The Accounting and

Business Management

Case Competition

2014-15

Tertiary Institute Group

1

Established in 1991, Luk Fook Holdings (International) Limited (“Lukfook”) is one of the

leading jewellery retailers in Hong Kong and Mainland China.

Lukfook principally engages in the sourcing, designing, wholesaling, trademark licensing

and retailing of a variety of gold and platinum jewellery, gold ornaments and gem-set

jewellery, with a total of over 1,300 “Lukfook Jewellery” shops in Hong Kong, Macau,

Mainland China, Singapore, the United States, Canada and Australia. The corporate vision

of Lukfook is to be the “Brand of Hong Kong, Sparkling the World”. This is also the core

brand value of Lukfook.

Lukfook was listed on the Main Board of The Stock Exchange of Hong Kong Limited in May

1997, with stock code 0590.

For the year ended 31 March 2014, the revenue of Lukfook increased by 43.3% to HK$19

billion, marking the 10th consecutive year of record high. The profit attributable to equity

holders hit its record high and reached HK$1,865 million, representing a 50% increase.

Basic earnings per share were HK$3.17.

On 6 June 2014, Lukfook completed the acquisition of 50% interest in the issued share

capital of China Gold Silver Group Company Limited, an operating company engaging in

jewellery retailing and franchising under the brandname of “3D-GOLD”, and kicked off the

dual brand strategy to mark a new page of Lukfook.

2

REQUIRED

Lukfook is committed to maintaining high standards of corporate governance. Conducting

business with "Exquisite Craftsmanship, Quality Services and Customer-Oriented", the

Group serves both the Group's and shareholders' long-term interests.

You are a business strategy advisor, and Lukfook has invited you to conduct a study of its

business and develop a strategic plan to improve its business performance for the coming

THREE years, from 2015 to 2017.

In addition, Lukfook wishes to engage you in undertaking a comprehensive evaluation of its

current corporate governance practices, and to help identify the strengths and weaknesses

of its existing corporate governance system. In particular, management is looking for your

advice as to whether Lukfook’s corporate governance system should be further enhanced

to cope with the forthcoming changes in the Hong Kong corporate governance code.

Your business plan is suggested to include the following elements:

(1) Table of contents

(2) Executive summary

(3) Introduction

(4) Current business situation

(5) Financial analysis (Note 1)

(6) Strategic analysis (Note 2)

(7) Strategic plan (Note 3)

(8) Implementation plan (Note 4)

(9) Financial forecasts (Note 5)

(10) Review of corporate governance practices (Note 6)

(11) Appendices and references

Notes

1. In performing the financial analysis, you may refer to Lukfook’s financial reports.

Detailed financial analysis of the past three years (i.e. 2012-2014) is required and the

formulae used for calculating accounting ratios should be stated.

2. Strategic analysis may cover non-financial analysis, such as the external environment,

internal resources, current strategies, the core competencies of Lukfook and its

competitors, etc.

3. When developing a strategic plan, you should first determine the overall direction

Lukfook should pursue in the coming three years and then advise on the strategies to

be followed.

4. Implementation plans relay the tactics/actions required to execute the strategies set

out in your strategic plan. These actions could be related to marketing, production,

operations and/ or different business units of Lukfook which you think are important in

achieving your defined goals.

3

5. Your recommended strategies and implementation plans should be supported by a

projected Statement of Comprehensive Income for the next THREE years, from

2015 to 2017.

6. All corporate governance recommendations should be made in light of the Hong Kong

Corporate Governance Code and Corporate Governance Report, as contained in

Appendix 14 of the Rules Governing the Listing of Securities on the Stock Exchange

of Hong Kong Limited.

7. In preparing the proposal, you should:

ensure that all your suggestions and recommendations are in line with Lukfook's

vision, mission and values;

quote references from the annual reports with their page numbers ;

state all relevant information such as charts, graphs, published information,

articles, research findings and copies of questionnaires (if any), etc., for reference

under the Appendices section;

quote other external sources under the References section;

state clearly any underlying assumptions which can justify your analysis and

recommendations; and

support all your calculations with workings and explanations.

4

PROPOSAL FORMAT AND RULES

1. Each team should submit a business proposal in English of 15-20 A4 pages. The

total number of pages includes the executive summary, index, appendices, graphs,

and references, but excludes the table of contents, cover sheet, survey questionnaire

and results. Please include the questionnaire and survey results, if any, in the last

part of the proposal so that the number of pages can be counted easily.

2. Each proposal should include a separate cover sheet with name of the competition,

names of team members, the institution at which they are studying, as well as the

contact number and e-mail address of the team leader.

3. To save paper, your proposal should be printed double-sided (except the cover

sheet).

