Annual Report 2008 04
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tones Hong Kong ed in Hong Kong. Miles 4). lish 1983 Estab Stock Exchange of the ock code: 30 1993 d (St Listed on Limite 8 199 . Factory complex in Xixiang in production 1999 ISO 9001 (1994 version) of Design and Obtainedfacture. Manu 2001 Vertically integrated manufacturing process was esting. completed includingt additional machinery and equipmentlaboratory for manufacturing, electroplating and 2002 Obtained ISO 9001 (2000 version) of Design and Manufacture. 2008 • Peace Mark signed an exclusive franchi se 2003 agreement with De Beers Diamond omic Partnership ed Closer Econ Jewellers Limited, giving the Group stores Obtain ) certificate of Hong Kong exclusive rights to operate De Beers retail Arrangement lier(CEPA for wholesale and distribution service supp stores in China. China. services in • Acqui red the majority share of Sincere Watch Limited, to become the largest 2004 luxury watch retail network in Asia. • The first timepiece ma nufacturer in Hong Kong to deliver the first batch of timepieces to the PRC under CEPA. • Acq uired a multi-brand sales chann ‘TimeZone’. el, namely • Opened advanced components manufac 2007 i, Hong Kong. facilities in Longhua, Chin turing a. • Opened the first Rolex store in Canton Road, Tsim Sha Tsu • Agreement with ‘BOUCHERON’, a French High Jewelery brand, owned by GUCCI Group, for retail expansion. • Acquired 51% share in state-owned Tianjin Sea-Gull Watch Company, the or largest mechanical movement f factory in China. 2006 • Established a joint venture with Tourneau luxury watch market in China. olex store in Shanghai. R • OpenedTimezone mid-range (Exclusive watches European platform, Collection EEC ) in Hong Kong. • Opened the largest 2005 Opened a series of ‘TimeZone’ retail stores in Hong Kong. Contents Corporate Profile 02 Corporate Culture 48 Corporate Information 04 Directors and Senior 50 Management Profiles Luxury-Mainland China 06 Directors’ Report 53 Luxury 08 Independent Auditor’s Report 64 Mid-Range 10 Consolidated Income Statement 66 Expanding Horizons 11 Consolidated Balance Sheet 67 Review of 2007 12 Balance Sheet 69 Review of 2008 14 Consolidated Statement of 70 Changes in Equity Chairman's Statement 18 Consolidated Cash Flow 72 Review of Operation 22 Statement Management Discussion 30 Notes to the 75 and Analysis Financial Statements Corporate Governance Report 39 Summary of Properties 143 Investor Relations 46 Five-Year Financial Summary 144 02 A Leading Manufacturer, Distributor & Retailer In The Timepiece Industry Headquartered in Hong Kong, Peace Mark is a leading international watch and jewelry company and Asia’s largest luxury watch retailer, offering one-stop services from manufacturing to distribution and sale of watches and jewelry. Peace Mark (Holdings) Limited 03 LUXURY MID-RANGE MANUFACTURING DISTRIBUTION Sincere TimeZone Complete Watches United States Tourneau Mono-brand Mechanical Europe Joint Venture Movements Mono-brand RETAIL SUPPLY CHAINS MANAGEMENT The Group operates the multi-brand retail expanded Peace Mark’s geographical Stock Exchange of Hong Kong since chain and specialty image stores for coverage to South East Asia. It is also 1993 under the stock code 304. It is a luxury watches as well as the