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On behalf of the board of Directors of ANTA Sports Products Limited, I am pleased to report the annual results of the Company and its subsidiaries for the year ended 31 December 2015.

Mr. Ding Shizhong
ANTA Sports Products Limited
Chairman

 
Corporate Social Responsibility Report

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We understand good corporate governance is an essential foundation of our success and the key to our bright prospects for future advancement. To fulfill the responsibility of good corporate citizenship, we have incorporated CSR principles into our general business practices. These have enabled our business operations reaching the highest ethical standards while complying with all laws and regulations. During the year, we launched several community activities, combining charitable donations with our strength and resources in the sports field. We have actively promoted participation in various sports, including running, basketball, soccer and so on, in order to foster the popularisation and development of sports in China, and to further support the health and welfare of society.

Community Involvement Environmental Protection
Harmonious Workplace Effective Management of Relationships With Stakeholers

 

Community Involvement

“Sport-All for All” Charity Projects

Under the cooperation with the COC, the Champion Fund and the Juan Antonio Samaranch Foundation, we have collectively established the “Olympic Charity Collaboration Alliance” to promote sports awareness in schools in China. Starting from 2013, the “Olympic Charity Collaboration Alliance” has organised a variety of “Sport-All for All” charity projects across 31 provinces and municipalities in China through ANTA sportswear donations to several hundreds of schools and face-to-face interactions between Olympic champions and children. During the year, “Sport-All for All” charity projects were held in Haikou, Hainan Province and Maoming, Guangdong Province, Lhasa in Tibet as well as Yichang, Hubei province etc. Furthermore, we donated more than RMB25 million worth of sportswear to local schools and government.

  • Haikou, Hainan Province

    We visited the Lingshan County Central Primary School in Haikou with athlete celebrities such as Li Na, Olympic diving champion; Li Na, Olympic fencing champion; Cheng Shuang, world skiing champion; Liu Qiuhong, world short skating champion; Sui Lu, world gymnastics champion; Li Ke, former China basketball national team player and current basketball commentator on CCTV. During the visit, they shared their Olympic experiences and encouraged the children to fight for their dreams and concluded their visit with a soccer game with the students.

  • Maoming, Guangdong Province

    Li Na, Olympic diving champion; Cheng Shuang, world skiing champion; Liu Qiuhong, world short skating champion and other renowned athletes visited schools in Maoming. They visited Maoming Eleventh Secondary School for the “Soccer on Campus” program where they interacted with the students. The visit included a soccer coaching session to provide professional skills advice to students, offered by Liu Chao, former Beijing Guoan Football Club player, and Kou Shen, former Qingdao Hainu Football Club player, followed by a friendly soccer match. More importantly, they shared their Olympic stories and encouraged students to pursue their dreams.

  • Lhasa in Tibet

    Along with the Samaranch Foundation and Tibet 5100 Water Resources Holdings Ltd, we jointly held the “Founding of Tibet 5100 Education Foundation cum ANTA ‘SportsAll for All’ Charity in Tibet” activity. Cheng Shuang and Zhang Dan, Winter Sports champions, and other renowned athletes visited Wanquan Secondary and Primary School in Dangxiong Country in Lhasa, Tibet and interacted with the students. In order to make the Teacher’s Day a unique one to all teachers and students, the “Sports-All for All” activity featured a “Physical education lesson by Olympic champions”. Champion athletes including Cheng Shuang and Zhang Dan were guest physical education teachers for the students. They taught exercise skills, introduced exercise precautions and played matches with students. The program contributed to sports education development in Tibet by allowing local students to experience and understand the Olympic spirit and the joy of playing sports.

  • Yichang, Hubei Province

    We worked together with the Marketing Department of COC to hold “Olympic Athletes Charity in Action—Inheriting the Spirit of the Chinese Women’s Volleyball cum ANTA ‘SportsAll for All’ Charity Program” in Sanmai Stadium in Yichang, Hubei. Teachers and students from Hubei Gezhouba Secondary School, Dangyang First Secondary School and Yichang Sixth Secondary School met Chinese volleyball legends and Chinese women’s volleyball champions 30 years ago including Shen Sanying, Chen Yaqiong, Liang Yan and Li Yanjun. Athens Olympic volleyball champions, Feng Kun and Song Nina also attended the activity, where they interacted with the students and gave them lessons in volleyball. This visit aimed to instill the “fear nothing, spare no effort” spirit of the Chinese women’s volleyball team in the students, as well as to inspire students to engage in sports and to gain the courage to follow their dreams through the charitable donation and face to face interaction with Olympic champions.

