Stock code: 301088
Rumere Co., Ltd.
Annual Report 2023
April 2023
Annual Report 2023
Section I Important Notice, Contents and DefinitionsThe Board of Directors and the Board of Supervisors of the Company and itsdirector, supervisors and senior management warrant that the informationcontained in this annual report is true, accurate and complete without any falserecords, misleading statements or material omissions, and severally and jointlyaccept legal liability thereof.Guo Jian, the person in charge of the Company, Yu Qingtao, the person in chargeof accounting of the Company, and Wang Dongmei, the person in charge of theaccounting department of the Company, have declared that they warrant thetruthflness, accuracy and completeness of the financial ststements set out in thisannual report.All directors of the Company attended the Board meeting on which this reportwas reviewed.The company elaborates in detail on the reasons and circumstances leading to adecline in the company's performance in the "IV: Analysis of Main Business" of"Section III: Discussion and Analysis of the Management" of this report. Wekindly request investors to pay attention to the relevant content.The forward-looking statements in this annual report, including developmentstrategies and business plans, do not constitude substantive commitments of theCompany to investors. Investors and related personnel should remain vigilant andunderstand the differences between plans, forecasts and commitments.The Company has described potential risks it may face in the future in “Section
III Discussion and Analysis of the Management” and “Saection XI FutureDevelopment Prospects of the Company”. Investors should be aware of theinvestment risks.The Board meeting has deliberated and approved the following profit distributionproposal: Distribute a cash dividend of RMB 4.39 (tax inclusive) for every 10shares to all shaerholders based on a total share capital of 228,000,000; no bonusshares will be issued and no capital reserve will be converted into share capital.
Table of Contents
Section I Important Notice, Contents and Definitions ...... 2
Section II Company Profile and Key Financial Indicators ...... 8
Section III Discussion and Analysis of the Management ...... 13
Section IV Corporate Governance ...... 53
Section V Environmental and Social Responsibilities ...... 72
Section VI Significant Events ...... 74
Section VII Changes in Shareholding and Information of Shareholders ...... 82
Section VIII Particulars of Preference Shares ...... 91
Section IX Particulars of Bonds ...... 92
Section X Financial Statements ...... 93
Documents Available for Inspection
I. Financial statements affixed with official stamps and the signatures of the Company’s responsibleperson, the person in charge of accounting and the charge of accounting department of the Company;II. Original of the audit report affixed with the stamp of the accounting firm as well as stamps andsignatures of the certified public accountants;III. All original copies of the Company’s documents and the original drafts of the Company’sannouncements as disclosed on websites designated by the CSRC during the reporting period;IV. Place for document inspection: Office of the Board of Directors, Room 2902, Floor Shimao Plaza,Minjiang Road, Changshu, Jiangsu Province, China.
Terms and Definitions
| Term | refers to | Definition |
| The Company, we, Rumere Co., Ltd. or Rumere | refers to | Rumere Co., Ltd. |
| Meicang Fashion | refers to | Suzhou Meicang Fashion Co., Ltd, a wholly-owned subsidiary of the Company |
| Shanghai Rumere | refers to | Shanghai Rumere Brand Management Co., Ltd, a wholly owned subsidiary of the Company |
| Rumere International | refers to | Suzhou Rumere International Trade Co., Ltd, a wholly-owned subsidiary of the Company |
| Rumere High-end Ladies-wear | refers to | Rumere High-end Ladies-wear is a taobao store operated by the Company, with its domain name of https://rumere.taobao.com/ |
| Rumere Flagship Store | refers to | Rumere Flagship Store is a Tmall store operated by the Company, with its domain name of https://rumere.tmall.com/ |
| Rongmere Flagship Store | refers to | Rongmere Flagship Store is a Tmall store operated by the Company, with its domain name of https://rongmere.tmall.com/ |
| General Meeting of Shareholders | refers to | General Meeting of Shareholders of Rumere Co., Ltd. |
| Board of Directors | refers to | Board of Directors of Rumere Co., Ltd. |
| Board of Supervisors | refers to | Board of Supervisors of Rumere Co., Ltd. |
| CSRC | refers to | China Securities Regulatory Commission |
| Company Law | refers to | Company Law of the People’s Republic of China |
| Securities Law | refers to | Securities Law of the People’s Republic of China |
| Articles of Association | refers to | Articles of Association of Rumere Co., Ltd. |
| Reporting Period | refers to | Year 2023, from 1 January 2023 to 31 December 2023 |
| Same period of previous year | refers to | Year 2022, from 1 January 2022 to 31 December 2022 |
| Beginning of the Reporting Period | refers to | 1 January 2023 |
| End of the Reporting Period | refers to | 31 December 2023 |
| Online Retailing | refers to | Merchandising through Internet |
| Third-party payment platform | refers to | An intermediary between the buyer and the seller in the payment process; after the buyer pays, the payment will enter the third-party payment platform, then the intermediary will notify the seller to deliver the goods; when the buyer receives the goods and clicks “confirm |
| receipt” on the e-commerce platform, or the system automatically confirms receipt, the payment will be transferred to the seller’s account. | ||
| SPU | refers to | Standard Product Unit |
| GMV | refers to | Gross Merchandise Value |
| BEST Inc. | refers to | Best Logistics Technology (China) Co., Ltd. |
| SF Express | refers to | Suzhou Industrial Park SF Express Co., Ltd. |
Section II Company Profile and Key Financial IndicatorsI. Company information
| Stock abbreviation | Rumere | Stock code | 301088 |
| Chinese name of the Comapny | 日禾戎美股份有限公司 | ||
| Abbreviation of Chinese name of the Company | 戎美股份 | ||
| English name of the Company (if any) | Rumere Co.,Ltd. | ||
| Abbreviation of English name of the Company (if any) | RUMERE | ||
| Legal Representativeof the Company | Guo Jian | ||
| Registered address | No.86, Shenzhen Road, Changfu Street, Changshu City, Jiangsu Province | ||
| Postal code of registered address | 215523 | ||
| Historical changes of the Company’s registered address | Date of first registration: March 13, 2012; Registed address: No. 2 Jianye Road, High-tech Industrial Park, Changshu city, Jiangsu Province Date of registration change: December 24, 2022; Registed address: No.86, Shenzhen Road, Changfu Street, Changshu City, Jiangsu Province | ||
| Office address | Room 2901, Shimao Plaza, Minjiang Road, Changshu, Jiangsu Province | ||
| Postal code of office address | 215500 | ||
| Official website | http://www.rumere.com | ||
| rumerebod@rumere.com | |||
II. Contact Persons and Contact Methods
| Sectary to the Board | Representative of securities affairs | |
| Name | Yu Qingtao | Yu Dongxue |
| Address | Room 2901, Shimao Plaza, Minjiang Road, Changshu, Jiangsu Province | Room 2901, Shimao Plaza, Minjiang Road, Changshu, Jiangsu Province |
| Tel. | 0512-52969003 | 0512-52969003 |
| Fax | 0512-52969003 | 0512-52969003 |
| rumerebod@rumere.com | rumerebod@rumere.com |
III. Information Disclosure and Location for Inspection of Documents
| Websites on which the annual report is published as required by the stock exchange | Shenzhen Stock Exchange (http://www.szse.cn) |
| Media on which the annual report is published | Securities Times, Shanghai Securities News, China Securities Journal, Securities Daily, and http://www.cninfo.com.cn |
| Location for inspection of the annual report | Office of the Board of Directors |
IV. Other Relevant InformationAccounting firm engaged by the Company
| Name | RSM China (Special General Partnership) |
| Office address | 901-22 to 901-26, Block 1, Foreign Trade Building, No. 22 Fuchengmenwai Street, Xicheng District, Beijing |
| Name of signing accountants | Ye Chun, Xu Zongqing |
Sponsor engaged by the Company to fulfill continuous supervision obligation during the reportingperiod.? Applicable □ Not applicable
| Name of sponsor | Office address of sponsor | Name of sponsor respresentative | Period of continuous supervision |
| China International Capital Corporation | 27/F and 28/F, Tower 2, China World Trade Center, No.1 Jianguomenwai Avenue, Chaoyang District, Beijing | Lai Tianxing, Deng Miaoqing | October 2021 to December 2024 |
Financial advisor engaged by the Company to fulfill continuous supervision obligation during thereporting period
□ Applicable ? Not applicable
V. Main Accounting Data and Financial IndicatorsWhether the Company needs to perform retrospective adjustment or restatement of previous years
□Yes ?No
| 2023 | 2022 | Changes over last year | 2021 | |
| Revenue (RMB) | 767,316,817.65 | 948,811,767.71 | -19.13% | 872,310,059.47 |
| Net profit attributable to ordinary shareholders (RMB) | 84,719,397.91 | 167,040,817.13 | -49.28% | 162,674,559.03 |
| Net profit attributable | 48,448,846.15 | 125,662,452.72 | -61.45% | 150,289,718.68 |
| to ordinary shareholders after extraordinary gains and losses (RMB) | ||||
| Net cash flows from operating activities (RMB) | -7,344,227.07 | 125,309,020.66 | -105.86% | 4,202,782.48 |
| Basic earnings per share (RMB/share) | 0.3716 | 0.7326 | -49.28% | 0.90 |
| Diluted earnings per share (RMB/ share) | 0.3716 | 0.7326 | -49.28% | 0.90 |
| Weighted average return on net assets | 3.29% | 6.66% | -3.37% | 17.74% |
| End of 2023 | End of 2022 | Changes over end of last year | End of 2021 | |
| Total assets (RMB) | 2,667,766,675.11 | 2,713,064,879.72 | -1.67% | 2,539,878,965.21 |
| Net assets attributable to shareholders of the listed company (RMB) | 2,569,730,653.19 | 2,568,459,255.28 | 0.05% | 2,442,002,438.15 |
The lower of the net profits before and after deducting the non-recurring profit and loss in the mostrecent three accounting years is all negative, and the audit report of the most recent year shows that theCompany’s ability to continue operations is uncertain.
□Yes ?No
The lower of the net profits before or after deducting non-recurring profit and loss is negative
□Yes ?No
VI. Major Financial Indicators by Quarter
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Revenue | 206,902,477.80 | 185,589,030.72 | 129,473,109.30 | 245,352,199.83 |
| Net profit attributable to shareholders of the listed company | 36,343,813.96 | 19,903,962.14 | 7,126,201.80 | 21,345,420.01 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profit and loss | 25,821,813.45 | 9,290,452.46 | -1,515,276.05 | 14,851,856.29 |
| Net cash flow from operating activities | 42,732,269.76 | 13,524,208.23 | -74,075,743.96 | 10,475,038.90 |
Whether the above financial indicators or their sums are materially different from the relevant financialindicators in the disclosed quarterly and semi-annual reports of the Company
□ Yes ? No
VII. Difference in Accounting Data under Domestic and International Accounting Standards
1. Net profit and net asset differences under International Financial Reporting Standards (IFRS)and Chinese Accounting Standards (CAS)
□ Applicable ? Not applicable
No such differences for the reporting period.
2. Net profit and net asset differences under foreign accounting standards and ChineseAccounting Standards (CAS)
□ Applicable ? Not applicable
No such differences for the reporting period.VIII. Non-recurring Items and Amounts? Applicable □ Not applicable
Unit: RMB
| Item | Amount in 2023 | Amount in 2022 | Amount in 2021 | Description |
| Gains or losses from disposal of non-current assets (including the write-off portion of provision for asset impairment) | 30,655.86 | - | 157,707.84 | |
| Government grants recognised in current profit or loss (except government grants that is closely related to operations and determined based on the established standard, and have a continuous impact on the company's profits and losses.) | 1,866,161.60 | 6,358,231.30 | 7,165,956.84 | |
| Gains /(losses) arising from changes in fair value of financial assets, derivative financial assets, other non-current financial assets, financial liabilities and derivative financial liabilities during the holding period of non-financial enterprises and investment income arising from disposal of financial assets, and derivative financial assets except effective hedging transactions related to the Company's principal activities | 47,797,868.30 | 49,321,536.77 | 9,503,111.55 | |
| Other non-operating income/expenses except for items mentioned above | -1,046,114.40 | -392,412.06 | -311,331.09 | |
| Less: tax effect | 12,378,019.60 | 13,908,991.60 | 4,130,604.79 | |
| Total | 36,270,551.76 | 41,378,364.41 | 12,384,840.35 | -- |
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable ? Not applicable
The Company has no other profit and loss items that qualified the definition of non-recurring profit andloss.Descriptions where the Company defines any non-recurring profit and loss items listed in the No. 1Explanatory Announcement on Information Disclosure of Companies Offering Securities to the Public—Non-recurring Profit and Loss as recurring profit and loss items during the reporting period
□ Applicable ? Not applicable
The Company did not define any non-recurring profit and loss items listed in the No. 1 ExplanatoryAnnouncement on Information Disclosure of Companies Offering Securities to the Public—Non-recurring Profit and Loss as recurring profit and loss items during the reporting period.
Section III Discussion and Analysis of the Management
I. Status of the Industry in Which the Company Is Located during the Reporting Period(I) Basic information, development stage, cyclical characteristics of the involved industry andour position in the industryAccording to the CSRC’s Guidelines for the Industry Classification of Listed Companies (2012Revision), the Company is a member of retail industry (classification code: F52). The Company isengaged in planning, design, supply chain management, and sales of clothing and accessories. Onlineretailing refers to the activities of retailers selling products through e-commerce platforms.TheCompany sells clothing, jewellery accessories and aquatic products directly to end consumers throughAlibaba’s e-commerce platforms (Taobao and Tmall).According to data from the National Bureau of Statistics, China’s retail sales of consumables in 2023was RMB 47.1 trillion in total, and the online retail sales was RMB 15. 4 trillion, an increase of 11.0%from the previous year. Among them, the online retail sales of physical goods was RMB 13.0 trillion,an increase of 8.4%, accounting for 27.6% of the total retail sales of consumer goods; among the onlineretail sales of physical goods, the sales of food, clothing, and daily-use articles increased by 11.2%,
10.8%, and 7.1%, respectively. In terms of channels, the online retail sales growth is higher than overallretail growth. The internet retail industry is burgeoning..Within two decades of development, online retailing, driven by the continuous improvement ofresidents’ consumption levels and the continuous upgrading of Internet infrastructure, has achievedgrowth rates that surpass traditional offline retail channels, significantly altering the way consumersbuy. For consumers, compared to traditional stores, online retailing has lifted the limitations of timeand space limitations, providing consumers with more product information in terms of quantity andvariety, significantly reducing information costs and speeding up decision-making process. Thecontinuous technological upgrading of Internet infrastructure optimizes shopping experience throughtextual information to images, short videos, live streaming, and even virtual reality technology for someproducts; the rapid development of the logistics and express delivery industry provides necessarylogistical support for online retailing; mobile payment technology and third-party payments enableconsumers to complete transactions without worries, make payments, refunds, and returns moreconvenient, achieving convenience and satisfaction for consumers. The explosive application ofArtificial Intelligence technology (AI) enables internet retail enterprises to continually benefit in areas
such as big data analysis in production and operation, marketing communication, and visual contentcreation, which can help enhance market share and reduce operational cost.For enterprises, online retailing can simplify the distribution of goods and help them reduce the costsfor intermediate circulation; additionally, it enables digitalizing and visualizing consumer behaviorsthrough information technology, so as to help enterprises to better meet consumer needs throughanalysis of consumer behavior and big data, and to reduce excess inventory through agile supply chainmanagement, resulting in better ecological benefits. The structural shift of the value chain reflects thelong-term trend of efficiency, and the application of new technologies and models continuouslyoptimizes the integration of information flow, logistics, and capital flow. While obtaining goods in amore convenient, swift, and cost-effective way, consumers are also forming their own shopping habitsand make it a ratchet effect. That is to say, once they shop in a faster, better, and more cost-effectiveway, it is difficult for them to return to the opposite way, in which they have to spend more (includinginformation costs and economic expenditures). Therefore, for both enterprises and consumers, onlineretailing has significantly increased the supply and demand of goods, improved overall social welfare,and made more people feel a stronger sense of gain. This is the basic logic behind our long-termoptimism for this business model.As a well-known Internet retailer of fashion clothing, the Company provides consumers with high-quality and cost-effective clothing through Internet channels. With many years of efforts in talent,technology, and supply chain management, our online store “Rumere” has advantages in terms ofcreditworthiness, fan base, and customer reputation. For a long time, the Company has been committedto providing consumers with high-value and cost-effective quality products, and its clothing andapparel products are made from globally selected raw materials and fashionable designs, and throughdata-driven marketing and lean supply chain management technology, the Company reduces inventoryredundancy, increasing inventory turnover rates and customers’ repurchase rates, exceeding theperformance of conventional competitors within the clothing sector. The advantages of the businessmodel and its operating efficiency are reflected in the level of profitability. In the “2022 Top 100Profitable Enterprises in the Clothing Industry” officially released by the China National GarmentAssociation, the Company ranked in the top three.As of the end of 2023, as a “Outstanding Seller” and “Must-Visit Store” and five-golden-crown storeon Taobao, “Rumere” has received more than 17 million positive comments from buyers; the storeratings in terms of product conformity, service attitude, and logistics service were all near perfect, andour fan base had more than 6.66 million followers, and positive comments accounted for over 99.9%
of the total. The Comopany has teamed up a professional, efficient, and experienced livestream salesbusiness, and our Taobao livestream account with the name of “Rumere” has been followed by over
6.66 million fans. The Company sells clothing and jewellery accessories by taking advantage offrequent launch of new products and fragment orders based on data analysis to offer consumers a moreimmersive shopping experience throughmore dressing looks and professional recommends. Gradually,a perception of "high quality and cost-effectiveness" has been formed among both new and existingfans of Rongme During the Reporting Period, the Company sold more than 4,000 SPUs on a yearlybasis and has served more than 2.89 million consumers.(II) Applicable industry policiesIn recent years, the government has issued a series of industry policies to promote the development ofthe e-commerce industry, which plays a positive role in promoting the development of online retailers.In the clothing industry, the promotion of brand building and the expansion of the supply of mid-to-high-end clothing products proposed in the national industry policies play an important role inpromoting and guiding the development of the clothing industry and independent brands. See thefollowing for details:
1. Policies and regulations for e-commerce industry (including livestream sales)The formulation and implementation of laws and regulations for online retailing are conducive to long-term standardized and orderly development of the industry, as well as creating a fair competitionenvironment. Relevant policies and opinions have injected long-term driving force into the industryfor its long-term development. From these perspectives, as a market entity which has strict internalcontrol systems and complies with applicable laws and regulations with respect to financialmanagement and operating activities, the Company faces positive factors in market competition andindustry development.
| Regulations | Issued by | Issued on |
| Measures to Restore and Expand Consumption | National Development and Reform Commission | July 2023 |
| Notice on the Issuance of the Code of Conduct for Live Streamers | National Radio and Television Administration | June 2022 |
| Opinions on Further Regulating the Profit-seeking Behavior in Online Live-streaming and Promoting the Healthy Development of the Industry. | Cyberspace Administration of China | March 2022 |
| Planning for the Development of E-commerce in the 14th Five-Year Plan | Ministry of Commerce, Cyberspace Administration of China, National Development and Reform Commission | October 2021 |
| Regulations on the Management of Online Live Marketing | Cyberspace Administration of China, Ministry of Public Security, Ministry of Commerce, Ministry of Culture and Tourism, State Taxation Administration, State Administration for Market Regulation, National Radio and Television Administration | April 2021 |
| Regulations on the Supervision and Management of Online Transactions | State Administration for Market Regulation | March 2021 |
| Provisional Regulations on the Standardization of Promotional Activities | State Administration for Market Regulation | December 2020 |
| Notice of the National Radio and Television Administration on Strengthening the Management of Online Showroom Live Streaming and E-commerce Live Streaming | National Radio and Television Administration | November 2020 |
| Guiding Opinions of the State Administration for Market Regulation on Strengthening the Supervision of Online Live Marketing Activities | State Administration for Market Regulation | November 2020 |
| Opinions on Accelerating the Development of New Types of Consumption Driven by New Business Forms and Patterns. | General Office of the State Council | September 2020 |
| Regulations on Online Live Marketing Behaviors | China Advertising Association | June 2020 |
| Regulations on the Management of Internet Live Streaming Services | Cyberspace Administration of China | November 2016 |
2. Policies and regulations applicable to the clothing industryThe Company focused on selling clothing products during the Reporting Period, and a series of positivepolicies issued by regulatory authorities are conducive to our innovations in fashion brand building,
application of green and eco-friendly fibers, and use of technological elements to maintain itscompetitiveness.
| Regulations | Issued by | Issued on |
| Action for Building a Modern Textile Industry system (2022-2035) | China National Textile and Apparel Council | August 2023 |
| Implementation Plan on Promoting Green Consumption | National Development and Reform Commission | January 2022 |
| Guiding Opinions on the 14th Five-Year Plan for the Development of China’s Clothing Industry and Visions and Goals for 2035 | China National Garment Association | October 2021 |
| Guiding Opinions on Fashion Development during the 14th Five-Year Plan Period for the Textile Industry | China National Textile and Apparel Council | June 2021 |
3. Policies and regulations applicable to the retail industry
The Company has always abode by relevant laws and regulations on the protection of consumer rightsand interests, as well as institutional regulations of administrations for market regulation and relevantrules of Internet platforms, to provide timely and accurate return and exchange services for customersand maintain customer satisfaction at the industry-leading level.
| Regulations | Issued by | Issued on |
| Guidance on Speeding up the Digital Empowerment of Life Services | 12 Departments including the Ministry of Commerce | December 2023 |
| Interim Measures for the Return without Reasons of Commodities Purchased Online within Seven Days (2020 Revision) | State Administration for Market Regulation | October 2020 |
II. Main business during the Reporting Period(I) Business and product overview and business model
1. Business and product overview
The Company with the “RUMERE” brand opeates the business of designing, merchandising, and salesof clothing and apparel products through supply chain management. The products include women’swear, men’s wear and jewellery accessories in both professional and casual styles, as well as hometextiles, etc. We kept following global fashion trends with our own style. With the support of Internetplatforms and the management information system, the Company builds up a flexible supply chainsystem and forms a unique model featuring fragment orders and fast reactions. Our corecompetitiveness lies in quick-response designing, merchandising and supply chain management.
2. Business model
The Company focuses on clothing designing and merchandising, Internat retail operation, and supplychain management, outsourcing warehousing, logistics and clothing production to well-knownqualified suppliers in the industry. The business models and processes of the Company are describedas follows:
1) Merchandising and designning
The annual design and merchandising is broken down into a 52-week rolling plan under the annualdevelopment plan, and product-based elements such as design elements, style, launching time, fabricsand auxiliary materials, costs, and prices will be confirmed and adjusted.
2) Supply chain management
Our supply chain management follows three models: (1) Partially outsourced processing model: theCompany directly purchases fabrics, auxiliary materials, and yarns and sends them to qualifiedsuppliers for processing and production. This model is used for the production of outerwear, pants,dresses and skirts, and some tops; (2) Fully outsourced processing model: the supplier purchases fabrics,auxiliary materials, and yarns and completes the processing and production. This model is used forproduction of fur, some tops, and accessories; (3) Self-production model: the Company purchasesfabrics and auxiliary materials and uses its own production capacity for production. This model is usedfor the production of some tops and outerwear.
3) Sales and marketing online
The Company operates online and adopts a vertical sales model without intermediate steps, greatlyreducing the distribution cost, physical rentals and staff cost of shopping stores etc, enabling cunsumersto have the products at relatively low prices. Moreover, relying on Internet platforms and information
management systems, we can obtain instant feedback from consumers and make timely adjustments tojustify our product combinations and action plan, to improve the sales efficiency. In addition, theCompany has gradually formed a qualified live streaming team. Through the Taobao account “Rumere”,we perform livestream sales every week and make nearly half of the GMV by this way. The livestreamaccount has been followed by more than 6.6 million fans for the time being.
4) Warehousing and logistics model
The Company has a raw material warehouse and uses a self-developed WMS to store and managefabrics, auxiliary materials and yarns. The Company has built an intelligent warehousing anddistribution base that can meet the needs for warehousing and distributing over 12 million pieces ofclothing and accessory products. We outsource the warehousing of garments to BEST Inc. TheCompany has realized real-time data interchange among OMS, BEST’s WMS system and SF Express’OMS system, thus respond to new orders by sorting out goods and delivering them to end consumersthrough SF Express in a timely manner.(II) Market position of our products and key performance drivers during the Reporting Period
1. Market position of our products
Our main products are RUMERE branded clothing and apparel, in which women’s wear accountingfor 95% of income in 2023. We deem our products as mid-to-high-end. Firstly, we procure high-endnatural raw materials across the globe, including fine contton, cashmere silk and high-end flax. Fine-spun composite fabrics with frontier high-tech are also widely used in our products’ design andproduction, while most brand retailers using similar materials in the clothing sector put themselves onhigh-end and high-priced market segments, such as Erdos, Shanghai Silk in China and Loro Piana,Maxmara globally. Secondly, we have a professional design and merchandising team with richexperience in high-end clothing design and business knowhow, making our products hybrid RUMEREstyle consistency and the fresh ideas in fashion world. In addition, we work with first tier processingmanufactories in China, which have been for long the key suppliers of some globle high-end brands.Furthermore, the Company globally sources scarce pearls and other materials from renowned origins,designs and produces jewellery products that rival the quality of leading international brands. Relyingon e-commerce platforms (ALIBABA) and with the support of information management systems, theCompany enjoys benefit of significant advantages in creditworthiness, fan base, and customerreputation.
2. Key performance drivers
The revenue is the operating result comprehensively impacted by customer’s pageviews, conversionrate, average spend per customer, return rate, repeat purchase rate and other factors, while itsprofitability also depends on such factors as gross margin (pricing multiplier), expense ratio, and sell-through rate.Customer’s pageviews is composed of natural consumer flow (arising from customers’ spontaneousaccess to product information due to public praise, repeat purchases and other factors) and paid flow.The methods to increase natural flow include impressing customers with product quality to encouragerepeat purchases or using brand promotion through other media to attract customers to access productinformation spontaneously. To obtain consumer flow, the Company relies on accumulated promotionalexperience to comprehensively design and execute promotional plans based on commodity attributes,regions, time intervals and other factors, striving to achieve optimal ROI. Our experience of onlinepromotion enables us to continuously acquire and increase consumer flow at a reasonable cost.In online retailing, a conversion rate depends on various factors such as visual presentation, productdescription, and customer service. Visual design and live streaming presentation are importantcompetitive advantages for the Company in online retailing. We always keep an eye on newtechnologies, platforms, and product presentation methods to increase conversion rate, which meansturn the consumer flow into a real shopping actions as many as possible.Average spend per customer is related to product price and the number of items purchased per order.The Company adheres to the principle of selecting global materials for product planning, strives todifferentiate products for strengthening our pricing ability, and also increases the gross profit rateappropriately on the premise that customers can accept. The number of items purchased per orderdepends on whether customers are willing to purchase our products. We showcase more productcombination schemes through livestream demonstrations and comprehensive visual displays toincrease the number of items purchased per order and improve the shopping experience.Return rate and repeat purchase rate are directly related to product quality. The Company has alwaysregarded product quality as its lifeblood from designing and merchandising, material selecting, factoryscreening, and quality control, resulting in relatively low return rate and high repeat purchase rate.Our operating costs include sales, management, and research and development expenses, with salesexpenses consisting of promotion, storage and transportation costs. The promotion expense ratiocontinued to increase in the past few years, which is consistent with the industry trend and reflects theincreasing competition in online retailing, and all competitors have to face this reality and trend, so wemust gain a competitive advantage by optimizing our promotion efficiency. Generally, storage and
transportation costs are linearly related to delivering volume, but like the upward trend in labor costsacross all industries, these costs have also seen an upward trend in the long run. Unlike traditional think,we believe that the rise in labor costs is beneficial for the long-term development of the consumer retailindustry because the increase in such cost represents improved consumers’ income level. The rise incosts requires competitors to improve their operating efficiency, thereby contributing to the progressand efficiency improvement of the entire industry.Sell-through rate is a key indicator affecting the profitability of every retailer. A higher sell-throughrate means better cash flow, lower inventory redundancy costs, and stronger pricing ability. TheCompany has always been committed to improving sell-through rates by combining in-stock and pre-sale modes without affecting the customer shopping experience. We use a quick-response orderresponse mechanism and data-driven promotion methods to increase sell-through rate, reduceinventory redundancy and pass on these cost savings to our customers, providing them with high-quality and cost-effective products and achieving a virtuous cycle featuring high repeat purchase rateand high sell-through rate.The Company needs to comply with the disclosure requirements for “e-commerce business”as stated in the “No. 4 Self-Discipline Supervision Guidelines of the Shenzhen Stock Exchangefor Listed Companies - GEM Industry Information Disclosure”:
Since its establishment, the Company has been deeply involved in the Taobao platform for many yearsand sold the products under its self-owned women’s clothing brand “RUMERE” through three onlinestores on Taobao and Tmall (“Rumere High-end Women’s Clothing - High-Quality & Cost-effective”,“Rongmere Flagship Store”, and “Rumere Flagship Store”).Our core operating data is recorded and kept by orders placed on Taobao, including the number ofbuyers, total order amount, and the number of sub-orders; we rely on the information provided byInternet platforms through their business insight software to obtain the data related to customers’consumption behaviors, including pageviews, the number of visitors and new visitors. According tothe backend data provided by business insight software, our operating data for the Reporting Periodand for the same period of previous year are shown in the table below: The data shows that theCompany was under stable operation, and all core data show an overall upward trend.
| Indicator | Amount in 2023 | Amount in 2022 |
Annual pageviews (in 10,000)
| Annual pageviews (in 10,000) | 171,669.02 | 172,775.89 |
Annual visitors (in 10,000)
| Annual visitors (in 10,000) | 26,014.24 | 17,454.26 |
| Annual new visitors (in 10,000) | 16,597.74 | 9,593.86 |
| Annual buyers (in 10,000) | 289.40 | 329.36 |
| Annual total order amount (in RMB 10,000) | 262,921.05 | 317,671.66 |
| Sub-orders (in 10,000) | 575.92 | 653.61 |
Per capita consumptionfrequency
| Per capita consumption frequency | 1.99 | 1.98 |
Note 1: The above data only involves our online store “Rumere High-end Women’s Clothing”, because the sales revenue of this storeaccounts for 99.6% during the Reporting Period.Note 2: The annual visitors and annual new visitors are calculated by summing up the daily data provided by the business insightsoftware.Note 3: The difference between annual gross merchandise value (GMV) and main business revenue is caused due to the followingthree reasons: 1) Customers fail to complete their payment on time after placing an order on the platform, and these transactions will beautomatically closed; 2) Customers cancel the order through the platform before the product is shipped; 3) Customers apply for andcomplete a return before confirming receipt of and payment for the product.III. Analysis of core competitiveness
1. Online retailing
With the development of the Internet in China and changes in consumers’ shopping habits, China hasseen an increasing proportion of online shopping in the retail industry. The advantages of no time andspace limitations and lower channel costs allow those retailers that use e-commerce platforms as theirmain sales channels to have a wider development space. The Company relies on online channels andadopts a vertical sales model without intermediate steps, greatly reducing the commodity circulationcost and information communication cost, and enabling customers to purchase high-quality productsat relatively low prices. Moreover, relying on Internet platforms and information management systems,the Company can obtain complete feedback information from consumers and make timely adjustmentsto its own business strategies and product combinations. Since its establishment, the Company hasbased itself on online retailing, and after many years of efforts, it has set up an online retailing teamwith high-level business capabilities. The team has rich experience in online store operations, customerservice, marketing and promotion, and other important aspects of online retailing, ensuring that theCompany can flexibly adapt to changing trends in the online clothing retail industry and maintain itsonline channel advantage. The Company has already established an influential brand image on Taobaoand formed a stable customer base over time, attracting great attention.
2. Design and merchandising
The Company has established a professional product design and merchandising team. Based on thebrand style and concept, the team closely follows current trends and strives to innovate and create new
product styles, and makes continuous efforts in optimizing our brand image and vitality. Planning isthe starting point for product development and design, promotion, and sales. We will analyze andinvestigate the high-end clothing market and fashion trend in the planning stage to ensure that ourdesigns reflect the brand style and keep up with market trends. Additionally, our design andmerchandising team continues to conduct market research based on the development plan to determinethe design and merchandising direction of newly developed products. In addition to obtaining marketinformation, our planning department also analyzes global popular styles and colors, popularity of sub-categories, sales status, and transaction data on online retailing platforms from different perspectivesto timely and accurately obtain consumer preferences and customer feedback. This helps to fully utilizethe rapid response capability of our supply chain and make timely adjustments to consumer needs andkeep optimizing the design and merchandising of new products. The Company is used to formulatingan annual development plan for its clothing brands, comprehensively considering overall strategicplanning, brand and product style positioning, annual business goals, market feedback and other factorsin the plan.
3. Information system
The Company operates business based on Internet platforms and attaches great importance to theestablishment and upgrade of management information systems, and over the years of continuousimprovement and updating, it has accumulated practical experience and established a series of systemsthat talored for our operations. The Company has launched new product arrangement, suppliersettlement management, intelligent raw material management and other systems, all of which form abasic information management system covering all business processes to achieve full coverage fromdesign and merchandising to production management, as well as sales data digitization from ordermanagement to shipping management, resulting in a closed-loop information system among theCompany, customers, and suppliers, so as to form the information infrastructure for frequent update ofonline products and small orders based repeat purchases.
4. Supply chain management
Relying on its sales channels based on Internet platforms, the Company can analyze transaction dataon e-commerce platforms and real-time order information in its information management system totimely and accurately obtain consumer preferences, sales progress, customer feedback and otherinformation, and give full play to its matrix product team mechanisms and strong design andmerchandising capabilities to make timely adjustments to its product development plans based onconsumer needs and complete the design and merchandising of new products. Through long-term
cooperation and coordination with our suppliers, the Company has established a network of high-quality suppliers covering all clothing categories, who meet the requirements for production capacityand technique skill. Meanwhile, our self-owned factory features small-batch rapid production capacityto provide us with flexible product supply. The overall control over the supply chain ensures that small-batch and high-frequency order demands can be met as soon as possible and the quality requirementscan also be satisfied. With the support of management information systems to collect and analyzecustomer feedback, the design and merchandising team working efficiently on product development,and fast-response supply chain network, the Company is able to make available online its new productsthree times a week to timely meet consumer demands and help consumers to develop a habit of visitingour online stores, further enhancing customer loyalty. Moreover, our systems are connected to ensurethat we can timely obtain the data on how many products are purchased by each consumer and whetherthey are satisfied with our product and service as well as other consumer data, and feed these data backto related departments, so that the Company can understand and satisfy consumer needs timely andmake quick adjustments accordingly, such as accepting more orders or launching similar hot-sellingproducts, to form a virtuous cycle for its business.
5. Customer service
The company can provide better customer experience by virtue of the new model of online retailing.Relying on Internet platforms (ALIBABA), the Company can make available online its new productsseveral times a week to timely meet consumer demands. At the same time, highly developed onlinepayment, and express and logistics as part of online retailing infrastructure, also provide conveniencefor customer payments and try-ons. By selling products online, the Company can obtain consumerfeedback more timely and completely. By obtaining real-time sales information from online platforms,the Company ensures that consumers’ browsing frequency for each style of garments, their purchasequantity, satisfaction level and other data can be timely fed back to the Company, enabling us to makequick adjustments accordingly, such as accepting more orders or launching similar hot-selling products,and to timely understand and satisfy consumer needs. Additionally, our online stores are always readyto provide customer service on a 7×24 basis throughout the year, where any consumer can purchaseour products at any time, creating a more convenient shopping environment and fully meeting customerdemands.
