BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
2021 Annual Report
April 2022
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Section I Important Notice, Contents and Definitions
The Board of Directors and the Board of Supervisors of the Company and its
directors, supervisors and senior management warrant that the information
contained in this annual report is true, accurate and complete without any false
records, misleading statements or material omissions, and severally and jointly
accept legal liability thereof.
Xie Bingzheng, the person in charge of the Company, Tang Xinqiao, the person
in charge of accounting of the Company, and Chen Shaobing, the person in
charge of the accounting department of the Company, have declared that they
warrant the truthfulness, accuracy and completeness of the financial statements
set out in this annual report.
All directors of the Company attended the Board meeting on which this report
was reviewed.
The forward-looking statements in this annual report, including development
strategies and business plans, do not constitute substantive commitments of the
Company to investors. Investors and related personnel should remain vigilant
and understand the differences between plans, forecasts and commitments.
Investors should be aware of the investment risks.
The Company needs to comply with information disclosure requirements on the
textile and garment-related industries as stipulated in the SZSE Guidelines No. 3
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
for the Self-discipline and Supervision of Listed Companies — Industry
Information Disclosure.
The Company has described potential risks it may face in the future in “Section
III Discussion and Analysis of the Management” and “Section XI Future
Development Prospects of the Company”. Investors should be aware of the
investment risks.
The Board meeting has deliberated and approved the following profit
distribution proposal: Distribute a cash dividend of RMB3.00 (tax inclusive) for
every 10 shares to all shareholders based on a total share capital of 570,707,084
shares as at March 31, 2022; no bonus shares will be issued and no capital
reserve will be converted into share capital.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
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 ............................................................................................................................................. 59
Section V Environmental and Social Responsibilities ................................................................................................................ 83
Section VI Significant Events ..................................................................................................................................................... 85
Section VII Changes in Shareholding and Information of Shareholders ................................................................................... 95
Section VIII Particulars of Preference Shares .......................................................................................................................... 103
Section IX Particulars of Bonds ............................................................................................................................................... 104
Section X Financial Report....................................................................................................................................................... 108
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Documents Available for Inspection
(1) Financial statements affixed with official stamps and the signatures of the Company’s responsible person, the person in charge of
accounting, and the person in charge of accounting department of the Company;
(2) Original of the audit report affixed with the stamp of the accounting firm as well as stamps and signatures of the certified public
accountants;
(3) All original copies of the Company’s documents and the original drafts of the Company’s announcements as disclosed on
websites designated by the CSRC during the reporting period;
(4) Place for document inspection: Office of the Board of Directors.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Terms and Definitions
Term Definition
Issuer, Company, the Company, joint-stock
BIEM.L.FDLKK Garment Co., Ltd.
company, BIEM.L.FDLKK
Controlling shareholder, actual controller Xie Bingzheng and Feng Lingling, who are a couple
Persons acting in concert Xie Bingzheng, Feng Lingling and Xie Ting
Articles of Association Articles of Association of BIEM.L.FDLKK Garment Co., Ltd.
RMB-denominated ordinary shares with a par value of RMB1.00 per
A shares
share
RMB Official currency of PRC
Company Law The Company Law of the People’s Republic of China
Securities Law The Securities Law of the People’s Republic of China
CSRC China Securities Regulatory Commission
SZSE Shenzhen Stock Exchange
Huaxing Huaxing Certified Public Accountants LLP
A general term for articles that decorate the human body, including
Garment
clothes, shoes, hats, socks, gloves, scarves, ties, bags, etc.
A model where the Company opens direct retail terminals, is responsible
Direct sale
for the management of the terminal stores and bears all channel costs
A model where the Company signs a franchise contract with enterprises or
individuals up to certain certifications, granting them the right to run the
Company’s branded clothes by opening franchise stores within a certain
Franchise
period of time and region, while the Company provides corresponding
guidance and support. The franchisee is responsible for the management
and operation of the terminal store and bears channel expenses.