“Charity Hour, Athletes at Service” Program

Our newly launched “Charity Hour, Athletes at Service” program was held at ANTA stores in Haikou, Hainan Province and Maoming, Guangdong Province and so on. We invited athlete celebrities to become salespersons to provide passionate and professional sales service to customers. The total sales being generated in the form of sportswear were donated to local schools. During the year, more than RMB450,000 worth of sportswear was donated through this program to bring the joy of sports to children.

  • Haikou, Hainan Province

    Athlete celebrities such as Li Na, Olympic diving champion; Li Na, Olympic fencing champion; Cheng Shuang, world skiing champion; Liu Qiuhong, world short skating champion; Sui Lu, world gymnastics champion; Li Ke, former China basketball national team player and current basketball commentator on CCTV visited our ANTA store in Haikou to act as salespersons and explained the functions and features of ANTA sportswear and safe exercise precautions to consumers.

  • Maoming, Guangdong Province

    Li Na, Olympic diving champion; Luo Wei, Olympic taekwondo champion; Cheng Shuang, world skiing champion; Liu Qiuhong, world short skating champion; Zhang Doudou, renowned artistic gymnast; and Huo Nan, former China basketball national team player and current basketball commentator on CCTV became “athlete salespersons” at the ANTA store in Maoming to provide passionate and professional sales service to consumers.

Enhancing the Development of Various Types of Sports in China

  • Running

    We aimed to integrate green and healthy running exercise into people’s daily lives. Sponsoring the Olympic Day Run for the seventh consecutive year, the event attracted more than 80,000 running enthusiasts from 11 cities including Beijing, Xiamen and Chengdu, etc., to participate in the running activity. Together with Olympic gymnastics champions Zou Kai and Zhang Chenglong, world gymnastics champion Huang Huidan as well as other renowned athletes, we integrated Olympics Day Run with our online marketing campaign “RUN WITH ME” running strategy in order to inspire more people to make running a habit. Moreover, we also sponsored 2015 Chengde International Half Marathon to support its theme “Go Green”. Being an outfit sponsor for the event, we served the runners by providing tailor-made and personalised official competition outfits. To encourage more people to engage in physically activity by way of running, our running endorser, Chen Penbin also joined these events wearing our “Challenge 100” supreme functional running shoes.

  • Basketball

    We actively promoted the development of basketball and raising the skill levels of young basketball players in China. During the “ANTA-endorsed Star Players’ China Tour”, three of our NBA basketball endorsers, Luis Scola, Rajon Rondo and Klay Thompson participated in different activities respectively, with the aim of teaching basketball skills and tactical analysis to young players. Rajon Rondo continued to take part in our “Ball Control Training Camp”, he shared his point guard techniques with young people, and helped them improve basic skills such as layups, mid-range shots, dribble moves and defensive reactions.

    During the ANTA University Basketball Association (AUBA) 2015 season, we leveraged NBA resources and invited NBA legendary players and coaches to visit universities to teach basketball skills and share their basketball stories. Former NBA players Cedric Z. Ceballos and Daniel Gregg joined the “ANTA 2015 Fall NBA on Campus” and “NBA on Campus” events in Yunnan University and Chongqing Medical University. They provided fundamental skills and specific basketball training, demonstrating defensive skills to trainees and played friendly matches with university students.

    As a partner of the Women’s Chinese Basketball Association (WCBA), we collectively organised the WCBA All-Star Game in Nanjing to raise social awareness of disabled children. For every three pointer or slam dunk scored in the game, we donated RMB5,000 and RMB20,000 worth of sportswear, respectively. We eventually donated a total of RMB205,000 worth of sportwear to the schools for the deaf and other schools in Nanjing in this charity event. We also entered into an alliance with Chinese Basketball Association and Ordos Municipal People’s Government, to jointly hold the “‘Basketball for Hope’ ANTA • Chinese Basketball Association Charity Basketball in Ordos” event in Ordos, Inner Mongolia. In order to ignite the basketball interest in the youth of northwest China, famous basketball players, namely Li Yulin, Li Ke, Huo Nan, Xu Nuo, Liu Mingyu and Pan Li, coached teenage players to correct their movements. They demonstrated how to improve shooting accuracy, concluding with a basketball match with the students. Through this event, we donated basketball sportswear to the Ordos Municipal Government to support the development of basketball in the region.