6. Business expansion
We always regard innovative supply chain based on real and effective customer demands as the servicephilosophy we should adhere to. As primary decision-makers for consumption, our customers may
have other shopping needs for other products than clothing and apparel when shopping online orthrough live streaming. The Company makes full use of the characteristics of information release byInternet platforms to provide customers with high-quality products and services in multiple categories.In 2023, the Company launched products such as Song brocade (a sophisticated ancient way to makesilk brocade from Song dynasty, , which are known as materials of intangible cultural heritage),jewellery accessories (Akoya pearl), and high-end home textiles, and all achieved the sales beyond ourexpectations. Our capabilities in e-commerce operation, information system, supply chain management,and customer service, which have been made available in the women’s wear retailing, have also beenwell applied to more product categories and types. By using new products to satisfy customers’diversified needs, we can not only improve their shopping experience, but also strengthen our brandcredibility and reputation, and our strong capability in business expansion has created a virtuousinteraction between customer base, high-quality products, and brand image.IV. Analysis of main business
1. Overview
In 2023, confronted with the severe and complex macroeconomic situation both at home and abroad,the garment market vitality did not exhibit a clear recovery, and the trend of shrinking operating incomeand total profit continued to shrank. According to data released by the National Bureau of Statistics,the total profit of 2023 of industrial regulated of enterprises nationwide reached 7.68583 trillion RMB,decreasing 2.3% compared to the previous year. And the operating income of the textile, apparel, andclothing industry amounted to 1.21047 trillion RMB, which is a year-on-year decrease of 5.4%, andthe total profit was 61.38 billion RMB that is a year-on-year decrease of 3.4%. The operating incomeprofit margin was 5.07%. In terms of the production volume of clothing categories, in 2023, the outputof woven clothing in regulated enterprises in the garment industry was 6.556 billion pieces, a year-on-year decrease of 15.01%, and the output of knitted clothing was 12.833 billion pieces, which is a year-on-year decrease of 5.08%. The decline rates increased by 9.86 and 2.84 percentage points comparedto the same period in 2022. Against this industry contex, the Company achieved operating income of767 million RMB in 2023, a decrease of approximately 19.13% compared to last year; net profit was85 million RMB, a decrease of approximately 49.28% year-on-year. The company's operating incomeprofit margin was 13.54%.The decrease of the company's operating income and total profit is mainly due to: (1) The downturn inthe garment and apparel consumer market, and there is a year-on-year decline in the transaction volumeof clothing and apparel categories on Alibaba's platform according to the announcement analysis,
indicating an unfavorable environment for the company; (2) The temperature dropped later in the fourthquarter, which resulting in relatively insufficient inventory of autumn and winter products and a salesfalling short of expectations; (3) Intensified competition among sellers on retail platforms negativelyimpacting operating profit margins; (4) As there is an increase in the average inventory age, the loss ofinventory price calculated according to the age structure of the warehouse also increases accordingly,based on the principle of prudence; (5) In mid-2023, Shanghai Rumere purchased an office building tofacilitate the implementation of the "Design and Research Center Construction Project" financed bycapital raising projects and for the company's daily operation, resulting in a significant increase indepreciation expense compared to last year.From the perspective of the domestic market, China's stabilized and improving economy has createdfavorable conditions and foundations for consumption recovery. With a GDP growth target of around5% in 2024, we anticipate the recovery trend in the apparel and fashion market. Over a longer horizon,due to the continuous decline in total population and the proportion of the young, the long-termdevelopment of the retail industry, including the apparel and fashion sector, increasingly relies on thecompany's product innovation capability and expectation of consumer income growth. Therefore, webelieve that enhancing product innovation and customer service capability continuously will be thefundamental direction of business competition strategy in the new normal.We have a long-term positive outlook on China's high-quality economic development, as well as thesustained stability and prosperity of the consumer market. The pains accompanying structural reformsmay bring headwinds to some industries and companies in the short term, but in the broader economiclandscape, adverse external condition will compel companies to make strategic and tactical choicesconducive to long-term development. Leveraging business models with technological advantages,continuously improving operational capability, and enhancing overall competitiveness throughcustomer value creation will lead to sustained success over the long term.We maintain confidence in the Company's business model and core competitiveness. While conductingoperation prudently and accumulating resources actively will lead the company to achieve long-termhigh-quality development. During the reporting period, the Company invested 280 million RMB topurchase Building 4 of Shanghai Wanyuan City, aiming to advance the construction of the "Design andResearch Center Project" and the "Exhibition Center Construction Project." The Company's firstflagship store will be established here, which will facilitate the construction of multi-level marketingchannel, bring new customer flows, broaden communication channel with consumers, and enhance fanshopping experiences. Additionally, the company continues to optimize product planning, design, and
supply chain management, select high-end materials globally to provide consumers with a rich andcost-effective range of clothing. In terms of materials, the company has continuously introducedpremium materials from Italy, such as high-end cashmere, Danish mink, Spanish Lagone, Turkishdenim, Japanese vinegar, etc. Especially with the rise of the "New Chinese Style," the company hasestablished close cooperation with a well-known supplier of "intangible cultural heritage" Songbrocade in Suzhou, developing a series of New Chinese Style clothing. And for the accessories, a newhigh-end jewellery line has been developed, with the Aus White and AKOYO series achievingsatisfactory sales. Thirdly, we have continuously strengthened competitive advantages, gatheringoutstanding talent, and improved operational efficiency, which made the Comapany ranke among thetop three in the "Operating Income Profit Margin" list of the Chinese Clothing Association for the pasttwo years. The company's modern manufacturing service base project has put intelligent manufacturingand logistics distribution workshops into use, which further enhanced the company's delivery operationcapability and automation level. Dynamic inventory management system and customized clothingpattern design software have been launched, in line with the continuous iteration and upgrade of thecompany's own business, have further enhanced the company's digital management level. Fourthly, weseized strategic opportunity and utilized market fluctuation actively, which made us increase thefrequency of live commerce, expande the team. Fifthly, the Company’s prudently managing financialassets has created long-term value for investors.
2. Revenue and cost
(1) Composition of revenue
Composition of revenue
Unit: RMB
| 2023 | 2022 | YoY changes | |||
| Amount | Proportion in revenue | Amount | Proportion in revenue | ||
| Total revenue | 767,316,817.65 | 100% | 948,811,767.71 | 100% | -19.13% |
| By industry | |||||
| Clothing | 765,889,176.04 | 99.81% | 946,278,717.99 | 99.73% | -19.06% |
| Other businesses | 1,427,641.61 | 0.19% | 2,533,049.72 | 0.27% | -43.64% |
| By product | |||||
| Tops | 243,946,736.80 | 31.79% | 328,029,179.28 | 34.57% | -25.63% |
| Coats | 155,188,755.89 | 20.22% | 217,453,325.21 | 22.92% | -28.63% |
| Pants | 128,129,350.33 | 16.70% | 153,682,693.10 | 16.20% | -16.63% |
| Skirts and dresses | 110,771,808.93 | 14.44% | 113,325,747.28 | 11.94% | -2.25% |
| Fur | 42,407,445.65 | 5.53% | 69,462,339.95 | 7.32% | -38.95% |
| Jewel | 36,559,618.62 | 4.76% | — | — | — |
| Others | 48,885,459.82 | 6.37% | 64,325,433.17 | 6.78% | -24.00% |
| Other businesses | 1,427,641.61 | 0.19% | 2,533,049.72 | 0.27% | -43.64% |
| By region | |||||
| East China | 375,073,498.97 | 48.88% | 460,992,533.23 | 48.59% | -18.64% |
| North China | 129,646,567.04 | 16.90% | 163,440,527.42 | 17.23% | -20.68% |
| Southwest China | 68,750,116.02 | 8.96% | 86,722,866.43 | 9.14% | -20.72% |
| Southern China | 65,698,489.51 | 8.56% | 73,592,409.08 | 7.76% | -10.73% |
| Central China | 62,784,048.46 | 8.18% | 80,489,346.66 | 8.48% | -22.00% |
| Northeast China | 34,238,605.61 | 4.46% | 45,396,886.89 | 4.78% | -24.58% |
| Northwest China | 29,671,725.40 | 3.87% | 35,560,601.61 | 3.75% | -16.56% |
| Others | 26,125.03 | 0.00% | 83,546.67 | 0.01% | -68.73% |
| Other businesses | 1,427,641.61 | 0.19% | 2,533,049.72 | 0.27% | -43.64% |
| By sales model | |||||
| Online | 767,316,817.65 | 100.00% | 948,811,767.71 | 100.00% | -19.13% |
(2) Industries, products, regions, or sales models that accounded for over 10% of theCompany’s revenue or operating profit? Applicable □ Not applicable
Unit: RMB
| Revenue | Cost of revenue | Gross profit margin | YoY changes of revenue | YoY changes cost of revenue | YoY changes of gross profit margin | |
| By industry | ||||||
| Clothing | 765,889,176.04 | 465,928,820.89 | 39.16% | -19.06% | -17.23% | -1.35% |
| By product | ||||||
| Tops | 243,946,736.80 | 151,442,730.18 | 37.92% | -25.63% | -25.11% | -0.43% |
| Coats | 155,188,755.89 | 93,181,528.92 | 39.96% | -28.63% | -27.41% | -1.01% |
| Pants | 128,129,350.33 | 72,666,603.55 | 43.29% | -16.63% | -12.21% | -2.85% |
| Skirts and dresses | 110,771,808.93 | 66,497,040.68 | 39.97% | -2.25% | -2.37% | 0.07% |
| Fur | 42,407,445.65 | 27,751,253.04 | 34.56% | -38.95% | -38.23% | -0.76% |
| Jewel | 36,559,618.62 | 24,140,594.44 | 33.97% | |||
| Others | 48,885,459.82 | 30,249,070.08 | 38.12% | -24.00% | -17.20% | -5.09% |
| By region | ||||||
| East China | 375,073,498.97 | 228,587,579.85 | 39.06% | -18.64% | -16.85% | -1.30% |
| North China | 129,646,567.04 | 78,021,028.51 | 39.82% | -20.68% | -18.74% | -1.43% |
| Southwest China | 68,750,116.02 | 42,101,519.70 | 38.76% | -20.72% | -18.94% | -1.35% |
| Southern China | 65,698,489.51 | 39,920,667.82 | 39.24% | -22.00% | -8.54% | -1.45% |
| Central China | 62,784,048.46 | 38,570,160.29 | 38.57% | -10.73% | -20.29% | -1.32% |
| Northeast China | 34,238,605.61 | 20,831,672.56 | 39.16% | -24.58% | -22.77% | -1.42% |
| Northwest China | 29,671,725.40 | 17,882,320.29 | 39.73% | -16.56% | -14.84% | -1.22% |
| Others | 26,125.03 | 13,871.87 | 46.90% | -68.73% | -69.61% | 1.53% |
| By sales model | ||||||
| Online sales | 765,889,176.04 | 465,928,820.89 | 39.16% | -19.06% | -17.23% | -1.35% |
Where the statistical standards for the Company’s principal business data were adjusted in the reportingperiod, principal business data of the Company in the recent year adjusted as per statistical standardsat the end of the reporting period
□ Applicable ? Not applicable
(3) Whether the Company’s goods sales income is greater than the labor service income? Yes □ No
| Industry | Item | Unit | 2023 | 2022 | YoY changes |
| Clothing | Sales volume | (in 10,000 pcs) | 223.79 | 259.49 | -13.76% |
| Production volume | (in 10,000 pcs) | 228.98 | 265.75 | -13.83% | |
| Products in stock | (in 10,000 pcs) | 114.03 | 114.10 | -0.06% |
Reasons for YoY changes of relevant data over 30%
□ Applicable ? Not applicable
(4) Performance of major sales contracts and major procurement contracts already signed bythe Company as of the end of the reporting period
□ Applicable ? Not applicable
(5) Composition of cost of revenue
Product classification
Unit: RMB
| Product | Item | 2023 | 2022 | YoY changes | ||
| Amount | Proportion in cost of revenue | Amount | Proportion in cost of revenue | |||
| Tops | Operating cost | 151,442,730.18 | 32.50% | 202,220,530.82 | 35.92% | -25.11% |
| Coats | Operating cost | 93,181,528.92 | 20.00% | 128,369,290.11 | 22.80% | -27.41% |
| Pants | Operating cost | 72,666,603.55 | 15.60% | 82,771,023.17 | 14.70% | -12.21% |
| Skirts and dresses | Operating cost | 66,497,040.68 | 14.27% | 68,111,675.60 | 12.10% | -2.37% |
| Fur | Operating cost | 27,751,253.04 | 5.96% | 44,928,447.32 | 7.98% | -38.23% |
| Jewel | Operating cost | 24,140,594.44 | 5.18% | — | — | — |
| Others | Operating cost | 30,249,070.08 | 6.49% | 36,533,152.38 | 6.49% | -17.20% |
(6) Whether there are changes to the consolidated scope during the reporting period
□Yes ?No
(7) Whether there are significant changes or adjustments to the Company’s businesses,products or services during the reporting period
□ Applicable ? Not applicable
(8) Major customers and suppliers
Major customers of the Company
| Total sales to the top five customers (RMB) | 3,429,370.74 |
| Proportion of sales to top five customers in total annual sales | 0.45% |
| Proportion of sales to related party among the top five customers in total annual sales | 0.00% |
Information of the top five customers of the Company
| No. | Name of customer | Sales amount (RMB) | Proportion in total annual sales |
| 1 | Customer A | 956,315.33 | 0.12% |
| 2 | Customer B | 737,783.32 | 0.10% |
| 3 | Customer C | 654,447.20 | 0.09% |
| 4 | Customer D | 559,592.55 | 0.07% |
| 5 | Customer E | 521,232.34 | 0.07% |
| Total | -- | 3,429,370.74 | 0.45% |
Other description of major customers
□ Applicable ? Not applicable
Major suppliers of the Company
| Total purchase amount from the top five suppliers (RMB) | 44,739,799.13 |
| Proportion of the total purchase amount from the top five suppliers in total annual purchase amount | 9.47% |
| Proportion of purchase amount from related parties among the top five suppliers in total annual purchase amount | 0.00% |
Information of the top five suppliers of the Company
| No. | Name of supplier | Purchase amount (RMB) | Proportion in total annual purchase amount |
| 1 | Supplier A | 11,052,956.49 | 2.34% |
| 2 | Supplier B | 9,311,845.12 | 1.97% |
| 3 | Supplier C | 8,218,037.49 | 1.74% |
| 4 | Supplier D | 8,206,305.48 | 1.74% |
| 5 | Supplier E | 7,950,654.55 | 1.68% |
| Total | -- | 44,739,799.13 | 9.47% |
Other description of major suppliers
□ Applicable ? Not applicable
3. Expenses
Unit: RMB
| 2023 | 2022 | YoY changes | Description of significant changes | |
| Selling and distribution expenses | 112,694,426.94 | 124,929,882.78 | -9.79% | |
| General | 46,136,415.37 | 37,502,995.96 | 23.02% | The main reason for the |
| and administrative expenses | increase in depreciation expenses is the commissioning of the Shanghai office building, which is part of the Phase I of the modern service industry base project. | |||
| Finance costs | -8,040,892.05 | -8,135,107.69 | -1.16% | |
| R&D expenses | 20,470,389.61 | 20,266,745.83 | 1.00% |
4. R&D investment
? Applicable □ Not applicable
| Name of key R&D projects | Objective | Progress | Expected goals | Expected impact on our future development |
| Clothing design and R&D | To develop a variety of product styles that follow current trends and consumer preferences based on the brand style and concept, and to comprehensively improve our brand image and product competitiveness | Ongoing | By continuing to innovate in design and merchandising, to form a model featuring frequent online provision of new products and large numbers of SPUs to enhance customer loyalty and lay a solid foundation for brand image and customer base. | Continuously improve our brand influence and core product competitiveness |
| Information technology improvement | To strengthen our capabilities in the management of design, procurement, production, warehousing, logistics, sales, and after-sales service and to improve the overall management of our information technologies by establishing an information management system to support our future business development | Ongoing | To set up an information management system that fits the full business process in our new retail business model to help improve operating efficiency | Realize refined management, help improve operating efficiency, and continuously improve our competitiveness |
R&D personnel
| 2023 | 2022 | Change | |
| Number of R&D personnel | 70 | 67 | 4.48% |
| Proportion of R&D personnel | 15.66% | 15.06% | 0.60% |
| Education background of R&D personnel | |||
| Bachelor’s degree | 20 | 18 | 11.11% |
| Master’s degree | 4 | 4 | 0.00% |
| Associate degree | 15 | 13 | 15.38% |
| Others | 31 | 32 | -3.13% |
| Age range of R&D personnel | |||
| Under 30 years old | 10 | 17 | -41.18% |
| 30-40 years old | 35 | 26 | 34.62% |
| Above 40 years old | 25 | 24 | 4.17% |
R&D investment amount and its proportion to operating income in the past three years:
| 2023 | 2022 | 2021 | |
| R&D investment amount (RMB) | 20,470,389.61 | 20,266,745.83 | 13,821,826.16 |
| Proportion of R&D investment to operating income | 2.67% | 2.14% | 1.58% |
| Amount of capitalized R&D expenses (RMB) | - | - | - |
| Proportion of capitalized R&D expenses to R&D investment | - | - | - |
| Proportion of capitalized R&D expenses to current net profit | - | - | - |
Reason for and impact of marked changes in the composition of the Company’s R&D personnel
□ Applicable ? Not applicable
Reason for marked changes in the proportion of R&D investment in total revenue over the last year
□ Applicable ? Not applicable
Reason for marked changes in the proportion of capitalized R&D investment and its reasonableexplanation
□ Applicable ? Not applicable
5. Cash flow
Unit: RMB
| Item | 2023 | 2022 | YoY changes |
| Sub-total of cash inflow from operating activities | 891,874,223.20 | 1,090,880,492.87 | -18.24% |
| Sub-total of cash outflow from operating activities | 899,218,450.27 | 965,571,472.21 | -6.87% |
| Net cash flows from operating activities | -7,344,227.07 | 125,309,020.66 | -105.86% |
| Subtotal of cash inflows from investing activities | 5,388,499,419.51 | 5,998,982,635.85 | -10.18% |
| Sub-total of cash outflows from investing activities | 5,292,443,769.92 | 6,308,601,094.72 | -16.11% |
| Net cash flows from investing activities | 96,055,649.59 | -309,618,458.87 | -131.02% |
| Subtotal of cash outflows from financing activities | 85,402,161.72 | 43,796,832.37 | 95.00% |
| Net cash flows from financing activities | -85,402,161.72 | -43,796,832.37 | 95.00% |
| Net increase / (decrease) in cash and cash equivalents | 3,309,260.80 | -228,106,270.58 | -101.45% |
Major influencing factors for significant YoY changes in relevant data
? Applicable □ Not applicable
1. The reasons for a significant decline in net cash flow from operating activities compared to theprevious include the year-on-year contraction of the company's sales gross margin, compounded by theexpansion of the new jewellery business, which has a long procurement cycle for raw material pearls.
2. The reasons for the change in net cash flow from investing activities include the Company’s cashmanagement of idle funds and its subscription and redemption of wealth management products duringthe Reporting Period.
3. The reason for a significant increase in net cash outflow from financing activities is the distributionof cash dividends to shareholders during the Reporting Period.
4. The reasons for a significant increase in net increase in cash and cash equivalents compared to thesame period of previous year include increased collected payments for sales, subscription andredemption of wealth management products, cash dividends and other factors during the ReportingPeriod.Reasons for significant difference between net cash flow from operating activities during the ReportingPeriod and net profit for current year? Applicable □ Not applicableMainly due to the increase in the proportion of spot stock in the Reporting Period, and the increasein inventory.V. Analysis of Non-principal Businesses? Applicable □ Not applicable
Unit: RMB
| Amount | Proportion in total profit | Description | Whether it is sustainable | |
| Income of investment | 38,061,196.16 | 36.64% | Cash management of idle fund | Yes |
| Gains/(losses) from changes in fair values | 9,736,672.14 | 9.37% | Cash management of idle fund | Yes |
VI. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
| End of 2023 | Beginning of 2023 | Proporti | Description of |
| Amount | Proportion in total assets | Amount | Proportion in total assets | on changes | significant changes | |
| Cash and cash equivalents | 150,353,208.66 | 5.64% | 442,675,454.71 | 16.32% | -10.68% | Mainly consisting of financial products purchased with idle self-owned funds |
| Inventory | 393,717,469.09 | 14.76% | 361,661,336.69 | 13.33% | 1.43% | |
| Fixed assets | 431,839,182.13 | 16.19% | 178,412,503.35 | 6.58% | 9.61% | Caused by Shanghai Rumere’s purchasing real estate |
| Construction in progress | 53,331,524.63 | 2.00% | 52,063,773.07 | 1.92% | 0.08% | |
| Right-of-use assets | 1,029,642.86 | 0.04% | 1,194,865.27 | 0.04% | 0.00% | |
| Financial assets held-for-trading | 1,368,674,089.95 | 51.30% | 1,318,197,593.83 | 48.59% | 2.72% | |
| Deferred Tax Assets | 39,308,918.26 | 1.47% | 28,995,779.03 | 1.07% | 0.40% | Mainly due to the increase in deductible temporary differences caused by the provision for inventory price decline |
| Non-current Assets Maturing within One Year | - | - | 151,075,205.48 | 5.57% | -5.57% | Due to the maturity and redemption of the company's wealth management products |
| Non-current assets maturing within one year | 132,030,082.19 | 4.95% | 100,115,890.41 | 3.69% | 1.26% | Mainly caused by the wealth management products with a maturity of more than one year |
| Other current financial assets | 21,135,612.09 | 0.79% | 241,481.62 | 0.01% | 0.78% | Input tax credit amount by Shanghai Rumere’s purchasing real estate |
| Accounts payable | 58,163,158.46 | 2.18% | 93,606,271.18 | 3.45% | -1.27% | Due to the payment of accounts payable of the project |
| Tax payable | 17,882,840.82 | 0.67% | 28,953,139.67 | 1.07% | -0.40% | Affected by the decline in income, the income tax payable at the end of the current period is lower than that at the end of the previous period |
High proportion of overseas assets
□ Applicable ? Not applicable
2. Assets and liabilities measured at fair value
? Applicable □ Not applicable
Unit: RMB
| Item | Beginning balance | Gain or loss on fair value changes recognized in the Reporting Period | Accumulated gain or loss on fair value changes recognized in equity | Provision for impairment recognized in the Reporting Period | Purchase amount in the Reporting Period | Sales amount in the Reporting Period | Other changes | Ending balance |
| Financial assets | ||||||||
| 1. Financial assets held-for-trading (excluding derivative financial assets) | 1,318,197,593.83 | 41,500,421.09 | - | - | 4,840,010,000.00 | 4,831,033,924.97 | 1,368,674,089.95 | |
| 2. Other none-current finantial assets | 251,191,095.89 | 12,102,102.77 | - | - | 131,950,000.00 | 263,213,116.47 | 132,030,082.19 | |
| Others | 1,569,388,689.72 | 53,602,523.86 | - | - | 4,971,960,000.00 | 5,094,247,041.44 | 1,500,704,172.14 | |
| Total of the above | 1,569,388,689.72 | 53,602,523.86 | - | - | 4,971,960,000.00 | 5,094,247,041.44 | 1,500,704,172.14 | |
| Financial liabilities | ||||||||
Other changesNoWhether there was any significant change in the measurement attributes of our major assets during theReporting Period?
□Yes ?No
3. Restriction of asset rights at the end of the reporting period
Not applicable.VII. Analysis of Investment
1. Overviw
? Applicable □ Not applicableRumere Modern Manufacturing Service Base, one of our projects under construction, broke ground onMarch 15, 2021. In this project, three intelligent manufacturing, logistics and distribution workshopsin Phase I were officially put into operation in the second half of 2022; the foundations of Phase II wasconstructed, and this phase was expected to be put into operation in Mid-2024.
| Investment amount during the Reporting Period (RMB) | Investment amount during the same period of previous year (RMB) | Change |
| 257,108,421.57 | 87,603,230.20 | 193.49% |
2. Major equity investment during the reporting period
? Applicable □ Not applicable
Unit: 10,000 RMB
| Name of the invested company | Main business | Mode of investment | Amount pof | Shareholding ratio | Source of fund | Partner | Investment period | Type of product | Progress as at balance sheet date | Expected income | Investment profit and loss in the current period | Whether the lawsuit is involved or not | Date of disclosure (if any) | Disclosure index (if any) |
| Jiangsu Suhao International Group Co., Ltd. | Import and export of silk, clothing | others | 7695 | 4.88% | Own fund | Not applicable | Not applicable | Not applicable | Completed the purchase | — | - | No | November 30, 2023 | 2023-038 |
| Total | -- | -- | 7695 | -- | -- | -- | -- | -- | -- | — | - | -- | -- | -- |
3. Major non-equity investment during the reporting period
? Applicable □ Not applicable
Unit: RMB
| Project name | Investment method | Whether it was an investment in fixed assets | Involved industry | Investment amount during the Reporting Period | Cumulative actual investment amount as of the end of the Reporting Period | Source of funds | Project progress | Expected returns | Cumulative realized returns as of the end of the Reporting Period | Reasons for failure to reach planned progress and expected returns | Disclosure date (if any) | Disclosure index (if any) |
| Modern Manufacturing Service Base Project | Self-construction | Yes | Clothing | 33,027,259.95 | 211,527,912.14 | Fundraising | 51.01% | Not applicable. | Not applicable. | |||
| Total | -- | -- | -- | 33,027,259.95 | 211,527,912.14 | -- | -- | -- | -- | -- |
4. Financial assets investment
(1) Security Investment
? Applicable □ Not applicable
Unit:10,000 RMB
| Type | Stock code | Stock abbreviation | Initial investment cost | Accounting measurement model | Beginning book value | Gain or loss on fair value changes recognized in the Reporting Period | Accumulated gain or loss on fair value changes recognized in equity | Purchase amount in the Reporting Period | Sales amount in the Reporting Period | Gains or losses during the Reporting Period | Ending book value | Accounting item | Source of funds |
| Others | Not applicable. | Not applicable. | 93,300 | Fair value measurement | 93,704 | 2,794 | - | 279,500 | 289,406 | 2,794 | 86,592 | Trading financial assets | Fundraising |
| Others | Not applicable. | Not applicable. | 32,500 | Fair value measurement | 33,082 | 681 | - | 100,501 | 118,262 | 681 | 16,002 | Trading financial assets | Self-owned funds |
| Trust product | Not applicable. | Not applicable. | 5,000 | Fair value measurement | 5,033 | 675 | - | 104,000 | 75,435 | 675 | 34,273 | Trading financial assets | Self-owned funds |
| Trust product | Not applicable. | Not applicable. | 25,000 | Fair value measurement | 25,120 | 1,210 | - | 5,500 | 26,322 | 1,210 | 5,508 | Other non-current financial assets | Self-owned funds |
| Total | 155,800 | -- | 156,939 | 5,360 | - | 489,501 | 509,425 | 5,360 | 142,375 | -- | -- | ||
| Date of the announcement of the Board of Directors for approval of investment in securities | October 25, 2023 | ||||||||||||
| Date of the announcement of the Board of Shareholders for approval of investment in securities (if any) | November 17, 2023 | ||||||||||||
(2) Derivative Investment
□ Applicable ? Not applicable
The Company did not invest in derivatives during the reporting period.
5. Use of proceeds
? Applicable □ Not applicable
(1) Overall use of proceeds
? Applicable □ Not applicable
Unit: RMB 10,000
| Year of fundraising | Fundraising method | Total amount of raised funds | Net amount of raised funds | Total amount of raised funds used in the Reporting Period | Cumulative total amount of raised funds used | Total amount of raised funds which were used for other | Cumulative total amount of raised funds which were used | Proportion of cumulative total amount of raised funds which were used for | Total amount of raised funds unused | Purpose and allocation of raised funds unused | Amount of raised funds idle for more than two years |
| purposes during the Reporting Period | for other purposes | other purposes | ||||||||||
| 2021 | Issuance of new shares | 189,012 | 173,268 | 8,818 | 92,387 | 87,568 | Some of raised funds unused and temporarily idle were used to purchase wealth management products provided by banks, and the rest were stored in a special account | |||||
| Total | -- | 189,012 | 173,268 | 8,818 | 92,387 | - | - | - | 87,568 | -- | - | |
| Description on overall use of proceeds | ||||||||||||
| Approved by Shenzhen Stock Exchange, the Company provided initial public offering of 57 million ordinary shares (A shares) in RMB at an issue price of RMB 33.16/share according to the CSRC’s Reply on Agreeing on the Initial Public Offering and Registration of the Shares of Rumere Co., Ltd. (Z.J.X.K. [2021] No. 2597), raising a total of RMB 1,890.12 million, and the actual net amount of raised funds was RMB 1,732.68 million after deducting relevant issuance expenses. Whether the above-mentioned raised funds were put in place was audited and verified by RSM China (Special General Partnership), which issued the Capital Verification Report on the Raised Funds of Rumere Co., Ltd. through Initial Public Offering (R.C.Y.Z [2021] No. 201Z0044). The Company stored the raised funds in a special account, and signed a Three-Party Supervision Agreement for Raised Funds with the sponsor institution and the bank where the special account was opened. Based on the progress of investment projects with raised funds, the Company cumulatively invested RMB 244.60 million of raised funds, and the permanent supplement to working capital with excess funds was RMB 679.27 million, and the net amount of returns and interest income from the special account for raised funds management was RMB 66,480,000 when deducting the service charge. As of December 31, 2022, the balance in the special account for raised funds totaled RMB875.68 million. The reason for the difference between the total expected balance and the actual balance was that the issue expenses of RMB 398,300 were paid from an account other than that for raised funds. | ||||||||||||
(2) Projects committed with proceeds raised
? Applicable □ Not applicable
Unit: RMB 10,000
| Promissory investment projects and allocation of excess funds | Whether any change was made to the project (including partial changes) | Total amount of promissory investment with raised funds | Adjusted total investment amount (1) | Investment amount during the Reporting Period | Cumulative investment amount as of the end of the Reporting Period (2) | Investment progress as of the end of the Reporting Period (3) = (2) / (1) | Date when the project reached the expected operational status | Benefits achieved during the Reporting Period | Cumulative benefits achieved as of the end of the Reporting Period | Whether the expected benefits were achieved | Whether there was any significant change in the feasibility of the project |
| Promissory investment projects | |||||||||||
| 1. Modern Manufacturing Service Base Project | No | 41,471.32 | 41,471.32 | 3,302.73 | 21,152.80 | 51.01% | Year 2025 | Not applicable | Not applicable | Not applicable. | No |
| 2. Design and R&D Center Construction Project | No | 4,308.20 | 4,308.20 | 2,812.25 | 2,812.25 | 65.28% | Year 2025 | Not applicable | Not applicable | Not applicable. | No |
| 3. Information Technology Improvement Project | No | 5,023.46 | 5,023.46 | 153.86 | 281.93 | 9.18% | Year 2025 | Not applicable | Not applicable | Not applicable. | No |
| 4. Exhibition Center Construction Project | No | 9,252.71 | 9,252.71 | 33.60 | 33.60 | 0.36% | Year 2025 | Not applicable | Not applicable | Not applicable. | No |
| Subtotal of promissory investment projects | -- | 60,055.69 | 60,055.69 | 6,328.03 | 24,460.03 | -- | -- | Not applicable | Not applicable | -- | -- |
| Allocation of excess funds | |||||||||||
| Excess funds with undecided purpose | No | 11,321.40 | 11,321.40 | ||||||||
| Supplementary working capital (if any) | -- | 101,890.80 | 101,890.80 | 2,490.00 | 67,927.20 | 66.67% | -- | -- | -- | -- | -- |
| Subtotal of allocated excess | -- | 113,212.20 | 113,212.20 | 2,490.00 | 67,927.20 | -- | -- | -- | -- | ||
| funds | |||||||||||
| Total | -- | 173,267.89 | 173,267.89 | 8,818.03 | 92,387.23 | -- | -- | -- | -- | ||
| Explanation of why the planned progress and expected benefits were not achieved for each project (including reasons for selecting “not applicable” for “whether the expected benefits were achieved”) | The implementation of the Design and R&D Center Construction Project, the Information Technology Improvement Project, and the Exhibition Center Construction Project has been affected by objective factors such as domestic macroeconomic environment and market conditions, resulting in a delay in investment progress compared to expectations, and failure to reach the planned usable state within the planned time frame. In light of these circumstances, the Proposal on Re-evaluating Some Investment Projects with Raised Funds and Changing Implementation Methods, Implementers, Internal Investment Structures, and Postponement was reviewed and approved at the Fourth Meeting of the Second Board of Directors, The fourth meeting of the second session of the Supervisory Board and General meeting of shareholders in 2022, and it is agreed that, taking into account the actual construction and investment progress of current projects, the desired usable date of the aforementioned projects will be extended to October 2025. There are many uncontrollable factors in the construction process, including the long construction period, its large workload, and the domestic macroeconomic environment during the construction process, so the Modern Manufacturing Service Industry Base Project is delayed. In light of these circumstances, the ‘Proposal on the Postponement of the Modern Manufacturing Service Industry Base Projec’ was reviewed and approved at the Eighth Meeting of the Second Board of Directors and the Seventh meeting of the second session of the Supervisory Board. | ||||||||||
| Significant changes in the feasibility of the project | Not applicable. | ||||||||||
| Amount, purpose, and use of excess funds | Applicable | ||||||||||
| In October 2021, the Company actually raised net funds of RMB 1,732.6789 million by public offering of stocks, including excess funds of RMB 1,132.122 million. 1. On November 15, 2021, the 10th meeting of the 1st Board of Directors and the 10th meeting of the 1st Board of Supervisors were held; on December 3, 2021, the 2nd extraordinary general meeting of shareholders in 2021 was held, at which the Proposal on the Permanent Supplement to Working Capital with Part of Excess Funds was approved, agreeing that the Company could use part of the excess funds, i.e. RMB 339.636 million, as the permanent supplement to working capital. Please refer to the Announcement on the Permanent Supplement to Working Capital with Part of Excess Funds (Announcement No.: 2021-004) disclosed by the Company on www.cninfo.com.cn on November 16, 2021. 2. On October 26, 2022, the 3rd meeting of the 2nd Board of Directors and the 3rd meeting of the 2nd Board of Supervisors were held; on November 15, 2022, the first extraordinary general meeting of shareholders in 2022 was held, at which the Proposal on the Permanent Supplement to Working Capital with Part of Excess Funds was approved, agreeing that the Company could use part of excess funds, i.e. RMB 339.636 million, as the permanent supplement to working capital. Please refer to the Announcement on the Permanent Supplement to Working Capital with Part of Excess Funds (Announcement No.: 2022-034) disclosed by the Company on www.cninfo.com.cn on October 27, 2022. 3. On October 24, 2023, the 6th meeting of the 6th Board of Directors and the 3rd meeting of the 2nd Board of Supervisors were held; on November 17, 2023, the first extraordinary general meeting of shareholders in 2023 was held, at which the Proposal on the Permanent Supplement to Working Capital with Part of Excess Funds was approved, agreeing that the Company could use part of excess funds, i.e. RMB 339.636 million, as the permanent supplement to working capital. Please refer to the Announcement on the Permanent Supplement to Working Capital with Part of Excess Funds (Announcement No.: 2023-031) disclosed by the Company on www.cninfo.com.cn on October 25, 2023. As of December 31, 2023, the cumulative amount of excess funds used to permanently supplement working capital was | |||||||||||
| RMB 679.272 million. As of the date when the Report was disclosed, the cumulative amount of excess funds used to permanently supplement working capital was RMB 679.272 million. | |
| Changes in the implementation location of the investment projects with raised funds | Not applicable. |
| Adjustments in the implementation method of the investment projects with raised funds | Applicable. Please refer to the Announcement on the Permanent Supplement to Working Capital with Part of Excess Funds (Announcement No.: 2023-012) disclosed by the Company on www.cninfo.com.cn on April 26, 2023. |
| Early investment and replacement regarding the investment projects with raised funds | The company held its second board of directors' fifth meeting and the second supervisory board's fifth meeting on August 28, 2023, where they reviewed and passed the "Proposal on Using Self-Raised Funds to Pay Part of the Investment Project Funds and Subsequently Replace Them with an Equivalent Amount of Fundraising Funds." It was agreed that during the implementation period of the "Design and Research and Development Center Construction Project" and the "Exhibition Center Construction Project," the company and its subsidiaries implementing the fundraising investment projects would first use their own funds to pay for the funds required for the investment projects. This mainly includes wages for staff, social insurance premiums, housing provident fund, etc., and then periodically replace them with an equivalent amount of fundraising funds. During the reporting period, the company incurred a replacement amount of 2.2055 million yuan, all of which was the company's own funds used to advance the wages, social insurance premiums, and housing provident fund for the research and design personnel involved in the Design and Research and Development Center Construction Project. |
| Temporary supplement to working capital with idle raised funds | Not applicable. |
| Amount and reasons for surplus raised funds in the | Not applicable. |
| implementation of the project | |
| Purpose and allocation of raised funds unused | As of December 31, 2023, the Company had used RMB 863.9 million of idle raised funds to purchase wealth management products from banks. The remaining unused raised funds are stored in a special account opened by the Company for raised funds and will be used for subsequent payments for investment projects. The Company will properly use the remaining raised funds as needed. |
| Issues or other situations in the use and disclosure of raised funds | Not applicable. |
(3) Change in the use of proceeds
□ Applicable ? Not applicable
The Company did not change the use of proceeds during the reporting period.VIII. Major Asset and Equity Sales
1. Sale of major assets
□ Applicable ? Not applicable
The Company did not sell major assets during the reporting period.
