Stock Code 股份代號: 0345 where healthy life begins ANNUAL REPORT 年 08/09 報 HONG KONG ࠗಋ پAND MACAU ʥዌ ಶࠎณۂכᙩҙ༅ܛ Continuous investment in brand rejuvenation and distribution channel expansion ʥᒷɣʗሻಒ༞ MAINLAND CHINA ɻਝʑΔ Growing net sales revenue by 56% ሻਕνɃ૱ᔾᄈ˱56%c and expanding market presence ొঢ়̟௿Ќτଅ AUSTRALIA ዌݘ AND NEW ZEALAND ʥณϹᙬ Achieving No.1 market position and ࣃӸ̟௿ეኒΔϽc ଊᖇ৪ٲdelivering healthy business performance พ৻ NORTH AMERICA ˵޻ݘ Improving operating results ஦༦ࠇኬพ৻ୂ΋c cۂby readjusting business make-up ਿ؇ঢ়Сᅼଐ and focusing on more profitable areas ҝഁᏪ༜พᐜ SINGAPORE ณ˱գ Integrating successfully with ι˲ጪɃၐˢ̘එ྆c ଊଉ෱ٲVitasoy family and recording พᐜ satisfactory financial performance CONTENTS ͌፣ Directors and Corporate Information 2 ໎ԑʥඑ྆༅ࢿ Financial Highlights 4 ল৻࿂߬ Chairman’s Statement 6 ˚࢐ంй࣊ Management Report 16 ဳଉᄙంй࣊ Corporate Governance Report 36 พဳ؝ంй࣊ͬ Directors and Senior Management 48 ໎ԑʥঢ়ᄙဳଉɁࡗ Report of the Directors 54 ໎ԑผంй࣊ Independent Auditor’s Report 67 ዟ͓࣏ᅕ࢑ంй࣊ Consolidated Income Statement 69 ٲ၃΋ฌऩం Consolidated Balance Sheet 70 ٲ၃΋༅ଐ߲ඦ Balance Sheet 72 ٲ༅ଐ߲ඦ Consolidated Statement of Changes in Equity 74 ٲ၃΋ᚬऩᛰ৽ Consolidated Cash Flow Statement 75 ٲݚ൴ټ၃΋ଊ Notes to the Financial Statements 78 ഽڃٲল৻ం Five Year Summary 183 ʄαল৻࿂߬ Vitasoy International Holdings Ltd. ၐˢ̘ਝ჌එ྆τࠉʔ̇ DIRECTORS AND CORPORATE INFORMATION ໎ԑʥඑ྆༅ࢿ BOARD OF DIRECTORS ໎ԑผ EXECUTIVE CHAIRMAN ਨϷ˚࢐ Mr. Winston Yau-lai LO ᖓʤᓤͱ́ ਨϷ໎ԑڈINDEPENDENT NON-EXECUTIVE DIRECTORS ዟ͓ Dr. The Hon. Sir David Kwok-po LI ңਝᗸᏲɡ Mr. Iain F. BRUCE ̠ቧɡͱ́ Mr. Jan P. S. ERLUND Jan P. S. ERLUNDͱ́ ਨϷ໎ԑڈ NON-EXECUTIVE DIRECTORS Ms. Myrna Mo-ching LO ᖓᄮ߱ɤɡ Ms. Yvonne Mo-ling LO ᖓᄮށɤɡ EXECUTIVE DIRECTORS ਨϷ໎ԑ ͱ́۽ڌMr. Laurence P. EISENTRAGER ቭ Mr. Eric Fat YU Еೕͱ́ COMPANY SECRETARY ʔ̇ो࣊ Ms. Paggie Ah-hing TONG ಝԓࡇɩմ QUALIFIED ACCOUNTANT ΋༅ࣟผ߮࢑ Mr. William Chi-chung LO ᖓҁᐱͱ́ REGISTERED & HEAD OFFICE ഽ˫ፒԑᐢ୮ No. 1 Kin Wong Street, Tuen Mun, ࠗಋณވ ഷȹ໔לۺپNew Territories, Hong Kong ʰ AUDITORS ࣏ᅕ࢑ KPMG ଓ৛ۤผ߮࢑ԑ৻ֺ PRINCIPAL BANKERS ˚߬Ԟ֡ႺϷ The Bank of East Asia, Limited ׭ԓႺϷτࠉʔ̇ ٦࿏ႺϷ .Citibank, N.A The Bank of Tokyo-Mitsubishi, Limited ׭ԕɍഝႺϷ Australia and New Zealand Banking Group Limited Australia and New Zealand Banking Group Limited Rabobank ୩ᙬ΋АႺϷ BNP Paribas ؒਝʱቭႺϷ Bank of China (Hong Kong) Limited ɻਝႺϷࠗಋτࠉʔ̇ 02 Annual Report 2008/2009 αం DIRECTORS AND CORPORATE INFORMATION ໎ԑʥඑ྆༅ࢿ ᚋਐ܁PRINCIPAL LAWYER ˚߬ؒ ࢑ԑ৻ֺ܁ڌStephenson Harwood & Lo ᖓࡧ SHARE REGISTRAR ٖͫ༦ʸ೔ত୮ Computershare Hong Kong Investor Services Limited ࠗಋɻ̕ᖬԴ೔তτࠉʔ̇ ΍ɣ༞׭183໔ޒF., Hopewell Centre, 183 Queen’s Road East, ࠗಋᜪˠ/46 Wanchai, Hong Kong ΋՗ɻʶ46ᅢ WEBSITE ADDRESSES ၉э Vitasoy International Holdings Limited ၐˢ̘ਝ჌එ྆τࠉʔ̇ – www.vitasoy.com (English and Chinese) – www.vitasoy.comɻߜʼ – www.vitasoy.com.hk (English and Chinese) – www.vitasoy.com.hkɻߜʼ ৻τࠉʔ̇רVitaland Services Limited ၐˢʨΔ – www.vitaland.com.hk (Chinese only) – www.vitaland.com.hkɻʼ Hong Kong Gourmet Limited ࠗಋ޻ࠕτࠉʔ̇ – www.hkgourmet.com.hk (Chinese only) – www.hkgourmet.com.hkɻʼ ඝࢿτࠉʔ̇ۂࠕעShenzhen Vitasoy (Guang Ming) Foods and Beverage ૯Γၐˢͮ Company Limited ၐˢ̘ɐࣵτࠉʔ̇ Vitasoy (Shanghai) Company Limited – www.vitasoy-chn.comɻʼ – www.vitasoy-chn.com (Chinese only) Vitasoy Australia Products Pty. Ltd. Vitasoy Australia Products Pty. Ltd. – www.vitasoy.com.au (English only) – www.vitasoy.com.auߜʼ Vitasoy USA Inc. Vitasoy USA Inc. – www.vitasoy-usa.com (English only) – www.vitasoy-usa.comߜʼ ӝɁτࠉʔ̇ۂUnicurd Food Co. (Private) Limited ଻ȹࠕ – www.unicurd.com.sg (English only) – www.unicurd.com.sgߜʼ KEY DATES ࠇ߬ˀ౨ Closure of Register: 31st August, 2009 (Monday) to ᅗ৤ፒଉٖͫ ɀཌྷཌྷȾαɄ˂ɍɊȹˀ 3rd September, 2009 (Thursday) ༦ʸ೔তi ܱ౨ȹϭ ɀཌྷཌྷȾαȾ˂ɍˀ ܱ౨̒ ɀཌྷཌྷȾαȾ˂ɍˀכ Annual General Meeting: at 4:00 p.m., ٖ׭൪αɣผi 3rd September, 2009 (Thursday), ܱ౨̒Ɏʟ̒ࣂ̳ ᘸ༞88໔ټSalon 1-3, Level 3, ৥࢔ࠗಋ JW Marriott Hotel Hong Kong, ʪ̀ᄤ௿ Pacific Place, 88 Queensway, ࠗಋJWຒႚৈ֙ Hong Kong ɍᅢຒႚࡽผᜨ1-3 Final and Special 17th September, 2009 ݢೕ̱౨ ɀཌྷཌྷȾαȾ˂Ɋȼˀ Dividends Payable: (Thursday) ʥऋПٖࢠi ܱ౨̒ 03 Vitasoy International Holdings Ltd. ၐˢ̘ਝ჌එ྆τࠉʔ̇ FINANCIAL HIGHLIGHTS ল৻࿂߬ Year Ended 31st March ࿀ϭɍ˂ɍɊȹˀ˅α۹ 2009 2008 % Results พᐜ HK$ million HK$ million Change ಋྫྷϛຒʏ ಋྫྷϛຒʏ ᛰ৽ Turnover Ꮺพᔾ 2,783 2,416 15 Gross Profit ˉС 1,279 1,131 13 EBITDA ̰߮Сࢠdೢඖdҗᓿ С 406 391 4ޔکʥᚫሻ൒͂ τɁܛProfit Attributable to Equity ̯ʔٖ̇ᚬ Shareholders of the Company ᎶЌึС 217 211 3 Сಋ˦ 21.4 20.9 2ޔBasic Earnings per Share (HK cents) Ұٖਥ̯ Dividends per Ordinary Share (HK cents) # Ұٖౝ஝ٖٖࢠಋ˦# 21.8 21.5 1 ऋПٖࢠܢ˳ # Including special dividend # ɍ˂ɍɊȹˀכ At 31st March 2009 2008 % ؗ HK$ million HK$ million ChangeرFinancial Position ল৻ ಋྫྷϛຒʏ ಋྫྷϛຒʏ ᛰ৽ Total Assets ᐢ༅ଐ 2,112 2,021 4 (ᔾ 406 444 (9૱ټNet Cash Balance ଊ τɁܛTotal Equity Attributable to Equity ̯ʔٖ̇ᚬ Shareholders