  • Taekwondo

    During the year, we joined hands with Champion Fund and Olympic medalist, Wu Jingyu, to initiate the first “Migrant Workers’ Children Taekwondo Friendlies” at the taekwondo gym of the Chinese Taekwondo Team Demonstration Group. With the aim of creating a platform to promote communication and physical development for youth from different communities, nearly 100 youngsters in Beijing from ten schools for migrant workers’ children and taekwondo gyms participated in the friendlies. Olympic taekwondo champion Wu Jingyu, greeted the children in a video, while another Olympic taekwondo champion, Chen Zhong, coached the young players in person.

  • “Olympic Training Program”

    As a strategic partner of the COC, we are committed to promoting sports education related charity events and building an Olympics charity platform. To continually promote the standards for sports in schools, we believe it is necessary for strengthening the teaching standards of physical education teachers in rural areas. In cooperation with the COC and other reputable companies, we organised the “Olympic Training Program” and invited more than 20 physical education teachers to participate in a one-week professional training program that included classes in exercise training, the sociology of physical activity and first aid etc., with the ultimate aim of providing better education to children in China.

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Environmental Protection

We made efforts in protecting the natural resources and sought ways to minimise harm to the environment. Starting from 1 January 2015, an update to the “Environmental Protection Law of the People’s Republic of China” was enacted. The law clarified that every company in China holds an essential role in promoting the sustainable development of resources and environment. Together with the “Law of the People’s Republic of China on Conserving Energy” and other relevant laws, our business strictly complies with environmental regulations and rules while ensuring the highest quality standards in our products. Since 2005, we have held ISO14001 Environmental Management Systems certification for the purpose of formulating environmental management targets, monitoring our emissions and initiating environmental protection-related activities. Having ISO14001 systems certification at both offices and factories helps us address environmental issues and improve our environmental performance. Related analysis is regularly reported to senior management for review and improvement.

We enthusiastically fulfill the responsibilities of environmental conservation. During production, we prefer to use renewable energy and equipment with minimum pollutant emissions. Use of toxic materials are prohibited within our company. In addition to providing the “Chemical Safety Guidelines on Apparel, Footwear and Accessories”, the “Supplier Chemical Safety Handbook”, and providing environmental advice to our major suppliers, we require their acknowledgement that their manufacturing processes and products are eco-friendly and safe. To promote a sense of environmental consciousness, we regularly conduct inspections of our suppliers and encourage them to obtain certifications to allow them to make positive contributions to environmental protection. We also continue to expand our R&D activity so as to introduce eco-friendly materials like DuPont™ Sorona® into our products series.

In terms of regulation, we have set up an internal environmental protection policy, including the “3Rs” environmental strategies, the installation of monitoring equipment and our emergency environmental plan. Our “3Rs” environmental strategies stands for “Reduce, Reuse and Recycle” and focuses on the minimisation of water, electricity and paper usage throughout all of our operational processes. Compared to last year, the total usage of water and electricity in our offices was reduced by 300,000 tons and 2,000,000 kw/h respectively. Save as confidentiality, we utilise double-sided copies and fax papers, reducing more than three tons of paper in the office, evidencing the success in our environmental strategies.

“3Rs” plays not only an important role in reducing costs effectively, but also helps us to avoid adding unnecessary materials into the environment. Through monitoring systems on waste gas, waste water and noise, the pollutants generated from production is discarded through proper drainage systems. We also hired a professional company specialising in toxic waste collection in order to meet stringent emissions standards. To further protect the environment and community, our emergency environmental plans were set up to minimise the likelihood of accidents, emergency situations as well as disruptions to production.

To provide a green workplace, we have controlled resource consumption at operational levels, while strengthening employees’ environmental mindset. The introduction of highefficiency electronic office systems, has provided a convenient work platform as well as reducing operating expenses. We also accelerated the setup of infrastructure of telecommunications in order to arrange different kinds of meeting using teleconference and video conference, resulting in savings in time and resources. Aside from utilising energy-saving light bulbs, we closely monitor energy consumption at our offices and factories as well as making use of natural light. Permission is required for lighting and air conditioning during non-business hours. By limiting the use of company vehicles, we encourage our employees to take public transport to work. Through our rubbish and recycling collections initiatives, water conservation and other environmental policies, we fulfill our mission of conserving the environment, while also improving work efficiencies in production.