2. Sale of major equities
□ Applicable ? Not applicable
IX. Analysis of Main Holding and Joint-stock Companies
□ Applicable ? Not applicable
X. Structured entities controlled by the Company
□ Applicable ? Not applicable
XI. Outlook of the Company’s Future Development(I) Industry landscape and trend
1. The fashion retail industry has been reshaped by the rapid development of digitaleconomy, and the sustained growth of online retailing is a long-term trendAs the digital economy blooms, the retail industry has benefited from the progress and application ofonline digital technologies, and has ushered in better development opportunities. In particular, thedevelopment of 5G, Wifi and other technologies has greatly improved the speed and breadth ofinformation transmission in the mobile Internet era, and also brought more consumers to the onlineera based on information infrastructure, and the number of mobile Internet users has exceeded 1.4billion. Technological advancements have profoundly changed the way, speed, scope, and contentregarding information acquisition, and reshaped the supply chain of most industries, including theclothing industry. Online retailing’s rapid growth has become a long-term trend within the sector. Theaccelerated application of Artificial Intelligence (AI) technology has improved the efficiency of bigdata analysis and content creation.Relying on online retail platforms and eliminating the circulation process required for distributorsand offline stores, online retailing can offer more benefits to end consumers compared to conventionalstores, reflecting our strategic advantage in cost reduction.At the same time, online retailing has a vertical layout, and with the help of IT system, it can obtainreal-time feedback from end consumers, forming a business model known for fragment orders, quickresponse, and frequent launch of new products. In recent years, the live streaming economy hasdeepened the integration of online platforms and retail industry, making online retailing featured withhigher interactivity, diversity, and fewer time and space limitations. Online retailing enables directcommunication between sellers and buyers, making more efficient interaction and fluiding thetrasactions online. As a well-known online clothing brand operator in China, the Company hasworked on Taobao-based online business for more than 10 years, and actively expand the livebroadcast business in years, becoming one of practitioners who implemented reforms in the retailindustry.
2. Design and merchandising capabilities and brand image have been the corecompetitiveness in the clothing industry, and become more and more importantConsumers put greater emphasis on brand value, fashion and other factors, making the success ofonline clothing retailers more dependent on their capabilities in design and merchandising and brand
operation. Online clothing retailers consider design and merchandising as the core, properly combineavant-garde design concepts, supply of high-quality raw materials, and impressive workmanship. Bycontinuously enhancing their product strength, they can make consumers more willing to purchasetheir products. As people chase for better lifestyle and more sofisticate products, design andmerchandising capabilities and brand image will become more important. In addition, effectiveproduct promotion is another important way for us to expand our customer base and shape our brand.Operating on the digital platform, the Company can fully convey product information to potentialconsumers through online retail platforms by such means as impressive page design, product graphicsand text, short videos, and live streaming, so as to encourage them to buy our products.The Company impresses our customers with product quality, increases sales by online promotion andword-of-mouth marketing, and achieves a virtuous cycle featuring purchases by new customer andrepurchases by old customers, accumulating many loyal customers and shaping a good brand imagefor Rumere. The large number of loyal customers can reflect our comprehensive competitiveness,and is a result of continuously strengthening our brand culture through long-term fine quality andcustomer service to gain recognition and build up reputation.
3. A new model of cooperation through integration has become a trend in theclothing industryChina has seen relatively mature supply chain and supporting facilities for clothing production, anda series of mature industrial clusters have been formed in coastal areas such as Jiangsu, Zhejiang, andGuangdong, gathering a large number of yarn production, fabric and auxiliary material manufacturing,and garment manufacturing factories with decades of experience, providing downstream brandclothing retailers with qualified resources. Therefore, the Company adopts a production model thatoutsources main production activities to first-tier manufacturers and is also supported by independentproduction. In addition, the Company has maintained long-term partnership with major raw materialand processing suppliers, thereby improving the reliability of our outsourced production activities.This production model based on outsourced production enables the Company to invest superiorresources in the core skill we accumulated through years.As people can obtain more real-time information through the Internet in their daily life, the continuousimprovement of information transmission speed contributes to the globalization of fashioninformation, making fashion trends more flattened, and global fashion consumption trends areconverging at an unprecedented pace. At the same time, global clothing industry chains are graduallycoordinated, leading to a trend of global cooperation in clothing design, fabric development, brand
operation, and distribution channels. In fabric selection and product design, the Company has fullyconsidered the latest fashion trends in other countries, and established deep cooperation with high-quality fabric suppliers globally to provide consumers with differentiated products and form acompetitive advantage.
4. Mature third-party logistics enable e-retailers improve their storage anddistributing efficiencyAs the rapid development of the e-commerce industry brings a rapid growth to the warehousing andlogistics industry, a group of highly-specialized and large-sized warehousing management andlogistics distribution companies have emerged and formed a relatively open and transparent serviceand price system. Therefore, outsourcing warehousing and logistics activities to third-partyprofessionals has become a preferred choice for most e-retailers at a certain size. Additionally, asrelated industries gradually mature, this trend of outsourcing warehousing and logistics process toprofessional service providers in the e-commerce industry is expected to continue in the future.BEST Inc. and SF Express are both our partners, responsible for warehousing and shipping ourgarments, and for distributing and delivering our products, respectively. By working with theseprofessional warehousing management and logistics distribution companies, the Company hasimproved the management of warehousing and logistics, reduced warehousing and logistics costs,and improved overall operating efficiency.(II) Development strategyThe Company focuses on key part of in the clothing value chain as design and merchandising, supplychain management, and online retailing, and outsources warehousing, logistics, and most ofproduction activities to qualified suppliers, forming a business model featuring independent designand merchandising, controlled supply chain management, and retailing through online stores.The Company is committed to providing consumers with comfortable, fashionable, high-quality, andcost-effective products. The Company will continue to expand our business by using many years ofexperience in online clothing retailing to develop cross-category, multi-platform, and multi-channelbusinesses through the development of modern manufacturing service bases, design and R&D centers,exhibition shops, information system upgrades and the improvement of talent training mechanisms.We will expand our product categories beyond women’s wear to include women’s shoes, bags,underwear, and accessories that are favored by female consumers. At the same time, we will takeadvantage of the favorable condition that female consumers are the key decision-makers for familypurchase, increase the sales of men’s and children’s wear, and gradually launch household products,
and jewellery accessories, home textiles, and other products, making our brand a life style.People have more fragmented time and more diversified interest in the digital era, which has givenrise to many online retailing platforms such as WeChat, Tik Tok, and Xiaohongshu. As a pioneer inonline clothing retailing, the Company will cooperate with these already-established platforms andother potential emerging platforms in the medium and long term as a gradually mature and improvedbrand to realize multi-platform development, and fully utilize the characteristics of each platform toachieve synergy of marketing materials, integration of marketing communication, and optimizationof marginal utility.In addition, exhibition shops will be established as an important supplement and physical support toonline retailing, and the Company will take it as an opportunity to enhance interaction with consumers,acquire experience in online and offline combined retailing, gradually develop new markets, connectphysical shops to form a new retail model covering all channels, and enhance brand influence byimproving shopping experience.(III) Business plan
1. Strengthening live commerce and supporting team buildingRecent years, the competition among various internet platforms for traffic has become increasinglyfierce, with the primary competitive means of live commerce and content marketing. Live streamersare abundant and the internet retail vibrant. So we believe that based on current technologicalconditions and market trend, the advantages of live commerce, information dissemination, and trafficoperation will continue. During the Reporting Period, the company has increased the frequency oflive commerce and enhanced the capability of the accompanying operation team. Building on thisfoundation, we plan to further increase the frequency of live commerce and expand the scale of ourteam, integrating it organically combine with the company's product strength. And this will enable usbetter explain products and clothing combinations to consumers, which can finally expand our sales.
2. Continuously strengthening our capabilities in product design and R&DCapabilities in product design and R&D are important measures for us to enhance our corecompetitiveness. We will increase our investment in product design and R&D to improve the softwareand hardware facilities in the entire design system, and attract outstanding design talents to build adiversified design talent system. We plan to build a multi-functional innovation center that integratesproduct planning, design, and research and development to comprehensively improve our competitiveadvantage in product design and R&D. By providing more software and hardware facilities and
recruiting more talents for our team, we will break through the bottlenecks due to lack of designtalents and restricted design capacity, enhance our capabilities in design and R&D innovation, andseize the market opportunities to achieve a rapid growth in business scale and brand awarenessimprovement, and enhance our comprehensive competitiveness and market position.
3. Integration and upgrade of information systems
As a high-quality online clothing retailer, the Company has generally built up an MIS that covers allbusiness processes. With the continuous integration and innovation of traditional industries andtechnologies, and the emergence of new technologies, new demands, new models, and new businesstypes, we will continue to upgrade and transform our information systems, strengthen ourmanagement capabilities in design, procurement, production, warehousing, logistics, sales, and after-sales services via the upgrade of ERP, warehousing and logistics management platforms and suppliermanagement systems, and the construction of data centers and intelligent warehouses, and improveour overall quality of IT management to help to level up the operating efficiency.
4. Actively developing more distribution channels
Exhibition shops will be established as an important supplement and physical support to onlineretailing, and the Company will take their establishment as an opportunity to enhance interaction withconsumers offline, accumulate experience in online and offline combined retailing, gradually developnew markets, connect both to form a new retail model covering all channels, and enhance brandinfluence by improving consumer experience. According to the Company’s current businessdevelopment and strategic planning in the future, we will push forward setting up exhibition shops asappropriate according to the changes in objective conditions and our business progress.(II) Probable risks ahead of us
1. Risks caused by failure to be accurately aware of the changes in fashion trendsThe fashion clothing industry is featured with fast-changing trends and consumer preferences. Currentconsumers also have fast-changing demands for fashion trends and styles and are putting forwardmore requirements for workmanship and fabric quality of clothing products. Due to fast iteration ofproducts in the clothing industry and constant changes in popular culture and fashion trends, marketplayers need to maintain their design and merchandising capabilities and match them with popularculture and consumer preferences. If we fail to be accurately aware of the changes in fashion trends,fail to take the lead in or timely follow up on consumer preferences of the target group, or fail to maketimely and effective adjustments to product design and merchandising, we will not be able to updateor upgrade our design and merchandising capabilities to meet the fashion trends in the fierce
competition, and this may lead to weakened brand influence, decreased product sales, inventorybacklog, and profit decline, having an adverse impact on our business performance.
2. Risks caused by highly-centralized sales channels
During the Reporting Period, we realized our goals for sales revenue, and the sales revenue realizedthrough third-party platforms such as Taobao and Tmall accounted for more than 99% of our totalsales, indicating a high centralization of sales channels.Most online branded clothing retailers sell products and provide customer service through third-partye-commerce platforms. However, if these platforms experience significant changes in their ownoperations, business models, and operating strategies, or adjust related rules to make themunfavorable to merchants, it may have an adverse impact on our business performance. In addition,if the stable partnership between the Company and these third-party e-commerce platforms undergoesa significant change in the future, such change may also have an adverse impact on our businessperformance.
3. Risk of a decline in performance due to macro economy and other factorsClothing is a kind of optional consumer products, and the growth of the clothing industry is closelyrelated to the macro economy. In the long run, the changes in the population size and structure inChina will accelerate a structural change in the consumer goods market, and China has seen a trendin aging of consumer groups and a decrease in the number of young consumers. Given possible long-term slowdown in economic growth, the decrease in economic vitality will change consumers’income expectations, thereby reducing their motivation to purchase durable consumer goods,including clothing, which may affect our future performance.XII. Record forms for reception for investigators, communication, interviews and otheractivities during the Reporting Period
□ Applicable ? Not applicable
No reception for investigators, communication, interviews or other activities were conducted duringthe Reporting Period.XIII Implementation of "double improvement of quality and return"
□ Applicable ? Not applicable
Section IV Corporate Governance
I. Basic Situation of Corporate GovernanceDuring the reporting period, the Company has constantly improved its corporate governance structureand optimized its internal management systems in strict compliance with requirements of theCompany Law, the Securities Law, the Code of Corporate Governance for Listed Companies, theRules Governing the Listing of Shares on Shenzhen Stock Exchange, and other relevant laws,administrative regulations and normative rules promulgated by China Securities RegulatoryCommission (CSRC) and Shenzhen Stock Exchange (SZSE).(I) Shareholders and general meeting of shareholdersThe Company has formulated the Rules of Procedure for the General Meetings of Shareholders andimplements them strictly. During the reporting period, the Company convened five general meetingsof shareholders. The calling and convening procedures, notifications, authorizations and delegations,resolutions, deliberations and announcements of the general meeting of shareholders are all compliantwith relevant laws and regulations. In addition, all the meetings conducted voting both on site and viaInternet, so that all shareholders, especially minority shareholders, can fully exercise their rights.(II) The Company and its controlling shareholdersThe Company is independent from the controlling shareholder in terms of business, personnel, assets,institution, finance, etc. and has independent and complete business systems and independentoperation capabilities. The controlling shareholder of the Company strictly regulates his behaviors inaccordance with relevant requirements on listed companies. All major business decisions of theCompany have been made in line with standardized operating procedures, and there are nocircumstances of damaging the interests of the Company and other shareholders. The property rightsof assets between the Company and its shareholders are clearly defined. There is no situation whereassets, equities or reputation of the Company are used as guarantees for debts of shareholders, orwhere controlling shareholder and related parties embezzle funds, assets and other resources of thelisted company.(III) Directors and the Board of Directors
The Board of Directors of the Company currently comprises 5 directors, among which 2 areindependent directors. The number and composition of the Board of Directors meet requirements oflaws, regulations, and the Articles of Association. The Company organized the directors to attendrelevant training activities of regulatory authorities. Further study and familiarity with relevant lawsand regulations has effectively improved the capabilities of directors to perform their duties.Independent directors of the Company have fulfilled their duties in a serious and responsible manner.They are responsible for safeguarding the overall interests of the Company, with a special focus onthe protection of the legitimate interests of minority shareholders, and expressing independentopinions on material and important matters.(IV) Supervisors and the Board of SupervisorsThe Board of Supervisors of the Company comprises 3 supervisors, among which 1 is an employeerepresentative supervisor. The number and composition of the Board of Supervisors meetrequirements of laws, regulations, and the Articles of Association. All supervisors earnestly performtheir duties as per requirements of the Rules of Procedure of the Board of Supervisors and otherrelevant regulations, to supervise the decision-making procedures and resolutions of the Board ofDirectors and the Company’s legal operations and to effectively oversee the legality and complianceof directors, managers and other senior executives of the Company in their duty performance.(V) Information disclosure and transparencyThe Board of Directors has designated the Secretary to the Board in accordance with provisions ofthe Measures of the Company on Information Disclosure Management, who is responsible forinvestor relations management and daily information disclosure and for receiving visits andconsultations from shareholders. The Company strives to disclose information in a fair, timely,accurate and complete manner such that all shareholders may learn about information of the Companytimely and fairly.(VI) StakeholdersThe Company fully respects and safeguards the legitimate rights and interests of all stakeholdersincluding shareholders, employees, suppliers and customers. While creating the optimal profits, theCompany strives to achieve a balance of interests among the society, shareholders, employees andother relevant parties, to jointly promote its continual, sustainable development.
Whether there are significant differences between the Company’s actual status of corporate governanceand laws, administrative regulations and CSRC normative documents on the governance of listedcompanies
□Yes ?No
There was no significant differences between Company’s actual conditions and laws, administrativeregulations and CSRC normative documents on listed company governance.II. The Company’s Independence from Its Controlling Shareholders in terms of Business,Personnel, Finance, Organization, Business, etc.During the reporting period, the Company operates in strict compliance with the Company Law andthe Articles of Association. It is entirely independent from the controlling shareholder in terms ofbusiness, personnel, assets, institution, finance, etc. and has independent and complete businesssystems and independent operation capabilities.
1. In respect of assets: The Company legally owns the ownership or use rights of lands, properties,and trademark patents, and other assets relating to its current businesses.
2. In respect of personnel: Directors, supervisors and senior management of the Company have beenelected and appointed in strict accordance with provisions of the Company Law and the Articles ofAssociation. Senior management of the Company including the Chairman, General Manager, DeputyGeneral Manager, Chief Financial Officer and Board Secretary serve full-time in the Company. Theydo not hold any positions other than directors and supervisors in the controlling shareholder or actualcontroller or other companies controlled by them, nor do they receive remuneration from thecontrolling shareholder or actual controller or other companies controlled by them. Finance personnelof the Company do not moonlight in the controlling shareholder or actual controller or othercompanies controlled by them.
3. In respect of finance: The Company has set up an independent finance department equipped withfull-time financial personnel. It has also established an independent accounting system and astandardized financial management system in accordance with the Accounting Law of the People’sRepublic of China and the Accounting Standards for Business Enterprises, and is able to makedecisions relating to financial matters independently. The Company opens independent bank accounts
and files for tax returns and performs taxation obligations independently. There is no shared bankaccount with the controlling shareholder or actual controller or other companies controlled by them.
4. In respect of institution: The Company has established and improved an independent and completeorganizational structure in line with the needs of its own business development, with clear divisionof labor as well as coordination and cooperation among units and departments. Functionaldepartments are completely independent from the controlling shareholder and actual controller inrespects of personnel, office sites and management systems. The Company has put in place arelatively complete corporate governance structure in accordance with relevant laws. Generalmeetings of shareholders, the Board of Directors and the Board of Supervisors operate standardly instrict accordance with the Company Law and the Articles of Association. Moreover, the Company isalso equipped with an independent director system. Office premises of the Company are independentof those of the shareholder units, without any co-working or mixed operation.
5. In respect of bsinesse: The Company is equipped with independent R&D design, procurement,marketing and supply systems. It faces the market and operates independently, without any relianceon the controlling shareholder and other related parties for production and operation. Its businessesare also independent from the controlling shareholder and other related parties.III. Horizontal competition
□ Applicable ? Not applicable
IV. Annual General Meeting and Extraordinary General Meetings Held during the ReportingPeriod
1. Shareholder meetings during the reporting period
| Session of meeting | Type | Ratio of investor participation | Date of convening | Date of disclosure | Resolutions of the meeting |
| 2022 Annual General Meeting of Shareholders | Annual general meeting | 74.96% | May 16, 2023 | May 16, 2023 | Deliberated and approved all proposals. Details can be found in the Announcement of Resolutions of 2022 Annual General Meeting Shareholders (Announcement No: 2023-017) on CNINFO |
| (http://www.cninfo.com.cn) | |||||
| 2023 First Extraordinary General Meeting | Extraordinary general meeting of the shareholders | 74.97% | November 17, 2023 | November 17, 2023 | Deliberated and approved all proposals. Details can be found in the Announcement on Resolutions of 2023 First Extraordinary General Meeting (Announcement No: 2023-035) on CNINFO (http://www.cninfo.com.cn) |
2. Extraordinary general meetings of shareholders proposed to be convened by preferredshareholders whose voting rights were resumed
□ Applicable ? Not applicable
V. Arrangements for differentiated voting rights of the Company
□ Applicable ? Not applicable
VI. Governance of red-chip firms
□ Applicable ? Not applicable
VII. Particulars of Directors, Supervisors and Senior Management
1. Basic information
| Name | Position | Position status | Gender | Age | Start date of term of office | End date of term of office | Number of shares held at the beginning of the Period | Increase of shares during the period | Decrease of shares during the period | Other changes (shares) | Number of shares held at the end of the period | Reason for change |
| Guo Jian | Chairman | Incumbent | Male | 44 | May 16, 2019 | May 12, 2025 | 25,200,000.00 | 25,200,000.00 | ||||
| Wen Di | Director & General Manager | Incumbent | Female | 43 | May 16, 2019 | May 12, 2025 | 25,200,000.00 | 25,200,000.00 | ||||
| Yu Qingtao | Director, Deputy General Manager, Board Secretary & CFO | Incumbent | Male | 41 | May 16, 2019 | May 12, 2025 | 2,800,000.00 | 2,800,000.00 | ||||
| Zhu | Deputy | Resi | M | 41 | September | Apr 25, | 200,000.00 | 200,000.00 |
| Zhengjun | General Manager | gned | ale | 10, 2019 | 2023 | |||||||
| Fang Junxiong | Independent director | Incumbent | Male | 49 | May 16, 2019 | May 12, 2025 | ||||||
| Duan Guoqing | Independent director | Incumbent | Female | 41 | September 10, 2019 | May 12, 2025 | ||||||
| Zhang Ke | Supervisor (Employee representative supervisor) | Incumbent | Male | 36 | September 10, 2019 | May 12, 2025 | ||||||
| Qian Xiaolan | Chairman of the Board of Supervisors | Incumbent | Female | 40 | May 13, 2022 | May 12, 2025 | ||||||
| Lu Liying | Supervisor | Incumbent | Female | 46 | May 13, 2022 | May 12, 2025 | ||||||
| Total | -- | -- | -- | -- | -- | -- | 53,400,000.00 | 53,400,000.00 | -- |
Whether there is any resignation of directors and supervisors or dismissal of senior management withintheir term of office during the reporting period? Yes □ No
| Name | Position | Type | Date | Reason |
| Zhu Zhengjun | Vice General Manager | Dismissal | Apr 25, 2023 | Unable to perform the duties of deputy general manager due to personal reasons. |
2. Main working experience
Professional background, main working experience and main current responsibilities of the Company’sin-service directors, supervisors and senior managementMr. Guo Jian, born in 1980, is of Chinese nationality and has no permanent residency abroad. Mr.Guo holds a master degree from Tsinghua University. He has served multi-national company likeGlencore, British Petrol and Cargill as analyst or trader before he co-founded the Company and servedas an executive director. Since May 2019, he has been the Chairman of the Company.Ms. Wen Di, born in 1981, is of Chinese nationality and has no permanent residency abroad. Ms.Wen holds a master degree from Tsinghua University. She started the career with China Telecom and
then operated online store with the Rumere brand. In 2012, she co-founded the Company and servedas a supervisor; since May 2019, she has been the director and the General Manager of the Company.Mr. Yu Qingtao, born in 1982, is of Chinese nationality and has no permanent residency abroad. MrYu holds a master degree from Fudan University and the charter of CPA. He has served KPMG, anaudit frim, UAVM and EBA, well known PE firms and gained experieces with corporate finance andcapital market. He joined the Company in 2017 as a deputy general manager and CFO; since May2019, he has been the director, Deputy General Manager, CFO, and the Board Secretary in theCompany.Mr. Fang Junxiong, born in 1974, is of Chinese nationality and has no permanent residency abroad.Mr. Fang holds a doctor’s Degree from Fudan University. Since 2021, he has been a professor atZhejiang University of Finance and Economics; since March 2021, he has been the independentdirector of Xinjiang Xiling Information Technology Co., Ltd.; and since May 2019 and theindependent director of Caitongzhengquan Co., Ltd. since Feb 2024, he has been the independentdirector of the Company.Ms. Duan Guoqing, born in 1982, is of Chinese nationality and has no permanent residency abroad.Ms. Duan holds a master degree from Fudan University. Since 2004, she had served as a legalspecialist at Shenzhen Chenglin Sanitary Ware Co., Ltd., apprentice lawyer at Shanghai Nordi LawFirm, and lawyer at Capital Equity Legal Group; since 2014, she has been a lawyer and partner atShanghai Shenhao Law Firm; since May 2019, she has been the independent director of the Company.Mr. Zhang Ke, born in 1987, is of Chinese nationality and has no permanent residency abroad Mr.Zhang holds a high school diploma. Since 2014, he has been a business manager of the Company;since May 2019, he has been a supervisor of the Company.Ms. Qian Xiaolan, born in 1983, is of Chinese nationality and has no permanent residency abroad.Ms. Qian holds a bachelor degree. Since October 2014, she has been a product manager and businessmanager of the Company.Ms. Lu Liying, born in 1978, is of Chinese nationality and has no permanent residency abroad. Ms.Lu holds a high school diploma. Since November 2011, she has been an assistant general manager ofthe Company.
Positions in shareholder entities? Applicable □ Not applicable
| Name | Name of shareholder entity | Position held in shareholder entity | Start date of term of office | End date of term of office | Whether receiving remuneration or allowance from shareholder entity |
| Guo Jian | Suzhou Rumere Group Co., Ltd. | Executive director & General Manager | February 27, 2017 | No | |
| Wen Di | Suzhou Rumere Group Co., Ltd. | Supervisor | February 27, 2017 | No | |
| Description on position held in shareholder entity | None | ||||
Positions in other entities? Applicable □ Not applicable
| Name | Name of other entity | Position held in other entity | Start date of term of office | End date of term of office | Whether receiving remuneration or allowance from other entity |
| Guo Jian | Shanghai Rumere Model Agency Co., Ltd. | Executive director | January 6, 2020 | No | |
| Wen Di | Shanghai Rumere Model Agency Co., Ltd. | Supervisor | January 6, 2020 | No | |
| Yu Qingtao | Shanghai Yinzhi Cultural Communication Co., Ltd. | Supervisor | October 28, 2019 | No | |
| Fang Junxiong | Zhejiang University of Finance and Economics | Professor | August 1, 2021 | Yes | |
| Fang Junxiong | Xinjiang Xiling Information Technology Co., Ltd. | Independent director | March 26, 2021 | Yes | |
| Fang Junxiong | Caitongzhengquan Co., Ltd | Independent director | Feb 23, 2024 | Yes |
| Duan Guoqing | Shanghai Shenhao Law Firm | Partner | September 1, 2014 | Yes |
Penalties by regulatory authorities on the Company’s directors, supervisors and senior managementboth incumbent and resigned during the reporting period in the last three years
□ Applicable ? Not applicable
3. Remuneration of directors, supervisors, and senior managementProcedures and basis for determining the remuneration of directors, supervisors and seniormanagement and actual paymentFor the remuneration and appraisal of directors, the Remuneration and Review Committee proposesthe program, which is then submitted to the general meeting of shareholders for approval. For theremuneration and appraisal of supervisors, the Board of Supervisors proposes the program, which isthen submitted to the general meeting of shareholders for approval. For the remuneration and appraisalof senior management, the Remuneration and Review Committee proposes the program, which is thensubmitted to the Board of Directors for approval.The annual allowance for independent directors is determined after being reviewed and approved bythe general meeting of shareholders.During the reporting period, remunerations of directors, supervisors and senior management of theCompany are reasonable and paid in time, which are consistent with requirements of regulatoryauthorities and relevant regulations of the Company.Remuneration of directors, supervisors and senior management of the Company during thereporting period
Unit: RMB 10,000
| Name | Position | Gender | Age | Position status | Total remuneration before tax received from the Company | Whether receiving remuneration from related parties of the Company |
| Guo Jian | Chairman | Male | 44 | Incumbent | 83.14 | No |
| Wen Di | Director & General Manager | Female | 43 | Incumbent | 83.14 | No |
| Yu Qingtao | Director, Deputy General Manager, Secretary of the Board of Directors & CFO | Male | 41 | Incumbent | 180.91 | No |
| Zhu Zhengj | Deputy General Manager | Male | 41 | Resigned | 14.06 | No |
| un | ||||||
| Fang Junxiong | Independent director | Male | 49 | Incumbent | 15.14 | No |
| Duan Guoqing | Independent director | Female | 41 | Incumbent | 15.14 | No |
| Zhang Ke | Supervisor (Employee representative supervisor) | Male | 36 | Incumbent | 51.43 | No |
| Qian Xiaolan | Chairman of the Board of Supervisors | Female | 40 | Incumbent | 71.58 | No |
| Lu Liying | Supervisor | Female | 46 | Incumbent | 42.33 | No |
| Total | -- | -- | -- | -- | 556.87 | -- |
VII. Performance of Duties by Directors during the Reporting Period
1. Board meetings during the reporting period
| Session of meeting | Date of convening | Date of disclosure | Resolutions of the meeting |
| 4th Meeting of the Second Board of Directors | April 25, 2023 | April 26, 2023 | No proposal was rejected at the meeting. For details, please refer to the announcement on CNINFO (http://www.cninfo.com.cn). |
| 5th Meeting of the Second Board of Directors | August 28, 2023 | August 29, 2022 | No proposal was rejected at the meeting. For details, please refer to the announcement on CNINFO (http://www.cninfo.com.cn). |
| 6th Meeting of the Second Board of Directors | October 24, 2023 | October 25, 2023 | No proposal was rejected at the meeting. For details, please refer to the announcement on CNINFO (http://www.cninfo.com.cn). |
| 7th Meeting of the Second Board of Directors | November 24, 2023 | November 25, 2023 | No proposal was rejected at the meeting. For details, please refer to the announcement on CNINFO (http://www.cninfo.com.cn). |
2. Directors’ attendance to Board meetings and general meetings of shareholders
| Directors’ attendance to Board meetings and general meetings of shareholders | |||||||
| Name of director | Number of Board meetings required to attend during the reporting period | Number of Board meetings attended in person | Number of Board meetings attended via communication methods | Number of Board meetings attended by proxy | Number of absence | Any failure in attending in person for two consecutive meetings | Number of general shareholder meetings attended |
| Guo Jian | 4 | 4 | 0 | 0 | 0 | No | 2 |
| Wen Di | 4 | 4 | 0 | 0 | 0 | No | 2 |
| Yu Qingtao | 4 | 4 | 0 | 0 | 0 | No | 2 |
| Fang Junxiong | 4 | 4 | 0 | 0 | 0 | No | 2 |
| Duan Guoqing | 4 | 4 | 0 | 0 | 0 | No | 2 |
Explanation of failure in attending in person for two consecutive meetingsNot applicable.
3. Objections by directors to the Company’s relevant matters
Whether directors raised objections to relevant matters of the Company
□Yes ?No
Directors did not raise objections to relevant matters of the Company during the reporting period.
4. Other descriptions on directors’ performance of duty
Whether opinions from directors were adopted? Yes □ NoDescription on whether opinions from directors were adoptedDuring the reporting period, all the directors of the Company performed their duties faithfully anddiligently in strict accordance with the Company Law, the Securities Law, the Rules Governing theListing of Shares on Shenzhen Stock Exchange and other relevant laws and regulations. They paidattention to the Company’s standardized operations and reviewed various matters of the Companyscientifically and prudently, and put forward valuable, professional suggestions regarding operationsand development of the Company according to actual situations of the Company. Efforts were alsomade to actively protect the legitimate rights and interests of the Company and all shareholders.IX. Particulars of the Special Committees under the Board of Directors during the ReportingPeriod
| Name of committee | Members | Number of meetings convened | Date of convening | Contents | Important opinions and suggestions raised | Other situations of duty performance | Specifics of objections (if any) |
| 2nd Strategy Committee | Guo Jian, Wen Di, Yu | 1 | April 15, 2023 | Discussed and reviewed the Proposal on the Strategic Planning of Branches in 2022. | All the proposals were agreed. | None | None |
| Qingtao | |||||||
| 2nd Audit Committee | Fang Junxiong, Guo Jian, and Duan Guoqing | 3 | April 15, 2023 | 1. Reviewed the 2022 Internal Audit Work Report of the Company; 2. Reviewed the Proposal on the 2023 Financial Budget Report; 3. Reviewed the Proposal on the 2022 Internal Control Self-Evaluation Report; 4. Reviewed the Proposal on the 2022 Annual Report and its Summary; 5. Reviewed the Proposal on the Special Report on the Storage and Actual Use of Raised Funds in 2022; 6. Reviewed the Proposal on the 2023 Q1 Report; 7. Reviewed the Proposal on the Engagement of the Accounting Firm; 8. Reviewed the Proposal on the Expected Daily Related Party Transactions in 2023. | All the proposals were agreed. | None | None |
| August 18, 2023 | 1. Reviewed the Proposal on the Semi-annual Report 2023; 2. Reviewed the Proposal of using the company’s own fund to pay part of the fund raised for the project and subsequent replacement of the same amount of fund raised; 3. Reviewed the Proposal on the Special Report on the Storage and Actual Use of Raised Funds in the First Half of 2023 | All the proposals were agreed. | None | None | |||
| October 19, 2023 | Reviewed the Third Quarter Report 2023 | All the proposals were agreed. | None | None | |||
| 2st Remuneration and Review Committee | Duan Guoqing, Guo Jian, Yu Qingtao | 1 | April 15, 2023 | 1. Reviewed the 2022 General Manager’s Work Report; 2. Reviewed the 2022 Board of Directors’ Work Report. | All the proposals were agreed. | None | None |
X. Work of the Board of SupervisorsWhether the Board of Supervisors discovered risks in supervisory activities during the reporting period
□Yes ?No
The Board of Supervisors had no objections to supervised events during the reporting period.XI. Employees of the Company
1. Number, profession and education level of employees
| Number of in-service employees of the Parent Company at the | 328 |
| end of the reporting period | |
| Number of in-service employees of the major subsidiaries at the end of the reporting period | 119 |
| Total number of in-service employees at the end of the reporting period | 447 |
| Total number of employees receiving remuneration in the reporting period | 447 |
| Number of retired employees whose expenses are borne by the Parent Company and its major subsidiaries | - |
| Composition of professions | |
| Type of professions | Number of staff in the profession |
| Production personnel | 89 |
| Sales personnel | 217 |
| Technical personnel | 70 |
| Financial personnel | 17 |
| Administrative personnel | 28 |
| Other personnel | 26 |
| Total | 447 |
| Education level | |
| Type of education level | Number of persons |
| Postgraduates and above | 7 |
| University graduates | 92 |
| College graduates | 141 |
| Others | 207 |
| Total | 447 |
2. Remuneration policies
Remunerations of the Company should be performance-oriented and encourage and give full play tothe initiatives and innovations of employees internally, and remain competitive externally. TheCompany pays attention to both performance and position values, and adopts a flexible remunerationstructure for different sequences of positions. The remuneration base and total amount aredynamically managed in line with business performance of the Company.
3. Training program
The Company values the growth of every employee and has set up different training programs foremployees and managers based on their different professional sequence and management level.Moreover, targeted courses have been developed in combination with the results of survey on annualtraining needs, to ensure the reasonableness and effectiveness of the curriculum.
