Sa Sa International Holdings Limited Sa Sa
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Sa Sa International Holdings Limited Sa Sa International Holdings Limited 莎莎國際控股有限公司* Stock Code: 178 Annual Report 2012/13 Sa Sa International Holdings Limited 14th Floor, Block B, MP Industrial Centre, 18 Ka Yip Street, Chai Wan, Hong Kong Tel : (852) 2889 2331 Fax : (852) 2898 9717 Website : corp.sasa.com www.sasa.com Shares of Sa Sa International Holdings Limited are traded on The Stock Exchange of Hong Kong Limited (Stock Code: 178) Annual ReportAnnual 2012/13 * for identification only Beautiful results for a beautiful you Just as letters are sent to convey warm wishes and postcards to share loving thoughts, our annual performance is delivered like a delightful greeting card filled with the joy of our success. We offer premium solutions to bring out your beauty, and our beauty shows in the strong performance that we take pride to present to you year after year. Now, more than ever, the beautiful you will continue to drive our success. Your support and love have always underpinned Sa Sa's accomplishments. Contents Corporate Profile 2 Corporate Information 4 Five-Year Financial Summary 5 Footprint in Asia 8 Awards and Recognition 12 Milestones 20 Chairman’s Statement 24 Report of the Directors 145 Management Discussion & Analysis 30 Independent Auditor’s Report 160 Financial Review 45 Consolidated Income Statement 162 Biographical Information of Directors and Consolidated Statement of Senior Management 48 Comprehensive Income 163 Environmental, Social and Governance Report 56 Consolidated Statement of Financial Position 164 Investor Relations Report 94 Statement of Financial Position 166 Corporate Governance Report 108 Consolidated Statement of Cash Flows 167 Enterprise Risk Management Report 140 Consolidated Statement of Changes in Equity 168 Significant Accounting Policies 169 Notes to the Consolidated Financial Statements 180 Glossary 215 Sa Sa International Holdings Limited Annual Report 2012/13 1 Corporate Profile Sa Sa International Holdings Limited is a leading cosmetics retailing group in Asia. According to the “Retail Asia-Pacific Top 500” ranking of Retail Asia Magazine, KPMG and Euromonitor in 2012, Sa Sa is the largest cosmetics retail chain in Asia and one of the top ten retail groups in Hong Kong. The Company was listed on the Main Board of The Stock Exchange of Hong Kong Limited in 1997 (Stock Code: 178) and its business covers Hong Kong and Macau, Mainland China, Taiwan, Singapore, and Malaysia, in which markets it employs close to 4,800 staff. Maintaining its position as the leading cosmetics retailing group in Asia is the Group’s overriding vision. Our four-fold mission is to offer quality and comprehensive beauty solutions to our customers; to share success with our staff; to build long-term partnership with our suppliers; and to adhere to the principles of good corporate citizenship. We deliver sustainable value to our shareholders, customers, employees, suppliers and the community in the short, medium and long term through the two distinct business segments in our business model: Retail – Sa Sa strategically positions itself as one-stop cosmetics specialty stores with a business focus on beauty. The Group caters to the market by offering a large variety of quality products from over 600 beauty brands around the globe, covering a wide spectrum of products from skin care, fragrance, make-up, body care and hair care to health food, and stretching across a broad price range from mass to premium markets for customers’ selection. The resulting product portfolio appeals to a highly diverse customer base. The Group sharpens its competitive edge through enhancing product portfolio, launching new products frequently, and expanding product variety and concept. Its extensive regional retail network currently comprises 249 “Sasa” multi-brand stores, as well as a La Colline specialty store, a Suisse Programme specialty store and nine Suisse Programme counters. Our e-commerce platform, sasa.com, offers round-the-clock online shopping services along with comprehensive product and corporate information. It now serves customers from over 100 countries. Brand Management – In addition to selling its own-branded products, the Group also acts as the sole agent for many international cosmetic brands in Asia. Since October 2002, Sa Sa has been appointed by a leading global prestige brand, Elizabeth Arden, as its sole agent in Hong Kong and Macau. The Group currently manages over 100 exclusive major beauty brands and is responsible for their brand building, promotion and distribution. This business accounts for 42.5% of Sa Sa’s total retail turnover. 