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Harmonious Workplace

Employees are a crucial part of our long-term strategy, and we aim to develop a harmonious workplace in which employees recognise organisational targets as well as their own roles. Owing to our reputable business operation and performance, we continually attract talents from different backgrounds. We strive to promote gender equality. As at 31 December 2015, we had about 16,700 employees (2014: 14,300 employees) in total, of which 44% were male and 56% were female.

We believe employees are a key element to the success of our business, so we strive to maintain a high staff retention rate. With the aim of ensuring fair and equal protection for all employees, we strictly comply with relevant labour laws, regulations and industry practices - including minimum wages, gender equality, statutory holidays, the prohibition of child labor, as well as enforcing anticorruption practices. Our Human Resources Department reviews and updates relevant company policies constantly in accordance with the latest laws and regulations. Apart from providing competitive remuneration packages, we also offer a wide range of fringe benefits including staff vouchers, staff discounts, transport services, meal and accommodation subsidies to employees. We also provide free health and mental checks to employees and continue to expand the scope of health assessment for disease prevention.

As a responsible employer, our policies and procedures are in place to ensure the safety and health of employees within the workplace. In addition to requiring our employees to comply with our “Safety Handbook” and “Environmental and Occupational Health Handbook”, we also teach them practical safety knowledge. Safety education and fire precaution courses are compulsory for every employee to ensure everyone meets the necessary requirements. Our well-trained safety officers frequently conduct monitoring and examination of safety measures to prevent workplace injuries, especially at production lines. During the year, our safety and health measures showed remarkable results, with the work-related injuries ratio (the number of employee injured/total number of employees) of less than 1%. Obtaining the “Occupational Health and Safety Management Systems Certificate” from China Quality Mark Certification Group proves that our products, manufacturing processes and sales management fulfill the relevant safety standards and requirements.

We also endeavor to support self-enhancement of our employees, as well as identifying their hidden potentials, which promotes higher productivity in return. Therefore, we have organised tailored training sessions and seminars as well as education subsidies to qualified employees. Following our “keep moving” spirit, employees working in both offices and factories underwent training during the year, and more than half of the employees from both factories and offices participated in team building workshops, technical training sessions, safety courses and retail training camps this year. New graduates undertake a 60-day mentoring programme that includes coaching by experienced colleagues, from orientation and tuition to on-the-job training. This programme is useful for building cohesion within us, by providing new graduates with professional job knowledge and advice in a short period of time. Other highlighted programmes, “Champion Intelligent” and “Class for Vice President”, were offered to officer to managerial levels and vice presidents respectively, for the purposes of cultivating talented employees to take up important future positions through sharing sessions and comprehensive training courses. The “Class for President” was designed in cooperation with Xiamen University. These training sessions proved to be beneficial for our employees in adopting professional knowledge and improving efficiency in processes, ultimately increasing their job satisfaction and morale. In addition, we implemented a fair and transparent performance evaluation system to reward employees for their work contributions. In order to reward good employee performances, we promote employees through internal evaluations. The news of their promotion is announced publicly within us to share the good news of their achievements and to serve as motivation for other employees.

As a branded sportswear company, we understand the importance of a harmonious work culture. Our internal monthly newsletter, “ANTA Youth”, provides the latest updates on ANTA news so as to deepen our employees’ sense of attachment. We provide sports and leisure amenities such as tennis and basketball courts, leisure centers and gymnastics facilities for our staff to promote a sporting atmosphere. During the year, we set up ANTA running teams at Xiamen, Jinjiang and Henan. With routine training and competitions, it effectively promotes the importance of a healthy life, as well as improving work morale and productivity. Fulfilling our “RUN WITH ME” running strategies, our teams also participated actively in the 29th Olympic Day Run in different cities. ANTA ABA League, a basketball league organised for our staff, has been running for 11 years. This year, our basketball endorser, Klay Thompson, was a special guest during his China tour. He delivered a speech and hosted the opening tip-off of a game, allowing our staff to experience his shooting skills. Other activities include birthday parties, annual dinners, singing contests and other outings, generating staff enthusiasm towards us. We also set up our own “Love Charities Foundation” to sponsor medical expenses for sick employees or their relatives.