4. Labor outsourcing
? Applicable □ Not applicable
| Total working hours of labor outsourcing (h) | 105,826 |
| Total remuneration payment (RMB) | 2,423,037.67 |
XII. Profit Distribution of the Ordinary Shares and Conversion of Capital Reserve to ShareCapital of the CompanyFormulation, implementation or adjustment of profit distribution policies of ordinary shares especiallythe cash dividend plan in the reporting period? Applicable □ Not applicable(I) Principles for planning for dividend distribution to shareholdersThe Company will establish a sustainable and stable mechanism for dividend distribution to investorsto ensure the continuity and stability of the Company's profit distribution policy, and shall distributeprofits first in cash.(II) Method of dividend distribution to shareholdersThe Company may distribute profits in the form of cash or shares or both, or other methods permittedby laws and regulations.(III) Adjustment of the profit distribution plan and related decision-making mechanism
1. Conditions for distribution of cash dividends
The Company's Board of Directors shall propose a differentiated cash dividend policy in line with theprocedure under the Company's Articles of Association after a comprehensive analysis of factors such
as industrial condition, development stage, its own business mode, profitability, and major spendingarrangements.When eligible for cash dividends under the Company's Articles of Association, the Company shall, inprinciple, distribute profits in cash on a yearly basis.During the Reporting Period, the Company approved the 2023 annual profit distribution plan.
| Special explanation on cash dividend policy | |
| Whether the policy complies with provisions of the Articles of Association or requirements of the resolutions made on the shareholders’ general meeting: | Yes |
| Whether dividend standards and ratio are definite and clear: | Yes |
| Whether relevant decision-making procedure and mechanism are well-established: | Yes |
| Whether independent directors have performed duties and played their roles properly: | Yes |
The specific reason of failing to pay cash dividends, and the measures to be taken in thenext step to enhance the return level of investors:
| Not applicable. | |
| Whether minority shareholders have sufficient opportunities to express opinions and requests, and whether their legitimate rights and interests were sufficiently protected: | Yes |
| Where the cash dividend policy undergoes any adjustment or change, whether the conditions and procedures are compliant and transparent: | Not applicable. |
The profit distribution scheme implemented this time is consistent with the scheme deliberated andagreed by the shareholders’ meeting.? Yes □ No □ N/AThe Company’s profit distribution scheme implemented this time is consistent with the schemedeliberated and agreed by the shareholders’ meeting.Profit distribution and capital reserves’ conversion to share capital in the year
| Number of bonus shares for every 10 shares | 0 |
| Amount of dividend for every 10 shares (tax included) (RMB) | 4.39 |
| Number of transfer of reserve to shares per 10 shares | 0 |
| Basis of the shares for distribution proposal | 228,000,000.00 |
| Amount of cash dividends (RMB) (tax included) | 100,092,000.00 |
| Cash dividend amount in other ways (such as share repurchase) (RMB) | - |
| Total amount of cash dividends (including other ways) (RMB) | 100,092,000.00 |
| Distributable profit (RMB) | 430,348,609.93 |
| Proportion of total cash dividends (including other ways) in distributable profit | 23.26% |
| Cash dividend of the reporting period | |
| If the Company is in the mature period and there is no major capital expenditure arrangements, when the profit is distributed, the proportion of cash dividends in this profit distribution should be at least 80%. | |
| Details of the profit distribution proposal or share conversion proposal from capital reserve | |
| The Company plans to distribute a cash dividend of RMB 4.39 (tax included) for every 10 shares to all shareholders based on a total share capital of 228,000,000 shares, with a total amount of RMB 100,092,000 (tax included); no bonus shares will be issued and no capital reserve will be converted into share capital; the remaining undistributed profits will be carried forward to the next year. | |
The Company gained profit in the reporting period and the retained profit of the Parent Company forholders of ordinary shares is positive, but no plan of cash dividend is proposed.
□ Applicable ? Not applicable
XIII. Implementation of the Stock Incentive Plan, Employee Stock Ownership Plan, andOther Employee Incentives of the Company
□ Applicable ? Not applicable
XIV. Construction and Implementation of the Internal Control System during the ReportingPeriod
1. Internal control construction and implementation
In accordance with the internal control system of enterprises, the board of directors of a companyholds the responsibility to establish and improve the internal control, evaluate its effectiveness andtruthfully disclose the corresponding assessment report. The board of supervisors of a companysupervises the establishment and implementation of the internal control by the board of directors. Themanagement team is responsible for initiating and organizing daily activities of the enterprise internalcontrol. The board of directors, board of supervisors and all members thereof, including directors andsupervisors, as well as the senior management of the company, confirm that the report is true, accurateand complete, does not contain any misleading statements or material omissions and assume joint andseveral legal liability arising therefrom.
2. Particulars of material internal control defects detected during the reporting period
□Yes ?No
XV. Management and Control of the Company for Subsidiaries during the Reporting Period
| Name of company | Integration plan | Integration progress | Problems in integration | Solutions taken | Solution progress | Subsequent solution plan |
| Not applicable. | Not applicable. | Not applicable. | Not applicable. | Not applicable. | Not applicable. | Not applicable. |
XVI. Self-assessment Report on Internal Control or Internal Control Audit Report
1. Self-assessment report on internal control
| Disclosure date of the assessment report on internal control | April 24, 2024 |
| Disclosure index of the assessment report on internal control | CNINFO (http://www.cninfo.com.cn) |
Percentage of total assets of unitsincluded in the assessment scope tothe total assets in the Company’sconsolidated financial statements
| 100.00% | ||
| Percentage of total revenue of units included in the assessment scope to the revenue in the Company’s consolidated financial statements | 100.00% | |
| Defect identification criteria | ||
| Category | Financial report | Non-financial report |
| Qualitative criteria | Material defect: (1) The internal control is invalid; (2) Directors, supervisors and senior management have committed fraud and caused serious losses and severe adverse impacts to the company; (3) Significant errors in the current financial reports were identified by the certified public accountants but not by internal control; (4) The internal control and supervision conducted by the company’s audit committee and internal auditing units are invalid; (5) There exist one or a combination of control defects that may cause the company to materially deviate from the objectives of internal control. Major defect: (1) The company fails to select and apply accounting policies based on generally accepted accounting standards; (2) There are no anti-fraud procedures and control measures; (3) There is no control mechanism for significant non-routine or special transactions or the mechanism is not implemented, while there is no compensatory control; (4) There are one or multiple defects in the control of the financial reporting process at the end of the period such that the authenticity and completeness of the prepared financial reports could not be | Material defect: Its probability of occurrence is high or the defect severely reduces work efficiency or effectiveness, or severely increases the uncertainty of effects or causes severe deviations from expected objectives. Major defect: Its probability of occurrence is relatively high or the defect significantly reduces work efficiency or effectiveness, or significantly increases the uncertainty of effects or causes obvious deviations from expected objectives. General defect: Its probability of occurrence is low or the defect reduces work efficiency or effectiveness, or increases the uncertainty of effects or causes deviations from expected objectives. |
| reasonably guaranteed. General defect: Other internal control defects than material defects and major defects. | ||
| Quantitative criterion | Material defect: (1) The misstated amount ≧ 2% of the revenue; (2) The misstated amount ≧ 1% of the total assets; (3) The misstated amount ≧ 5% of the total profits. Major defects: (1) 0.5% of revenue ≦ misstated amount ﹤ 2% of revenue; (2) 0.2% of the total assets ≦ misstated amount ﹤ 1% of total assets; (3) 1% of total profits ≦ misstated amount ﹤ 5% of total profits. General defects: (1) misstated amount < 0.5% of the revenue; (2) misstated amount < 0.2% of total assets; (3) mistated amount < 1% of total profits. | Evaluation level Quantitative criteria Material defects Loss amount ≧ 5% of total profits Major defects 1% of total profits ≦ loss amount ﹤ 5% of total profits General defects Loss amount ﹤ 1% of total profits |
| Number of material defects in financial reports | 0 | |
| Number of material defects in non-financial reports | 0 | |
| Number of major defects in financial reports | 0 | |
| Number of major defects in non-financial reports | 0 | |
2. Internal control audit report
Internal control authentication report
| Audit opinions of the internal control audit report | |
| We believe that, the company maintained effective internal control over financial reporting in all material aspects in accordance with the Basic Norms for Corporate Internal Control and related regulations on December 31st, 2023. | |
| Disclosure of the internal control audit report | Disclosure |
| Disclosure date for the full text of the internal control audit report | April 24, 2024 |
| Disclosure index for the full text of the internal control audit report | 2023 Annual Self-Assessment Report on Internal Control disclosed on Securities Times, China Securities Journal and www.cninfo.com.cn by the Company |
| Type of opinion of the internal control authentication report | Standard without reserved opinion |
| Whether or not exists significant defects in non-financial reports | No |
Whether or not the accounting firm issued non-standard opinions for the audit report of internalcontrol
□Yes ?No
Whether the audit report of internal control issued by the accounting firm is in consistency with theself-assessment report of the board of directors? Yes □ No
XVII. Rectification of Detected Problems in the Corporate Governance Special Action ofListed CompaniesNot applicable.
Section V Environmental and Social Responsibilities
I. Major Environmental Protection IssuesWhether the listed company and its subsidiaries are the key pollution discharge units published bythe environmental protection department
□Yes ?No
Administrative penalties due to environmental issues during the reporting period
| Name of company or subsidiary | Reason for penalty | Violation | Penalty result | Impact on production and operation of the listed company | Rectification measures of the Company |
| Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable |
Refer to other environmental information disclosed by key pollutant discharge unitsNot applicable.Measures taken to reduce carbon emissions during the reporting period and their effects
□ Applicable ? Not applicable
Reason for not disclosing other environmental informationNot applicable.II. Corporate Social ResponsibilitiesAs a listed company, the Company places great importance on fulfilling its social responsibilities .We actively adhere to the core spirit of social responsibility and continuously monitor the company'sprogress in protecting investor rights, environmental conservation, and social welfare undertakings.While ensuring the steady development of the enterprise, we promote the coordinated developmentof the company with stakeholders, society, and the environment. For more details, please refer to the"2023 Annual Corporate Social Responsibility Report" published by the China Securities RegulatoryCommission's website (www.cninfo.com.cn)..
III. Efforts Regarding Poverty Alleviation and Rural RevitalizationThe Company did not directly engage in any poverty alleviation and rural revitalization work duringthe reporting period.
Section VI Significant Events
I. Implementation of Commitments
1. Commitments completed by actual controllers, shareholders, related parties, purchasers, orthe Company within the reporting period and commitments not fulfilled by the end of thereporting period? Applicable □ Not applicable
| Causes of commitment | Undertaking party | Type of commitment | Content of commitment | Time of commitment | Term of commitment | Fulfillment of commitment |
| IPO-related commitments | Controlling shareholder and actual controller Guo Jian, Wen Di | Restrictions on sales | 1. Within 36 months from the date of the Company's IPO, they shall not transfer or authorize any other to manage their shares directly or indirectly held in the Company or have the Company repurchase such shares. 2. If their shares in the Company are sold within two years upon expiration of the lock-up period, the selling price shall not be lower than the offering price. If the closing price of the Company's shares is lower than the offering price for 20 consecutive trading days within 6 months after the Company's IPO, or the closing price as of the end of the 6-month period after the Company's IPO is lower than the offering price, the lock-up period for their shares in the Company will be automatically extended for 6 months. | July 28, 2020 | October 28, 2021 to April 27, 2025 | Ongoing normally |
| IPO-related commitments | Yu Qingtao, Zhu Zhengjun | Restrictions on sales | 1. Within 12 months from the date of the Company's IPO, they shall not transfer or authorize any other to manage their shares directly or indirectly held in the Company or have the Company repurchase such shares. 2. If their shares in the Company are sold within two years upon expiration of the lock-up period, the selling price shall not be lower than the offering price. If the closing price of the Company's shares is lower than the offering price for 20 consecutive trading days within 6 months after the Company's IPO, or the closing price as of the end of the 6-month period after the Company's IPO is lower than the offering price, the lock-up period for their shares in the Company will be automatically extended for 6 months. | July 28, 2020 | October 28, 2021 to April 27, 2023 | Fulfilled |
| IPO-related commitments | The Company's controlling shareholders and actual controllers | Restictions to share reduction | He promises that the total share reduction in the first year upon the expiration of the lock-up period will not exceed 25% of the shares he held in the issuer before the issuance; after the reduction in the second year, his total number of shares will not be lower than 25% of the shares | July 28, 2020 | April 28, 2025 to April 27, 2027 | Ongoing normally |
| he held in the issuer before the issuance; the reduction price will not be lower than the issuance price. | ||||||
| IPO-related commitments | The Company's controlling shareholders and actual controllers | Restrictions on Not-to-compete | They promise not to compete with the Company in the same business sector. | July 28, 2020 | Long term | In the process of normal fulfillment |
| Whether commitments are fulfilled on time | Yes | |||||
| If the commitment is not fulfilled within the time limit, the specific reasons for the failure to complete the performance and the next work plan shall be explained in detail. | Not applicable | |||||
2. If there are assets or projects of the Company which have profit forecast while thereporting period is still in the forecast period, the Company should state whether the assets orprojects have attained the profit forecast and explain reasons
□ Applicable ? Not applicable
II. Appropriation of Funds for Non-operating Purposes by Controlling Shareholder and ItsRelated Parties
□ Applicable ? Not applicable
During the reporting period, the Company did not have any funds appropriated for non-operatingpurposes by the controlling shareholder and its related parties.III. External Guarantee in Violation of Prescribed Procedures
□ Applicable ? Not applicable
During the reporting period, there was no external guarantee in violation of prescribed procedures.IV. Explanation by the Board of Directors of the “Non-standard Audit Report” of the LatestPeriod
□ Applicable ? Not applicable
V. Explanation by the Board of Directors, the Board of Supervisors, and IndependentDirectors (if any) of the “Non-standard Audit Report” for the Reporting Period Issued by theAccounting Firm
□ Applicable ? Not applicable
VI. Explanation of Changes in Accounting Policies and Estimates or Correction of SignificantAccounting Errors Compared with the Financial Report of Last Fiscal Year
□ Applicable ? Not applicable
VII. Description of Changes in the Scope of Consolidated Statements Compared with theFinancial Report of Last Year
□ Applicable ? Not applicable
VIII. Employment and Dismissal of Accounting FirmAccounting firm engaged
| Name of the domestic accounting firm | RSM China (Special General Partnership) |
| Remuneration for the domestic accounting firm (RMB 10,000) | 80 |
| Consecutive years of auditing service provided by the domestic accounting firm | 5 |
| Name of domestic certified public accountants | Ye Chun, Xu Zongqing. |
| Consecutive years of auditing service provided by domestic certified public accountants | 1 year |
Whether the accounting firm was changed in the reporting period
□Yes ?No
Appointment of accounting firm, financial advisor or sponsor for internal control audit? Applicable □ Not applicable
During the reporting period, the Company employed RSM China (Special General Partnership) asthe audit agency and internal control audit agency of the Company in 2023, with a total fee of RMB800,000 (excluding VAT).IX. The Company Facing Delisting after the Disclosure of the Annual Report
□ Applicable ? Not applicable
X. Matters relating to Bankruptcy and Restructuring
□ Applicable ? Not applicable
No bankruptcy and restructuring-related matters of the Company happened during the reportingperiod.XI. Material Litigations and Arbitrations
□ Applicable ? Not applicable
There were no material litigations or arbitrations during the reporting period.XII. Penalties and Rectifications
□ Applicable ? Not applicable
No penalties and rectifications of the Company occurred during the reporting period.XIII. Integrity Records of the Company and its Controlling Shareholder and ActualController
□ Applicable ? Not applicable
XIV. Material Related Party Transactions
1. Related party transactions relating to daily operations
□ Applicable ? Not applicable
The Company had no related party transactions relating to daily operations during the reporting period.
2. Related party transactions relating to acquisition and sale of assets or equity
□ Applicable ? Not applicable
During the reporting period, there was no related party transaction relating to acquisition and sale ofassets or equity.
3. Related party transactions relating to joint outbound investment
□ Applicable ? Not applicable
During the reporting period, there was no related party transaction relating to joint outboundinvestment.
4. Related party transactions relating to credits and debts
□ Applicable ? Not applicable
During the reporting period, there was no related party transaction relating to credits and debts.
5. Transactions with related party financial companies
□ Applicable ? Not applicable
The Company did not have deposit, loan, credit or other financial business transactions with financialcompanies that have related relationship and the associated related parties.
6. Transactions between financial companies controlled by the Company and related parties
□ Applicable ? Not applicable
Financial companies controlled by the Company did not have deposit, loan, credit or other financialbusiness transactions with related parties.
7. Other significant related party transactions
□ Applicable ? Not applicable
During the reporting period, there were no other significant related party transactions.
XV. Significant Contracts and Their Performance
1. Custody, contracting and leasing matters
(1) Custody
□ Applicable ? Not applicable
During the reporting period, there was no custody.
(2) Contracting
□ Applicable ? Not applicable
During the reporting period, there was no contracting.
(3) Leasing
? Applicable □ Not applicableDescription of leasing mattersFor details on leasing matters, please refer to “Section X Financial Report --> VII. Other SignificantMatters --> 45. Leases”.Projects whose profits or losses brought to the Company reached more than 10% of the total profitsof the Company during the reporting period
□ Applicable ? Not applicable
During the reporting period, there were no leasing projects whose profits or losses brought to theCompany reached more than 10% of the total profits of the Company during the reporting period.
2. Material guarantee
□ Applicable ? Not applicable
During the reporting period, there was no material guarantee of the Company.
3. Entrusting others to manage cash assets
(1) Entrusted wealth management
? Applicable □ Not applicableOverview of entrusted wealth management during the reporting period
Unit: RMB 10,000
| Specific type | Source of entrusted wealth management funds | Incurred amount of entrusted wealth management | Undue balance | Amount overdue but not recovered | Amount overdue but not recovered with impairment having been accrued |
| Wealth management product of bank | Fundraising | 93,300.00 | 86,591.72 | - | - |
| Wealth management product of bank | Self-owned fund | 50,000.00 | 16,002.59 | - | - |
| Trusts | Self-owned fund | 39,000.00 | 39,781.11 | - | - |
| Total | 182,300.00 | 142,375.42 | - | - | |
Explanation of high-risk entrusted wealth management with large individual amount or low safetyand poor liquidity
□ Applicable ? Not applicable
Entrusted wealth management is expected to fail to recover the principal or there are othercircumstances that may lead to impairment
□ Applicable ? Not applicable
(2) Entrusted loans
□ Applicable ? Not applicable
There were no entrusted loans during the reporting period.
4. Other significant contracts
□ Applicable ? Not applicable
XVI. Other Significant Events
□ Applicable ? Not applicable
There were no other significant matters that need to be explained during the reporting period.XVII. Significant Events of Subsidiaries of the Company? Applicable □ Not applicableDuring the Reporting Period, the subsidiary of the company, Shanghai Rongmei, purchased the NO.4 of the Wanyuan City A Street Commercial and Office Project property located at No. 9-10, 1st-5thfloor, Lane 585, Wanyuan Road, Minhang District, Shanghai. It is for the company's operational use.For more details, please refer to the China Securities Regulatory Commission's website(www.cninfo.com.cn).
Section VII Changes in Shareholding and Information of
ShareholdersI. Changes in Share Capital
1. Changes in shares
Unit: Share
| Before change | Increase/decrease (+, -) of this change | After change | |||||||
| Number | Percentage | New shares issued | Bonus shares | Shares transferred from surplus reserve | Others | Subtotal | Number | Percentage | |
| I. Restricted shares | 172,809,408 | 75.79% | -2,559,408 | -2,559,408 | 170,250,000 | 74.67% | |||
| 1. Shares held by the state | |||||||||
| 2. Shares held by state-owned legal person | 1,809,408 | 0.79% | -1,809,408 | -1,809,408 | - | - | |||
| 3. Shares held by other domestic shareholders | 171,000,000 | 75.00% | -750,000 | -750,000 | 170,250,000 | 74.67% | |||
| Including: Shares held by domestic legal persons | 117,600,000 | 51.58% | 117,600,000 | 51.58% | |||||
| Shares held by domestic natural persons | 53,400,000 | 23.42% | -750,000 | -750,000 | 52,650,000 | 23.09% | |||
| 4. Shares held by foreign legal shareholders | |||||||||
| Including: Shares held by foreign legal persons | |||||||||
| Shares held by foreign natural persons | |||||||||
| II. Unrestricted shares | 55,190,592 | 24.21% | 2,559,408 | 2,559,408 | 57,750,000 | 25.33% | |||
| 1. RMB-denominated ordinary shares | 55,190,592 | 24.21% | 2,559,408 | 2,559,408 | 57,750,000 | 25.33% | |||
| 2. Domestic listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total number of shares | 228,000,000 | 100.00% | 228,000,000 | 100.00% |
Explanation on changes in shares
□ Applicable ? Not applicable
Approval of changes in shares
□ Applicable ? Not applicable
Transfer of title of changed shares
□ Applicable ? Not applicable
Impact of share changes on basic earnings per share and diluted earnings per share, net assets pershare attributable to ordinary shareholders of the Company, and other financial indicators in last yearand the latest period
□ Applicable ? Not applicable
Other contents considered necessary by the Company or required to be disclosed by the securitiesregulatory authority
□ Applicable ? Not applicable
2. Changes in restricted shares
? Applicable □ Not applicable
Unit: Share
| Shareholder’s name | Number of restricted shares at the beginning of the period | Increase in restricted shares during the period | Number of shares released from selling restrictions during the period | Number of restricted shares at the end of the year | Reason for selling restrictions | Date of lifting selling restrictions |
| Suzhou Rumere Group Co., Ltd. | 117,600,000 | 117,600,000 | Restricted shares prior to IPO | 2025-4-27 | ||
| Guo Jian | 25,200,000 | 25,200,000 | Restricted shares prior to IPO | 2025-4-27 | ||
| Wen Di | 25,200,000 | 25,200,000 | Restricted shares prior to IPO | 2025-4-27 | ||
| Yu Qingtao | 2,800,000 | 700,000 | 2,100,000 | Senior executives lock in shares | During the period of serving as directors, supervisors and senior managers of the company, the shares of the company held shall be locked up at 75%. | |
| Zhu Zhengjun | 200,000 | 50,000 | 150,000 | Senior executives lock in shares | On April 25, 2023, Zhu Zhengjun is no longer deputy general manager of the company. All his shares will be locked within half a year from the date of his departure, and according to the relevant regulations , only when the lock expires can be lifted. | |
| CICC Wealth Management Co., Ltd. | 1,809,408 | 1,809,408 | - | Restricted IPO strategic placement | 2023-10-27 | |
| Total | 172,809,408 | - | 2,559,408 | 170,250,000 | -- | -- |
II. Issuance and Listing of Securities
1. Issuance of securities (excluding preference shares) during the reporting period
□ Applicable ? Not applicable
2. Changes in total shares and shareholder structure as well as changes in asset and liabilitystructure of the Company
□ Applicable ? Not applicable
3. Internal employee shares
□ Applicable ? Not applicable
III. Information of Shareholders and Actual Controllers
1. Total number of shareholders
Unit: Share
| Total number of ordinary shareholders at the end of the reporting period | 22,931 | Total number of ordinary shareholders at the end of the month preceding the disclosure date of the annual report | 22,051 | Total number of preferred shareholders whose voting rights were resumed at the end of the reporting period | 0 | Total number of preferred shareholders whose voting rights were resumed at the end of the month preceding the disclosure date of the annual report | 0 | Total number of shareholders holding shares with special voting rights (if any) | 0 |
| Shareholdings of shareholders with more than 5% or the top 10 shareholders (not include lending shares through refinancing) | |||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage (%) | Shares held at the end of the reporting period d | Increase/decrease during the reporting period | Number of restricted shares | Number of unrestricted shares | Pledged, marked or frozen | ||
| Share status | Number | ||||||||
| Suzhou Rumere Group Co., Ltd. | Domestic non-state legal person | 51.58% | 117,600,000 | 117,600,000 | Not applicable | 0 | |||
| Guo Jian | Domestic natural person | 11.05% | 25,200,000 | 25,200,000 | Not applicable | 0 | |||
| Wen Di | Domestic natural person | 11.05% | 25,200,000 | 25,200,000 | Not applicable | 0 | ||
| Yu Qingtao | Domestic natural person | 1.23% | 2,800,000 | 2,100,000 | 700,000 | Not applicable | 0 | |
| Penghua Hongjia Flexibly Hybrid Securities Investment Fund | Others | 0.49% | 1,114,300 | N/A | - | 1,114,300 | Not applicable | 0 |
| Song Yingjie | Domestic natural person | 0.49% | 1,111,800 | 878,200 | - | 1,111,800 | Not applicable | 0 |
| Huashang Flexibly Hybrid Securities Investment Fund | Others | 0.41% | 925,910 | N/A | - | 925,910 | Not applicable | 0 |
| Shi Shengji | Domestic natural person | 0.24% | 550,400 | 230,300 | - | 550,400 | Not applicable | 0 |
| Xu Wei | Domestic natural person | 0.22% | 499,800 | N/A | - | 499,800 | Not applicable | 0 |
| Su Na | Domestic natural person | 0.22% | 496,793 | 112,600 | - | 496,793 | Not applicable | 0 |
| Strategic investors or general legal persons becoming top ten shareholders due to private placement of new shares | None | |||||||
| Description on the related relationship or persons acting-in-concert arrangements among the above shareholders | Guo Jian and Wen Di are husband and wife. | |||||||
| Description on entrusting/being entrusted with voting rights and waver of voting rights by the aforementioned shareholders: | None | |||||||
| Description on special repurchase account among top 10 shareholders | None | |||||||
| Top 10 shareholders not subject to selling restrictions | ||||||||
| Name of shareholder | Number of unrestricted shares held at the end of reporting period | Type of shares | |
| Type of shares | Number | ||
| Penghua Hongjia Flexibly Hybrid Securities Investment Fund | 1,114,300 | RMB-denominated ordinary shares | 1,114,300 |
| Song Yingjie | 1,111,800 | RMB-denominated ordinary shares | 1,111,800 |
| Huashang Flexibly Hybrid Securities Investment Fund | 925,910 | RMB-denominated ordinary shares | 925,910 |
| Yu Qingtao | 700,000 | RMB-denominated ordinary shares | 700,000 |
| Shi Shengji | 550,400 | RMB-denominated ordinary shares | 550,400 |
| Xu Wei | 499,800 | RMB-denominated ordinary shares | 499,800 |
| Su Na | 496,793 | RMB-denominated ordinary shares | 496,793 |
| Huashang Flexibly Mixed Securities Investment Fund in advantageous industries | 434,100 | RMB-denominated ordinary shares | 434,100 |
| Yan Yi | 377,900 | RMB-denominated ordinary shares | 377,900 |
| Liu Yifan | 360,000 | RMB-denominated ordinary shares | 360,000 |
| Description on the related relationship or persons acting-in-concert among the top ten ordinary shareholders without selling restrictions and between the top ten ordinary shareholders without selling restrictions and the top ten ordinary shareholders | It is unknown to the Company whether other shareholders are related parties or persons acting in concert as stipulated in the Administrative Measures on Acquisition of Listed Companies. | ||
| Description on the top 10 ordinary shareholders’ participation in margin trading and securities lending business (if any) | Song Yingjie holds 1,111,800 shares of the Company in total, among which 1,100,000 shares through ordinary accounts and 1,100,000 shares through credit securities accounts. Shi Shengji holds 550,400 shares of the Company in total, among which 400 shares through ordinary accounts and 319,700 shares through credit securities accounts. Yan Yi holds 377,900 shares of the Company in total, among which 0 shares through ordinary accounts and377,900 shares through credit securities accounts. | ||
Whether the top ten shareholders participate in the refinancing business and lend shares.
□ Applicable ? Not applicable
Whether the top ten shareholders have changed from the previous period.? Applicable □ Not applicable
Unit: Share
| The Change of the Top Ten Shareholders. | |||||
| Name of shareholder | Changes | The refinancing lent shares and the quantity has not been returned of the end of this Period | The number of shares held by shareholders in general accounts, credit accounts and the number of shares that have not yet been returned at the end of this Period | ||
| Number | Shareholding percentage (%) | Number | Shareholding percentage (%) | ||
| Penghua Hongjia Flexibly Hybrid Securities Investment Fund | New | - | - | 1,114,300 | 0.49% |
| Huashang Flexibly Hybrid Securities Investment Fund | New | - | - | 925,910 | 0.41% |
| Xu Wei | New | - | - | 499,800 | 0.22% |
| CICC Wealth Management Co., Ltd. | Exit | - | - | N/A | N/A |
| Xibulide Quantitative Growth Hybrid Initiated Securities Investment Fund | Exit | - | - | 33,100 | 0.01% |
| Shenwanlingxin Consumption Growth Hybrid Securities Investment Fund | Exit | - | - | N/A | N/A |
| Yin Ruibin | Exit | - | - | N/A | N/A |
| Huataiyouxiang Dividend Return Stock Pension Products | Exit | - | - | N/A | N/A |
Please note that China International Capital Corporation Limited (CICC), Shenwan HongyuanConsumer Growth Mixed Securities Investment Fund, Yin Ruibin, and Huatai Enjoy Dividend ReturnStock Pension Product are not included in the company's top 200 shareholders' register.Whether the Company has differential arrangement in voting rights
□ Applicable ? Not applicable
Whether the top ten ordinary shareholders and the top ten shareholders without selling restrictionsconducted the agreed repurchase transaction during the reporting period
□Yes ?No
The Company’s top ten ordinary shareholders and top ten ordinary shareholders without sellingrestrictions did not conduct agreed repurchase transactions during the reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholder: Natural person holdingType of controlling shareholder: Legal person
| Name of controlling shareholder | Legal representative | Establishment date | Organization code | Main business |
| Suzhou Rumere Group Co., Ltd. | Guo Jian | February 27, 2017 | 91320581MA1NFD8U3T | Exhibition and display services; modeling agency business; textile machinery and equipment leasing; textile technology extension services; freight forwarding agent; loading and unloading; general cargo storage. |
| Equity situation for the other domestic listed companies controlled or shared by the controlling shareholders during the report period | No | |||
Changes in the controlling shareholder during the report period
□ Applicable ? Not applicable
There are no changes in the controlling shareholder during the report period.
3. Actual controller and person acting in concert
Nature of actual controller: Domestic natural personType of actual controller: Natural person
| Name | Relationship with actual controller | Nationality | Whether having obtained the right of abode in other countries or regions |
| Guo Jian, Wen Di | Self | Chinese | No |
| Main occupation and position | For details, see Section IV Corporate Governance - VII. Directors, supervisors and senior management - 2. Employment | ||
| Holding of domestic and overseas listed companies over the past ten years | None | ||
Change of actual controllers during the reporting period
□ Applicable ? Not applicable
There was no change of the Company’s actual controllers during the reporting period.Diagram on equity and control relationship between the Company and actual controllers
Actual controller controls the Company by entrust or other asset management methods
□ Applicable ? Not applicable
4. Share pledge by controlling shareholder or largest shareholder and person acting in concertreaching 80% of shareholding
□ Applicable ? Not applicable
5. Other legal person shareholders holding 10% or more of shares
□ Applicable ? Not applicable
6. Restrictions on share reductions of controlling shareholder, actual controller, restructuringparties and other commitment subjects
□ Applicable ? Not applicable
IV. Implementation of Share Repurchase during the Reporting PeriodImplementation progress of share repurchase
□ Applicable ? Not applicable
Implementation of share repurchase by centralized bidding
□ Applicable ? Not applicable
Section VIII Particulars of Preference Shares
□ Applicable ? Not applicable
The Company does have preferred shares during the reporting period.
Section IX Particulars of Bonds
□ Applicable ? Not applicable
Section X Financial StatementsI. Audit report
| Type of audit opinions | Standard unqualified |
| Signing date of the audit report | April 23, 2024 |
| Name of audit agency | RSM China CPA LLP |
| Audit report document number | Audit No [2023] 200Z0041 |
| Name of certified public accountant | Ye Chun and Xu Zongqing. |
Auditor’s reportTo the shareholders of Rumere Co., Ltd.I. OpinionWe have audited the financial statements of Rumere Co., Ltd. (hereafter referred to as “Rumere/theCompany”), which comprises the consolidated and the parent company’s statement of financialposition as at December 31, 2023, the consolidated and the parent company’s statement of profit orloss and other comprehensive income, the consolidated and the parent company’s statement of cashflows, the consolidated and the parent company’s statement of changes in equity for the year thenended, and the notes to the financial statements.In our opinion, the accompanying Rumere’s financial statements present fairly, in all material respects,the consolidated and the parent company’s financial position as at December 31,2023, and of theirfinaicial performance and cash flows for the year then ended in accordance with AccountingStandards for Business Enterprices.II. Basis for OpinionWe conducted our audit in accordance with Chinese Standards on Auditing (CSAs). Ourresponsibilities under those standards are further described in the Auditor’s Responsibilities for theAudit of Financial Statements section of our report. We are independent of Rumere in accordancewith the Code of Ethics for Professional Accountants of the Chinese Institude of Certified PublicAccountants, and we have fulfilled our other ethical responsibilities. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
III. Key audit mattersKey audit matters are those matters that, in our professional judgment, were of the most significancein our audit of thefinancial statements of the current period. These matters were addressed in thecontext of an audit of the financial statements as a whole and in forming our opinion thereon, and wedo not provide a separate opinion on these matters.? Recognition of revenue
1. Description of the matter
With regard to revenue recognition, please refer to "Note V (20)" for accounting policies and "NoteVII (28) " Revenue and Cost of Sales for specific amount.Rumere is in Internet retail industry, and mainly sells women's clothing online. The Companyrecorded an operating income of RMB767.32 million in 2023. Since the amount of revenue issignificant and a key performance indicator, there is a relatively high inherent risk, so we indentifythe recognition of revenue as a key audit matter.
2. How the matter was addressed in our audit
Our audit procedures for revenue recognition mainly include:
(1) We obtained an understanding of and evaluated the key internal control design over therecognition of revenue and tested the effectiveness of key internal control;
(2) Considering the sales model of e-commerce platform, We analyzed and evaluated the major risksrelated to revenue and reward transfer point of revenue via interviewing the management, and thenevaluated whether policies for recognizing revenue of Rumere were in compliance with requirementsof accounting standards for business enterprises;
(3) We analyzed the overall sales income, gross profit of Rumere, and the monthly fluctuations ofproduct sales income and sales quantity, so as to judge whether there were abnormal fluctuations incurrent period;
(4) We adopted the sampling method to check supporting documents related to income recognition,including customer orders, logistics orders, payment receipts, online customer signing, etc., to verifythe authenticity of sales transaction;
(5) We checked several original sales documents and accounting vouchers before and after thebalance sheet date, and compared the dates of the accounting vouchers and the payment receipts,signed delivery notes, etc., to assess whether the revenue is included in the appropriate accountingperiod.
(6) We sampled and conducted telephone interviews with customers. From the answers to thetelephone interviews, which including transaction amount, transaction quantity, purchase purpose,etc., verified whether the amount, period and method of revenue recognition were accurate;
(7) We checked the goods return during and after the period to identify whether there were anysignificant and abnormal return;
(8) We employeed IT experts of the firm to tested the online trading information system of Rumere,including the general control of IT system, business data analysis, etc.
? Inventory write-down
1. Description of the matter
With regard to inventory provision for impairment, please refer to "Note V (11) " for accountingpolicies and "Note VII (7) " Inventories for specific amount.Inventories of Rumere are stated at the lower of cost and net realizable value. As of December 31,2023, the book balance of inventories amounted to RMB542.37 million, the provision for impairmentof inventories amounted to RMB148.65 million, and the carrying value of inventories amounted toRMB393.72 million. Given that the amount involved is large and the management needs to makesignificant judgments, we have identified inventory write-down as a key audit matter.
2. How the matter was addressed in our audit
Our audit procedures for inventory write-down mainly include:
(1) We obtained an understanding of and evaluated the effectiveness of key internal control designsrelated to inventory write-down, and tested the effectiveness of key internal control;
(2) We obtained an understanding of and evaluated the supporting documents and other relevant basisfor the management to determine the calculation method of provision for impairment of inventory,and evaluate the reasonableness of the calculation method of provision for impairment of inventories.
