Annual Report HKEX 01025 2012 HKEX 01025 2012 Annual Report 2012 年報 Corporate Vision
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年 報 Annual Report HKEX 01025 2012 HKEX 01025 2012 Annual Report Annual 2012 年報 Corporate Vision A dream we share — a dream of establishing an everlasting retail chain that Chinese people love patronizing, and that mingles with their daily lives — Wumart, thereby to provide the public with satisfying products and service and dedicate our wisdom and power to the pursuit of developing modern circulation industry and improving the life quality of the public. Contents 2 Company Information 4 Chairman’s Statement 10 Management Discussion and Analysis 24 Profile of Directors, Supervisors and Senior Management 28 Report of the Board of Directors 37 Report of the Supervisory Committee 39 Corporate Governance Report 49 Independent Auditor’s Report 51 Consolidated Statement of Comprehensive Income 52 Consolidated Statement of Financial Position 54 Consolidated Statement of Changes in Equity 55 Consolidated Statement of Cash Flows 57 Notes to the Consolidated Financial Statements 107 Financial Summary Wumart Stores, Inc. 2 Company Information BOARD OF DIRECTORS Independent Non-executive SENIOR MANAGEMENT Directors Mr. Xu Shao-chuan Executive Directors Mr. Han Ying (Vice President, General Manager Dr. Wu Jian-zhong (Chairman) Mr. Li Lu-an of Wumart Beijing Supermarket Madam Xu Ying (President) Mr. Lu Jiang Business Unit) Dr. Meng Jin-xian (Vice President) Note Mr. Wang Jun-yan Mr. Chong Xiao-bing Dr. Yu Jian-bo (Vice President) (Assistant President and Vice SUPERVISORY General Manager of Wumart Non-executive Directors Beijing Supermarket Business COMMITTEE Mr. Wang Jian-ping Unit) (Vice Chairman) Note Mr. Fan Kui-jie (Chairman) Mr. Zhang Yu Mr. John Huan Zhao Madam Xu Ning-chun (Executive Director of Finance Madam Ma Xue-zheng Mr. Zhang Zheng-yang Department) Annual Report 2012 3 Company Information Mr. Wu Du-qing REMUNERATION HONG KONG SHARE (Director of Procurement COMMITTEE REGISTRAR AND Department) Mr. Li Lu-an (Chairman) TRANSFER OFFICE Mr. Guo Tu-wei Mr. Han Ying Computershare Hong Kong (Director of Data Management Madam Xu Ying Investor Services Limited Centre and Director of Assets Rooms 1712–1716 Management Department) 17/Floor, Hopewell Centre NOMINATION 183 Queen’s Road East COMPANY SECRETARY COMMITTEE Wanchai Hong Kong AND SECRETARY TO Mr. Han Ying (Chairman) THE BOARD Mr. Li Lu-an Madam Xu Ying Madam Xie Dong PRC LEGAL ADDRESS Room 5610, COMPLIANCE OFFICER 1 Shixingdong Street AUDIT COMMITTEE Badachu HighTech Dr. Wu Jian-zhong Park District Mr. Han Ying (Chairman) Shijingshan District Mr. Li Lu-an Beijing Mr. Lu Jiang AUTHORIZED The PRC REPRESENTATIVES Dr. Wu Jian-zhong Madam Xie Dong HEAD OFFICE Wumart Commercial Building, 158-1 West 4th Ring North Road, AUDITOR Haidian District Beijing Deloitte Touche Tohmatsu PRC LEGAL ADVISERS PRINCIPAL PLACE OF As to Hong Kong Law: BUSINESS IN HONG DLA Piper Hong Kong KONG As to PRC Law: 18th Floor, Edinburgh Tower Haiwen & Partners The Landmark 15 Queen’s Road Central Hong Kong PRINCIPAL BANKERS Industrial and Commercial WEBSITE Bank of China www.wumart.com China Merchants Bank China Minsheng Banking Beijing Rural Commercial Bank STOCK CODE 1025 Note: On 22 March 2013, Mr. Wang Jian-ping resigned as a non-executive Director and Vice Chairman of the Company. Dr. Meng Jin-xian was redesignated as a non-executive Director. Wumart Stores, Inc. 4 Chairman’s Statement TO PROVIDE AFFORDABLE GOODS OF PREMIUM QUALITY TO THE GENERAL PUBLIC TO CREATE WEALTH AND VALUE FOR SHAREHOLDERS Annual Report 2012 5 Chairman’s Statement Dear Shareholders, On behalf of the Board, I am presenting to you the results of operations of Wumart Stores, Inc. (the “Company”) and its subsidiaries (collectively the “Group”) for the year 2012 (the “Reporting Period”). 2012 was a very difficult year for retail enterprises in China. With the slowdown of the pace of economic growth, the shrinkage in consumption, the continual upsurge in staff costs and rental costs, the swift and robust development of electronic commerce, and the entry of other industries to the retail sector, retail enterprises experienced unprecedentedly fierce competition. Being encountered by the severe economic conditions and competitive landscape, the Group adhered to its principle of prudency, and continued to maintain stable results of operations. It achieved a total revenue of RMB17,334.077 million which represented 5.7% growth from that recorded in 2011. The net profit attributable to owners of the Group amounted to RMB601.706 million, an increase of 2.7% from 2011. During the Reporting period, adhering to the strategy of national expansion with regional prioritization, the Group continued to grow bigger and stronger in Beijing, Tianjin and Zhejiang province markets, and