4. Font type and size: Arial (12 points).

5. 1.5 line spacing.

6. Margin: 1 inch for each side.

7. The content pages SHOULD NOT include the names of team members and the

school at which they are studying.

8. The business proposal SHOULD NOT be put in any folders/files nor be bound in a

book.

9. Each team should submit TWO hardcopies together with the following materials:

a soft copy (in both MS word and pdf format) saved on a CD-Rom; and

a completed competition questionnaire (this can be downloaded together with

the question).

10. Each team should insert the above documents in an envelope and submit their entry

to the HKIAAT by hand or by post to 27/F, Wu Chung House, 213 Queen's Road East,

Wanchai, Hong Kong. (PRC teams should submit their proposals to the CGCC.

Address: 北京市西城区月坛北街25号1号楼303室-100834). You should affix the

provided Business Proposal Submission Checklist which is appended at the end

of this case question on the envelope. If you are submitting the business proposal

by post, the checklist can be inserted in the envelope.

11. The deadline for submission is 5:00 pm, 6 February 2015. For proposals that are

submitted by post, the postmark date has to be two days before the deadline.

12. The HKIAAT has the right to disqualify any participant who is found to have violated

the rules of the competition.

5

Useful references

HKIAAT case competition website

www.hkiaat.org/index.php/case_competition/index/219/

Competition facebook page

www.facebook.com/hkiaatcompetition

Lukfook website

www.lukfook.com

Main Board Listing Rules on Corporate Governance Code and Corporate

Governance Report

http://www.hkex.com.hk/eng/rulesreg/listrules/mbrules/documents/appendix_14.pdf

The Accounting and Business Management Case Competition 2014-2015 (Tertiary Institute Group)

Business Proposal Submission Checklist

(Deadline for submission of business proposal: before 5:00 p.m., 6 February 2015)

(Please complete in BLOCK LETTERS)

Team Leader's Particulars

Institution

:

Surname

:

Given Name

:

Contact No.

:

Email

:

Please mark "√" wherever appropriate to confirm the submission of below documents

Submitted (completed by

participating team)

Submitted (completed by

HKIAAT)

Remarks (completed by

HKIAAT)

1) Two hardcopies of the business proposal (make sure the COVER SHEET is printed SINGLE-SIDED and NO institution name & student names inside proposal contents)

2) A CD-ROM with soft copy of the business proposal (saved on a CD-Rom in

Word and PDF format)

3) A completed questionnaire from HKIAAT

Remarks:

1) The above documents should be placed in an envelope and submitted to the HKIAAT or CGCC by hand or by post on or before

6 February 2015: Hong Kong teams: submit to the HKIAAT (27/F, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong) PRC teams: submit to the CGCC (北京市西城区月坛北街 25 号 1 号楼 303 室-100834)

For proposals that are submitted by post, the postmark date has to be at least two days before the deadline.

2) Please affix this checklist on the envelope. If you are submitting the proposal by post, the checklist can be inserted in the envelope.

3) The HKIAAT has the right to disqualify any participant or team if the participant or team is found to have violated the rules of the competition.

Hong Kong Institute of Accredited Accounting Technicians Limited 27/F Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong

Tel Fax Web Email

: 2823 0600 : 2823 0606 : www.hkiaat.org : hkiaat@hkiaat.org

Please affix this checklist to the

envelope.

The Accounting and Business Management Case Competition 2014-2015 (Tertiary Institute Group)

Competition Questionnaire – Business Proposal

(For participating teams)

This questionnaire is used to collect the participating students' feedbacks on the competition arrangement which are important to us for enhancement. It should be completed on a team basis (i.e. each team shall complete one questionnaire only). Please spend a few minutes to complete this questionnaire and return together with your business proposal. Please fill in the box where appropriate.

1. Why did you join the competition? (You can select more than one option)

Recommended by teacher

Gain real world experience

Enhance our accounting knowledge

The prizes are attractive

To widen the horizon

Enhance our CV

Others (please specify: )

2. Is the specification on the number of team members (i.e. 3 to 4 members per team) appropriate?

Yes

No, too many (please specify: )

No, not enough (please specify: )

3. Are the judging criteria clearly defined?

Yes

No (please specify: )

4. Is the specified page limitation (i.e. maximum 20 pages) appropriate for the business proposal?

Yes

No, too many (please specify: )

No, not enough (please specify: )

5. Is the level of difficulty in this competition appropriate?

Yes

No, too easy

No, too difficult

Please specify the reason(s)

Guidelines and references are not enough

Out of syllabus

Too much research is required

Too much time commitment

Others (please specify: )

6. Do you think the time allowed to prepare for the business proposal (i.e. around 2.5 months) is sufficient?

Yes

Not sufficient time (please specify: )

7. Approximately how many man-hours have your team spent in preparing the proposal? (e.g. 10 hours per team member x 4 members = 40 man hours)

Less than 100 man hours

101 – 200 man hours

201 – 300 man hours

Over 300 man hours

8. Has your ability in using accounting information for business development been enhanced as a result of joining the competition?