2 Sa Sa International Holdings Limited Annual Report 2012/13 Corporate Profile Competitive Edge Unique positioning as a one-stop cosmetics specialty store with strong branding Established since 1978, Sa Sa has built a widely recognised brand leveraging on its strong management team, well thought-out corporate strategies, and a robust balance sheet. We strategically position ourselves as one-stop cosmetics specialty stores with a business focus on beauty. Sa Sa continues to be the most distinctive and “top-of-the mind” cosmetics retail brand among local customers and PRC travellers. Wide range of products meeting various customer needs Sa Sa caters to the market by offering a large variety of quality products from over 600 beauty brands around the globe, covering a wide spectrum of products from skin care, fragrance, make-up, body care and hair care to health food, and stretching across a broad price range from mass to premium markets for customers’ selection. The resulting product portfolio appeals to a highly diverse customer base. The Group sharpens its competitive edge through enhancing product improvement, launching new products frequently, and expanding product variety and concept. Personalised cross-brand beauty advice A new beauty consultants (“BC”) receives over 240 training hours (including product knowledge; skin analysis; make-up application; selling techniques; supervisory skills; customer service and general management) before she becomes a qualified BC. Leveraging on up-to-date service skills and product knowledge, our BCs uphold professionalism in providing tailor-made beauty advice to our customers. Their personalised beauty services, together with multi-brand recommendations and advice on product usage, fulfill the delicate needs of our customers. Extraordinary shopping experience Sa Sa is well known as the pioneer of the open shelves retail concept. Our trendy and comfortable shopping environment allows customers to choose products of different brands at ease and freely, offering them an extraordinary shopping experience. Our relentless efforts to improve our trendy store design and product display provide more in-store interaction for customers, making the image of beauty brands more outstanding and the presentation of products more appealing. Exclusive Distributorship Sa Sa International Holdings Limited Annual Report 2012/13 3 Corporate Information BOARD OF DIRECTORS HONG KONG BRANCH SHARE REGISTRAR Executive Directors AND TRANSFER OFFICE Dr KWOK Siu Ming Simon, BBS, JP Tricor Abacus Limited (Chairman and CEO) 26th Floor, Tesbury Centre Dr KWOK LAW Kwai Chun Eleanor, BBS 28 Queen’s Road East (Vice-chairman) Hong Kong Mr LOOK Guy (CFO) Tel: (852) 2980 1333 Fax: (852) 2810 8185 Non-executive Director E-mail: [email protected] Ms LEE Yun Chun Marie-christine Website: www.tricoris.com Independent Non-executive Directors PRINCIPAL BANKERS Professor CHAN Yuk Shee, PhD, SBS, JP Bank of China (Hong Kong) Limited Dr LEUNG Kwok Fai Thomas, PhD, BBS, JP Bank of Communications Company Limited, Ms TAM Wai Chu Maria, GBM , JP Hong Kong Branch Ms KI Man Fung Leonie, SBS, JP Citibank, N. A. Mr TAN Wee Seng Hang Seng Bank Limited Industrial and Commercial Bank of China (Asia) Limited COMPANY SECRETARY Standard Chartered Bank (Hong Kong) Limited Mr TSANG Sai Chung Kirk Sumitomo Mitsui Banking Corporation, Hong Kong Branch HEAD OFFICE SHARE INFORMATION 14th Floor, Block B, MP Industrial Centre 18 Ka Yip Street Stock code: 178 Chai Wan, Hong Kong (The Stock Exchange of Hong Kong Limited) REGISTERED OFFICE INVESTOR RELATIONS P.O. Box 309 Corporate Communications and Ugland House Investor Relations Department Grand Cayman Sa Sa International Holdings Limited th KY1-1104 8 Floor, Block B, MP Industrial Centre Cayman Islands 18 Ka Yip Street Chai Wan, Hong Kong AUDITOR Investor Relations Hotline: (852) 2975 3638 Fax: (852) 2595 0797 PricewaterhouseCoopers E-mail: [email protected] Certified Public Accountants CORPORATE WEBSITE PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE corp.sasa.com Royal Bank of Canada Trust Company (Cayman) Limited 4th Floor, Royal Bank House 24 Shedden Road, George Town Grand Cayman KY1-1110 Cayman Islands SHOPPING SITE www.sasa.com Effective 1 July 2013. 4 Sa Sa International Holdings Limited Annual Report 2012/13 Five-Year Financial Summary (Note 1) (Note 1) Restated Restated 2013 2012 2011 2010 2009 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Consolidated Income Statement Turnover 7,669,798 6,405,121 4,901,364 4,111,345 3,608,990 Gross profit 3,558,344 2,896,681 2,211,880 1,814,864 1,576,866 Gross profit margin 46.4% 45.2% 45.1% 44.1% 43.7% Operating profit 987,169 828,374 608,267 459,324 370,907 Profit for the year 825,634 689,709 509,270 381,887 316,743 Profit margin 10.8% 10.8% 10.4% 9.3% 8.8% Turnover CAGR : 18.9% (HK$ million) 12/13 7,669.8 Hong Kong & Macau Mainland China 11/12 6,405.1 Singapore Malaysia 10/11 4,901.4 Taiwan 09/10 4,111.3