A model where the Company signs an agreement with the joint operation
party (shopping malls, airports, golf clubs) who provides the business
premise, collects payments from and issues invoices to consumers, and
settles with the Company after deducting a certain percentage from the
Joint operation
sales revenue. This model is also called “store-within-a-store” in the
industry, and the joint operation party allows the Company to renovate
and display based on its own styles for brand image presentation and
promotion.
Garment factory Manufacturing enterprises that process fabrics and accessories into
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
garments
A collective term for fabric suppliers, accessory suppliers and garment
Supplier
factories
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Section II Company Profile and Key Financial Indicators
I. Company Information
Stock abbreviation BYLF Stock code 002832
Stock exchange on which the
Shenzhen Stock Exchange
shares are listed
Chinese name of the Company 比音勒芬服饰股份有限公司
Abbreviation of Chinese name
比音勒芬
of the Company
English name of the Company
BIEM.L.FDLKK GARMENT CO., LTD.
(if any)
Abbreviation of English name
BIEM
of the company (if any)
Legal Representative of the
Xie Bingzheng
Company
Registered address No. 608 East Xingye Avenue, Nancun Town, Panyu District, Guangzhou City
Postal code of registered
511442
address
Date of first registration: January 2, 2003; Registered address: Room 3001, Tianyu Garden, No. 138
Linhe Middle Road, Tianhe District, Guangzhou;
Historical changes of the Date of registration change: November 28, 2007; Registered address: All of No. 309 Xingye
Company’s registered address Avenue, Nancun Town, Panyu District, Guangzhou;
Date of registration change: March 18, 2020; Registered address: No. 608 East Xingye Avenue,
Nancun Town, Panyu District, Guangzhou City.
Office address No. 608 East Xingye Avenue, Nancun Town, Panyu District, Guangzhou City
Postal code of office address 511442
Company website www.biemlf.com
Email investor@biemlf.com
II. Contact Persons and Contact Methods
Sectary to the Board Representative of securities affairs
Name Chen Yang Chen Haihua
No. 608 East Xingye Avenue, Nancun No. 608 East Xingye Avenue, Nancun
Address
Town, Panyu District, Guangzhou City Town, Panyu District, Guangzhou City
Tel 020-39952666 020-39952666
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Fax 020-39958289 020-39958289
Email investor@biemlf.com investor@biemlf.com
III. Information Disclosure and Location for Inspection of Documents
Websites on which the annual report is published as
Shenzhen Stock Exchange (http://www.szse.cn)
required by the stock exchange
Securities Times, Shanghai Securities News, China Securities Journal,
Media on which the annual report is published
Securities Daily, and http://www.cninfo.com.cn
Location for inspection of the annual report Shenzhen Stock Exchange, Office of the Board of Directors
IV. Historical Changes of the Company’s Registration Information
Organization code 914401017462725710
Changes in the Company’s main
businesses since listing (if any) None
Changes of controlling shareholder (if any)
None
V. Other Relevant Information
Accounting firm engaged by the Company
Name Huaxing Certified Public Accountants LLP
Floor 7-9, Block B, Zhongshan Building, No. 152 Hudong Road, Gulou District, Fuzhou City,
Office address
Fujian Province
Name of signing accountants Hong Wenwei, He Ting
Sponsor engaged by the Company to fulfill continuous supervision obligation during the reporting period
√ Applicable □ Not applicable
Period of continuous
Name of sponsor Office address of sponsor Name of sponsor representative
supervision
Room 2506, R&F Center, No.
Guotai Junan Securities Co.,
10 Huaxia Road, Zhujiang New Fang Zilong, Liu Xiangmao Until December 31, 2021
Ltd.