Yes

No

9. Will you recommend others to join the competition?

Yes

No (please specify: )

10. What factors affect your decision to join the competition? (please rank 1-5, "1" for the most important factor and "5" for the least important factor)

( ) Complexity of the annual report of the selected company (whether the annual report is too complicated)

( ) Complexity of the business of the selected company (whether the business nature is too difficult)

( ) The popularity of the selected company (whether you are familiar with the company)

( ) The attractiveness of the prizes

( ) The schedule of the competition

( ) The internship opportunity offered to the champion team

( ) The business seminar organized for participating students

( ) Others (please specify: )

11. Which of the following type of company do you think is more appealing to you for joining the competition?

(please choose ONE option for each category)

(i) Industry

Retail

Service

Manufacturing

Trading

(ii) Business nature

Single business

Conglomerate*

(iii) Geographical spread

Multinational corporation*

Hong Kong specific

* The consolidated annual reports of these companies may not contain sufficient information for detailed analysis.

(For Hong Kong teams only) 12. Are you satisfied with the support from HKIAAT e.g. briefing session, business seminar?

Yes

No (please specify: )

Please provide suggestions (e.g. possible options of company for case study)/ comments for our enhancement.

** Thank you for your time **

The Accounting and Business Management Case Competition 2014-2015 (Tertiary Institute Group)

Competition Questionnaire

(For teachers)

This questionnaire is used to collect teachers' feedbacks on the competition arrangement which are important to us for

enhancement. Please spend a few minutes to complete this questionnaire and return to us via fax (2823-0606) or email

(hkiaat@hkiaat.org) on or before 6 February 2015.

1. Did you recommend your students to join the competition?

Yes

No (go to Q.3)

2. Why did you recommend your students to join the competition? You can select more than one option.

Students can gain real world experience Enhance students' accounting knowledge

The prizes are attractive Can widen students' horizon

Business seminars are practical An assignment for students

Others (please specify___________________________________________________________________)

3. How many teams from your institution joined this competition? ___________ team(s)

4. Have you provided any support to your students during the process of preparing the business proposal?

Yes

No (go to Q.7)

5. Approximately how many hours in total have you spent in supporting all the teams?

Less than 20 hours 21 – 40 hours More than 40 hours

6. In what way did you provide support to your students? You can select more than one option.

Provide guidance on interpreting the question Provide guidance on doing research

Provide guidance on report writing (format, grammar) Provide class time for students to discuss/ prepare

Others (please specify: _________________________________________________________________)

7. Is the specified page limitation (i.e. maximum 20 pages) appropriate for the business proposal?

Yes No, too many

(please specify: ______ __)

No, not enough

(please specify: _______ _)

8. Is the level of difficulty in this case competition appropriate?

Yes

No, too easy

No, too difficult. Please specify the reason(s):

Guidelines and references are not enough

Out of syllabus

Too much research is required

Too much time commitment

Others (please specify: _____________________________________________)

9. Do you think the competition schedule (from Oct 2014 to Apr 2015) matches your institution's teaching schedule?

Yes No (please specify: ___________________________________)

10. Can students benefit from this competition in terms of enhancing their ability in using accounting information for

business development?

Yes No

11. Will you recommend your students to join the competition next year?

Yes

No (please specify: ___________________________________)

12. What factors affect your decision to recommend students to join the competition? (please rank 1-5, "1" for the most

important factor and "5" for the least important factor)

( ) Complexity of the annual report of the selected company (whether the annual report is too complicated for the

students)

( ) Complexity of the business of the selected company (whether the business nature is too difficult for students)

( ) The popularity of the selected company (whether students are familiar with the company)

( ) The attractiveness of the prizes

( ) The schedule of the competition

( ) The internship opportunity offered to the champion team

( ) The business seminar organized for participating students

( ) Others (please specify: _____________________________________________)

13. Which of the following type of company do you think is more appealing to students for joining the competition?

(please choose ONE option for each category)

(i) Industry (ii) Business nature (iii) Geographical spread

Retail Single business Multinational corporation*

Service Conglomerate* Hong Kong specific

Manufacturing

Trading

* The consolidated annual reports of these companies may not contain sufficient information for detailed analysis.

Please provide suggestions (e.g. possible options of company for case study)/ comments for our enhancement. Name of institution:

** Thank you for your time **