of the Company ᎶЌᚬऩᐢᔾ 1,287 1,305 (1) Year Ended 31st March ࿀ϭɍ˂ɍɊȹˀ˅α۹ HK$ million ಋྫྷϛຒʏ TURNOVER Ꮺพᔾ GROSS PROFIT ˉС 2005 1,849 2005 837 2006 1,962 2006 922 2007 2,109 2007 979 2008 2,416 2008 1,131 2009 2,783 2009 1,279 0 5001,000 1,500 2,0002,500 3,000 3,500 0 300 600 900 1,200 1,500 EBITDA ̰߮Сࢠdೢඖd PROFIT ATTRIBUTABLE TO EQUITY С SHAREHOLDERS OF THE COMPANYޔکҗᓿʥᚫሻ൒͂ τɁᎶЌึСܛʔٖ̇ᚬ̯ 2005 281 2005 121 2006 333 2006 172 2007 344 2007 174 2008 391 2008 211 2009 406 2009 217 0 100 200 300 400 500 050100 150 200 250 04 Annual Report 2008/2009 αం FINANCIAL HIGHLIGHTS ল৻࿂߬ SALES ANALYSIS BY CATEGORIES ᗘိۂଐܘሻਕᔾʗ׹ Year Ended 31st March, 2009 ࿀ϭɀཌྷཌྷȾαɍ˂ɍɊȹˀ˅α۹ 5% 4% 4% 5% Soymilk Ӳ̘ Tea এ Tofu Ӳၛ 8% 44% Lunch Boxes and Snacks ʟጕᎁଝʥɩࠕ Dairy Milk ˒̘ Distilled Water ၱᕄˋ ۂJuice Drinks ׮̸ඝ 10% Others ԯˢ 20% SALES ANALYSIS BY LOCATIONS Δਂܘሻਕᔾʗ׹ Year Ended 31st March, 2009 ࿀ϭɀཌྷཌྷȾαɍ˂ɍɊȹˀ˅α۹ 2% پHong Kong and Macau ࠗಋʥዌ 10% Mainland China ɻਝʑΔ Australia and New Zealand ዌݘʥณϹᙬ North America ˵޻ݘ Singapore ณ˱գ 15% 53% 20% 05 Vitasoy International Holdings Ltd. ၐˢ̘ਝ჌එ྆τࠉʔ̇ CHAIRMAN’S STATEMENT ˚࢐ంй࣊ 06 Annual Report 2008/2009 αం I am pleased to report that, despite a highly volatile market environment, the Group continued to grow its net sales revenue and pre-provision net profit in the year of 31st March, 2009. Total net sales revenue increased by 15% to HK$2,783 million, versus HK$2,416 million for fiscal year of 2007/2008. Gross profit was HK$1,279 million, up 13% from HK$1,131 million for the preceding year. Before the one-off provision for leave pay entitlements of Hong Kong employees of HK$25 million for previous five-and-a-half years up to March 2008, profit attributable to shareholders of the Company increased by 13% to HK$238 million year-on-year. After taking into account this provision, profit attributable to equity shareholders of the Company increased by 3% to HK$217 million. Earnings per share were HK21.4 cents. The Group’s EBITDA was HK$406 million, up 4%, while EBITDA margin to net sales was 15%. ࿀ϭɀཌྷཌྷȾαɍ˂ɍכಳමంcቱဳ̟௿᏷ྊรݯؐ৽cЎ̯එ྆؀Ɂ̯ ૱eᐢሻਕνɃٽᙩτֺᄈܛС૱ᔾึکɊȹˀ˅α۹ሻਕνɃ૱ᔾʥᅆௐ α۹ɾಋྫྷ2,416,000,000ʏᄈ˱15%ϭಋྫྷܧᔾ༖ɀཌྷཌྷȼþɀཌྷཌྷɄল 2,783,000,000ʏeˉСݯಋྫྷ1,279,000,000ʏc༖˾αಋྫྷ1,131,000,000 ʏɐʠ13%eߗ̰κ৖ݯࠗಋ཭ࡗ࿀ϭɀཌྷཌྷɄαɍ˂ɾ༦֡ʄα˸౨ංɾ ܘ৥౨ᑀ༭ᚬऩֺАɾȹωֲᅆௐಋྫྷ25,000,000ʏc̯ʔٖ̇׭ᎶЌึС τɁᎶܛc̯ʔٖ̇ᚬ܃αᄈ˱13%ϭಋྫྷ238,000,000ʏe့߮໮ඖᅆௐ Сݯ21.4ಋ˦e̯එ྆ɾ̰߮ޔЌึСᄈ˱3%ϭಋྫྷ217,000,000ʏeҰٖ СEBITDAݯಋྫྷ406,000,000ʏcᄈޔکСࢠdೢඖdҗᓿʥᚫሻ൒͂ Ќሻਕ૱ᔾɾ15%eڬcϤEBITDA%4ٽ 07 Vitasoy International Holdings Ltd. ၐˢ̘ਝ჌එ྆τࠉʔ̇ CHAIRMAN’S STATEMENT ˚࢐ంй࣊ ɀཌྷཌྷȾαȾ˂ɍˀᐾϷɾכThe Board of Directors of the Company is recommending a final ̯ʔ̇໎ԑผੀ ᘪݢೕ̱౨ٖࢠҰٖౝ஝ٖۺdividend of HK9.0 cents per ordinary share at the Annual General ٖ׭൪αɣผɐ Meeting on 3rd September, 2009. This, together with the interim 9.0ಋ˦eட΃ɰݢೕɾɻ౨ٖࢠҰٖౝ஝ٖ αܧɀཌྷཌྷɄþɀཌྷཌྷȾলכdividend of HK2.8 cents per ordinary share, will mean that the 2.8ಋ˦c̯එ྆ Group’s total dividend for fiscal year of 2008/2009 will be HK11.8 ۹ɾͲαٖࢠᐢᔾ༠Ұٖౝ஝ٖ11.8ಋ˦ɀཌྷ cents per ordinary share (2007/2008 total dividend: HK11.5 cents ཌྷȼþɀཌྷཌྷɄα۹ٖࢠᐢᔾiҰٖౝ஝ٖ per ordinary share). 11.5ಋ˦e ᘪݢೕऋПٖࢠҰٖౝ஝ٖۺIn addition, the Board is recommending a special dividend of HK10.0 ϊ̔c໎ԑผ cents per ordinary share (2007/2008 special dividend: HK10.0 cents 10.0ಋ˦ɀཌྷཌྷȼþɀཌྷཌྷɄα۹ऋПٖࢠi per ordinary share). This is the seventh consecutive year that a Ұٖౝ஝ٖ10.0ಋ˦e஛ܰடᙩ଱ȼαݢೕऋ special dividend is paid. Пٖࢠe GENERAL REVIEW ลᙴ ძࣟۂኝeቱဳਆܥα˨࿶˾כThe operating environment for the business sector was extremely ͲଈᏪਆ᏷ྊ cಳϤڰੜྦྷޚଊʋٲchallenging in the past year. After a relatively strong first half despite ร۹ঢ়ͬcЎɐ˸αɾ ܈Ɏ˸αכጪ΀ዀᕶೕc̟௿᏷ྊټextraordinarily high commodity prices, conditions deteriorated ፭ടͲଈ rapidly in the second half after the eruption of the global financial ᑸᔝᕝcֺ஥ιɾᗲࠇᄧᚊ˥Ͳଈ຤Ꮬ࢏ɺΛ crisis, the devastating effects of which extended to nearly all quarters Έ࠯ᄙࠍяՇԷᇰᎾe፭܃ೕ́ɾ຤Ꮬঞঽࠇ ʶcʮԯྦྷཌྷਕพ஥ιɺСᄧᚊeڌof the world’s economy. Because of the ensuing economic slump, ࢹࣱ൒ّ consumers’ confidence plummeted, which in turn had a particularly ɐ˸αшᒹ࢏ɺΛֺτϷพɾ஝ഌʥࡈҥࢿι Ɏ˸α፭ട຤ᏜɎไΕܺכadverse impact on the retail sector. The acute problems of inflation ̯ɐʠɾᗲ࢈ਐᕀ ʋಳجand rising raw material costs that harassed nearly all businesses in ೡ۹ɐ੡ԷἢᇅeಳϤcֺτ̟௿ɾᘏ the first half of the year subsided to some extent in the latter half ውईe alongside the economic downturn. Competition in all markets, however, remained intense. 08 Annual Report 2008/2009 αం CHAIRMAN’S STATEMENT ˚࢐ంй࣊ Despite these challenges, the Group recorded positive sales growth ቱဳΦΕɐ߸ܥኝcЎ̯එ྆஦༦৻ྡྷɾพ৻ e̯එٽin all its major markets by pursuing pragmatic business strategies. ೪଑cԯֺτ˚̟߬௿я፣੡ሻਕᄈ ඀ೕॶɈcઐˮɣғԮௐ৪੖ۂWe succeeded in leveraging our product development capabilities ྆ι˲༜͂ଐ cԎ஦༦τࢽׅࢄʗሻಒ༞c቏ۂto roll out a host of new products with healthy features.