Town, Guangzhou
Financial advisor engaged by the Company to fulfill continuous supervision obligation during the reporting period
□ Applicable √ Not applicable
VI. Main Accounting Data and Financial Indicators
Whether the Company needs to perform retrospective adjustment or restatement of accounting data for previous years
□ Yes √ No
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
2021 2020 Changes over last year 2019
Revenue (RMB) 2,719,989,257.14 2,303,326,211.84 18.09% 1,825,516,844.69
Net profit attributable to
shareholders of the listed company 624,541,483.00 498,822,424.55 25.20% 406,606,998.01
(RMB)
Net profit attributable to
shareholders of the listed company
580,283,266.50 463,280,686.95 25.26% 388,974,096.92
after deducting non-recurring profit
and loss (RMB)
Net cash flow from operating
897,523,638.07 636,849,599.20 40.93% 333,469,113.65
activities (RMB)
Basic earnings per share
1.15 0.95 21.05% 0.78
(RMB/share)
Diluted earnings per share
1.15 0.94 22.34% 0.78
(RMB/share)
Weighted average return on net
21.73% 22.97% -1.24% 22.86%
assets
Changes over end of
End of 2021 End of 2020 End of 2019
last year
Total assets (RMB) 4,862,956,852.42 3,748,598,697.97 29.73% 2,524,364,584.28
Net assets attributable to
shareholders of the listed company 3,245,441,596.49 2,416,825,789.61 34.29% 1,957,377,185.61
(RMB)
The lower of the net profits before and after deducting the non-recurring profit and loss in the most recent three accounting years is
all negative, and the audit report of the most recent year shows that the Company’s ability to continue operations is uncertain.
□ Yes √ No
The lower of the net profits before and after deducting the non-recurring profit and loss is negative.
□ 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 Chinese Accounting
Standards (CAS)
□ Applicable √ Not applicable
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
No such differences for the reporting period
VIII. Major Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Revenue 622,634,600.78 586,926,011.59 759,005,521.13 751,423,123.64
Net profit attributable to
150,536,147.62 94,838,031.69 213,672,889.31 165,494,414.38
shareholders of the listed company
Net profit attributable to
shareholders of the listed company
145,396,952.74 79,019,300.39 203,893,570.87 151,973,442.50
after deducting non-recurring profit
and loss
Net cash flow from operating
366,315,799.97 87,618,879.85 233,014,106.31 210,574,851.94
activities
Whether there are significant differences between the above-mentioned financial indicators or its total number and the relevant
financial indicators disclosed in the Company’s quarterly reports and semi-annual report
□ Yes √ No
IX. Non-recurring Items and Amounts
√ Applicable □ Not applicable
Unit: RMB
Item Amount in 2021 Amount in 2020 Amount in 2019 Description
Profits/losses from the disposal of
non-current asset (including the write-off -411,065.65 -54,727.43 881,981.37
that accrued for impairment of assets)
Governmental grants reckoned into current
profits/losses (not including grants enjoyed
in quota or ration according to national 14,577,835.79 19,663,426.38 5,298,362.00
standards, which are closely relevant to the
company’s normal business)
Gain or loss from debt restructuring 104,009.33
Gain or loss from changes in fair value of
financial assets and financial liabilities held
for trading, and investment income from
the disposal of financial assets and financial
3,424,832.00 425,333.33
liabilities held for trading and
available-for-sale financial assets, excluding
the effective hedging business related to the
normal operation of the Company
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Reversal of write-down for receivables
1,944,412.53
whose impairment was tested individually
Other non-operating revenue and expenses
-4,924,109.89 -980,592.68 -2,105,395.15
except for the aforementioned items
Other profit and loss items that meet the
38,711,860.90 24,501,459.48 16,863,429.42
definition of non-recurring profit and loss
Less: Influence of income tax 9,169,558.51 8,013,161.48 3,289,353.72
Impacted amount of equity of minority
16,122.83
shareholders
Total 44,258,216.50 35,541,737.60 17,632,901.09 --
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 and loss.
Descriptions where the Company defines any non-recurring profit and loss items listed in the No. 1 Explanatory 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 Explanatory 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.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Section III Discussion and Analysis of the Management
I. Status of the Industry in Which the Company Is Located during the Reporting Period
The Company needs to comply with information disclosure requirements on the textile and garment-related industries as stipulated in
the SZSE Guidelines No. 3 for the Self-discipline and Supervision of Listed Companies — Industry Information Disclosure.
1. China’s garment industry continues to pick up, with profit growing at an accelerated rate.
China’s garment industry continued the recovery trend as of December 2021, with steady improvement in domestic sales and rapid
growth in exports. As both performances and profitability of enterprises were picking up, the overall economic operation of the
industry was stabilized during the reporting period. From January to December 2021, there were 12,653 industrial enterprises above
designated size in China’s garment industry, which realized revenue of RMB1,482.336 billion, an increase of 6.51% over the
previous year; their total profit reached RMB76.782 billion, up by 14.41% over the previous year. Both the quality and efficiency of
the garment industry are improving, with profit growing at a faster speed.