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Effective Management of Relationships With Stakeholers

Good corporate governance mechanisms require stable relationships with our suppliers, distributors, franchisees, customers, shareholders and other stakeholders. We believe every stakeholder hold the key to our financial and operating performance, and more importantly, business success. Through effective communication and cooperation with stakeholders, we have incorporated corporate governance principles into our business, including applying, enforcing and reviewing a wide range of appropriate policies and practices. Maintaining relationships with our stakeholders is not only a valuable intangible asset to us, but also helps all parties to comply with our code of business ethics, achieving win-win outcomes.

Relationship with Suppliers

We established a supplier workflow management system to ensure high-quality production. Ranging from exploration, identification and evaluation of potential suppliers, we conduct comprehensive investigations in choosing our suppliers meticulously. We establish stringent rules on assessing suppliers, supported by yearly CSR reviews to ensure the performances of suppliers and their products meet our strict standards. Satisfactory suppliers will be given complimentary rewards, while substandard suppliers will be given chances to improve before being eliminated. Our R&D and quality control departments provide advice and support on optimising their workflow and enhancing their management, operational and R&D capabilities, resulting in strengthening their overall operation and profitability. We also require suppliers to comply with relevant laws and regulations to ensure a safe workplace. Our long term collaboration with qualified suppliers enables us to produce reliable and premium products of apparel, shoes and accessories collectively, which are beneficial for the public.

Relationship with Distributors and Franchisees

Distributors and franchisees are indispensable front-runners to our business. Our sustained growth is attributed to our long term successful cooperation with distributors and franchisees. Other than providing them constant training and guidance on inventory control, we also collect real-time operational data through our ERP system to facilitate responsiveness to satisfy the needs of consumers in a short period of time. To enhance their operational effectiveness and profitability, we not only provide retail data analysis and updated market insights, but also competent support with product training, information and resources sharing, as well as the latest marketing display equipment.

Relationship with Consumers

Regarding ourselves as a retail company, the interests of our consumers are a top priority. To ensure continuous improvement of the quality of products and services, we regularly conduct internal and external market surveys to interact with consumers and to gain market insights and feedback. We also have strict data protection policies on ANTA and FILA membership systems. After purchasing our products, consumers can choose one of the ways if they are dissatisfied with the product quality in seven days through our “Repair, Exchange and Return” policy. Together with our customer service hotline, feedback is immediately communicated to our distributors and handled within three working days. All of these measures strengthen our product offerings and service quality, and consequently allow us to stay competitive in the market.

Relationship with Investors and Public

The advice we receive from investors provide strong support to our business improvement. We believe effective communication and accurate information disclosure builds investor confidence, and also facilitates the flow of constructive feedback and ideas that are beneficial for our investor relations and future corporate development. Besides annual reports, interim reports and announcements, we facilitate our communication between shareholders by explaining financial and operational information through conference calls, meetings and roadshows. Company visits, trade fairs, store visits and other events also deepen their understanding of our business.

Through our user-friendly brand and investor relations websites (http://www.anta.com and http://ir.anta.com), we not only publish our financial results on time, but also instantly upload a wide range of relevant information onto our investor relations website such as press releases, announcements and live webcast presentations for interim and annual results etc. With an aim of enhancing information accessibility and efficiency, the mobile version of our investor relations website (http://m.ir.anta.com) and online social media platforms provide additional convenient channels of information for online users. During the year, we were honored with two awards, including “Best Investor Relations Company” and “Best Investor Relations Professional” at the “Asian Excellence Awards 2015” organised by Corporate Governance Asia magazine. In addition, we won the “Best Investor Relations Company - Mid Cap” and “Best Investor Relations Presentation Collaterals - Mid Cap” at the inaugural “Hong Kong Investor Relations Association Investor Relations Awards” which demonstrated investors’ recognition of our continuous pursuit of excellence and commitment to best practices in investor relations. Furthermore, our outstanding 2014 Annual Report was given an “Honourable Mention” at the Hong Kong Management Association’s Best Annual Report Awards 2015.

Interactions between the Group and the Investing Public

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