(3) We obtained the aging list of the Company’s inventories at fiscal year-end, and selected thesamples and tracked the original warehousing lists to evaluate the rationality of the inventory age inthe aging list.
(4) We retested the provision for impairment of inventory to verify the accuracy of the inventorywrite-down;
(5) We conducted inventory monitoring, and observed the actual situation of inventory to identifysluggish, damaged or obsolete inventory, to analyse whether the write-down was sufficient.IV. Other informationManagement of Rumere is responsible for other information. The other information comprises theinformation included in the Annual Report of the Company for the year of 2023, but excludes thefinancial statements and our audited reports.Our opinion on the financial statements does not cover the other information and we do not expressany form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact. We have nothing to report in this regard.V. Responsibility of Management and Those Charged with Governance for the FinancialStatements
Management of the Company is responsible for the preparation and fair presentation of the financialstatements in accordance with Accounting Standards of Business Enterprises, and for the design,implementation and maintenance of such internal control as management determines is necessary toenable the preparation of financial statements that are free from material misstatement, whether dueto fraud or error.In preparing the financial statements, management is responsible for assessing the Company’s abilityto continue as a going concern, disclosing, as applicable, matters related to going concern and usingthe going concern basis of accounting unless management either intends to liquidate the Company orto cease operations, or have no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reportingprocess.VI. Auditor’s Responsibilities for the Audit of the Financial StatementsOur Objectives are to obtain reasonable assurance about whether the financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with CSAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material if, individually or inthe aggregate, they could reasonably be expected to influence the economic decisions of users takenon the basis of these financial statements.As part of an audit in accordance with CSAs, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:
i) Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detectinga material misstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internalcontrol.
ii) Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances,iii) Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by management.iv) Conclude on the appropriateness of management’s use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern.If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Company to cease to continueas a going concern.v) Evaluate the overall presentation, structure and content of the financial statements, and whetherthe financial statements represent the underlying transactions and events in a manner that achievesfair presentation.vi) Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Company to express an opinion on the financial statements. We areresponsible for the direction, supervision and performance of the group audit. We remain solelyresponsible for our audit opinion.We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence, and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable,related safeguards.
From the matters communicated with those charged with governance, we determine those mattersthat were of most significance in the audit of the financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor’s report unless law orregulation precludes public disclosure about the matter or when, in extremely rare circumstances, wedetermine that a matter should not be communicated in our report because the adverse consequencesof doing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.II. Financial statementsUnit of financial statements: RMB
1. Consolidated Statement of Financial Position
Prepared by: Rumere Co., Ltd.
December 31, 2023
Unit: RMB
| Item | December 31, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash and cash equivalents | 150,353,208.66 | 442,675,454.71 |
| Settlements provision | ||
| Loans to banks and other financial institutions | ||
| Financial assets held-for-trading | 1,368,674,089.95 | 1,318,197,593.83 |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | ||
| Accounts receivable financing | ||
| Advances to suppliers | 56,838,564.73 | 58,815,621.48 |
| Premium receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserves receivable | ||
| Other receivables | 360,617.41 | 476,745.77 |
| Including: Interests receivable | ||
| Dividends receivable | ||
| Financial assets held under resale agreements |
| Inventories | 393,717,469.09 | 361,661,336.69 |
| Contract assets | ||
| Assets classified as held for sale | ||
| Non-current assets maturing within one year | - | 151,075,205.48 |
| Other current assets | 21,135,612.09 | 241,481.62 |
| Total current assets | 1,991,079,561.93 | 2,333,143,439.58 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | ||
| Other equity instrument investment | ||
| Other non-current financial assets | 132,030,082.19 | 100,115,890.41 |
| Investment properties | ||
| Fixed assets | 431,839,182.13 | 178,412,503.35 |
| Construction in progress | 53,331,524.63 | 52,063,773.07 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 1,029,642.86 | 1,194,865.27 |
| Intangible assets | 17,616,944.85 | 17,979,246.69 |
| Development costs | ||
| Goodwill | ||
| Long-term deferred expenses | 904,818.26 | 1,159,382.32 |
| Deferred tax assets | 39,308,918.26 | 28,995,779.03 |
| Other non-current assets | 626,000.00 | |
| Total non-current assets | 676,687,113.18 | 379,921,440.14 |
| Total assets | 2,667,766,675.11 | 2,713,064,879.72 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Borrowing from the central bank | ||
| Deposits and balances from banks and other financial institutions | ||
| Financial liabilities held-for-trading |
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 58,163,158.46 | 93,606,271.18 |
| Advances from customers | ||
| Contract liabilities | ||
| Financial assets sold under repurchase agreements | ||
| Deposits and balances from customers and banks | ||
| Customer securities brokerage deposits | ||
| Customer securities underwriting deposits | ||
| Employee benefits payable | 5,582,823.78 | 5,161,338.44 |
| Taxes payable | 17,882,840.82 | 28,953,139.67 |
| Other payables | 8,995,145.79 | 9,784,082.94 |
| Including: Interests payables | ||
| Dividend payables | ||
| Fees and commissions payable | ||
| Reinsurance payable | ||
| Liabilities classified as held for sale | ||
| Non-current liabilities maturing within one year | 857,142.86 | 1,110,716.50 |
| Other current liabilities | 453,230.76 | 562,321.13 |
| Total current liabilities | 91,934,342.47 | 139,177,869.86 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preference share | ||
| Perpetual debt | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Estimated liabilities | ||
| Deferred income | 1,900,000.10 | 1,966,666.70 |
| Deferredtax liabilities | 4,201,679.35 | 3,461,087.88 |
| Other non-current liabilities | ||
| Total non-current liabilities | 6,101,679.45 | 5,427,754.58 |
| Total liabilities | 98,036,021.92 | 144,605,624.44 |
| Owners' equity: | ||
| Share capital | 228,000,000.00 | 228,000,000.00 |
| Other equity instruments | ||
| Including: Preference shares | ||
| Perpetual debt | ||
| Capital reserves | 1,782,210,407.28 | 1,782,210,407.28 |
| Less: Treasury stock | ||
| Other comprehensive income | ||
| Special reserves | ||
| Surplus reserves | 61,597,845.57 | 54,889,643.62 |
| General risk reserves | ||
| Retained earnings | 497,922,400.34 | 503,359,204.38 |
| Total owner's equity attributable to parent company | 2,569,730,653.19 | 2,568,459,255.28 |
| Non-controlling interests | ||
| Total owners' equity | 2,569,730,653.19 | 2,568,459,255.28 |
| Total liabilities and owners' equity | 2,667,766,675.11 | 2,713,064,879.72 |
Legal representative: Guo Jian Chief Financial Officer: Yu Qingtao Finance Manager：: WangDongmei
2. Statement of Financial Position
Unit: RMB
| Item | December 31, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash and cash equivalents | 143,783,234.12 | 432,719,477.03 |
| Financial assets held-for-trading | 1,353,641,570.68 | 1,318,197,593.83 |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | ||
| Accounts receivable financing | ||
| Advances to suppliers | 61,757,175.33 | 71,688,165.55 |
| Other receivables | 256,117.41 | 353,024.42 |
| Including: Interests receivable | ||
| Dividends receivable | ||
| Inventories | 391,564,923.86 | 359,991,620.28 |
| Contract assets | ||
| Assets classified as held for sale | ||
| Non-current assets maturing within one year | - | 151,075,205.48 |
| Other current assets | 289,889.56 | 224,928.45 |
| Total current assets | 1,951,292,910.96 | 2,334,250,015.04 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 269,886,865.58 | 886,865.58 |
| Other equity instrument investment | ||
| Other non-current financial assets | 132,030,082.19 | 100,115,890.41 |
| Investment properties | ||
| Fixed assets | 176,143,625.50 | 176,902,267.12 |
| Construction in progress | 53,331,524.63 | 52,063,773.07 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 1,029,642.86 | 1,194,865.27 |
| Intangible assets | 17,616,944.85 | 17,979,246.69 |
| Development costs | ||
| Goodwill | ||
| Long-term deferred expenses | 904,818.26 | 1,159,382.32 |
| Deferred tax assets | 37,681,921.38 | 26,385,922.47 |
| Other non-current assets | 626,000.00 | |
| Total non-current assets | 689,251,425.25 | 376,688,212.93 |
| Total assets | 2,640,544,336.21 | 2,710,938,227.97 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Financial liabilities held-for-trading | ||
| Derivative financial liabilities |
| Notes payable | ||
| Accounts payable | 103,837,375.43 | 149,179,873.04 |
| Advances from customers | ||
| Contract liabilities | ||
| Employee benefits payable | 3,523,261.73 | 3,082,487.70 |
| Taxes payable | 15,263,333.50 | 23,929,875.61 |
| Other payables | 8,922,715.83 | 9,628,394.82 |
| Including: Interests payables | ||
| Dividend payables | ||
| Liabilities classified as held for sale | ||
| Non-current liabilities maturing within one year | 857,142.86 | 1,110,716.50 |
| Other current liabilities | 453,230.76 | 562,321.13 |
| Total current liabilities | 132,857,060.11 | 187,493,668.80 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Interests payables | ||
| Devidend payables | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Estimated liabilities | ||
| Deferred income | 1,900,000.10 | 1,966,666.70 |
| Deferred tax liabilities | 3,630,413.22 | 2,955,049.14 |
| Other non-current liabilities | ||
| Total non-current liabilities | 5,530,413.32 | 4,921,715.84 |
| Total liabilities | 138,387,473.43 | 192,415,384.64 |
| Owners' equity: | ||
| Share capital | 228,000,000.00 | 228,000,000.00 |
| Other equity instruments | ||
| Including: Preference shares | ||
| Perpetual debt | ||
| Capital reserves | 1,782,210,407.28 | 1,782,210,407.28 |
| Less: Treasury stock | ||
| Other comprehensive income | ||
| Special reserves | ||
| Surplus reserves | 61,597,845.57 | 54,889,643.62 |
| Retained earnings | 430,348,609.93 | 453,422,792.43 |
| Total owners' equity | 2,502,156,862.78 | 2,518,522,843.33 |
| Total liabilities and owners' equity | 2,640,544,336.21 | 2,710,938,227.97 |
3. Consolidated Statement of Profit or Loss and Other Comprehensive Income
Unit: RMB
| Item | 2023 | 2022 |
| 1. Revenue | 767,316,817.65 | 948,811,767.71 |
| Including: Operating income | 767,316,817.65 | 948,811,767.71 |
| Interest income | ||
| Premium income | ||
| Fee and commission income | ||
| II. Costs of sales | 644,524,980.64 | 743,897,473.51 |
| Including: Operating cost | 466,719,350.89 | 564,347,276.40 |
| Interest expense | ||
| Fee and commission expenses | ||
| Cash surrender value | ||
| Net amount of insurance claims | ||
| Net provision of insurance contract reserve | ||
| Policyholder dividends resulting from participation in profits | ||
| Reinsurance expense | ||
| Taxes and surcharges | 6,545,289.88 | 4,985,680.23 |
| Selling and distribution expenses | 112,694,426.94 | 124,929,882.78 |
| General and administrative expenses | 46,136,415.37 | 37,502,995.96 |
| Research and development expenses | 20,470,389.61 | 20,266,745.83 |
| Financial costs | -8,040,892.05 | -8,135,107.69 |
| Including: Interest expense | 5,232.32 | 50,146.33 |
| Interest income | 11,571,422.65 | 12,484,242.39 |
| Add: Other income | 1,949,083.97 | 6,404,373.44 |
| Investment income (losses) | 38,061,196.16 | 40,009,346.45 |
| Including: Investment income from associates and joint ventures | ||
| Gains /(losses) from derecognition of financial assets measured at amortised cost | ||
| Gains /(losses) from foreign exchange | ||
| Income /(losses) from net exposure hedging | ||
| Gains/(losses) from changes in fair values | 9,736,672.14 | 9,312,190.32 |
| Credit impairment losses | 6,112.02 | 23,422.95 |
| Asset impairment losses | -67,568,625.27 | -49,127,914.01 |
| Gains/(losses) from disposal of assets | 30,655.86 | |
| III. Profit/(loss) from operations | 105,006,931.89 | 211,535,713.35 |
| Add: Non-operating income | 4,267.00 | 44,880.37 |
| Less: Non-operating expenses | 1,133,303.77 | 483,434.57 |
| IV. Profit/(loss) before tax | 103,877,895.12 | 211,097,159.15 |
| Less: Income tax expenses | 19,158,497.21 | 44,056,342.02 |
| V. Net profit/(loss) for the year | 84,719,397.91 | 167,040,817.13 |
| (I) Net profit/(loss) by continuity | ||
| 1. Net profit/(loss) from continuing operation | 84,719,397.91 | 167,040,817.13 |
| 2. Net profit/(loss) from discontinued operation | ||
| (II) Net profit/(loss) by ownership attribution | ||
| 1. Attributable to owners of the parent | 84,719,397.91 | 167,040,817.13 |
| 2. Attributable to non-controlling interests | ||
| VI. Other comprehensive income for the year, after tax | ||
| Attributable to owners of the parent | ||
| (I) Other comprehensive income that will not be reclassified subsequently to profit or loss | ||
| 1. Remeasurement gains or losses of a defined benefit plan | ||
| 2. Other comprehensive income using the equity method that will not be reclassified subsequently to profit and loss | ||
| 3. Changes in fair value of other equity instrument investment | ||
| 4. Changes in fair value of the Company’s own credit risks | ||
| (II) Other comprehensive income to be reclassified subsequently to profit or loss | ||
| 1. Other comprehensive income using the equity method which will be reclassified subsequently to profit or loss | ||
| 2. Changes in fair value of other debt instrument investment | ||
| 3. Other comprehensive income arising from the reclassification of financial assets |
| 4. Provision for credit impairment in other debt investments | ||
| 5. Reserve for cash flow hedges | ||
| 6. Exchange differences on translating foreign operations | ||
| Attributable to non-controlling interests | ||
| VII. Total comprehensive income for the year | ||
| Attributable to owners of the parent | ||
| Attributable to non-controlling interests | 84,719,397.91 | 167,040,817.13 |
| VII. Earnings per share | ||
| (I) Basic earnings per share | 0.37 | 0.73 |
| (II) Diluted earnings per share | 0.37 | 0.73 |
Legal representative: Guo Jian Chief Financial Officer: Yu Qingtao Finance Manager：: WangDongmei
4. Statement of Profit or Loss and Other Comprehensive Income
Unit: RMB
| Item | 2023 | 2022 |
| I. Revenue | 766,415,438.58 | 947,720,334.71 |
| Less: Cost of sales | 472,105,707.49 | 570,947,825.37 |
| Taxes and surcharges | 5,178,209.83 | 4,552,274.37 |
| Selling and distribution expenses | 112,570,609.88 | 124,793,369.69 |
| Administrative expenses | 46,395,393.35 | 44,509,546.28 |
| Research and development expenses | 37,485,698.67 | 36,725,347.66 |
| Financial costs | -8,225,550.20 | -8,398,540.05 |
| Including: Interest expense | 5,232.32 | 50,146.33 |
| Interest income | 11,534,097.63 | 12,463,526.69 |
| Add: Other income | 418,689.90 | 4,966,558.30 |
| Investment income/(losses) | 38,061,196.16 | 40,009,346.45 |
| Including: Investment income from associates and joint ventures | ||
| Gains /(losses) from derecognition of financial assets measured at amortised cost | ||
| Income /(losses) from net exposure hedging | ||
| Gains/(losses) from changes in fair values | 9,604,152.87 | 9,312,190.32 |
| Credit impairment losses | 5,100.37 | 13,422.95 |
| Asset impairment losses | -67,568,625.27 | -49,127,914.01 |
| Gains/(losses) from disposal of assets | 32,941.76 |
| II. Profit/(loss) from operations | 81,458,825.35 | 179,764,115.40 |
| Add: Non-operating income | 600.00 | 4,734.90 |
| Less: Non-operating expenses | 1,132,999.63 | 483,169.12 |
| III. Profit/(loss) before tax | 80,326,425.72 | 179,285,681.18 |
| Less: Income tax expense | 13,244,406.27 | 36,191,123.71 |
| IV. Net profit/(loss) for the year | 67,082,019.45 | 143,094,557.47 |
| (1) Net profit/(loss) from continuing operation | 67,082,019.45 | 143,094,557.47 |
| (2) Net profit/(loss) from discontinued operation | ||
| V. Other comprehensive income for the year, after tax | ||
| (I) Other comprehensive income that will not be reclassified subsequently to profit or loss | ||
| 1. Remeasurement gains | ||
| 2. Other comprehensive income using the equity method which will not be reclassified subsequently to profit and loss | ||
| 3. Changes in fair value of other equity instrument investment | ||
| 4. Changes in fair value of the Company’s own credit risks | ||
| (II) Other comprehensive income to be reclassified subsequently to profit or loss | ||
| 1. Other comprehensive income that can be reclassified to profit or loss in equity method | ||
| 2. Changes in fair value of other debt instrument investment | ||
| 3. Other comprehensive income arising from the reclassification of financial assets | ||
| 4. Provision for credit impairment in other debt investments | ||
| 5. Reserve for cash flow hedges | ||
| 6. Exchange differences on translating foreign operations | ||
| VI. Total comprehensive income for the year | 67,082,019.45 | 143,094,557.47 |
| VII. Earnings per share: | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
5. Consolidated Statement of Cash Flows
Unit: RMB
| Item | 2023 | 2022 |
| I. Cash flows generated from operating activities: | ||
| Cash received from the sale of goods and the rendering of services | 866,901,807.91 | 1,071,988,258.29 |
| Net increase in customer bank deposits and deposits from banks and other financial institutions | ||
| Net increase in borrowings from the central bank | ||
| Net increase in placements from other financial institutions | ||
| Cash received from premiums received on original insurance contracts | ||
| Net cash received from reinsurance business | ||
| Net increase in deposit and investments from insurers | ||
| Cash received from interests, fees and commissions | ||
| Net increasein borrowings from other banks | ||
| Net increase in repurchase business funds | ||
| Net cash received from securities trading brokerage business | ||
| Cash received from tax refund | ||
| Other cash received relating to operating activities | 24,972,415.29 | 18,892,234.58 |
| Subtotal of cash inflows from operating activities | 891,874,223.20 | 1,090,880,492.87 |
| Cash payments for goods purchased and services received | 639,184,418.87 | 697,389,028.81 |
| Net increase in loans and advances to customers | ||
| Net increase of deposits in central bank and other financial institutions | ||
| Cash payments for claims for original insurance contract | ||
| Net increase in loans to banks and other financial institutions | ||
| Cash payments to interests, fees and commissions | ||
| Cash payments for policyholder dividends resulting from participation in profits | ||
| Cash payments to and on behalf of employees | 72,648,591.99 | 65,992,227.69 |
| Payments for taxes | 73,025,705.91 | 77,120,435.77 |
| Other cash payments relating to operating activities | 114,359,733.50 | 125,069,779.94 |
| Subtotal of cash outflows from operating activities | 899,218,450.27 | 965,571,472.21 |
| Net cash flow from operating activities | -7,344,227.07 | 125,309,020.66 |
| II. Cash flow from investment activities: | ||
| Cash received from disposal and redemption of investments | 5,339,110,000.00 | 5,956,550,000.00 |
| Cash received from returns on investments | 49,332,385.88 | 42,432,635.85 |
| Net cash received from disposals of fixed assets, intangible assets and other long-term assets | 57,033.63 | |
| Net cash received from disposals of subsidiaries and other business units | ||
| Other cash received relating to investing activities |
| Subtotal of cash inflows from investing activities | 5,388,499,419.51 | 5,998,982,635.85 |
| Cash payments to acquire fixed, intangible and other long-term assets | 320,483,769.92 | 68,051,094.72 |
| Cash payments to acquire investments | 4,971,960,000.00 | 6,240,550,000.00 |
| Net increase in pledged loan | ||
| Net cash payments to acquire subsidiaries and other business units | ||
| Other cash payments relating to investing activities | ||
| Subtotal of cash outflows from investing activities | 5,292,443,769.92 | 6,308,601,094.72 |
| Net cash flows from investing activities | 96,055,649.59 | -309,618,458.87 |
| III. Cash flow from financing activities: | ||
| Cash received from capital contributions | ||
| Including: Cash receipts from capital contributions form non-controlling interests of subsidiaries | ||
| Cash received from borrowings | ||
| Other cash received relating to financing activities | ||
| Subtotal of cash inflows from financing activities | ||
| Cash repayments of debts | ||
| Cash payments for dividends, distribution of profit and interest expenses | 83,448,000.00 | 40,584,000.00 |
| Including: Dividends, distribution of profit paid to non-controlling shareholders of subsidiaries | ||
| Other cash payments relating to financing activities | 1,954,161.72 | 3,212,832.37 |
| Subtotal of cash outflows from financing activities | 85,402,161.72 | 43,796,832.37 |
| Net cash flows from financing activities | -85,402,161.72 | -43,796,832.37 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | ||
| V. Net increase / (decrease) in cash and cash equivalents | 3,309,260.80 | -228,106,270.58 |
| Plus: Cash and cash equivalents at the beginning of the period | 142,243,947.86 | 370,350,218.44 |
| VI. Cash and cash equivalents at the end of the period | 145,553,208.66 | 142,243,947.86 |
6. Statement of Cash Flows
Unit: RMB
| Item | 2023 | 2022 |
| I. Cash flowsfrom operating activities: | ||
| Cash received from the sale of goods and the rendering of services | 865,825,096.21 | 1,070,896,825.29 |
| Cash received from tax refund | ||
| Other cash received relating to operating activities | 23,384,463.20 | 17,233,703.74 |
| Subtotal of cash inflows from operating activities | 889,209,559.41 | 1,088,130,529.03 |
| Cash payments for goods purchased and services received | 659,647,457.30 | 723,828,042.25 |
| Cash payments to and on behalf of employees | 50,988,407.71 | 45,702,095.32 |
| Payments for taxes | 63,547,453.33 | 67,276,421.41 |
| Other cash payments relating to operating activities | 146,507,841.41 | 123,410,687.34 |
| Subtotal of cash outflows from operating activities | 920,691,159.75 | 960,217,246.32 |
| Net cash flow froms operating activities | -31,481,600.34 | 127,913,282.71 |
| II. Cash flow from investment activities: | ||
| Cash received from disposal and redemption of investments | 5,338,010,000.00 | 5,956,550,000.00 |
| Cash received from returns on investments | 49,332,385.88 | 42,432,635.85 |
| Net cash received from disposals of fixed assets, intangible assets and other long-term assets | 57,033.63 | |
| Net cash received from disposals of subsidiaries and other business units | ||
| Other cash received relating to investing activities | ||
| Subtotal of cash inflows from investing activities | 5,387,399,419.51 | 5,998,982,635.85 |
| Cash payments to acquire fixed, intangible and other long-term assets | 39,442,918.54 | 68,008,094.72 |
| Cash payments to acquire investments | 5,224,960,000.00 | 6,240,550,000.00 |
| Net cash payments to acquire subsidiaries and other business units | ||
| Other cash payments relating to investing activities | ||
| Subtotal of cash outflows from investing activities | 5,264,402,918.54 | 6,308,558,094.72 |
| Net cash flows from investing activities | 122,996,500.97 | -309,575,458.87 |
| III. Cash flow from financing activities: | ||
| Cash received from capital contributions | ||
| Cash received from borrowings | ||
| Other cash received relating to financing activities | ||
| Subtotal of cash inflows from financing activities | ||
| Cash repayments of debts | ||
| Cash payments for dividends, distribution of profit and interest expenses | 83,448,000.00 | 40,584,000.00 |
| Other cash payments relating to financing activities | 1,371,636.69 | 3,212,832.37 |
| Subtotal of cash outflows from financing activities | 84,819,636.69 | 43,796,832.37 |
| Net cash flows from financing activities | -84,819,636.69 | -43,796,832.37 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | ||
| V. Net increase / (decrease) in cash and cash equivalents | 6,695,263.94 | -225,459,008.53 |
| Plus: Cash and cash equivalents at the beginning of the period | 132,287,970.18 | 357,746,978.71 |
| VI. Cash and cash equivalents at the end of the period | 138,983,234.12 | 132,287,970.18 |
7. Consolidated statement of changes in owner’s equity
Amount of the current period
Unit: RMB
| Item | 2023 | ||||||||||||||
| Owners’ equity attributable to the parent company | Non-controlling interests | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | General risk reserves | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I. Clothing balance of the Previous Year | 228,000,000.00 | 1,782,210,407.28 | 54,889,643.62 | 503,359,204.38 | 2,568,459,255.28 | 2,568,459,255.28 | |||||||||
| Plus: Changes in accounting policies | |||||||||||||||
| Correction of previous period errors | |||||||||||||||
| Others | |||||||||||||||
| II. Opening Balance of Current Year | 228,000,000.00 | 1,782,210,407.28 | 54,889,643.62 | 503,359,204.38 | 2,568,459,255.28 | 2,568,459,255.28 | |||||||||
| III. Changes in equity during the reporting period | 6,708,201.95 | -5,436,804.04 | 1,271,397.91 | 1,271,397.91 | |||||||||||
| (I) Total comprehensive income | 84,719,397.91 | 84,719,397.91 | 84,719,397.91 | ||||||||||||
| (II) Capital contributions or withdrawals by owners | |||||||||||||||
| 1. Ordinary shares contributed by | |||||||||||||||
| 2. Capital contributed by holders of | |||||||||||||||
| 3. Share-based payments recognised in owners’ equity | |||||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | 6,708,201.95 | -90,156,201.95 | -83,448,000.00 | -83,448,000.00 | |||||||||||
| 1. Transfer to surplus reserves | 6,708,201.95 | -6,708,201.95 | |||||||||||||
| 2. Transfer to general risk reserves | |||||||||||||||
| 3. Profit distribution to owners (or shareholders) | -83,448,000.00 | -83,448,000.00 | -83,448,000.00 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Transfer within owners' equity | |||||||||||||||
| 1. Capital reserves converted to share capital | |||||||||||||||
| 2. Surplus reserves converted to share capital | |||||||||||||||
| 3. Loss made up by surplus reserves |
| 4. Changes in the defined benefit plan transferred to retained earnings | |||||||||||||||
| 5. Other comprehensive income transferred to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserves | |||||||||||||||
| 1. Withdrawal during the reporting period | |||||||||||||||
| 2. Usage during the reporting period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Clothing balance of the period | 228,000,000.00 | 1,782,210,407.28 | 61,597,845.57 | 497,922,400.34 | 2,569,730,653.19 | 2,569,730,653.19 |
Amount of last period
Unit: RMB
| Item | 2022 | ||||||||||||||
| Owners’ equity attributable to the parent company | Non-controlling interests | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | General risk reserves | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I. Clothing balance of the Previous Year | 228,000,000.00 | 1,782,210,407.28 | 40,580,187.87 | 391,211,843.00 | 2,442,002,438.15 | 2,442,002,438.15 | |||||||||
| Plus: Changes in accounting policies | |||||||||||||||
| Correction of previous period errors | |||||||||||||||
| Others | |||||||||||||||
| II. Opening Balance of Current Year | 228,000,000.00 | 1,782,210,407.28 | 40,580,187.87 | 391,211,843.00 | 2,442,002,438.15 | 2,442,002,438.15 | |||||||||
| III. Changes in equity during the reporting period | 14,309,455.75 | 112,147,361.38 | 126,456,817.13 | 126,456,817.13 | |||||||||||
| (I) Total comprehensive income | 167,040,817.13 | 167,040,817.13 | 167,040,817.13 | ||||||||||||
| (II) Capital contributions or withdrawals by owners | |||||||||||||||
| 1. Ordinary shares contributed by | |||||||||||||||
| 2. Capital contributed by holders of | |||||||||||||||
| 3. Share-based payments recognised in owners’ equity | |||||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | 14,309,455.75 | -54,893,455.75 | -40,584,000.00 | -40,584,000.00 | |||||||||||
| 1. Transfer to surplus reserves | 14,309,455.75 | -14,309,455.75 | |||||||||||||
| 2. Transfer to general risk reserves | |||||||||||||||
| 3. Profit distribution to owners (or | -40,584,000.00 | -40,584,000.00 | -40,584,000.00 |
| shareholders) | |||||||||||||||
| 4. Others | |||||||||||||||
| (IV) Transfer within owners' equity | |||||||||||||||
| 1. Capital reserves converted to share capital | |||||||||||||||
| 2. Surplus reserves converted to share capital | |||||||||||||||
| 3. Loss made up by surplus reserves | |||||||||||||||
| 4. Changes in the defined benefit plan transferred to retained earnings | |||||||||||||||
| 5. Other comprehensive income transferred to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserves | |||||||||||||||
| 1. Withdrawal during the reporting period | |||||||||||||||
| 2. Usage during the reporting period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Clothing balance of the period | 228,000,000.00 | 1,782,210,407.28 | 54,889,643.62 | 503,359,204.38 | 2,568,459,255.28 | 2,568,459,255.28 |
8. Statement of changes in owner's equity of the Parent CompanyAmount of the current period
Unit: RMB
| Item | 2023 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | Retained earnings | Others | Total owners' equity | |||
| Preference shares | Perpetual capital securities | Others | ||||||||||
| I. Clothing balance of the Previous Year | 228,000,000.00 | 1,782,210,407.28 | 54,889,643.62 | 453,422,792.43 | 2,518,522,843.33 | |||||||
| Add：Changes in accounting policies | ||||||||||||
| Correction of prior period errors | ||||||||||||
| Others | ||||||||||||
| II. Operating balance of the current year | 228,000,000.00 | 1,782,210,407.28 | 54,889,643.62 | 453,422,792.43 | 2,518,522,843.33 | |||||||
| III. Changes in equity during the reporting period | 6,708,201.95 | -23,074,182.50 | -16,365,980.55 | |||||||||
| (I) Total comprehensive income | 67,082,019.45 | 67,082,019.45 | ||||||||||
| (II) Capital contributions or withdrawals by owners | ||||||||||||
| 1. Ordinary shares contributed by shareholders | ||||||||||||
| 2. Capital contributed by holders of other equity instruments | ||||||||||||
| 3. are-based payments recognised in owners’ equity | ||||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | 6,708,201.95 | -90,156,201.95 | -83,448,000.00 | |||||||||
| 1. Transfer to surplus reserves | 6,708,201.95 | -6,708,201.95 | - | |||||||||
| 2. Profit distribution to owners (or shareholders) | -83,448,000.00 | -83,448,000.00 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Transfer within owners' equity | ||||||||||||
| 1. Capital reserves converted to share capital | ||||||||||||
| 2. Surplus reserves converted to share capital | ||||||||||||
| 3. Loss made up by surplus reserves | ||||||||||||
| 4. Changes in the defined benefit plan transferred to retained earnings | ||||||||||||
| 5. Other comprehensive income transferred to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserves | ||||||||||||
| 1. Withdrawal during the reporting period | ||||||||||||
| 2. Usage during the reporting period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Clothing balance of the period | 228,000,000.00 | 1,782,210,407.28 | 61,597,845.57 | 430,348,609.93 | 2,502,156,862.78 |
Amount of the previous period
Unit: RMB
| Item | 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | Retained earnings | Others | Total owners' equity | |||
| Preference shares | Perpetual capital securities | Others | ||||||||||
| I. Clothing balance of the Previous Year | 228,000,000.00 | 1,782,210,407.28 | 40,580,187.87 | 365,221,690.71 | 2,416,012,285.86 | |||||||
| Add：Changes in accounting policies | ||||||||||||
| Correction of prior period errors | ||||||||||||
| Others | ||||||||||||
| II. Operating balance of the current year | 228,000,000.00 | 1,782,210,407.28 | 40,580,187.87 | 365,221,690.71 | 2,416,012,285.86 | |||||||
| III. Changes in equity during the reporting period | 14,309,455.75 | 88,201,101.72 | 102,510,557.47 | |||||||||
| (I) Total comprehensive income | 143,094,557.47 | 143,094,557.47 | ||||||||||
| (II) Capital contributions or withdrawals by | ||||||||||||
| owners | ||||||||||||
| 1. Ordinary shares contributed by shareholders | ||||||||||||
| 2. Capital contributed by holders of other equity instruments | ||||||||||||
| 3. are-based payments recognised in owners’ equity | ||||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | 14,309,455.75 | -54,893,455.75 | -40,584,000.00 | |||||||||
| 1. Transfer to surplus reserves | 14,309,455.75 | -14,309,455.75 | ||||||||||
| 2. Profit distribution to owners (or shareholders) | -40,584,000.00 | -40,584,000.00 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Transfer within owners' equity | ||||||||||||
| 1. Capital reserves converted to share capital | ||||||||||||
| 2. Surplus reserves converted to share capital | ||||||||||||
| 3. Loss made up by surplus reserves | ||||||||||||
| 4. Changes in the defined benefit plan transferred to retained earnings | ||||||||||||
| 5. Other comprehensive income transferred to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserves | ||||||||||||
| 1. Withdrawal during the reporting period | ||||||||||||
| 2. Usage during the reporting period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Clothing balance of the period | 228,000,000.00 | 1,782,210,407.28 | 54,889,643.62 | 453,422,792.43 | 2,518,522,843.33 |
III. Basic Information of the CompanyRumere Co., Ltd. (hereinafter referred to as "the Company") has obtained a business license ofenterprise legal person with the registration number of 91320581591184437J issued by SuzhouAdministrative Examination and Approval Bureau. As at December 31, 2023, the Company has hada registered capital of RMB228,000,000. The office address of the headquarters of the Company isNo. 86, Shenzhen Road, Changfu Street, Changshu City. The legal representative is Guo Jian.The Company, formerly known as Suzhou Rumere Trading Co., Ltd., restructured into a joint-stocklimited company on June 6, 2019.The Company has had a original registered capital of RMB 171,000,000 and a share capital of RMB171,000,000.Approved by the resolution of the first Interim General Meeting of shareholders of the Company in2020 and Zheng Jian Xu Ke [2021] No.2597 issued by CSRC, in October 2021, the Company publiclyoffered RMB57,000,000 ordinary shares(A-stock) with a par value of 1.00 RMB/per share in China.After the initial public offerings, the Company has had a registered capital of RMB228,000,000.The Company mainly engages in the following: R&D, production, and online sales of Rumere's ownclothing brand products and jewellery.The financial statements were approved for issue by the Board of Directors of the Company on April23, 2024.IV. Preparation Basis for Financial Statements
1. Basis of preparation
The Company has prepared the financial statements on a going concern based on actual transactionsand events that are recognized and measured in accordance with the Accounting Standards forBusiness Enterprises - Basic Standards as well as other specific accounting standards, applicationguidelines, standard interpretations and other relevant regulations (hereinafter collectively referred toas “Accounting Standards for Business Enterprises”) and in combination with provisions set out inRules No. 15 on the Preparation of Information Disclosure Documents by Companies That Offer
Securities to the Public - General Rules for Financial Statements (2023 Revision) issued by ChinaSecurities Regulatory Commission.
2. Going concern
The Company has assessed its ability to continually operate for the next twelve months from the endof the reporting period, and no any matters that may result in doubt on its ability as a going concernwere noted. Therefore, it is reasonable for the Company to prepare financial statements on the goingconcern basis.V. Significant Accounting Policies and Accounting EstimatesSpecific accounting policies and accounting estimates:
The following significant accounting policies and accounting estimates of the Company areformulated in accordance with the Accounting Standards for Business Enterprises. Businesses notmentioned are complied with relevant accounting policies of the Accounting Standards for BusinessEnterprises.
1. Statement of Compliance with the Accounting Standards for Business EnterprisesThe Company prepares its financial statements in accordance with the requirements of the AccountingStandards for Business Enterprises, truly and completely reflecting the Company’s financial positionas at 31 December 2023, and its operating results, changes in shareholders' equity, cash flows andother related information for the year then ended.
