnishing market, Produces high quality products at a valuable guaranteed with international both domestically and in exports for more price with an effective management system standard than 25 years, the Company has a high which reduces the waste of resources and production volume which results in low raw materials in every procedure in order to costs, so that you can have high-quality maximize efficiency. products that don’t hurt your wallet. Index Living Mall Public Company Limited Index Living Mall Public Direct to Our Customers JOY Hi-Technology As a manufacturer and distributor that has 008 Through the use of machines and one of implemented integrated marketing, we are 009 the most modern technology systems in able to control price factors directly in order Annual Report 2020 4There are 4 joys DESIGN the world. to have quality products at an appropriate price level. JOY DESIGN Annual Report 2020 to serve you at by world class Index Living Mall which give designers you pleasure to shop for furniture and home furnishings that don’t hurt your wallet and offer you special services QUALITY that are unlike any other. JOY QUALITY guaranteed with international standard CONVENIENCEYOUR ONLINE Convenient and fast no matter where and when you can do shopping instantly. No matter what time you want to shop, it can be done 24 hours a day, no need to wait for the store opening-closing, no need to wait until SHOP the holidays to buy. Just go to your smartphone or computer anywhere in Thailand and you can do shopping instantly. The company also provides transportation and installation services covering all provinces. The customers can reach online distribution channel as below details: YOUR SAFETY 1. The website www.indexlivingmall.com gathers furniture, home YOUR CONVENIENCE appliances, home decoration accessories, and all electrical appliances The company is a manufacturer and in one place and also has a Virtual Store to support online visits and Company Limited Index Living Mall Public distributor of furniture and home decoration shopping through the website. product using state-of-the-art technology. 2. Selling products through Line “Index Chat to Shop”, “Facebook Live”, There is a systematic management system. and “Facebook Messenger” to support the behavior of Thai consumers From sales to shipping, quick installation who use social media applications to communicate. This is another and after-sales service to customers. The online product distribution channel that continues to expand. Company has focused on creating the 3. Selling products through Marketplace and other platforms such as identity of each brand and its products to be Lazada, Shopee, JD Central, and NocNoc.com in order to cover the Index Living Mall Public Company Limited Index Living Mall Public recognized by customers. With a wide variety possible growth of online customers. 010 011 of products and quality to meet all lifestyles Annual Report 2020 through various distribution channels covering all customer groups domestically and abroad.