Peak Sport Products Co., Limited

Peak Sport Products Co., Limited 2012 Annual Report

Peak Sport Products Co., Limited (Incorporated in the Cayman Islands with limited liability) Stock Code: 1968 www.peaksport.com 2012 Annual Report Mission To facilitate the development of global sports business and to provide quality sports products and services for the betterment of human health Vision To become an internationally renowned brand of sports products that can be sustainable for centuries Core Value United, practical and effective Pragmatic, conscientious and diligent People-oriented, creating value for customers and society Making dreams come true through team work Contents Corporate information 02 Chairman’s statement 04 Financial highlights 08 Five-year financial summary 09 Management discussion and analysis 12 Corporate governance report 39 Corporate social responsibility report 52 Directors and senior management 54 Report of the directors 58 Independent auditor’s report 68 Consolidated financial statements 69 Glossary 112 Corporate information

BOARD OF DIRECTORS Remuneration Committee Executive Directors Dr. Xiang Bing (項兵) (Chairman) Mr. Wang Mingquan (王明權) Mr. Xu Jingnan (許景南) (Chairman) Dr. Ouyang Zhonghui (歐陽鐘輝) Mr. Xu Zhihua (許志華) Mr. Shen Nanpeng (沈南鵬) Mr. Xu Zhida (許志達) Mr. Xu Jingnan (許景南) Non-executive Directors Ms. Wu Tigao (吳提高) Nomination Committee Mr. Wang Mingquan (王明權) (Chairman) Mr. Shen Nanpeng (沈南鵬) Dr. Xiang Bing (項兵) Mr. Zhu Linan (朱立南) Dr. Ouyang Zhonghui (歐陽鐘輝) Independent Non-executive Directors Dr. Xiang Bing (項兵) Mr. Wang Mingquan (王明權) COMPANY SECRETARY Dr. Ouyang Zhonghui (歐陽鐘輝) Mr. Tsoi Ka Ho (蔡家豪) CPA, ACA, FCCA

BOARD COMMITTEES AUTHORIZED REPRESENTATIVES Audit Committee Dr. Xiang Bing (項兵) (Chairman) Mr. Xu Zhihua (許志華) Mr. Wang Mingquan (王明權) Mr. Tsoi Ka Ho (蔡家豪) Dr. Ouyang Zhonghui (歐陽鐘輝)

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REGISTERED OFFICE AUDITOR

Cricket Square, Hutchins Drive KPMG P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands SHARE REGISTRAR AND TRANSFER OFFICE

Computershare Hong Kong Investor Services Limited HEAD OFFICE AND PRINCIPAL PLACE Shops 1712–1716, 17th Floor OF BUSINESS IN THE PRC Hopewell Centre, 183 Queen’s Road East Wanchai, Hong Kong Peak Building Dongbao Industrial Area Donghai, Fengze District, Quanzhou Fujian Province, the PRC PRINCIPAL BANKERS Bank of China (Quanzhou Branch) China CITIC Bank (Quanzhou Branch) PRINCIPAL PLACE OF BUSINESS IN China Construction Bank (Quanzhou Bincheng Branch) HONG KONG The Hongkong and Shanghai Banking Corporation

Units 1613 & 1615, 16th Floor Tower Two, Lippo Centre COMPANY WEBSITE 89 Queensway, Hong Kong www.peaksport.com Xu Jingnan Chairman Chairman’s statement

… We have worked to develop a clear and consistent brand image to highlight our unique advantages in the sportswear industry through internationalization and specialization first in basketball, followed by an expanding array of sports.

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Dear respectful shareholders, Our Business in 2012

2012 was a challenging year for Peak because of the fragility Since our establishment in 1991, the Group has been of the domestic and international economies during the year. dedicated to building up a leading international sportswear The slowdown in the domestic market for sports products brand. We have worked to develop a clear and consistent left many brands, including ours, with excess channel brand image to highlight our unique advantages in the inventory. During the year, we took measures to reduce sportswear industry through internationalization and inventory and adjust our order book, including the closure of specialization first in basketball, followed by an expanding small and less-efficient sales outlets. Nonetheless, we believe array