2. Accounting period
The accounting year of the Company is from January 1 to December 31 in calendar year.
3. Operating cycle
The normal operating cycle of the Company is twelve months.
4. Functional Currency
The Company takes Renminbi Yuan (“RMB”) as the functional currency.
5. Determining method and selecting basis of audit materiality
| Item | Important Standard |
| Significant inventories for which provision for impairment maded by item | RMB2.4 million |
| Significant construction in progress | RMB2.4 million |
6. Method of Preparing the Consolidated Financial Statements
(1) Scope of consolidation
All the subsidiaries of the Company are wholly-owned subsidiaries.
(2) Method of preparing consolidated financial statements
The consolidated financial statements shall be prepared by the Company based on the financialstatements of the Company and its subsidiaries, and using other related information.When preparing consolidated financial statements, the Company shall consider the entire group as anaccounting entity, adopt uniform accounting policies and apply the requirements of AccountingStandard for Business Enterprises related to recognition, measurement and presentation. Theconsolidated financial statements shall reflect the overall financial position, operating results and cashflows of the group.(i) Like items of assets, liabilities, equity, income, expenses and cash flows of the parent are combinedwith those of the subsidiaries.(ii) The carrying amount of the parent’s investment in each subsidiary is eliminated (off-set) againstthe parent’s portion of equity of each subsidiary.(iii) Eliminate the impact of intragroup transactions between the Company and the subsidiaries orbetween subsidiaries, and when intragroup transactions indicate an impairment of related assets, thelosses shall be recognised in full.(iv) Make adjustments to special transactions from the perspective of the group.
(3) Special considerations in consolidation elimination
If temporary timing difference between the book value of the assets and liabilities in the consolidatedstatement of financial position and their tax basis is generated as a result of elimination of unrealized
inter-company transaction profit or loss, deferred tax assets of deferred tax liabilities shall berecognised, and income tax expense in the consolidated statement of profit or loss shall be adjustedsimultaneously, excluding deferred taxes related to transactions or events directly recognised inowner’s equity or business combination.
7. Cash and Cash Equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cashequivalents include short-term (generally within three months of maturity at acquisition), highlyliquid investments that are readily convertible into known amounts of cash and which are subject toan insignificant risk of changes in value.
8. Foreign Currency Transactions
(1) Methods for translation of transactions denominated in foreign currenciesAt the time of initial recognition of a foreign currency transaction, the amount in the foreign currencyshall be translated into the amount in the functional currency at the spot exchange rate of thetransaction date.
(2) Translation of monetary items denominated in foreign currency on the balance sheet dateThe foreign currency monetary items shall be translated at the spot exchange rate on the balance sheetdate. The balance of exchange arising from the difference between the spot exchange rate on thebalance sheet date and the spot exchange rate at the time of initial recognition or prior to the balancesheet date shall be recorded into the profits and losses at the current period. The foreign currency non-monetary items measured at the historical cost shall still be translated at the spot exchange rate on thetransaction date; for the foreign currency non-monetary items restated to a fair value measurement,shall be translated into the at the spot exchange rate at the date when the fair value was determined,the difference between the restated functional currency amount and the original functional currencyamount shall be recorded into the profits and losses at the current period.
9. Financial instruments
Financial instrument is any contract which gives rise to both a financial asset of one entity and afinancial liability or equity instrument of another entity.
(1) Recognition and derecognition of financial instrument
A financial asset or a financial liability should be recognised in the statement of financial positionwhen, and only when, an entity becomes party to the contractual provisions of the instrument.A financial asset can only be derecognised when meets one of the following conditions:
(i) The rights to the contractual cash flows from a financial asset expire(ii) The financial asset has been transferred and meets one of the following derecognition conditions:
Financial liabilities (or part thereof) are derecognised only when the liability is extinguished—i.e.,when the obligation specified in the contract is discharged or cancelled or expires. An exchange ofthe Company (borrower) and lender of debt instruments that carry significantly different terms or asubstantial modification of the terms of an existing liability are both accounted for as anextinguishment of the original financial liability and the recognition of a new financial liability.Purchase or sale of financial assets in a regular-way shall be recognised and derecognised using tradedate accounting. A regular-way purchase or sale of financial assets is a transaction under a contractwhose terms require delivery of the asset within the time frame established generally by regulationsor convention in the market place concerned. Trade date is the date at which the entity commits itselfto purchase or sell an asset.
(2) Classification and measurement of financial assets
At initial recognition, the Company classified its financial asset based on both the business model formanaging the financial asset and the contractual cash flow characteristics of the financial asset:
financial asset at amortised cost, financial asset at fair value through profit or loss (FVTPL).Reclassification of financial assets is permitted if, and only if, the objective of the entity’s businessmodel for managing those financial assets changes. In this circumstance, all affected financial assets
shall be reclassified on the first day of the first reporting period after the changes in business model;otherwise the financial assets cannot be reclassified after initial recognition.Financial assets shall be measured at initial recognition at fair value. For financial assets measured atFVTPL, transaction costs are recognised in current profit or loss. For financial assets not measuredat FVTPL, transaction costs should be included in the initial measurement.Subsequent measurement of financial assets will be based on their categories:
(i)Financial asset at amortised costThe financial asset at amortised cost category of classification applies when both the followingconditions are met: the financial asset is held within the business model whose objective is to holdfinancial assets in order to collect contractual cash flows, and the contractual term of the financialasset gives rise on specified dates to cash flows that are solely payment of principal and interest onthe principal amount outstanding. These financial assets are subsequently measured at amortised costby adopting the effective interest rate method. Any gain or loss arising from derecognition accordingto the amortization under effective interest rate method or impairment are recognised in current profitor loss.(ii) Financial asset at fair value through profit or loss (FVTPL)Financial asset at fair value through profit or loss shoulds be subsequently measured at fair value. Allthe changes in fair value are included in current profit or loss.
(3) Classification and measurement of financial liabilities
All the financial liabilities of the Company are financial liabilities at amortised cost. After initialrecognition, the Company measured these financial liabilities at amortised cost using the effectiveinterest method.
(4) Impairment of financial instruments
The Company shall recognise a loss allowance based on expected credit losses on a financial assetthat is measured at amortised cost.
(i) Measurement of expected credit lossesExpected credit losses are the weighted average of credit losses of the financial instruments with therespective risks of a default occurring as the weights. Credit loss is the difference between allcontractual cash flows that are due to the Company in accordance with the contract and all the cashflows that the Company expects to receive (ie all cash shortfalls), discounted at the original effectiveinterest rate or credit- adjusted effective interest rate for purchased or originated credit-impairedfinancial assets.Lifetime expected credit losses are the expected credit losses that result from all possible defaultevents over the expected life of a financial instrument.12-month expected credit losses are the portion of lifetime expected credit losses that represent theexpected credit losses that result from default events on a financial instrument that are possible withinthe 12 months after the reporting date (or the expected lifetime, if the expected life of a financialinstrument is less than 12 months).At each reporting date, the Company classifies financial instruments into three stages and makesprovisions for expected credit losses accordingly. A financial instrument of which the credit risk hasnot significantly increased since initial recognition is at stage 1. The Company shall measure the lossallowance for that financial instrument at an amount equal to 12-month expected credit losses. Afinancial instrument with a significant increase in credit risk since initial recognition but is notconsidered to be credit-impaired is at stage 2. The Company shall measure the loss allowance for thatfinancial instrument at an amount equal to the lifetime expected credit losses. A financial instrumentis considered to be credit-impaired as at the end of the reporting period is at stage 3. The Companyshall measure the loss allowance for that financial instrument at an amount equal to the lifetimeexpected credit losses.The Company may assume that the credit risk on a financial instrument has not increased significantlysince initial recognition if the financial instrument is determined to have low credit risk at thereporting date and measure the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.
For financial instrument at stage 1, stage 2 and those have low credit risk, the interest revenue shallbe calculated by applying the effective interest rate to the gross carrying amount of a financial asset(ie, impairment loss not been deducted). For financial instrument at stage 3, interest revenue shall becalculated by applying the effective interest rate to the amortised cost after deducting of impairmentloss.For other receivables which are demonstrated to be impaired by any objective evidence, or applicablefor individual assessment, the Company shall individually assess for impairment and recognise theloss allowance for expected credit losses. If the Company determines that no objective evidence ofimpairment exists for other receivables, or the expected credit loss of a single financial asset cannotbe assessed at reasonable cost, such other receivables shall be divided into several groups with similarcredit risk characteristics and collectively calculated the expected credit loss. The determination basisof groups is as following:
Determination basis of other receivables is as following:
Group 1 of other receivables: Deposit, guarantee receivable and imprest fundsGroup 2 of other receivables: temporary payments and othersFor each group, the Company calculates expected credit losses through default exposure and the 12-months or lifetime expected credit losses rate, taking reference to historical experience for creditlosses and considering current condition and expectation for the future economic situation.(ii) Low credit riskIf the financial instrument has a low risk of default, the borrower has a strong capacity to meet itscontractual cash flow obligations in the near term and adverse changes in economic and businessconditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfillits contractual cash flow obligations.(iii) Significant increase in credit riskThe Company shall assess whether the credit risk on a financial instrument has increased significantlysince initial recognition, using the change in the risk of a default occurring over the expected life ofthe financial instrument, through the comparison of the risk of a default occurring on the financial
instrument as at the reporting date with the risk of a default occurring on the financial instrument asat the date of initial recognition.To make that assessment, the Company shall consider reasonable and supportable information, thatis available without undue cost or effort, and that is indicative of significant increases in credit risksince initial recognition, including forward-looking information. The information considered by theCompany are as following:
? Significant changes in internal price indicators of credit risk as a result of a change incredit risk since inception? Existing or forecast adverse change in the business, financial or economic conditions ofthe borrower that results in a significant change in the borrower’s ability to meet its debtobligations；? An actual or expected significant change in the operating results of the borrower; Anactual or expected significant adverse change in the regulatory, economic, or technologicalenvironment of the borrower；? Significant changes in the value of the collateral supporting the obligation or in thequality of third-party guarantees or credit enhancements, which are expected to reduce theborrower’s economic incentive to make scheduled contractual payments or to otherwiseinfluence the probability of a default occurring;? Significant change that are expected to reduce the borrower’s economic incentive tomake scheduled contractual payments;? Expected changes in the loan documentation including an expected breach of contractthat may lead to covenant waivers or amendments, interest payment holidays, interest ratestep-ups, requiring additional collateral or guarantees, or other changes to the contractualframework of the instrument；? Significant changes in the expected performance and behavior of the borrower；? Contractual payments are more than 30 days past due.
Depending on the nature of the financial instruments, the Company shall assess whether the creditrisk has increased significantly since initial recognition on an individual financial instrument or agroup of financial instruments. When assessed based on a group of financial instruments, theCompany can group financial instruments on the basis of shared credit risk characteristics, forexample, past due information and credit risk rating.Generally, the Company shall determine the credit risk on a financial asset has increased significantlysince initial recognition when contractual payments are more than 30 days past due. The Companycan only rebut this presumption if the Company has reasonable and supportable information that isavailable without undue cost or effort, that demonstrates that the credit risk has not increasedsignificantly since initial recognition even though the contractual payments are more than 30 dayspast due.(iv) Credit-impaired financial assetThe Company shall assess at each reporting date whether the credit impairment has occurred forfinancial asset at amortised cost. A financial asset is credit-impaired when one or more events thathave a detrimental impact on the estimated future cash flows of that financial asset have occurred.Evidences that a financial asset is credit-impaired include observable data about the following events:
Significant financial difficulty of the issuer or the borrower；a breach of contract, such as a defaultor past due event; the lender(s) of the borrower, for economic or contractual reasons relating to theborrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s)would not otherwise consider；it is becoming probable that the borrower will enter bankruptcy orother financial reorganisation;the disappearance of an active market for that financial asset becauseof financial difficulties；the purchase or origination of a financial asset at a deep discount that reflectsthe incurred credit losses.(v) Presentation of impairment of expected credit lossIn order to reflect the changes of credit risk of financial instrument since initial recognition, theCompany shall at each reporting date remeasure the expected credit loss and recognise in profit orloss, as an impairment gain or loss, the amount of expected credit losses addition (or reversal). Forfinancial asset at amortised cost, the loss allowance shall reduce the carrying amount of the financialasset in the statement of financial position.
(vi) Write-offThe Company shall directly reduce the gross carrying amount of a financial asset when the Companyhas no reasonable expectations of recovering the contractual cash flow of a financial asset in itsentirety or a portion thereof. Such write-off constitutes a derecognition of the financial asset. Thiscircumstance usually occurs when the Company determines that the debtor has no assets or sourcesof income that could generate sufficient cash flow to repay the write-off amount.Recovery of financial asset written off shall be recognised in profit or loss as reversal of impairmentloss.
(5) Determination of fair value of financial instruments
Determination of fair value of financial assets and financial liabilities please refer to NoteV (10).
10. Fair Value Measurement
Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date.The Company determines fair value of the related assets and liabilities based on market value in theprincipal market, or in the absence of a principal market, in the most advantageous market price forthe related asset or liability. The fair value of an asset or a liability is measured using the assumptionsthat market participants would use when pricing the asset or liability, assuming that marketparticipants act in their economic best interest.The principal market is the market in which transactions for an asset or liability take place with thegreatest volume and frequency. The most advantageous market is the market which maximizes thevalue that could be received from selling the asset and minimizes the value which is needed to bepaid in order to transfer a liability, considering the effect of transport costs and transaction costs both.If the active market of the financial asset or financial liability exists, the Company shall measure thefair value using the quoted price in the active market. If the active market of the financial instrumentis not available, the Company shall measure the fair value using valuation techniques.
A fair value measurement of a non-financial asset takes into account a market participant’s ability togenerate economic benefits by using the asset in its highest and best use or by selling it to anothermarket participant that would use the asset in its highest and best use.
? Valuation techniquesThe Company uses valuation techniques that are appropriate in the circumstances and for whichsufficient data are available to measure fair value, including the market approach, the incomeapproach and the cost approach. The Company shall use valuation techniques consistent with one ormore of those approaches to measure fair value. If multiple valuation techniques are used to measurefair value, the results shall be evaluated considering the reasonableness of the range of valuesindicated by those results. A fair value measurement is the point within that range that is mostrepresentative of fair value in the circumstances.When using the valuation technique, the Company shall give the priority to relevant observable inputs.The unobservable inputs can only be used when relevant observable inputs is not available orpractically would not be obtained. Observable inputs refer to the information which is available frommarket and reflects the assumptions that market participants would use when pricing the asset orliability. Unobservable Inputs refer to the information which is not available from market and it hasto be developed using the best information available in the circumstances from the assumptions thatmarket participants would use when pricing the asset or liability.
? Fair value hierarchyTo Company establishes a fair value hierarchy that categorises into three levels the inputs to valuationtechniques used to measure fair value. The fair value hierarchy gives the highest priority to Level 1inputs and second to the Level 2 inputs and the lowest priority to Level 3 inputs. Level 1 inputs arequoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can accessat the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1that are observable for the asset or liability, either directly or indirectly. Level 3 inputs areunobservable inputs for the asset or liability.
11. Inventories
(1) Classification of inventories
Inventories are finished goods or products held for sale in the ordinary course of business, in theprocess of production for such sale, or in the form of materials or supplies to be consumed in theproduction process, including raw materials, Inventories mainly include raw materials, materials forconsigned processing, goods in progress, commodity stocks and goods in transit.
(2) Measurement method of cost of inventories
Cost of raw materials and cost of materials for consigned processing are calculated using the weightedaverage method.The Company adopts the standard cost method for the goods in transit and commodity stocks. At theend of the period, the difference between the standard cost and the actual cost will be shared amongthe goods in transit, commodity stocks and operating costs.
(3) Inventory system
The perpetual inventory system is adopted. The inventories should be counted at least once a year,and surplus or losses of inventory stocktaking shall be included in current profit and loss.
(4) Provision for impairment of inventory
Inventories are stated at the lower of cost and net realizable value. The excess of cost over netrealizable value of the inventories is recognised as provision for impairment of inventory, andrecognised in current profit or loss.Net realizable value of the inventory should be determined on the basis of reliable evidence obtained,and factors such as purpose of holding the inventory and impact of post balance sheet event shall beconsidered.The Company determines the proportion of providing impairment of commodity stocks according tothe industry characteristics, product sales strategy, sales price and other elements. The specificproportion of providing impairment is as follows:
| Aging | Proportion of providing impairment (%) |
| Within 1 year (inclusive) | - |
| 1-2 years | 30.00 |
| 2-3 years | 50.00 |
| Over 3 years | 100.00 |
No provision for impairment loss of goods in transit needs to be calculated considering that suchgoods had been deliveried to the customers.For raw materials that are damaged, sluggish and other impairment conditions, the provisions forinventory impairment are determined on an individual basis. For all other cases, the provisions forraw materials impairment are determined on an aging basis. The specific proportion of providingimpairment is as follows:
| Aging | Proportion of providing impairment (%) |
| Within 1 year (inclusive) | - |
| 1-2 years | 30.00 |
| 2-3 years | 50.00 |
| Over 3 years | 100.00 |
If any factor rendering write-downs of the inventories has been eliminated at the reporting date, theamounts written down are recovered and reversed to the extent of the inventory impairment, whichhas been provided for. The reversal shall be included in profit or loss.
12. Long-term Equity Investments
The Company's long-term equity investment only includes the equity investments where an investorhas control of.
(1) Determination of initial investment cost
Long-term equity investments generated in business combinations, the investment cost shall bedetermined based on the following requirements:
For a business combination involving enterprises under common control, if the Company makespayment in cash as the consideration for the business combination, the share of carrying amount ofthe owners’ equity of the acquiree in the consolidated financial statements of the ultimate controllingparty is recognised as the initial cost of the long-term equity investment on the combination date. Thedifference between the initial investment cost and the carrying amount of cash paid shall be adjustedagainst the capital reserve; if capital reserve is not enough to be offset, undistributed profit shall beoffset in turn.
Long-term equity investments acquired not through the business combination, the investment costshall be determined based on the following requirements:
For long-term equity investments acquired by payments in cash, the initial cost is the actually paidpurchase cost.
(2) Subsequent measurement and recognition of profit or loss
Long-term equity investment to an entity over which the Company has ability of control shall beaccounted for at cost method.For Long-term equity investment at cost method, cost of the long-term equity investment shall beadjusted when additional amount is invested or a part of it is withdrawn. The Company recognises itsshare of cash dividends or profits which have been declared to distribute by the investee as currentinvestment income.
(3) Impairment testing and provision for impairment loss
For investment in subsidiaries , provision for impairment loss please refer to Notes V (16).
13. Fixed assets
(1) Recognition criteria of fixed assets
Fixed assets will only be recognised at the actual cost paid when obtaining as all the following criteriaare satisfied:
(i) It is probable that the economic benefits relating to the fixed assets will flow into the Company;(ii) The costs of the fixed assets can be measured reliably.Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets, if recognition criteriaof fixed assets are satisfied, otherwise the expenditure shall be recorded in current profit or loss whenincurred.
(2) Depreciation methods of fixed assets
The Company begins to depreciate the fixed asset from the next month after it is available for intendeduse using the straight-line-method. The estimated useful life and annual depreciation rates which are
determined according to the categories, estimated economic useful lives and estimated net residualrates of fixed assets are listed as followings:
| Category | Depreciation method | Estimated useful life (year) | Residual | Category |
| Buildings and constructions | Straight line depreciation | 23.67-30 years | 5.00 | 3.17-4.01 |
| Vehicles | Straight line depreciation | 6 years | 5.00 | 15.83 |
| Machinery equipment | Straight line depreciation | 5-10 years | 5.00 | 9.5-19.00 |
| Electrical equipment | Straight line depreciation | 3 years | 5.00 | 31.67 |
For the fixed assets with impairment provided, the impairment provision should be excluded fromthe cost when calculating depreciation.At the end of reporting period, the Company shall review the useful life, estimated net residual valueand depreciation method of the fixed assets. Estimated useful life of the fixed assets shall be adjustedif it is changed compared to the original estimation.
14. Construction in Progress
(a) Classification of construction in progressConstruction in progress is measured on an individual project basis.(b) Recognition criteria and timing of transfer from construction in progress to fixed assetsThe initial book values of the fixed assets are stated at total expenditures incurred before they areready for their intended use, including construction costs, original price of machinery equipment,other necessary expenses incurred to bring the construction in progress to get ready for its intendeduse. The construction in progress shall be transferred to fixed asset when the installation orconstruction is ready for the intended use. For construction in progress that has been ready for theirintended use but relevant budgets for the completion of projects have not been completed, theestimated values of project budgets, prices, or actual costs should be included in the costs of relevantfixed assets, and depreciation should be provided according to relevant policies of the Company whenthe fixed assets are ready for intended use. After the completion of budgets needed for the completion
of projects, the estimated values should be substituted by actual costs, but depreciation alreadyprovided is not adjusted.
15. Intangible Assets
(a) Measurement method of intangible assetsIntangible assets are recognised at actual cost at acquisition.(b) The useful life and amortisation of intangible assetsThe estimated useful lives of the intangible assets with finite useful lives are as follows:
| Category | Estimated useful life | Basis |
| Land use rights | 50 years | Legal life |
| Software | 10 years | The service life is determined by reference to the period that can bring economic benefits to the Company |
For intangible assets with finite useful life, the estimated useful life and amortisation method arereviewed annually at the end of each reporting period and adjusted when necessary. No change hasincurred in current year in the estimated useful life and amortisation method upon review.
(3) Criteria of classifying expenditures on internal research and development projects intoresearch phase and development phase
①Preparation activities related to materials and other relevant aspects undertaken by the Companyfor the purpose of further development shall be treated as research phase.
②Development activities after the research phase of the Company shall be treated as developmentphase..The Company only includes the expenditures incurred during the research phase of internal researchand development projects, which shall be recognised in profit or loss when incurred.
16. Impairment of Long-Term Assets
Impairment loss of long-term equity investment in subsidiaries, fixed assets ,constructions in progress,intangible assets, etc.(excluding inventories, deferred tax assets, financial assets), shall be determinedaccording to following method:
The Company shall assess at the end of each reporting period whether there is any indication that anasset may be impaired. If any such indication exists, the Company shall estimate the recoverableamount of the asset and test for impairment.The recoverable amounts of the long-term assets are the higher of their fair values less costs to disposeand the present values of the estimated future cash flows of the long-term assets. The Companyestimate the recoverable amounts on an individual basis. If it is difficult to estimate the recoverableamount of the individual asset, the Company estimates the recoverable amount of the groups of assetsthat the individual asset belongs to. Identification of a group of asset is based on whether the cashinflows from it are largely independent of the cash inflows from other assets or groups of assets.If, and only if, the recoverable amount of an asset or a group of assets is less than its carrying amount,the carrying amount of the asset shall be reduced to its recoverable amount and the provision forimpairment loss shall be recognised accordingly.The mentioned impairment loss will not be reversed in subsequent accounting period once it had beenrecognised.
17. Long-term Deferred Expenses
Long-term deferred expenses are various expenses already incurred, which shall be amortised overcurrent and subsequent periods with the amortisation period exceeding one year.Long-term deferred expenses are evenly amortised over the beneficial period and the amortised periodfor each expense are as following:
| Item | Amortisation period |
| Decoration costs | Expected benefit period |
18. Employee Benefits
(1) Short-term employee benefits
(i) Employee basic salary (salary, bonus, allowance, subsidy)The Company recognises, in the accounting period in which an employee provides service, actuallyoccurred short-term employee benefits as a liability, with a corresponding charge to current profitexcept for those recognised as capital expenditure based on the requirement of accounting standards.(ii) Employee welfareThe Company shall recognise the employee welfare based on actual amount when incurred intocurrent profit or loss or related capital expenditure. Employee welfare shall be measured at fair valueas it is a non-monetary benefits.(iii) Social insurance such as medical insurance, work injury insurance and maternity insurance,housing funds, labor union fund and employee education fundPayments made by the Company of social insurance for employees, such as medical insurance, workinjury insurance and maternity insurance, payments of housing funds, and labor union fund andemployee education fund accrued in accordance with relevant requirements, in the accounting periodin which employees provide services, is calculated according to required accrual bases and accrualratio in determining the amount of employee benefits and the related liabilities, which shall berecognised in current profit or loss or the cost of relevant asset.
(2) Post-employment benefits
Defined contribution plansThe Company shall recognise, in the accounting period in which an employee provides service, thecontribution payable to a defined contribution plan as a liability, with a corresponding charge to thecurrent profit or loss or the cost of a relevant asset.
(3) Termination benefits
The Company providing termination benefits to employees shall recognise an employee benefitsliability for termination benefits, with a corresponding charge to the profit or loss of the reportingperiod, at the earlier of the following dates:
(i) When the Company cannot unilaterally withdraw the offer of termination benefits because of anemployment termination plan or a curtailment proposal.(ii) When the Company recognises costs or expenses related to a restructuring that involves thepayment of termination benefits.
19. Estimated Liabilities
(a) Recognition criteria of estimated liabilitiesThe Company recognises the estimated liabilities when obligations related to contingencies satisfyall the following conditions:
(i) That obligation is a current obligation of the Company;(ii) It is likely to cause any economic benefit to flow out of the Company as a result of performanceof the obligation; and(iii) The amount of the obligation can be measured reliably.(b) Measurement method of estimated liabilitiesThe estimated liabilities of the Company are initially measured at the best estimate of expensesrequired for the performance of relevant present obligations. The Company, when determining thebest estimate, has had a comprehensive consideration of risks with respect to contingencies,uncertainties and the time value of money. The carrying amount of the estimated liabilities shall bereviewed at the end of every reporting period. If conclusive evidences indicate that the carryingamount fails to be the best estimate of the estimated liabilities, the carrying amount shall be adjustedbased on the updated best estimate.
The specific measurement method of estimated liabilities due to expected sales return: The Companyshall be measured estimated liabilities at 0.5 percent of the sales amount in the last month prior to thebalance sheet date.
20. Revenue
(1) General Principles
Revenue is defined as the gross inflow of economic benefits arising in the course of the ordinaryactivities of the Company when those inflows result in the increases in shareholders’ equity, otherthan increases relating to contributions from shareholders.The Company shall recognise revenue when it satisfies a performance obligation in the contract asthe customer obtains control of a good . Control of a good refers to the ability to direct the use of,and obtain substantially all of the remaining economic benefits from, the good or service.The Company shall recognise revenue when it satisfies a performance obligation in the contract asthe customer obtains control of a good . Control of a good refers to the ability to direct the use of,and obtain substantially all of the remaining economic benefits from, the good or service.The Company shall recognise revenue at the point in which a customer obtains control of a promisedgood or service if a performance obligation is satisfied at a point in time. To determine the point intime at which a customer obtains control of a promised good or service, the Company shall considerindicators of the transfer of control, which include, but are not limited to, the followings:
(i) The Company has a present right to payment for the good or service – a customer is presentlyobliged to pay for the good or service;(ii) The Company has transferred legal title of an asset to a customer - the customer has legal title tothe asset;(iii) The Company has transferred physical possession of an asset to a customer - the customer hasphysical possession of the asset;(iv) The Company has transferred the significant risks and rewards of ownership of the asset to acustomer - the customer has the significant risks and rewards of ownership of the asset;
(v) The customer has accepted the asset.Sale with a right of returnFor sales with a right of return, when the customer obtains the control of a product, the Companyshall recognise revenue for the transferred products in the amount of consideration to which theCompany expects to be entitled and a refund liability at the amounts receivable for which theCompany does not expect to be entitled; meanwhile, an asset shall be recognised as receivables onthe cost of return measured at the former carrying amount of the product expected to be returned lessany expected costs to recover those products (including potential decreases in the value to the entityof returned products), and the net amount of the former carrying amount of the product whentransferred to the customer less above mentioned cost shall be recorded into the cost of sales. At theend of each reporting period, the Company shall re-assess the expectations about the sales return andremeasure above mentioned assets and liabilities.
(2) Specific Method
Revenue recognition methods of the Company are as follows:
According to the contract of sales of goods between the Company and the customer, the Companysatisfies a performance obligation by transferring goods to the customer, which is a performanceobligation satisfied at a point in time.The specific method about online clothing sales recognition of the Company are as follows: Revenuecan be recognised when one of the following condition is satisfied: (1)the Company has transferredthe promised goods to the receiver's address, which filled in the order placed by the end-customersand the end-customer has clicked "confirm receipt" button; (2)The Company has transferred thepromised goods to the receiver's address, which filled in the order placed by the end-customers, andthe system automatically confirms receipt after the given time according to the rules made by theplatform, and platform gave the money to the seller.
21. Government Grants
(a) Recognition of government grants
A government grant shall not be recgonised until there is reasonable assurance that:
(i) The Company will comply with the conditions attaching to them; and(ii) The grants will be received.(b) Measurement of government grantsMonetary grants from the government shall be measured at amount received or receivable.(c) Accounting for government grants(i) Government grants related to assetsGovernment grants pertinent to assets mean the government grants that are obtained by the Companyused for purchase or construction, or forming the long-term assets by other ways. Government grantspertinent to assets shall be recognised as deferred income, and should be recognised in profit or losson a systematic basis over the useful lives of the relevant assets. When the relevant assets are sold,transferred, written off or damaged before the assets are terminated, the remaining deferred incomeshall be transferred into profit or loss of the period of disposing relevant assets.(ii) Government grants related to incomeGovernment grants other than related to assets are classified as government grants related to income.Government grants related to income are accounted for in accordance with the following principles:
If the government grants related to income are used to compensate the enterprise’s relevant expensesor losses in future periods, such government grants shall be recognised as deferred income andincluded into profit or loss in the same period as the relevant expenses or losses are recognised;If the government grants related to income are used to compensate the enterprise’s relevant expensesor losses incurred, such government grants are directly recognised into current profit or loss.For government grants comprised of part related to assets as well as part related to income, each partis accounted for separately; if it is difficult to identify different part, the government grants areaccounted for as government grants related to income as a whole.
Government grants related to daily operation activities are recognised in other income in accordancewith the nature of the activities, and government grants irrelevant to daily operation activities arerecognised in non-operating income.
22. Deferred Tax Assets and Deferred Tax Liabilities
Temporary differences are differences between the carrying amount of an asset or liability in thestatement of financial position and its tax base at the balance sheet date. The Company recognise andmeasure the effect of taxable temporary differences and deductible temporary differences on incometax as deferred tax liabilities or deferred tax assets using liability method. Deferred tax assets anddeferred tax liabilities shall not be discounted.(a) Recognition of deferred tax assetsDeferred tax assets should be recognised for deductible temporary differences, the carryforward ofunused tax losses and the carryforward of unused tax credits to the extent that it is probable thattaxable profit will be available against which the deductible temporary differences, the carryforwardof unused tax losses and the carryforward of unused tax credits can be utilised at the tax rates that areexpected to apply to the period when the asset is realised, unless the deferred tax asset arises from theinitial recognition of an asset or liability in a transaction that:
(i) Is not a business combination; and(ii) At the time of the transaction, affects neither accounting profit nor taxable profit (tax loss)The Company shall recognise a deferred tax asset for all deductible temporary differences arisingfrom investments in subsidiaries, associates and joint ventures, only to the extent that, it is probablethat:
(i) The temporary difference will reverse in the foreseeable future; and(ii) Taxable profit will be available against which the deductible temporary difference can be utilised.At the end of each reporting period, if there is sufficient evidence that it is probable that taxable profitwill be available against which the deductible temporary difference can be utilized, the Companyrecognises a previously unrecognised deferred tax asset.
The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period. TheCompany shall reduce the carrying amount of a deferred tax asset to the extent that it is no longerprobable that sufficient taxable profit will be available to allow the benefit of part or all of thatdeferred tax asset to be utilised. Any such reduction shall be reversed to the extent that it becomesprobable that sufficient taxable profit will be available.(b) Recognition of deferred tax liabilitiesA deferred tax liability shall be recognised for all taxable temporary differences at the tax rate thatare expected to apply to the period when the liability is settled.(c) Recognition of deferred tax liabilities or assets involved in special transactions or events(i) Unused tax losses and unused tax creditsUnused tax losses and unused tax credits generated from daily operation of the Company itselfDeductible loss refers to the loss calculated and permitted according to the requirement of tax lawthat can be offset against taxable income in future periods. The criteria for recognising deferred taxassets arising from the carryforward of unused tax losses and tax credits are the same as the criteriafor recognising deferred tax assets arising from deductible temporary differences. The Companyrecognises a deferred tax asset arising from unused tax losses or tax credits only to the extent thatthere is convincing other evidence that sufficient taxable profit will be available against which theunused tax losses or unused tax credits can be utilised by the Company. Income taxes in current profitor loss shall be deducted as well.(ii) Temporary difference generated in consolidation eliminationWhen preparing consolidated financial statements, if temporary difference between carrying value ofthe assets and liabilities in the consolidated financial statements and their taxable bases is generatedfrom elimination of inter-company unrealized profit or loss, deferred tax assets or deferred taxliabilities shall be recognised in the consolidated financial statements, and income taxes expense incurrent profit or loss shall be adjusted as well except for deferred tax related to transactions or eventsrecognised directly in equity and business combination.
23. Leases
(1) Accounting treatment method for operating lease
(a) Identifying a leaseAt inception of a contract, the Company shall assess whether the contract is, or contains, a lease. Acontract is, or contains, a lease if the contract conveys the right to control the use of one or moreidentified assets for a period of time in exchange for consideration. To assess whether a contractconveys the right to control the use of an identified asset for a period of time, the Company shallassess whether, throughout the period of use, the customer has the right to obtain substantially all ofthe economic benefits from use of the identified asset and to direct the use of the identified asset.The Company includes only leases as lessee.(b) Identifying a separate lease componentWhen a contract includes more than one separate lease components, the Company shall separatecomponents of the contract and account for each lease component separately. The right to use anunderlying asset is a separate lease component if both conditions have been satisfied: (i) the lesseecan benefit from use of the underlying asset either on its own or together with other resources that arereadily available to the lessee; (ii) the underlying asset is neither highly dependent on, nor highlyinterrelated with, the other underlying assets in the contract.(c) The Company as a lesseeAt the commencement date, the Company identifies the lease that has a lease term of 12 months orless and does not contain a purchase option as a short-term lease. A lease qualifies as a lease of a low-value asset if the nature of the asset is such that, when new, the asset is typically of low value lessthan RMB50,000. If the Company subleases an asset, or expects to sublease an asset, the head leasedoes not qualify as a lease of a low-value asset.For asset included in short-term leases or leases for which the underlying asset is of low value/ all theshort-term leases or leases for which the underlying asset is of low value, the Company shall recognisethe lease payments associated with those leases as cost of relevant asset or expenses in current profitor loss on a straight-line basis over the lease term.
Except for the election of simple treatment as short-term lease or lease of a low-value asset asmentioned above, at the commencement date, the Company shall recognise a right-of-use asset and alease liability.(i) Right-of-use assetA right-of-use asset is an asset that represents a lessee’s right to use an underlying asset for the leaseterm.At the commencement date, the Company shall initially measure the right-of-use asset at cost. Thecost of the right-of-use asset shall comprise:
the amount of the initial measurement of the lease liability；any lease payments made at or before the commencement date, less any lease incentives received;any initial direct costs incurred by the lessee; andan estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset,restoring the site on which it is located or restoring the underlying asset to the condition required bythe terms and conditions of the lease. The Company recognises and measures the cost in accordancewith the recognition criteria and measurement method for estimated liabilities, details please refer toNotes 5.18. Those costs incurred to produce inventories shall be included in the cost of inventories.The right-of-use asset shall be depreciated according to the categories using straight‐line method. Ifit is reasonably certain that the ownership of the underlying asset shall be transferred to the lessee bythe end of the lease term, the depreciation rate shall be determined based on the classification of theright-of- use asset and estimated residual value rate from the commencement date to the end of theuseful life of the underlying asset. Otherwise, the depreciation rate shall be determined based on theclassification of the right-of-use asset from the commencement date to the earlier of the end of theuseful life of the right-of-use asset or the end of the lease term.The depreciation method, estimated useful life, residual rates and annual depreciation rates which aredetermined according to the categories of right-of-use asset are listed as followings:
| Category | Depreciation method | Estimated useful life (year) |
| Buildings and constructions | Straight line method | Lease term |
(ii) Lease liabilityAt the commencement date, the lease liability shall be measured at the present value of the leasepayments that are not paid at that date. The lease payments included in the measurement of the leaseliability comprise the following 5 items:
fixed payments and in-substance fixed payments, less any lease incentives receivable;variable lease payments that depend on an index or a rate；the exercise price of a purchase option if the lessee is reasonably certain to exercise that option；payments of penalties for terminating the lease, if the lease term reflects the lessee exercising anoption to terminate the lease；
amounts expected to be payable by the lessee under residual value guarantees.In order to calculate the present value of the lease payments, interest rate implicit in the lease shall beused as the discount rate. If that rate cannot be readily determined, the Company shall use theincremental borrowing rate. The difference between the lease payments and its present value shall berecognised as unrecognised financing charges, calculated bases on the discount rate of the presentvalue of the lease payments in each period within the lease term and recorded as interest expense incurrent profit or loss. Variable lease payments not included in the measurement of lease liabilitiesshall be recognised in current profit or loss when incurred.After the commencement date, the Company shall remeasure the lease liability based on the revisedpresent value of the lease payments and adjust the carrying amount of the right-of-use asset if thereis a change in the in-substance fixed payments, or change in the amounts expected to be payableunder a residual value guarantee, or change in an index or a rate used to determine lease payments,or change in the assessment or exercising of an option to purchase the underlying asset, or an optionto extend or terminate the lease.(d) Lease modifications(i) A lease modification accounted for as a separate leaseThe Company shall account for a modification to a lease as a separate lease, if both:
the modification increases the scope of the lease by adding the right to use one or more underlyingassets; andthe consideration for the lease increases by an amount commensurate with the stand-alone pricefor the increase in scope.(ii) A lease modification not accounted for as a separate leaseThe Company as a lesseeAt the effective date of the lease modification, the Company shall redetermine the lease term of themodified lease and remeasure the lease liability by discounting the revised lease payments using arevised discount rate. The revised discount rate is determined as the interest rate implicit in the leasefor the remainder of the lease term, if that rate can be readily determined, or the incrementalborrowing rate at the effective date of the modification, if the interest rate implicit in the lease cannotbe readily determined.The Company shall account for the remeasurement of the lease liability by:
decreasing the carrying amount of the right-of-use asset to reflect the partial or full terminationof the lease for lease modifications that decrease the scope of the lease or shorten the lease term. TheCompany shall recognise in profit or loss any gain or loss relating to the partial or full termination ofthe lease.
Making a corresponding adjustment to the carrying amount of the right-of-use asset for all otherlease modifications.
24. Important accounting policies and estimates
The Company continuously assesses the significant accounting estimates and key assumptionsaccording to its historical experiences and other elements, including reasonable expectations on thefuture events. The significant estimates and key assumptions that may result in significant adjustmenton the assets and liabilities’ carrying value in the following fiscal year are listed as below:
(i)Classification of financial assets
Significant estimates and key assumptions involved in classification of financial assets includedetermination of business model and contractual cash flow characteristics.The Company’s business model is determined at a level that reflects how groups of financial assetsare managed. Evidences that the Company must consider include but not limited to:
how the performance of the business model and the financial assets held within that businessmodel are evaluated and reported to the entity’s key management personnel;the risks that affect the performance of financial assets and their management methods;how managers of the business are compensated.In order to assess whether the contractual cash flows are consistent with a basic lending arrangement,the Company must consider whether the financial asset contains a contractual term that could changethe timing or amount of the principal (for example, if the asset can be prepaid before maturity) andwhether the interest consists of consideration for time value of the money, credit risk, other basiclending risk and costs, as well as profit margin. For example, the Company shall consider whetherthe prepayment amount substantially represents unpaid amounts of principal and interest on theprincipal amount outstanding as well as reasonable additional compensation for the early terminationof the contract.(ii)Deferred tax assetsDeferred tax assets shall be recognised for all unused taxable losses to the extent that it is probablethat the taxable profits will be available against which unused tax losses can be utilised. It requiresmanagement to estimate the time and amount of future taxable profits using plenty of judgment so asto determine the amount to be recognised as deferred tax assets, taking into consideration of the taxplanning strategy.(iii) Provision for impairment of inventoryFor inventories, net realisable value is determined at the estimated selling price less the estimatedcosts of completion, the estimated selling expenses and relevant taxes. Net realizable value of theinventory should be determined on the basis of reliable evidence obtained, and factors such as purposeof holding the inventory and impact of post balance sheet event shall be considered.
The excess of cost over net realizable value of the inventories is recognised as provision forimpairment of inventory.The difference between the actual result and the original estimate will affectthe carrying value of the inventory and the provision for the inventory.(iv) Fair value of unlisted equity investmentsThe fair value of unlisted equity investments is the projected future cash flows discounted at thecurrent discount rate of projects with similar terms and risk characteristics. Such valuation requiresthe Company to estimate expected future cash flows and discount rates and is therefore subject touncertainty. In limited circumstances, if the information used to determine fair value is insufficient,or if the possible estimates of fair value are widely distributed, and the cost represents the bestestimate of fair value within that range, the cost may represent its appropriate estimate of fair valuewithin that range.
25. Changes in Significant Accounting Policies and Accounting Estimates(a) Changes in accounting policesImplementation of the Accounting Standards Interpretation for Business Enterprises No. 16"Accounting treatment of deferred income tax related to assets and liabilities arising from singletransactions not applicable to the initial recognition exemption"The implementation of No. 16 has no significant impact on the company's financial statements duringthe reporting period.
(2) Significant changes in accounting estimates
□ Applicable ? Not applicable
VI. Taxes
1. Major Categories of Tax and Tax Rates Applicable to the Company
| Categories of tax | Basis of tax assessment | Tax rate |
| VAT | Value added during the sale of goods | 13%、9% |
| Urban maintenance and construction tax | Turnover tax payable | 7%、5% |
| Enterprise income tax | Income tax payable | 25%、20% |
| Educational surcharge | Turnover tax payable | 3% |
| Local educational surcharge | Turnover tax payable | 2% |
| Property taxes | Property tax payable | 1.2% |
Description of disclosure if different income tax rates apply to different corporate taxpayers
| Name of taxpayer | Income tax rate |
| The Company | 25% |
| Shanghai Rumere | 25% |
| Meicang Fashion | 25% |
| Rumere International | 2.5% |
2. Tax incentive
Rumere International meets the following standard of small and low-profit enterprises.According to the Announcement on Preferential Income Tax Policies for Small and Micro Enterprisesand Individual Industrial and Commercial Households No. 6 of Finance and Taxation [2023], fromJanuary 1, 2023 to December 31, 2024, if the annual taxable income of small and micro enterprisesdoes not exceed RMB1 million, the taxable income is calculated at a reduced rate of 25% with acorporate income tax rate of 20%.According to the Announcement on the Further Implementation of Preferential Income Tax Policiesfor Small and Micro Enterprises No. 13 of Finance and Taxation [2022], from January 1, 2022 toDecember 31, 2024, if the annual taxable income of small and micro enterprises exceeding RMB1million but not exceeding RMB 3 million, the taxable income is calculated at a reduced rate of 25%with a corporate income tax rate of 20%.VII. Notes to consolidated financial statements
1. Cash and Cash Equivalents
Unit: RMB
| Items | Clothing balance | Opening balance |
| Cash on hand | 367,974.55 | 907,807.77 |
| Bank deposits | 145,524,991.69 | 432,283,197.31 |
| Other monetary funds | 4,460,242.42 | 9,484,449.63 |
| Total | 150,353,208.66 | 442,675,454.71 |
As of December 31, 2023, the Company had no funds whose use is restricted due to mortgage, pledgeor freezing or which are deposited overseas or have the potential risk of recovery.
2. Financial assets held-for-trading
Unit: RMB
| Item | Clothing balance | Opening balance |
| Financial assets at fair value through profit or loss | 1,368,674,089.95 | 1,318,197,593.83 |
| Including: | ||
| Including: Bank wealth management products | 1,025,943,095.04 | 1,267,862,799.31 |
| Trust wealth financial products | 342,730,994.91 | 50,334,794.52 |
| Total | 1,368,674,089.95 | 1,318,197,593.83 |
3. Advances to Suppliers
(1) Advances to suppliers by aging
Unit: RMB
| Aging of account | Clothing balance | Opening balance | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within1 year | 37,903,490.93 | 66.69 | 32,472,807.37 | 55.21 |
| 1 to 2 years | 10,865,321.40 | 19.12 | 26,082,080.23 | 44.35 |
| 2 to 3 years | 7,839,511.39 | 13.79 | 146,079.39 | 0.25 |
| Over 3 years | 230,241.01 | 0.40 | 114,654.49 | 0.19 |
| Total | 56,838,564.73 | 100.00 | 58,815,621.48 | 100.00 |
Explanation on the reason of untimely settlement of prepayments whose age exceeds one year withsignificant amount:
The reason for the untimely settlement of significant prepayments with age exceeds one year is thatthe purchase contract signed between the company and Consinee Group Co., Ltd. is still in execution.
(2) Top five closing balances by entity
| Entity name | Balance as at December 31, 2023 | Proportion of the balance to the total advances to suppliers (%) |
| Consinee Group Co., Ltd. | 16,136,032.96 | 28.39 |
| Hebei Yuhong Cashmere Products Co., Ltd. | 15,348,553.24 | 27.00 |
| Hangzhou Ali Mama Software Service Co., Ltd. | 4,711,208.32 | 8.29 |
| Zhejiang Alibaba Communication Technology Co., Ltd. | 1,434,870.00 | 2.52 |
| Zhuji Aode Jewellry Co., Ltd. | 1,009,400.00 | 1.78 |
| Total | 38,640,064.52 | 67.98 |
4. Other Receivables
Unit: RMB
| Item | Clothing balance | Opening balance |
| Other receivables | 360,617.41 | 476,745.77 |
| Total | 360,617.41 | 476,745.77 |
(1) Other Receivables
1) Other receivables by category
Unit: RMB
| Nature of payment | Book balance at the end of the period | Book balance at the beginning of the period |
| Deposits receivable, security deposits, and imprest funds | 356,233.00 | 501,837.65 |
| Temporary payments and others | 23,364.27 | |
| Total | 379,597.27 | 501,837.65 |
2) Other receivables by aging
Unit: RMB
| Aging of account | Book balance at the end of the period | Book balance at the beginning of the period |
| Within 1 year | 249,597.27 | 151,541.10 |
| 1-2 years | 30,000.00 | 10,253.85 |
| Over 3 years | 100,000.00 | 340,042.70 |
| 3-4 years | 121,870.40 |
| 4-5 years | 100,000.00 | 218,172.30 |
| Total | 379,597.27 | 501,837.65 |
3) Classified disclosure according to method of bad debt provision
□ Applicable ? Not applicable
Unit: RMB
| Category | Clothing balance | Opening balance | ||||||||
| Book balance | Provision | Book value | Book balance | Provision | Book value | |||||
| Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
| Among： | ||||||||||
| Provision for bad debts on a portfolio basis | 379,597.27 | 100.00% | 18,979.86 | 5.00% | 360,617.41 | 501,837.65 | 100.00% | 25,091.88 | 5.00% | 476,745.77 |
| Among： | ||||||||||
| Deposits receivable, security deposits, and imprest funds | 356,233.00 | 93.84% | 17,811.65 | 5.00% | 338,421.35 | 501,837.65 | 100.00% | 25,091.88 | 5.00% | 476,745.77 |
| Temporary payments and others | 23,364.27 | 6.16% | 1,168.21 | 5.00% | 22,196.06 | |||||
| Total | 379,597.27 | 100.00% | 18,979.86 | 5.00% | 360,617.41 | 501,837.65 | 100.00% | 25,091.88 | 5.00% | 476,745.77 |
Provision for bad debts on a portfolio basis: 18,979.86
Unit: RMB
| Categories | Clothing balance | ||
| Book balance | Provision for bad debts | Proportion | |
| Deposits receivable, security deposits, and imprest funds | 356,233.00 | 17,811.65 | 5.00% |
| Temporary payments and others | 23,364.27 | 1,168.21 | 5.00% |
| Total | 379,597.27 | 18,979.86 | |
Provision for bad debts on a portfolio basis: 25,091.88
Unit: RMB
| Categories | Opening balance |
| Book balance | Provision for bad debts | Proportion | |
| Deposits receivable, security deposits, and imprest funds | 501,837.65 | 25,091.88 | 5.00% |
| Total | 501,837.65 | 25,091.88 |
Provision for bad debts that maded by expected credit losses
Unit: RMB
| Provision for loss allowance | Stage 1 | Stage 2 | Stage 3 | Total |
| 12-month expected credit losses | Lifetime expected credit losses (not credit-impaired) | Lifetime expected credit losses (credit-impaired) | ||
| Balance as at January 1, 2023 | 25,091.88 | 25,091.88 | ||
| Balance as at January 1, 2023 January 1 changes in the reporting period | ||||
| Provision | 1,168.21 | 1,168.21 | ||
| Reversal | 7,280.23 | 7,280.23 | ||
| Balance as at December 31, 20223 | 18,979.86 | 18,979.86 |
Description of changes in the book balance where there are significant changes in provision for thecurrent period
□ Applicable ? Not applicable
4) Bad debt reserve that is set aside, recovered or transferred back in the reporting periodBad debt reserve of the reporting period:
Unit: RMB
| Category | Opening balance | Changes in current period | Clothing balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Deposits receivable, security deposits, and imprest funds | 25,091.88 | 7,280.23 | 17,811.65 | |||
| Temporary payments and others | 1,168.21 | 1,168.21 | ||||
| Total | 25,091.88 | 1,168.21 | 7,280.23 | 18,979.86 | ||
5) Top five debtors in closing balance of other receivable
Unit: RMB
| Entity name | Nature of the amount | Clothing balance | Aging | Percentage in total balance of other receivables at the end of the period | Balance of bad debt reserve at the end of the period |
| Zhejiang Tmall Technology Co., Ltd. | Security deposit | 220,000.00 | Less than 1 year, more than 3 years | 57.96% | 11,000.00 |
| Wework Information Consulting (Shanghai) Co., Ltd. | Security deposit | 48,000.00 | Less than 1 year | 12.64% | 2,400.00 |
| Weimeng Chuangke Network Technology (China) Co., Ltd. | Security deposit | 30,000.00 | 1-2 years | 7.90% | 1,500.00 |
| China Securities Depository and Clearing Co., Ltd. Shenzhen Branch | Temporary payments | 22,105.99 | Less than 1 year | 5.82% | 1,105.30 |
| Changshu Qinhong Real Estate Co., Ltd. | Security deposit | 20,000.00 | Less than 1 year | 5.27% | 1,000.00 |
| Total | 340,105.99 | 89.59% | 17,005.30 |
5. Inventory
(1) Inventories by category
Unit: RMB
| Item | Clothing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Raw materials | 155,446,112.20 | 70,408,768.65 | 85,037,343.55 | 155,954,218.85 | 52,689,895.85 | 103,264,323.00 |
| Goods in progress | 3,172,078.98 | 3,172,078.98 | 3,284,907.35 | 3,284,907.35 | ||
| Commodity stocks | 353,181,227.61 | 78,242,095.72 | 274,939,131.89 | 265,265,432.56 | 50,531,154.37 | 214,734,278.19 |
| Goods in transit | 19,891,051.92 | 19,891,051.92 | 20,693,585.11 | 20,693,585.11 | ||
| Materials for consigned processing, | 10,677,862.75 | 10,677,862.75 | 19,684,243.04 | 19,684,243.04 | ||
| Total | 542,368,333.46 | 148,650,864.37 | 393,717,469.09 | 464,882,386.91 | 103,221,050.22 | 361,661,336.69 |
(2) Provision for impairment
Unit: RMB
| Item | Opening | Increase during the | Decrease during the reporting | Clothing |
| balance | reporting period | period | balance | |||
| Provision | Others | Provision | Others | |||
| Raw materials | 52,689,895.85 | 25,082,029.94 | 7,363,157.14 | 70,408,768.65 | ||
| Commodity stocks | 50,531,154.37 | 42,486,595.33 | 11,197,642.99 | 3,578,010.99 | 78,242,095.72 | |
| Total | 103,221,050.22 | 67,568,625.27 | 18,560,800.13 | 3,578,010.99 | 148,650,864.37 | |
6. Non-current Assets Maturing within One Year
Unit: RMB
| Item | Clothing balance | Opening balance |
| Non-current financial assets maturing within one year | - | 151,075,205.48 |
| Total | - | 151,075,205.48 |
7. Other current assets
Unit: RMB
| Item | Clothing balance | Opening balance |
| Return cost receivable | 289,889.56 | 224,928.45 |
| Prepaid corporate income tax | 16,553.17 | |
| Input VAT to be deducted | 20,845,722.53 | |
| Total | 21,135,612.09 | 241,481.62 |
8. Other non-current financial assets
Unit: RMB
| Item | Clothing balance | Opening balance |
| Unlisted equity investments | 76,950,000.00 | 100,115,890.41 |
| Trust wealth financial products | 55,080,082.19 | 100,115,890.41 |
| Total | 132,030,082.19 | 100,115,890.41 |
In November 2023, the company obtained 48 million shares of Jiangsu SOHO International GroupCorporation held by Shanghai Zendai Investment Development Co., Ltd. through judicial auction,corresponding to a 4.8791% equity stake, with a payment of RMB76.95 million.
9. Fixed assets
Unit: RMB
| Item | Clothing balance | Opening balance |
| Fixed assets | 431,839,182.13 | 178,412,503.35 |
| Total | 431,839,182.13 | 178,412,503.35 |
(1) Fixed assets
Unit: RMB
| Item | Buildings and constructions | Machinery equipment | Vehicles | Electrical equipment | Total |
| I. Original Book Value: | |||||
| 1. Opening balance | 177,552,389.96 | 4,189,131.16 | 7,967,194.09 | 5,337,208.85 | 195,045,924.06 |
| 2. Increase in the current period | 261,140,368.55 | 169,469.04 | 2,871,364.61 | 848,851.16 | 265,030,053.36 |
| 3. Decrease in the current period | 371,235.13 | 223,632.48 | 594,867.61 | ||
| 4. Clothing balance | 438,692,758.51 | 4,358,600.20 | 10,467,323.57 | 5,962,427.53 | 459,481,109.81 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 6,276,798.51 | 1,502,478.64 | 5,541,154.44 | 3,312,989.12 | 16,633,420.71 |
| 2. Increase in the current period | 9,116,066.75 | 456,092.89 | 1,126,097.30 | 878,739.87 | 11,576,996.81 |
| 3. Decrease in the current period | 347,143.26 | 221,346.58 | 568,489.84 | ||
| 4. Clothing balance | 15,392,865.26 | 1,958,571.53 | 6,320,108.48 | 3,970,382.41 | 27,641,927.68 |
| III. Impairment Provision | |||||
| IV. Book Value | |||||
| 1. Book value at the end of the period | 423,299,893.25 | 2,400,028.67 | 4,147,215.09 | 1,992,045.12 | 431,839,182.13 |
| 2. Book value at the beginning of the period | 171,275,591.45 | 2,686,652.52 | 2,426,039.65 | 2,024,219.73 | 178,412,503.35 |
Shanghai rongme, a wholly-owned subsidiary of the Company, purchased the assets located at Building4 of the Wanyuan City No. 9 and 10, Lane 585, Wan Yuan Road, Minhang District, Shanghai, in June2023. The property covers an area of 4,967.78 square meters and has already obtained the real estatecertificate. The book value of these target assets is RMB255,840,670.01. The main purpose is thecompany's research and development base and daily operation purposes.
10. Construction in Progress
Unit: RMB
| Item | Clothing balance | Opening balance |
| Construction in Progress | 53,331,524.63 | 52,063,773.07 |
| Total | 53,331,524.63 | 52,063,773.07 |
(1) General information of construction in progress
Unit: RMB
| Item | Clothing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Modern Manufacturing Service Base | 53,331,524.63 | 53,331,524.63 | 52,063,773.07 | 52,063,773.07 | ||
| Total | 53,331,524.63 | 53,331,524.63 | 52,063,773.07 | 52,063,773.07 | ||
(2) Changes in significant projects of construction in progress
Unit: RMB
| Project name | Budget | Opening balance | Increase during the reporting period | Transfer to fixed asset | Decrease during the reporting period | Clothing balance | Proportion of project input to budgets (%) | Rate of progress | Cumulative amount of interest capitalisation | Including: interest capitalised during the reporting period | Interest capitalisation rate during the reporting period (%) | Source of funds |
| Modern Manufacturing Service Base | 250,044,300.00 | 52,063,773.07 | 1,267,751.56 | 53,331,524.63 | 83.60% | 83.60% | - | - | - | Proceeds raised | ||
| Total | 250,044,300.00 | 52,063,773.07 | 1,267,751.56 | 53,331,524.63 | - | - | - |
11. Right-of use Assets
Unit: RMB
| Item | Buildings and constructions |
| I. Original Book Value: | |
| 1. Opening balance | 3,959,129.79 |
| 2. Increase in the current period | 1,944,285.72 |
| 3. Decrease in the current period | 2,505,488.60 |
| 4. Clothing balance | 3,397,926.91 |
| II. Accumulated depreciation | |
| 1. Opening balance | 2,764,264.52 |
| 2. Increase in the current period | 1,278,053.14 |
| 3. Decrease in the current period | 1,674,033.61 |
| 4. Clothing balance | 2,368,284.05 |
| III. Impairment Provision | |
| 1. Opening balance | |
| 2. Increase in the current period | |
| 3. Decrease in the current period | |
| 4. Clothing balance | |
| IV. Book Value | |
| 1. Book value at the end of the period | 1,029,642.86 |
| 2. Book value at the beginning of the period | 1,194,865.27 |
Depreciation accrued in 2023 for the right-of-use assets was RMB1,278,053.14, among whichRMB1,278,053.14 was recorded in General and administrative expenses.
12. Intangible Assets
(1) General information of intangible assets
Unit: RMB
| Item | Land use rights | Software | Total |
| I. Original book value: | |||
| 1. Opening balance | 18,946,032.03 | 573,388.25 | 19,519,420.28 |
| 2. Increase in the current period | 80,530.98 | 80,530.98 | |
| 3. Decrease in the current period | |||
| 4. Clothing balance | 18,946,032.03 | 653,919.23 | 19,599,951.26 |
| II. Accumulated Amortization | |||
| 1. Opening balance | 1,223,913.50 | 316,260.09 | 1,540,173.59 |
| 2. Increase in the current period | 386,499.00 | 56,333.82 | 442,832.82 |
| (1) Provision | 386,499.00 | 56,333.82 | 442,832.82 |
| 3. Decrease in the current period | |||
| 4. Clothing balance | 1,610,412.50 | 372,593.91 | 1,983,006.41 |
| III. Impairment Provision | |||
| 1. Opening balance | |||
| 2. Increase in the current period | |||
| 3. Decrease in the current period | |||
| 4. Clothing balance | |||
| IV. Book Value |
| 1. Book value at the end of the period | 17,335,619.53 | 281,325.32 | 17,616,944.85 |
| 2. Book value at the beginning of the period | 17,722,118.53 | 257,128.16 | 17,979,246.69 |
13. Long-term Deferred Expenses
Unit: RMB
| Item | Opening balance | Increase during the reporting period | Amortized amount of the current period | Other decreases | Clothing balance |
| Decoration costs | 1,159,382.32 | 254,564.06 | 904,818.26 | ||
| Total | 1,159,382.32 | 254,564.06 | 904,818.26 |
14. Deferred Tax Assets and Deferred Tax Liabilities
(1) Deferred tax assets before offsetting
Unit: RMB
| Item | Clothing balance | Opening balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Provision for impairment loss | 148,650,864.37 | 37,162,716.09 | 103,221,050.22 | 25,805,262.56 |
| Deductible losses | 6,502,487.51 | 1,625,621.88 | 10,432,914.62 | 2,608,228.65 |
| Deferred income | 453,230.76 | 113,307.68 | 562,321.13 | 140,580.28 |
| Expected sales return | 18,979.86 | 4,744.97 | 25,091.88 | 6,272.97 |
| Bad debt provision | 1,900,000.10 | 475,000.03 | 1,966,666.70 | 491,666.68 |
| Total | 157,525,562.60 | 39,381,390.65 | 116,208,044.55 | 29,052,011.14 |
(2) Deferred tax liabilities before offsetting
Unit: RMB
| Item | Clothing balance | Opening balance | ||
| Deductible temporary differences | Deferred tax liabilities | Deductible temporary differences | Deferred tax liabilities | |
| Change in fair value of financial assets held-for-trading | 2,152,545.23 | 538,136.31 | 2,024,154.95 | 506,038.74 |
| Unrealized internal trading loss | 9,854,172.14 | 2,463,543.04 | 11,388,689.72 | 2,847,172.43 |
| Return cost receivable | 289,889.56 | 72,472.39 | 224,928.45 | 56,232.11 |
| Interest income | 4,800,000.00 | 1,200,000.00 | 431,506.85 | 107,876.71 |
| Total | 17,096,606.93 | 4,274,151.74 | 14,069,279.97 | 3,517,319.99 |
(3) Net balance of deferred tax liabilities and deferred tax assets after offsetting
Unit: RMB
| Item | Offset amount of the deferred tax assets and liabilities at the end of the reporting period | Balance of the deferred tax assets or liabilities after offset at the end of the reporting period | Offset amount of the deferred tax assets and liabilities at the beginning of the reporting period | Balance of the deferred tax assets or liabilities after offset at the beginning of the reporting period |
| Deferred tax assets | 72,472.39 | 39,308,918.26 | 56,232.11 | 28,995,779.03 |
| Deferred tax liabilities | 72,472.39 | 4,201,679.35 | 56,232.11 | 3,461,087.88 |
15. Other non-current assets
| Item | Clothing balance | Opening balance | ||||
| Book balance | Provision | Book value | Book balance | Provision | Book value | |
| Advance payment for equipment | 626,000.00 | 626,000.00 | ||||
| Total | 626,000.00 | 626,000.00 | ||||
16. Accounts Payable
(1) Accounts payable by nature
Unit: RMB
| Item | Clothing balance | Opening balance |
| Payables for constructions | 34,981,069.98 | 63,284,891.25 |
| Payables for materials | 1,278,327.82 | 8,213,807.93 |
| Payable for goods | 18,927,792.39 | 19,021,750.09 |
| Payable for processing | 2,975,968.27 | 3,085,821.91 |
| Total | 58,163,158.46 | 93,606,271.18 |
(2) Significant accounts payable with aging of over one year
Unit: RMB
| Item | Clothing balance | Reason |
| Shengfeng Construction & | 33,753,746.46 | Completion settlement not yet |
| Installation Engineering Co., Ltd. | completed | |
| Total | 33,753,746.46 |
The Clothing balance of accounts payable of Shengfeng Construction & Installation Engineering Co.,Ltd. is RMB33,753,746.46, with an age of one to two years.
17. Employee Benefits Payable
(1) Details of employee benefits payable
Unit: RMB
| Item | Opening balance | Increase during the reporting period | Decrease during the reporting period | Clothing balance |
| Short-term employee benefits | 5,107,789.54 | 68,631,295.79 | 68,206,696.88 | 5,532,388.45 |
| Post-employment benefits-defined contribution plans | 53,548.90 | 3,791,936.08 | 3,795,049.65 | 50,435.33 |
| Termination benefits | 637,158.00 | 637,158.00 | ||
| Total | 5,161,338.44 | 73,060,389.87 | 72,638,904.53 | 5,582,823.78 |
(2) Short-term employee benefits
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Clothing balance |
| 1.Salaries, bonuses, allowances and subsidies | 4,871,513.58 | 57,488,132.41 | 57,291,592.80 | 5,068,053.19 |
| 2.Employee benefits | 120,828.60 | 7,274,925.11 | 7,045,533.97 | 350,219.74 |
| 3.Social insurance | 32,973.20 | 1,718,652.52 | 1,720,569.69 | 31,056.03 |
| Health insurance | 32,453.90 | 1,480,165.67 | 1,482,052.70 | 30,566.87 |
| Injury insurance | 519.30 | 92,494.70 | 92,524.84 | 489.16 |
| Birth insurance | 145,992.15 | 145,992.15 | ||
| 4. Housing accumulation fund | 1,833,101.00 | 1,833,101.00 | ||
| 5. Labour union funds and employee education funds | 82,474.16 | 316,484.75 | 315,899.42 | 83,059.49 |
| Total | 5,107,789.54 | 68,631,295.79 | 68,206,696.88 | 5,532,388.45 |
(3) Defined contribution plans
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Clothing balance |
| 1. Basic endowment insurance | 51,926.20 | 3,677,237.53 | 3,680,256.74 | 48,906.99 |
| 2. Unemployment insurance | 1,622.70 | 114,698.55 | 114,792.91 | 1,528.34 |
| Total | 53,548.90 | 3,791,936.08 | 3,795,049.65 | 50,435.33 |
18. Other Payables
Unit: RMB
| Item | Clothing balance | Opening balance |
| Other payables | 8,995,145.79 | 9,784,082.94 |
| Total | 8,995,145.79 | 9,784,082.94 |
(1) Other Payables
1) Other payables by nature
Unit: RMB
| Item | Clothing balance | Opening balance |
| Express fees | 5,318,558.24 | 6,876,333.70 |
| Charges for storage and preservation of the goods | 1,055,250.79 | 990,763.74 |
| Other fees | 2,621,336.76 | 1,916,985.50 |
| Total | 8,995,145.79 | 9,784,082.94 |
There are no significant others aged over one year accured this year.
19. Taxes Payable
Unit: RMB
| Item | Clothing balance | Opening balance |
| Enterprise income tax | 12,246,217.29 | 21,585,182.85 |
| VAT | 3,766,299.71 | 5,502,791.86 |
| Property taxes | 950,717.23 | 776,679.02 |
| Individual income tax | 300,262.64 | 309,950.10 |
| Urban maintenance and construction tax | 237,225.33 | 351,808.94 |
| Stamp tax | 149,487.78 | 110,178.11 |
| Education surcharge | 101,667.99 | 152,902.74 |
| Local education surcharge | 67,778.66 | 101,935.15 |
| Land use tax | 63,184.19 | 61,710.90 |
| Total | 17,882,840.82 | 28,953,139.67 |
20. Non-current Liabilities Maturing within One Year
Unit: RMB
| Item | Clothing balance | Opening balance |
| Long-term lease liabilities due within one year | 857,142.86 | 1,110,716.50 |
| Total | 857,142.86 | 1,110,716.50 |
21. Other Current Liabilities
Unit: RMB
| Item | Clothing balance | Opening balance |
| Refunds payable | 453,230.76 | 562,321.13 |
| Total | 453,230.76 | 562,321.13 |
22. Lease liabilities
Unit: RMB
| Item | Clothing balance | Opening balance |
| Lease payments | 857,142.86 | 1,114,458.77 |
| Less: Unrealised finance expenses | - | 3,742.27 |
| Subtotal | 857,142.86 | 1,110,716.50 |
| Less: lease liabilities due within one year | 857,142.86 | 1,110,716.50 |
| Total | - | - |
23. Deferred Income
Unit: RMB
| Item | Opening balance | Increase during the reporting period | Decrease during the reporting period | Clothing balance | Reason |
| Government grants | 1,966,666.70 | - | 66,666.60 | 1,900,000.10 | Subsidies for supporting infrastructure |
| Total | 1,966,666.70 | - | 66,666.60 | 1,900,000.10 |
24. Share Capital
Unit: RMB
| Opening balance | Increase and decrease of this change (+ and -) | Clothing balance | |||||
| Issuance of new shares | Bonus issues | Shares transferred from surplus reserve | Others | Subtotal | |||
| Number of total shares | 228,000,000.00 | 228,000,000.00 | |||||
25. Capital Reserves
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Clothing balance |
| Share premium | 1,782,210,407.28 | 1,782,210,407.28 | ||
| Total | 1,782,210,407.28 | 1,782,210,407.28 |
26. Surplus reserves
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Clothing balance |
| Statutory surplus reserves | 54,889,643.62 | 6,708,201.95 | 61,597,845.57 | |
| Total | 54,889,643.62 | 6,708,201.95 | 61,597,845.57 |
The increase in the Company’s surplus reserve in the reporting period is due to the appropriation ofthe statutory surplus reserve at 10% of the Parent Company’s net profit in the period.