move on to tap Hebei province market. In 2012, 61 new stores were opened, meeting perfectly the pre-determined target for store network expansion and building Wumart brand in a wider geographical scope. In 2012, boosting operational capability in fresh merchandises was regarded by the Group as new opportunity for development under the new competitive landscape. The Group confirmed that “core competence represented by fresh fruits and vegetables” became the key operational target in 2012. During the Reporting Period, the Group strenuously uplifted its technology in fruits and vegetables operations, optimized the model of fresh items operations, increased the investments in human resources, physical resources and equipment, and established model shops. By adopting such measures, the Group achieved staged goals in its fruits and vegetables operations in 2012, with an excellent results of after-tax sales of comparable store growing by 21.1% and consolidated gross profit comparable growing by 46.8%. As a leading unit under the project of Fruits and Vegetables Farm-Supermarket Links Supply Chain System Integration and Application Demonstration, a scientific pillar project under the PRC’s Twelfth Five-Year Plan, the Group completed the research and integrated development of the information systems of quality traceability, electronic transactions, logistics and transportation optimization relating to Farm-Supermarket Links, in collaboration with four institutions namely Zhejiang University, Nankai University, Wuhan University of Technology and Research Institute of Forestry, Chinese Academy of Forestry, in addition to the compilation of the standards applicable to logistics tools and the standards applicable to professional technology, all of which explored ways for the future advancement of the Group’s work in its Farm-Supermarket Links initiatives. Meanwhile, the Group confirmed that Beijing Yongshunhua Vegetable Planting Co. Ltd and Shandong Zibo Zhongdeli Vegetables Specialized Cooperatives would become the cooperation bases in terms of thematic study and the study of organic vegetables. From theory to practice, the study will probe into the design proposals, planned applications of future key technologies and the proposals for information systems for the Group’s Farm-Supermarket Links business. While completing a nation-level technology project, it is meant to actively create the Farm-Supermarket business links which is more modernized and standardized. Wumart Stores, Inc. 6 Chairman’s Statement The formation of the Group’s supply chain system is currently on track in terms of the highly-attained standardization and professionalism, with the Group’s North China Distribution Centre receiving approximately 700,000 items of goods and having a throughput of 1.4 million items, delivering approximately 23,000 items of merchandise to superstores by means of cross-docking and approximately 3,500 items by “within-warehouse” mode. In 2012, Group’s North China Distribution Centre completed the change from the “within-warehouse” mode to “cross-docking” mode with the adoption of certain “within-warehouse” processes and the extension of the radius of distribution of the centre from 170 km to 300 km. This represented a radical change and new breakthrough in the entire supply chain model. In 2012, the logistics centre focused on enhancing service delivery to suppliers and stores. Quality and efficiency of service delivery to suppliers and stores were uplifted in terms of such basics as framework, processes, and systems. It effectively improved the efficiency of the Group’s supply chain and lowered the logistics costs involved, and laid an important foundation for the Group’s regional development in a larger scope. It is the Group’s long-term development strategy of focusing on “Technological Excellence” of Wumart as a primary goal of its work. Leveraging upon information technology, the Group adopted IT system management for all of the six items namely “Comprehensive Budget Management Project”, “Enterprise Warehouse Management Project”, “Order Approval Platform Project”, “WRF Mobile Store Management Project”, “Human Resources Management Project” and “Mobile OA Office Project”, thereby effectively uplifting the operational efficiency and quality in the Group’s operation and management. With the support of information technology, the Group achieved its marketing innovation by establishing its new network sales and marketing system which was based on O2O (online to offline) e-commerce. Through electronic means, marketing information would be directly pushed to the targeted consumer groups, which is an effective, precise and low-cost means of marketing. Not only did it actively apply technologies in supporting its operations and management, the Group also converted technologies into productivity,