Source: National Bureau of Statistics of China
2. China’s garment industry will usher in a golden decade, with high end and branding as the main theme.
The China National Garment Association (CNGA) complied and published the Guiding Opinions on the Development of China’s
Garment Industry during the 14th Five-Year Plan and the Long-range Objectives through the Year 2035 in October 2021.The
document proposed the following brand development goals: During the 14th Five-Year Plan, the quality of apparel products will
continue to improve while cultural connotations and influences of brands will continue to be enhanced. The brand incubation and
management system will be further optimized to create a batch of well-known brands with market recognition and good reputation.
Efforts will be stepped up to foster three to five international brands with discourse power in the global fashion circle and to build
industrial clusters with total brand value over hundreds of billions.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
In January 2022, the State Council printed and distributed the 14th Five-Year Plan for Market Regulation Modernization. According
to the document, China will roll out an initiative of brand building. Pilot efforts will be made in the consumer goods sector including
cosmetics, garment, textile and electronics to cultivate a batch of high-end brands. In the next golden decade, China’s garment
industry will accelerate integration into the new “dual circulation” development pattern and, focusing on the “technology, fashion and
green” theme, speed up the branding, digital, fashion and green based transformation. Efforts will be made to strengthen the
competitiveness of enterprises in the new era and forge a new industrial ecology that integrates technology, fashion and sustainable
development, to effectively promote the high-quality development of the industry.
3. Domestic sportswear market boasts huge potential, and high-end fashion sportswear becomes the new wind gap.
In March 2022, the General Office of the Central Committee of the Communist Party of China and the General Office of the State
Council jointly promulgated the Opinions on Building a Higher-level Public Service System for National Fitness, which proposed to
implement the “National Fitness Program”. By 2035, the public service system for national fitness that is compatible with modern
socialist countries will be established in an all-round way, while more than 45% of the population will exercise regularly. Fitness and
sports will become a common way of life and people’s physical quality and health level will lie at the forefront of the world.
Previously, the National Fitness Plan (2021-2025) pointed out that by 2025, the total output value of China’s sports industry would
increase to RMB5 trillion, meaning a compound annual growth rate of about 9% in the next five years. This will provide ample room
for the growth of domestic sportswear industry.
Moreover, according to a report of Global Industry Analysts Inc., global sports & fitness clothing market is expected to reach
US$221.3 billion by 2026, and China is forecast to reach US$27 billion. Wherein, the global market for Top Wear segment is
estimated at US$100.5 billion by 2026 reflecting a compound annual growth rate of 5.1%. China is poised to register the fastest
compound annual growth rate of 8.3%, to reach US$14.5 billion by 2026. If calculated on this basis, the high-end market will soon
occupy half of the entire sportswear industry. In addition, as consumers pay more attention to the design beauty and fashion elements
of clothes, the domestic high-end fashion sportswear will usher in new growth momentum.
4. With the rise of China-chic, domestic accessible luxury sportswear brands have the opportunity of corner overtaking.
In March 2021, the Fourth Session of the 13th National People’s Congress deliberated and approved the Outline of the 14th Five-Year
Plan for Economic and Social Development and Long-Range Objectives through the Year 2035. On the supply side, the Outline
emphasizes to build a strong manufacturing country and promote the optimization and upgrading of the manufacturing industry. On
the consumption side, priority is given to accelerate the cultivation of a complete domestic demand system, strengthen the
fundamental role of consumption in economic development, and steadily improve the level of household consumption. The “dual
upgrade” of both supply and demand has given rise to a new round of brand upgrading. Therefore, domestic brands user in a
historical opportunity.
In accordance with the Report on Yong People’s Consumption of Domestic Brands 2021, about 70% of the 90s and 80% of the
millenniums tend to choose domestic brands in shopping, indicating that young consumers have shifted their preferences to local
brands.