27. Retained Earnings
Unit: RMB
| Item | Current period | Last period |
| Balance as at the end of last period before adjustments | 503,359,204.38 | 391,211,843.00 |
| Balance as at the beginning of the reporting period after adjustments | 503,359,204.38 | 391,211,843.00 |
| Add: net profit attributable to owners of the parent company for the reporting period | 84,719,397.91 | 167,040,817.13 |
| Less: Transfer to statutory surplus reserves | 6,708,201.95 | 14,309,455.75 |
| Declaration of ordinary share dividends | 83,448,000.00 | 40,584,000.00 |
| Balance as at the end of the reporting period | 497,922,400.34 | 503,359,204.38 |
28. Revenue and Cost of Sales
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period | ||
| Revenue | Costs of sales | Revenue | Costs of sales | |
| Principal activities | 765,889,176.04 | 465,928,820.89 | 946,278,717.99 | 562,934,119.40 |
| Other activities | 1,427,641.61 | 790,530.00 | 2,533,049.72 | 1,413,157.00 |
| Total | 767,316,817.65 | 466,719,350.89 | 948,811,767.71 | 564,347,276.40 |
Whether lower of the audited net profits before and after deducting the non-recurring profit and lossis negative
□Yes ?No
Decomposed information of revenue from Principal activities
1) Principal activities (by product)
| Item | 2023 | 2022 | ||
| Income | Income | Income | Costs | |
| Tops | 243,946,736.80 | 151,442,730.18 | 328,029,179.28 | 202,220,530.82 |
| Coats | 155,188,755.89 | 93,181,528.92 | 217,453,325.21 | 128,369,290.11 |
| Pants | 128,129,350.33 | 72,666,603.55 | 153,682,693.10 | 82,771,023.17 |
| Skirts and dresses | 110,771,808.93 | 66,497,040.68 | 113,325,747.28 | 68,111,675.60 |
| Fur | 42,407,445.65 | 27,751,253.04 | 69,462,339.95 | 44,928,447.32 |
| Jewel | 36,559,618.62 | 24,140,594.44 | - | - |
| Others | 48,885,459.82 | 30,249,070.08 | 64,325,433.17 | 36,533,152.38 |
| Total | 765,889,176.04 | 465,928,820.89 | 946,278,717.99 | 562,934,119.40 |
2) Principal activities (by region)
| Item | 2023 | 2022 | ||
| Income | Costs | Income | Costs | |
| East China | 375,073,498.97 | 228,587,579.85 | 460,992,533.23 | 274,926,232.68 |
| North China | 129,646,567.04 | 78,021,028.51 | 163,440,527.42 | 96,014,105.24 |
| Southwest China | 68,750,116.02 | 42,101,519.70 | 86,722,866.43 | 51,941,606.03 |
| Item | 2023 | 2022 | ||
| Income | Costs | Income | Costs | |
| Southern China | 65,698,489.51 | 39,920,667.82 | 73,592,409.08 | 43,648,606.93 |
| Central China | 62,784,048.46 | 38,570,160.29 | 80,489,346.66 | 48,385,649.88 |
| Northeast China | 34,238,605.61 | 20,831,672.56 | 45,396,886.89 | 26,974,684.85 |
| Northwest China | 29,671,725.40 | 17,882,320.29 | 35,560,601.61 | 20,997,592.76 |
| Others | 26,125.03 | 13,871.87 | 83,546.67 | 45,641.03 |
| Total | 765,889,176.04 | 465,928,820.89 | 946,278,717.99 | 562,934,119.40 |
29. Taxes and Surcharges
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Property taxes | 2,542,708.76 | 914,271.14 |
| Urban maintenance and construction tax | 1,900,238.76 | 1,913,647.08 |
| Education surcharge | 814,468.25 | 824,107.79 |
| Local education surcharge | 542,978.82 | 549,405.16 |
| Stamp tax | 468,780.73 | 275,794.24 |
| Land use tax | 249,289.20 | 246,843.60 |
| Environmental protection tax | 16,061.76 | 256,942.62 |
| Others | 10,763.60 | 4,668.60 |
| Total | 6,545,289.88 | 4,985,680.23 |
30. Selling and Distribution Expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Marketing expenses | 77,247,592.73 | 91,935,794.45 |
| Employee benefits | 29,401,714.02 | 28,082,205.46 |
| Storage fees | 3,499,129.91 | 3,809,628.99 |
| Depreciation and amortization fees | 1,891,200.27 | 1,102,253.88 |
| Utilities | 654,790.01 | |
| Total | 112,694,426.94 | 124,929,882.78 |
31. General and Administrative Expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Employee benefits | 17,413,216.15 | 14,582,363.17 |
| Depreciation and amortization fees | 9,541,215.14 | 4,292,798.39 |
| Office allowance | 4,075,522.21 | 3,920,143.92 |
| Labor dispatch expenses | 2,423,037.67 | 2,734,195.92 |
| Scrapping of inventories | 2,552,789.57 | 1,115,191.58 |
| Consulting service fees | 2,000,206.04 | 1,386,162.70 |
| Depreciation of right-of-use assets | 1,278,053.14 | 1,576,681.40 |
| Utilities | 1,138,017.76 | 1,445,281.77 |
| Maintenance and decoration costs | 1,009,817.04 | 340,319.83 |
| Travelling expenses | 937,752.62 | 954,322.44 |
| Business entertainment expenses | 801,369.99 | 2,986,554.00 |
| Gains and losses on the counting | 144,486.76 | 87,857.45 |
| Property fees | 509,313.36 | 243,308.45 |
| Rental fee | 181,575.61 | 299,464.85 |
| Others | 2,130,042.31 | 1,538,350.09 |
| Total | 46,136,415.37 | 37,502,995.96 |
32. Research and development expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Employee benefits | 16,194,973.71 | 14,991,401.59 |
| Materials fees | 3,955,018.08 | 3,994,042.69 |
| Software development fees | 320,397.82 | 1,281,301.55 |
| Total | 20,470,389.61 | 20,266,745.83 |
33. Finance expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Interest expense | 5,232.32 | 50,146.33 |
| Including: Interest expense of lease liabilities | 5,232.32 | 50,146.33 |
| Less: Interest income | 11,571,422.65 | 12,484,242.39 |
| Net interest expense | -11,566,190.33 | -12,434,096.06 |
| Exchange losses | 137,534.76 | 226,587.41 |
| Less: Exchange gains | ||
| Net loss on exchange | 137,534.76 | 226,587.41 |
| Financial institution charges | 3,387,763.52 | 4,072,400.96 |
| Including: Alipay service charges | 3,224,566.43 | 3,929,233.20 |
| Total | -8,040,892.05 | -8,135,107.69 |
34. Other Income
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| 1. Government grant recognised in other imcome | 1,866,161.60 | 6,358,231.30 |
| Including: Government grant related to deferred income (related to assets) | 66,666.60 | 33,333.30 |
| Government grant directly recognised in current profit or loss | 1,799,495.00 | 6,324,898.00 |
| II. Others related to daily operation activities and recognised in other income | 82,922.37 | 46,142.14 |
| Including: Charges of withholding individual income tax | 62,253.81 | 14,582.52 |
| Additional tax deductions for Input tax | 20,668.56 | 31,559.62 |
| Total | 1,949,083.97 | 6,404,373.44 |
35. Investment income
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Gains on disposal of held-for-trading financial assets | 38,061,196.16 | 40,009,346.45 |
| Total | 38,061,196.16 | 40,009,346.45 |
36. Gains from Changes in Fair Values
Unit: RMB
| Sources of income from changes in fair value | Incurred in the current period | Incurred in the prior period |
| Financial assets held-for-trading | 9,736,672.14 | 9,312,190.32 |
| Total | 9,736,672.14 | 9,312,190.32 |
37. Credit Impairment Losses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Bad debt of other receivables | 6,112.02 | 23,422.95 |
| Total | 6,112.02 | 23,422.95 |
38. Asset Impairment Losses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Impairment of inventories | -67,568,625.27 | -49,127,914.01 |
| Total | -67,568,625.27 | -49,127,914.01 |
39. Gains from Disposal of Assets
Unit: RMB
| Source of asset disposal proceeds | Incurred in the current period | Incurred in the prior period |
| Gains from disposal of fixed assets | 30,655.86 | - |
40. Non-operating income
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period | Recognised in current extraordinary gains and losses |
| Others | 4,267.00 | 44,880.37 | 4,267.00 |
| Total | 4,267.00 | 44,880.37 | 4,267.00 |
41. Non-operating expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period | Recognised in current extraordinary gains and losses |
| Donations | 460,000.00 | 450,000.00 | 460,000.00 |
| Overdue fine | 613,660.63 | 613,660.63 | |
| Others | 59,643.14 | 33,434.57 | 59,643.14 |
| Total | 1,133,303.77 | 483,434.57 | 1,133,303.77 |
42. Income Tax Expenses
(1) Details of income tax expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Current income tax expense | 26,674,555.90 | 49,902,317.81 |
| Deferred income tax expense | -9,572,547.76 | -5,941,278.87 |
| Income taxes during the prior period | 2,056,489.07 | 95,303.08 |
| Total | 19,158,497.21 | 44,056,342.02 |
(2) Reconciliation of accounting profit and income tax expenses
Unit: RMB
| Item | Incurred in the current period |
| Profit before tax | 103,877,895.12 |
| Income tax expense at the statutory /applicable tax rate | 25,969,473.78 |
| Effect of different tax rate of subsidiaries | -47,200.20 |
| Effect of adjustments to income taxes during the prior period | 2,056,489.07 |
| Effect of non-deductible costs, expenses or losses | 463,594.66 |
| R&D expenses plus deduction | -9,355,404.78 |
| Expiration of unused taxable losses | 71,544.68 |
| Income tax expenses | 19,158,497.21 |
43. Notes to the Statement of Cash Flow
(1) Other cash received relating to operating activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Interest income | 7,202,929.50 | 12,052,735.54 |
| Government grants | 1,799,495.00 | 6,371,040.14 |
| Return of advances | 15,764,828.04 | |
| Others | 205,162.75 | 468,458.90 |
| Total | 24,972,415.29 | 18,892,234.58 |
Note: According to the fixed quantity purchase contract signed with Kangshen Group Co., Ltd., thecompany has correspondingly reduced the advance payment ratio based on the remaining purchasevolume. This year, the company received an advance payment of 15,764,828.04 yuan correspondingto the adjusted ratio.
(2) Other cash payments relating to operating activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Payment of Selling and Distribution Expenses | 87,246,236.15 | 99,982,376.87 |
| Payment of General and Administrative Expenses | 16,339,207.05 | 15,073,724.37 |
| Payment of Research and Development Expenses | 6,253,223.01 | 5,457,843.17 |
| Payment of finance expenses - charges | 3,387,763.52 | 4,072,400.96 |
| Others | 1,133,303.77 | 483,434.57 |
| Total | 114,359,733.50 | 125,069,779.94 |
(3) Cash relating to investing activities
Other important cash received relating to investing activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Finance products redemption | 5,339,110,000.00 | 5,956,550,000.00 |
| Total | 5,339,110,000.00 | 5,956,550,000.00 |
Other important cash payments relating to investing activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Finance products purchase | 4,895,010,000.00 | 6,240,550,000.00 |
| Unlisted equity investments purchase | 76,950,000.00 | |
| Total | 4,971,960,000.00 | 6,240,550,000.00 |
(3) Other cash payments relating to financing activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Payment for principal and interest of lease liabilities | 1,954,161.72 | 3,212,832.37 |
| Total | 1,954,161.72 | 3,212,832.37 |
44. Supplementary Information to the Statement of Cash Flows
(1) Supplementary information to the statement of cash flows
Unit: RMB
| Supplementary information | Incurred in the current period | Incurred in the prior period |
| 1. Adjustments of net profit to cash flows from operating activities: | ||
| Net profit | 84,719,397.91 | 167,040,817.13 |
| Add: Provisions for impairment of assets | 67,568,625.27 | 49,127,914.01 |
| Impairment Loss of Credit | -6,112.02 | -23,422.95 |
| Depreciation of fixed assets, Investment Properties ,oil and gas asset and productive biological assets | 11,576,996.81 | 5,207,037.51 |
| Depreciation of right to use assets | 1,278,053.14 | 1,576,681.40 |
| Amortisation of intangible assets | 442,832.82 | 441,544.32 |
| Amortisation of long-term deferred expenses | 254,564.06 | 213,644.79 |
| Losses /(gains) on disposal of fixed assets, intangible assets and other long-term assets | -30,655.86 | |
| Losses /(gains) on changes in fair value | -9,736,672.14 | -9,312,190.32 |
| Finance costs /(income) | 5,232.32 | 50,146.33 |
| Investment losses /(income) | -38,061,196.16 | -40,009,346.45 |
| Decreases /(increases) in deferred tax assets | -10,313,139.23 | -7,506,807.04 |
| Increases /(decreases) in deferred tax liabilities | 740,591.47 | 1,565,528.17 |
| Decreases /(increases) in inventories | -77,485,946.55 | -63,814,358.72 |
| Decreases /(increases) in operating receivables | -4,326,334.96 | 468,458.90 |
| Increases /(decreases) in operating payables | -33,903,797.35 | 20,316,706.88 |
| Others | -66,666.60 | -33,333.30 |
| Net cash flows from operating activities | -7,344,227.07 | 125,309,020.66 |
| 2. Significant investing and financing activities not involving cash receipts and payments: | ||
| Conversion of debt into capital | ||
| Convertible corporate bonds maturing within one year | ||
| Assets under leases(other than leases under simplified method) | ||
| 3. Net increases in cash and cash equivalents: | ||
| Cash at the end of the reporting period | 145,553,208.66 | 142,243,947.86 |
| Less: Cash at the beginning of the reporting period | 142,243,947.86 | 370,350,218.44 |
| Add: Cash equivalents at the end of the reporting period | ||
| Less: Cash equivalents at the beginning of the reporting period | ||
| Net increase in cash and cash equivalents | 3,309,260.80 | -228,106,270.58 |
The difference between ending balance of Cash and Cash Equivalents which listed in the cash flow asRMB 145,553,208.66 and the the ending balance of Cash and Cash Equivalents which listed in theBalance Sheet as RMB 150,353,208.66. The reason of the difference is the deduction of interestreceivable (RMB 4,800,000.00) which fails to meet the standards for Cash and Cash Equivalents at theend of the period.
(2) The components of cash and cash equivalents
Unit: RMB
| Item | Clothing balance | Opening balance |
| I. Cash | 145,553,208.66 | 142,243,947.86 |
| Including: Cash on hand | 367,974.55 | 907,807.77 |
| Cash in bank available for immediate use | 140,724,991.69 | 131,851,690.46 |
| Other monetary funds available for immediate use | 4,460,242.42 | 9,484,449.63 |
| III. Cash and cash equivalents at the end of the reporting period | 145,553,208.66 | 142,243,947.86 |
45. Leases
? Applicable □ Not applicableThe Company as lessee
| Item | Amount |
| Expenses for short-term lease under simplified method | 191,866.71 |
| Interest expense on lease liabilities | 5,232.32 |
| Cash outflows related to leases | 1,789,251.66 |
VIII. Changes in the Scope of Consolidation
1. Other explanations:
There is no change in the consolidation scope during the current period.
IX. Interests in Other Entities
1. Interests in subsidiaries
(1) Composition of corporate group
Unit: RMB
| Names of subsidiaries | Registered capital | Principal place of business | Registered Address | Nature of business | Percentage of equity interests by the Company (%) | Ways of acquisition | |
| Direct | Indirect | ||||||
| Shanghai Rumere | 270,000,000 | Shanghai | Shanghai | Brand management | 100.00% | Business combinations involving entities under common control | |
| Meicang Fashion | 4,000,000 | Changshu | Changshu | Clothing processing | 100.00% | Business combinations involving entities under common control | |
| Rumere International | 5,000,000 | Changshu | Changshu | Import of raw materials | 100.00% | Acquired through establishment | |
X. Government Grants
1、Government grants recognized at the end of the reporting period in the amount receivable
□ Applicable ? Not applicable
Reasons of government grants that failed to receive at the expected time
□ Applicable ? Not applicable
2、Liabilities involving government subsidies
?Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Increase during the reporting period | Decrease during the reporting period | Clothing balance | Related to assets/earnings |
| Government grants | 1,966,666.70 | - | 66,666.60 | 1,900,000.10 | Related to assets |
3、Government grants recognised in profit or loss for the current period?Applicable □Not applicable
Unit: RMB
| Category | Reporting items | Incurred in the current period | Incurred in the prior period |
| Financial support funds | Other income | 1,471,000.00 | 1,370,000.00 |
| Subsidy for job stabilization | Other income | 116,495.00 | 122,934.00 |
| Quality Management Excellence Award | Other income | 100,000.00 | |
| Modern Manufacturing Service Base Project phase I funds | Other income | 66,666.60 | 33,333.30 |
| Attract subsidies and talent introduction subsidies of Human Resources and Social Security Bureau | Other income | 62,000.00 | |
| Special funds for business development and high-quality development | Other income | 30,000.00 | 1,331,964.00 |
| Vehicle retirement subsidy | Other income | 20,000.00 | |
| Listing incentive | Other income | 3,500,000.00 | |
| Total | 1,866,161.60 | 6,358,231.30 |
XI. Risks related to financial instrumentsRisks related to the financial instruments of the Company arise from the recognition of variousfinancial assets and financial liabilities during its operation, including credit risk, liquidity risk andmarket risk.Management of the Company is responsible for determining risk management objectives and policiesrelated to financial instruments. Operational management is responsible for the daily riskmanagement through functional departments. Internal audit department is responsible for the dailysupervision of implementation of the risk management policies and procedures, and report theirfindings to the audit committee in a timely manner.Overall risk management objective of the Company is to establish risk management policies tominimize the risks without unduly affecting the competitiveness and resilience of the Company.
1. Credit risk
Credit risk is the risk of one party of the financial instrument face to a financial loss because the otherparty of the financial instrument fails to fulfill its obligation. The credit risk of the Company is relatedto cash and equivalent,and other receivables,etc. Credit risk of these financial assets is derived fromthe counterparty’s breach of contract. The maximum risk exposure is equal to the carrying amount ofthese financial instruments.
Cash and cash equivalent of the Company has lower credit risk, as they are mainly deposited in suchfinancial institutions as commercial bank, of which the Company thinks with higher reputation andfinancial position.For other receivables, the Company establishes related policies to control their credit risk exposure.The Company assesses credit capability of its customers and determines their credit terms based ontheir financial position, possibility of the guarantee from third party, credit record and other factors .The Company monitors its customers’ credit record periodically, and for those customers with poorcredit record, the Company will take measures such as written call, shortening or cancelling theircredit terms so as to ensure the overall credit risk of the Company is controllable.
(1) Determination of significant increases in credit risk
The Company assesses at each reporting date as to whether the credit risk on financial instrumentshas increased significantly since initial recognition. When the Company determines whether the creditrisk has increased significantly since initial recognition, it considers based on reasonable andsupportable information that is available without undue cost or effort, including quantitative andqualitative analysis of historical information, external credit ratings and forward-looking information.The Company determines the changes in the risk of a default occurring over the expected life of thefinancial instrument through comparing the risk of a default occurring on the financial instrument asat the reporting date with the risk of a default occurring on the financial instrument as at the date ofinitial recognition based on individual financial instrument or a group of financial instruments withthe similar credit risk characteristics.When met one or more of the following quantitative or qualitative criteria, the Company determinesthat the credit risk on financial instruments has increased significantly: the quantitative criteriaapplied mainly because as at the reporting date, the increase in the probability of default occurringover the lifetime is more than a certain percentage since the initial recognition; the qualitative criteriaapplied if the debtor has adverse changes in business and economic conditions, early warning list ofcustomer, and etc.
(2) Definition of credit-impaired financial assets
The criteria adopted by the Company for determination of credit impairment are consistent withinternal credit risk management objectives of relevant financial instruments in considering bothquantitative and qualitative indicators.When the Company assesses whether the debtor has incurred the credit impairment, the main factorsconsidered are as following: Significant financial difficulty of the issuer or the borrower; a breach ofcontract, e.g., default or past-due event; a lender having granted a concession to the borrower foreconomic or contractual reasons relating to the borrower’s financial difficulty that the lender wouldnot otherwise consider; the probability that the borrower will enter bankruptcy or other financial re-organisation; the disappearance of an active market for the financial asset because of financialdifficulties of the issuer or the borrower; the purchase or origination of a financial asset at a deepdiscount that reflects the incurred credit losses.The credit impairment of financial assets may be caused by the combination of multiple events, notnecessarily by individually identifiable events.
(3) The parameter of expected credit loss measurement
The company measures impairment provision for different assets with the expected credit loss of 12-month or the lifetime based on whether there has been a significant increase in credit risk or creditimpairment has occurred. The key parameters for expected credit loss measurement include defaultprobability, default loss rate and default risk exposure. The Company sets up the model of defaultprobability, default loss rate and default risk exposure in considering the quantitative analysis ofhistorical statistics and forward-looking information.Relevant definitions are as following:
Default probability refers to the probability of the debtor will fail to discharge the repaymentobligation over the next 12 months or the entire remaining lifetime;Default loss rate refers to the Company's expectation of the loss degree of default risk exposure. Thedefault loss rate varies depending on the type of counterparty, recourse method and priority, and thecollateral. The default loss rate is the percentage of the risk exposure loss when default has occurredand it is calculated over the next 12 months or the entire lifetime;
The default risk exposure refers to the amount that the company should be repaid when default hasoccurred in the next 12 months or the entire lifetime. Both the assessment of significant increase incredit risk of forward-looking information and the calculation of expected credit losses involveforward-looking information. Through historical data analysis, the Company identifies key economicindicators that have impact on the credit risk and expected credit losses for each business.The maximum exposure to credit risk of the Company is the carrying amount of each financial assetin the statement of financial position. The Company does not provide any other guarantees that mayexpose the Company to credit risk.For the other receivables of the Company, the amount of top 5 clients represents 89.59% of the total(31 December 2022:100.00%)
2. Liquidity Risk
Liquidity risk is the risk of shortage of funds when fulfilling the obligation of settlement by deliveringcash or other financial assets. The Company is responsible for the capital management of all of itssubsidiaries, including short-term investment of cash surplus and dealing with forecasted cashdemand by raising loans. The Company’s policy is to monitor the demand for short-term and long-term floating capital and whether the requirement of loan contracts is satisfied so as to ensure tomaintain adequate cash and cash equivalents.As at 31 December 2023, the maturity profile of the Company’s financial liabilities is as follows:
| 项目名称 | December 31, 2023 | |
| Within 1 year | Within 1 year | |
| Accounts payable | 58,163,158.46 | |
| Other payments | 8,995,145.79 | |
| 合计 | 67,158,304.25 | |
(Continued)
| 项目名称 | December 31, 2022 | |
| Within 1 year | Within 1 year | |
| Accounts payable | 82,251,827.41 | 11,354,443.77 |
| Other payments | 9,476,184.89 | 307,898.05 |
| 合计 | 91,728,012.30 | 11,662,341.82 |
3. Market risk
(1) Foreign currency risk
Foreign currency risk of the Company mainly arise from foreign currency assets and liabilitiesdenominated in currency other than the Company’s functional currency. The foreign currency riskthe Company is subject to is mainly related to the purchase raw materials denominated in EUR andUSD. Except for the operations of the Company’s subsidiaries Rumere International are denominatedand settled in USD and EUR, other main operations of the Company are settled in RMB.
(2) Interest rate risk
Interest rate risk of the Company primarily arises from bank debts. Financial liabilities with floatinginterest rate make the Company subject to cash flow interest rate risk, and financial liabilities withfixed interest rate make the Company subject to fair value interest rate risk. The Company determinesthe relative proportion of the fixed interest contracts and floating interest contracts based on thecurrent market environment.Finance department of the Company’s headquarter monitors interest rate of the group continuously.Increase of the interest rate will result in the increase of the cost of new interest-bearing debts and theinterest expense of the unpaid interest-bearing debts with floating rate, and subsequently lead tosignificant negative impact on the financial performance of the Company. The management makesadjustment in accordance with the update market condition in a timely manner.XII. Fair value disclosure
1. Closing fair values of assets and liabilities measured at fair value
Unit: RMB
| Item | Ending fair value | |||
| Fair value measurement with Level 1 inputs | Fair value measurement with Level 2 inputs | Fair value measurement with Level 3 inputs | Total | |
| I. Recurring Fair Value Measurement | -- | -- | -- | -- |
| 1. Financial assets held for trading | 15,807,554.49 | 1,352,866,535.46 | 1,368,674,089.95 | |
| Including: Bank wealth management | 15,032,519.27 | 1,010,910,575.77 | 1,025,943,095.04 | |
| products | ||||
| Trust wealth financial products | 775,035.22 | 341,955,959.69 | 342,730,994.91 | |
| 2. Other non-current financial assets | 55,080,082.19 | 76,950,000.00 | 132,030,082.19 | |
| Including: Trust wealth financial products | 55,080,082.19 | 55,080,082.19 | ||
| Unlisted equity investments | 76,950,000.00 | 76,950,000.00 | ||
| Total | 15,807,554.49 | 1,407,946,617.65 | 76,950,000.00 | 1,500,704,172.14 |
| II. Non-recurring fair value measurement | -- | -- | -- | -- |
2. Basis for determining the market price of recurring and non-recurring fair value measurementswith Level 1 inputsThe Company's bank financial products amounted RMB15,032,519.27 are purchased open net worthfinancial products, and the bank provides continuous product market value. The Company's Trustwealth financial products amounted RMB775,035.22 are purchased open net worth financial products,and the Trust provides continuous product market value.
3. Qualitative and quantitative information on important parameters and valuation techniquesused for recurring and non-recurring fair value measurements with Level 2 inputsThe fair value of the bank wealth management products of RMB1,010,910,575.77 and the fair valueof the trust wealth management products of RMB397,036,041.88 of the Company are determinedbased on the expected rate of return of the product.
4. Qualitative and quantitative information on important parameters and valuation techniquesused for recurring and non-recurring fair value measurements with Level 3 inputs
| Item | Fair value as at December 31 2023 | Valuation technique | Input values cannot be observed | Range (weighted average) |
| Equity investments | ||||
| Unlisted equity investments | 76,950,000.00 | Market method | EBITDA multiplier Revenue multiplier Liquidity discount control premium | 10-15(11.3)1.5-2.0(1.7)5%-20%(17%)10%-30%(20%) |
5. Financial assets and financial liabilities for which not measured at fair valueThe financial assets and financial liabilities of the Company measured at amortised cost mainlyinclude: cash and cash equivalents, accounts receivable, other receivables, accounts payable, otherpayables,etc.The difference between the carrying amount and the fair value of other financial assets and financialliabilities not measured at fair value is very little.XIII. Related parties and related party transactions
1. Information on the Parent Company of the Company
| Name of the parent company | Registered address | Nature of business | Registered capital | Percentage of equity interests in the Company (%) | Voting rights in the Company (%) |
| Suzhou Rumere Group Co., Ltd. | Changshu | Investment company | RMB56,000,000 | 51.58% | 51.58% |
Information on the Company s Parent CompanySuzhou Rumere Group Co., Ltd., formerly known as Suzhou Rumere Ingenuity Fashion Co., Ltd.,was established in February 2017, with Guo Jian and Wen Di respectively holding 50% of theCompany’s shares..The ultimate controller of the Company is Guo Jian and Wen Di.Guo Jian and Wen Di, who are a couple, directly and indirectly hold 73.68% of the Company’s sharesas of December 31,2023.
2. The Company's subsidiaries
For details of the Company's subsidiaries, please see Note IX. Interests in other entities.
3. Information of other related parties
| Name of other related parties | Relationship between other related parties and the Company |
| Yu Qingtao | Director, Deputy General Manager and |
| directors and participating shareholders | |
| Suzhou Rumere Furniture Co., Ltd.(Note 1) | A company controlled by the Company s controlling shareholders |
| Shanghai Rumere Model Agency Co., Ltd. | A company controlled by the Company s controlling shareholders |
| Key executives | Key executives |
4. Information on related party transactions
(1) Lease
The Company as lessee:
Unit: RMB
| The lessor | Type of assets | 2023 | ||||
| Expenses for short-term lease and lease of low value asset under simplified method | Variable lease payments not included in lease liabilities | Lease payment for current period | Interest expense of lease liabilities | Increase in right-of-use assets | ||
| Wen Di, Guo Jian | Buildings | 857,142.86 | 857,142.86 | |||
(continued)
Unit: RMB
| The lessor | Type of assets | 2022 | ||||
| Expenses for short-term lease and lease of low value asset under simplified method | Variable lease payments not included in lease liabilities | Lease payment for current period | Interest expense of lease liabilities | Increase in right-of-use assets | ||
| Wen Di, Guo Jian | Office floor | 857,142.86 | 13,438.18 | 857,142.86 | ||
Information on related party leasingThe office floor leased by the company from Guo Jian and Wen Di is 2,316 square meters, equivalentto RMB 1.079 per square meter per day, which is in line with the local rental market price betweenRMB 1 and 1.1.
(2) Key management personnel compensation
Unit: RMB Ten Thousand Yuan
| Item | Amount incurred in the current period | Amount incurred in the Last period |
| Key management personnel compensation | 556.87 | 625.96 |
XIV. Commitments and contingencies
1. Significant Commitments
The nature and amount of significant commitments existing at the balance sheet date:
(1) Capital commitments
| Capital commitment with contract signed | December 31, 2023 | December 31, 2022 |
| Commitment for build long-term assets | 2,839,049.70 | 4,100,980.67 |
(2) Operating lease commitment
| The total future minimum lease payments under non-cancellable operating leases of the Group’s properties | December 31, 2023 | December 31, 2022 |
| Within 1 year | 1,128,840.97 | 1,175,196.01 |
2. Contingencies
As at December 31 2023, the Company has no significant contingencies need to be disclosed.XV. Events after Balance Sheet Date
1. Profit Distribution
Unit: RMB
| Dividend to be distributed per 10 shares | 4.39 |
| Dividend to be distributed per 10 shares after deliberation, approval and announcement | 4.39 |
| Profit distribution plan | According to the resolution of the 8st meeting of the 2th Board of Directors held on April 23, 2024, profit distribution proposal of the Company in 2023: based on the number of shares of the Company’s total share capital as at the equity registration date of the implementation of this profitdistribution plan, distribute a cash dividend of RMB4.39 (tax included) for every 10 shares to all shareholders; no bonus shares will be issued and no capital reserve will be converted into sha re capital. |
XVI. Other Significant matters
1. Others
As at December 31 2023, the Company has no other significant matters need to be disclosed.XVII. Notes to Major Items of Financial Statements of the Parent Company
1. Other receivables by category
Unit: RMB
| Item | Clothing balance | Opening balance |
| Other receivables | 256,117.41 | 353,024.42 |
| Total | 256,117.41 | 353,024.42 |
(1) Other Receivables
1) Other receivables by category
Unit: RMB
| Nature of payment | Book balance at the end of the period | Book balance at the beginning of the period |
| Deposits receivable, security deposits, and imprest funds | 246,233.00 | 371,604.65 |
| Temporary payments and others | 23,364.27 | |
| Total | 269,597.27 | 371,604.65 |
2) Other receivables by aging
Unit: RMB
| Aging of account | Book balance at the end of the period | Book balance at the beginning of the period |
| Within 1 year | 189,597.27 | 91,541.10 |
| 1-2 years | 30,000.00 | 10,253.85 |
| Over 3 years | 50,000.00 | 269,809.70 |
| 3-4 years | 51,637.40 | |
| 4-5 years | 50,000.00 | 218,172.30 |
| Total | 269,597.27 | 371,604.65 |
3) Classified disclosure according to method of bad debt provision
□ Applicable ? Not applicable
Unit: RMB
| Category | Clothing balance | Opening balance | ||||||||
| Book balance | Provision | Book value | Book balance | Provision | Book value | |||||
| Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
| Among： | ||||||||||
| Provision for bad debts on a portfolio basis | 269,597.27 | 100.00% | 13,479.86 | 5.00% | 256,117.41 | 371,604.65 | 100.00% | 18,580.23 | 5.00% | 353,024.42 |
| Among： | ||||||||||
| Deposits receivable, security deposits, and imprest funds | 246,233.00 | 91.33% | 12,311.65 | 5.00% | 233,921.35 | 371,604.65 | 100.00% | 18,580.23 | 5.00% | 353,024.42 |
| Temporary payments and others | 23,364.27 | 8.67% | 1,168.21 | 5.00% | 22,196.06 | |||||
| Total | 269,597.27 | 100.00% | 13,479.86 | 5.00% | 256,117.41 | 371,604.65 | 100.00% | 18,580.23 | 5.00% | 353,024.42 |
Provision for bad debts on a portfolio basis: 13,479.86
Unit: RMB
| Categories | Clothing balance | ||
| Book balance | Provision for bad debts | Proportion | |
| Deposits receivable, security deposits, and imprest funds | 246,233.00 | 12,311.65 | 5.00% |
| Temporary payments and others | 23,364.27 | 1,168.21 | 5.00% |
| Total | 269,597.27 | 13,479.86 | |
Provision for bad debts on a portfolio basis: 18,580.23
Unit: RMB
| Categories | Opening balance | ||
| Book balance | Provision for bad debts | Proportion | |
| Deposits receivable, security deposits, and imprest funds | 371,604.65 | 18,580.23 | 5.00% |
| Total | 371,604.65 | 18,580.23 | |
Provision for bad debts that maded by expected credit losses
Unit: RMB
| Provision for loss allowance | Stage 1 | Stage 2 | Stage 3 | Total |
| 12-month expected credit losses | Lifetime expected credit losses (not credit-impaired) | Lifetime expected credit losses (credit-impaired) | ||
| Balance as at January 1, 2023 | 18,580.23 | 18,580.23 | ||
| Balance as at January 1, 2023 January 1 changes in the reporting period | ||||
| Provision | 1,168.21 | 1,168.21 | ||
| Reversal | 6,268.58 | 6,268.58 | ||
| Balance as at December 31, 20223 | 13,479.86 | 13,479.86 |
Description of changes in the book balance where there are significant changes in provision for thecurrent period
□ Applicable ? Not applicable
4) Bad debt reserve that is set aside, recovered or transferred back in the reporting periodBad debt reserve of the reporting period:
Unit: RMB
| Category | Opening balance | Changes in current period | Clothing balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Deposits receivable, security deposits, and imprest funds | 18,580.23 | 6,268.58 | 12,311.65 | |||
| Temporary payments and others | 1,168.21 | 1,168.21 | ||||
| Total | 18,580.23 | 1,168.21 | 6,268.58 | 13,479.86 | ||
5) Top five debtors in closing balance of other receivable
Unit: RMB
| Entity name | Nature of the amount | Clothing balance | Aging | Percentage in total balance of other receivables at the end of the | Balance of bad debt reserve at the end of the period |
| period | |||||
| Zhejiang Tmall Technology Co., Ltd. | Security deposit | 110,000.00 | Less than 1 year, more than 3 years | 40.80% | 5,500.00 |
| Wework Information Consulting (Shanghai) Co., Ltd. | Security deposit | 48,000.00 | Less than 1 year | 17.80% | 2,400.00 |
| Weimeng Chuangke Network Technology (China) Co., Ltd. | Security deposit | 30,000.00 | 1-2 years | 11.13% | 1,500.00 |
| China Securities Depository and Clearing Co., Ltd. Shenzhen Branch | Temporary payments | 22,105.99 | Less than 1 year | 8.20% | 1,105.30 |
| Changshu Qinhong Real Estate Co., Ltd. | Security deposit | 20,000.00 | Less than 1 year | 7.42% | 1,000.00 |
| Total | 230,105.99 | 85.35% | 11,505.30 |
2. Long-term Equity Investments
Unit: RMB
| Item | Clothing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Subsidiaries | 269,886,865.58 | 269,886,865.58 | 886,865.58 | 886,865.58 | ||
| Total | 269,886,865.58 | 269,886,865.58 | 886,865.58 | 886,865.58 | ||
(1) Investments in subsidiaries
Unit: RMB
| Investee | Opening balance (book value) | Increase/decrease in the period | Clothing balance (book value) | Clothing balance of impairment provision | |||
| Increase in investment | Decrease in investment | Impairment Provision | Others | ||||
| Sanghai Rumere | 389,702.72 | 269,000,000.00 | 269,389,702.72 | ||||
| Meicang Fashion | 497,162.86 | 497,162.86 | |||||
| Total | 886,865.58 | 269,000,000.00 | 269,886,865.58 | ||||
3. Revenue and Cost of Sales
Unit: RMB
| Item | Incurred in the current period | Incurred in the priort period | ||
| Revenue | Costs of sales | Revenue | Costs of sales | |
| Principal activities | 764,987,796.97 | 471,315,177.49 | 945,187,284.99 | 569,534,668.37 |
| Other activities | 1,427,641.61 | 790,530.00 | 2,533,049.72 | 1,413,157.00 |
| Total | 766,415,438.58 | 472,105,707.49 | 947,720,334.71 | 570,947,825.37 |
4. Investment income
Unit: RMB
| Item | Incurred in the current period | Incurred in the priort period |
| Gains on disposal of held-for-trading financial assets | 38,061,196.16 | 40,009,346.45 |
| Total | 38,061,196.16 | 40,009,346.45 |
XVII. Supplementary Information
1. Extraordinary Gains or Losses
? Applicable □ Not applicable
Unit: RMB
| Item | Amount | Description |
| Gain or loss on disposal of illiquid assets | 30,655.86 | |
| Government grants recognised in current profit or loss (except government grants that is closely related to operations and determined based on a fixed scale according to the national unified standard) | 1,866,161.60 | |
| Gains /(losses) arising from changes in fair value of financial assets held-for-trading, derivative financial assets, other non-current financial assets, financial liabilities held-for-trading and derivative financial liabilities during the holding period and investment income arising from disposal of held-for-trading financial assets, derivative financial assets, other non-current financial assets, held-for-trading financial liabilities, derivative financial liabilities and other debt investment except effective hedging transactions related to the Company's principal activities | 47,797,868.30 | |
| Other non-operating income/expenses except for items mentioned above | -1,046,114.40 | |
| Less: tax effect | 12,378,019.60 | |
| Total | 36,270,551.76 | -- |
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable ? Not applicable
The Company has no other profit and loss items that qualified the definition of non-recurring profitand loss.
Information Disclosure of Companies Offering Securities to the Public—Non-recurring Profit and Lossas recurring profit and loss items during the reporting period.
□ Applicable ? Not applicable
2. Return on Net Assets and Earnings Per Share (‘EPS’)
| Profit for the reporting period | Weighted average return on net assets (%) | EPS | |
| Basic | Diluted | ||
| Net profit attributable to ordinary shareholders | 3.29% | 0.37 | 0.37 |
| Net profit attributable to ordinary shareholders after extraordinary gains and losses | 1.88% | 0.21 | 0.21 |