leading manufacturer of mechanical constituent stock in the MSCI (Morgan for mid-range watches in Greater China. movements in China with its subsidiary Stanley Capital International) Hong Kong It also has exclusive rights to operate Tianjin Seagull holding a share of more Small Cap Index Series. De Beers retail stores in China and than 40% of the market. develop the French high-end jewelry brand Boucheron in Greater China. The Founded in 1983, the Group has recent acquisition of Sincere Watch has been listed on the Main Board of the Annual Report 2008 04 BOARD OF DIRECTORS PRODUCTION FACILITIES WEBSITE Executive Directors China http://www.peacemark.com Mr. Chau Cham Wong, Patrick (Chairman) 107 Shui Ku Lu Mr. Leung Yung (Chief Executive Officer) Fenghuang Gang REGISTERED OFFICE Mr. Tsang Kwong Chiu, Kevin, FCCA, HKICPA, Xixiang, Baoan MBA, MSc Shenzhen, PRC Clarendon House, Church Street Mr. Man Kwok Keung Hamilton HM 11 Mr. Cheng Kwan Ling Block 9 & Block 12 Bermuda Mr. de Jaillon Hugues Jacques Tong Fu Cun Gong Ye Yuan (appointed on 30 May 2008) Da Lang Cun Non-Executive Director Long Hua Zhen STOCK INFORMATION Baoan Mr. Tay Liam Wee (appointed on 1 April 2008) Shenzhen, PRC Listed on the main board of Stock Exchange of Hong Kong Limited Independent Non-Executive Directors Third Gong Ye Qu Ms. Susan So Bitou Estate Mr. Kwok Ping Ki, Albert Songgang Baoan STOCK CODE Mr. Tang Yat Kan Shenzhen, PRC Mr. Wong Yee Sui, Andrew, CPA SEHK : 304 Mr. Mak Siu Wing, Clifford 38 Shi Ma Lu Duan Jiu Guang Hua Lu Bloomberg : 304 HK Bai Yun Qu Reuters : 304.HK COMPANY SECRETARY Guangzhou, PRC 32 Wudong Road INVESTOR RELATIONS Ms. Fong Ho Yan, FCCA, HKICPA Yangpu District Shanghai, PRC Corporate Communications Department – General HEAD OFFICE 11 Fukang Road, Investor Relations Department Nankai District, – Investor Relations Hong Kong Tianjin, PRC Peace Mark (Holdings) Limited Unit 3, 12th Floor, Unit 3, 12th Floor Cheung Fung Industrial Building Cheung Fung Industrial Building Swiss 23-39 Pak Tin Par Street 23-39 Pak Tin Par Street Route de Reuchenette 19 Tsuen Wan, Hong Kong Tsuen Wan, Hong Kong 2502 Bienne Email: [email protected] Switzerland [email protected] Room 1001, Tower 1 Silvercord, 30 Canton Road, Tsim Sha Tsui, Kowloon Peace Mark (Holdings) Limited 05 PRINCIPAL BANKERS AUDITORS ABN AMRO Bank N.V. Chu and Chu Bank of America Certified Public Accountants Bank of China Suite 1801-5, 18/F, Tower 2 BNP Paribas China Hong Kong City Deutsche Bank AG 33 Canton Road ING Bank N.V. Tsim Sha Tsui HSH Nordbank AG Kowloon Merrill Lynch OCBC Bank Deloitte and Touche-Singapore Standard Chartered Bank 6 Shenton Way #32-00 United Overseas Bank DBS Building Tower-Two Singapore 068809 SHARE REGISTRARS AND TRANSFER OFFICES LEGAL ADVISORS In Hong Kong Gallant Y.T. Ho & Co. 5th Floor, Jardine House Tricor Group 1 Connaught Place Workshop 14, 10th Floor Hong Kong Honour Industrial Centre 6 Sun Yip Street Chai Wan, Hong Kong In Bermuda The Bank of Bermuda Limited Bank of Bermuda Building 6 Front Street Hamilton HM 11 Bermuda Annual Report 2008 06 Luxury – Mainland China Beijing Hangzhou Qingdao Qingdao Macau Peace Mark (Holdings) Limited 07 -6963:4503&4/&5803,*/$)*/" -JBPOJOH .POHPMJB #FJKJOH 9JOKJBOH 5JBOKJO 4IBBOYJ 4IBOEPOH +JBOHTV 4IBOYJ )VCFJ 4IBOHIBJ $IPOHRJOH ;IFKJBOH 4JDIVBO )VOBO 'VKJBO :VOOBO (VBOHYJ (VBOHEPOH 4IFO[IFO )POH,POH .BDBV )BJOBO (as at 31 March 2008) Annual Report 2008 08 Luxury Singapore Hong Kong Singapore Indonesia Singapore &9$-64*7"/%4 A. Lange & Sohne L.U.C. by Chopard Bovet Martin Braun Chaumet Mazzuoli Cvstos Pierre Kunz DeGrisogono Richard Harbring F.P. Journe Rodolphe Franck Muller Zenith Peace Mark (Holdings) Limited 09 -6963:4503&4/&5803, .BJOMBOE $IJOB 4PVUI,PSFB .BDBV )POH,POH *OEJB 5BJXBO #BOHLPL 7JFUOBN .BMBZTJB 1IJMJQQJOFT 4JOHBQPSF *OEPOFTJB (as at 31 March 2008) Annual Report 2008 10 Mid-range Hong Kong Hong Kong Shanghai Lanzhou Shanghai 10*/50'4"-&4 $JUZ Hainan Mongolia Beijing Hebei Shandong Chongqing Hefei Shannxi Shanghai Heilongjiang Shanxi Tianjin Henan Sichuan 1SPWJODF Hubei Xinjiang Fujian Hunan Yunnan Gansu Jiangsu Zhejiang Guangdong Jiangxi Guangxi Jilin Guizhou Liaoning Peace Mark (Holdings) Limited Expanding horizons 11 US CHINA Flat F, 16/F, Shui Chan Building 140-58th Street Suite 6C Unit 1, 10/F, Silvercord 3131 Ren Min North Road Brooklyn Tower 1 Shenzhen New York 30 Canton Road Tsim Sha Tsui Unit 603, Jin Hui Building 389 5th Avenue Kowloon 123 Jie Fang South Road Suite 302 Hong Kong Yuexiu District New York Guangzhou Suite 602B, West Wing PANAMA Tsim Sha Tsui Centre Unit 1501 Apartado 2034 66 Mody Road 15A Shuguang Building Zona Libre de Colon Kowloon 189 Puan Road Republic of Panama Hong Kong Shanghai SWITZERLAND Suite 5402-04 Unit 08, 11/F, Metro Tower Route de Reuchenette 19 Central Plaza 30 Tian Yao Qiao Road 2502 Bienne 18 Harbour Road Xu Hui District Wanchai Shanghai FRANCE Hong Kong 1 rue Royale-438 Bureaux Unit 07, 5/F, Building 4 de la Colline Unit 3, 7th Floor China Central Place 92213 Saint-Cloud Cheung Fung Industrial 89 Jianguo Road Building Chaoyang District ITALY 23-39 Pak Tin Par Street Beijing Via Colli, 3-10128 Tsuen Wan Toriono Hong Kong 11 Fukang Road Nankai District GERMANY Unit 10, 15th Floor Tianjin Zahringerallee 25 Cheung Fung Industrial DE 75177 Pforzheim Building 10/F, 221 Zheng Street 23-39 Pak Tin Par Street Pi Pa Shan, Yuzhong Schlop Street 23, Tsuen Wan Chongqing D-82031 Grunwald Hong Kong Postfach 13 Room B1, 12/F, 6th Floor, Integrated Donghai Shuguang Building SINGAPORE Building 455 Zhongshan East Road 8 Temasek China Construction Ningbo Boulevard Second Division #23-03 Shenzhen First Company 1/F, Zhong Shan Building Suntec Tower Three Jing Er Road 65, Zhongshan Road Luo Hu District Heping District Shenzhen Shenyang Unit 05 – 06, 19/F, TAIWAN Shenhua Commercial 3/F., No. 317 Building Sec 3 Ho-Ping E. Road 2018 Nanhu Road, Luohu Taipei Shenzhen Annual Report 2008 12 Review of 2007 4*/$&3&8"5$)"$26*4*5*0/ At the end of 2007, the Group announced its $-0$,8*4&'30.5013*()5 plan to acquire controlling stake in Sincere Watch • Luxury retail operation in Malaysia Limited. A Singapore-incorporated company listed • Sincere Watch at Vivocity, Singapore on the Singapore Exchange Securities Trading • The elegance of a luxury store in Singapore Limited, Sincere Watch is one of Asia’s longest- • Sincere Watch boasts the exclusive right on standing retailers and distributors of brand-name 14 luxury watch brands luxury watches with a retail network spanning Singapore, Malaysia, Thailand, Hong Kong, the PRC, India, Australia, South Korea and Indonesia.