Under the influence of global environment, coupled with the support of domestic consumers for local brands, the sales of
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
international brands have declined in China. At the same time, domestic sports brands are increasing their investments in innovative
research and development, supply chain and new retail. International brands no longer have an obvious edge in China’s mid- to
high-end markets, while domestic brands gradually take on a trend of “high-end + segmentation + digitalization”. Domestic brands
now have the possibility of overtaking international brands in the mid- to high-end markets. China’s local accessibly luxury sports
brands will usher in a good opportunity for development.
During the reporting period, there were no significant changes to national taxation, import and export policies that would exert a
significant impact on the Company against the industry in which the Company is located.
II. Principal Businesses of the Company during the Reporting Period
The Company needs to comply with information disclosure requirements on the textile and garment-related industries as stipulated in
the SZSE Guidelines No. 3 for the Self-discipline and Supervision of Listed Companies — Industry Information Disclosure.
(I) Principal businesses
BIEM.L.FDLKK Garment Co., Ltd. mainly engages in the research and design of sportswear, brand promotion, marketing network
construction and supply chain management. Adhering to the positioning of a high-end fashion sportswear brand, the Company digs
deep in its principal businesses. It is dedicated to meeting the multi-scenario dressing needs of the elites and the pursuit of a refined
and beautiful life, with a brand design concept of “three high and one innovation”, i.e. “high quality, high taste and high technology
and innovative spirit”.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Product research and
design
Brand promotion Digital operation
and marketing Supply chain
network management
construction
Principal businesses of the Company
The Company focuses on a segment of the garment industry and implements a multi-brand strategy. Priority is given to the
cultivation of core competitiveness, so as to build a leading brand in the segmented garment sector. Currently, the Company has two
brands: BIEM.L.FDLKK ( ) and CARNAVAL DE VENISE ( ).
1. BIEM.L.FDLKK brand
The BIEM.L.FDLKK brand ( ) is positioned as a high-end golf casual apparel brand. Continuous product innovation,
brand power enhancement, and channel expansion have driven the high growth of the brand. The Company intends to build it into the
first brand that would pop up in the minds of people when think of high-end golf casual apparel. The BIEM.L.FDLKK brand
( ) comprises four series: lifestyle series, fashion series, palace culture series and golf series
(1) Lifestyle series
The lifestyle series adopt internally-renowned fabrics and accessories, ultimate craftsmanship and brilliant designs to ensure high
quality and high taste. The series target at consumers who are keen on their image and influence with a casual, low-key yet luxurious
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
taste.
(2) Fashion series
The fashion series integrate elements of international trends and use high-quality fabrics and acme tailoring to ensure the fashion
sense and quality of the products. The series target at young consumers who are keen on self-image and attire charm with a taste for
personality and accessible luxury.
(3) Palace culture series co-branded with the Forbidden City
The palace culture of the Forbidden City is a symbol of nobility and classics, which has withstood the changes of the times with
endless new vitality. Golf is the representative of aristocratic culture. The Company combines the design essence and spiritual charm
of the two and gives them a new taste and charm with quality craftsmanship, to show the national confidence of contemporary
Chinese people. Under the continued, in-depth cooperation, the two parties have introduced series of co-branded products, including
“Zhen Dou Yi Ni” (the Emperor is at your service), “Tian Guan Ci Fu” (heaven official’s blessing), “Fu Lu Shou” (three gods of
fortune, prosperity and longevity), and “Feng Tian Cheng Yun” (Mandate from Heaven). These joint products bring trendy clothes
with signature Chinese styles to consumers.
(4) Golf series
Golf series are positioned as a high-end fashion sportswear. Using the world’s leading functional fabrics and integrating
characteristics of the golf sport into design, the products boast both functionality and comfort. Target consumers are golf enthusiasts
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
who pay attention to sports, fashion and functionality.
2. CARNAVAL DE VENISE
The CARNAVAL DE VENISE brand ( ) is positioned to tap the blue ocean market of vacation and travel apparel.
The products cater to the segmented market sector and satisfy the multi-scenario dressing needs of middle-class consumers in
high-quality travels. It is hoped that when people think of vacation travel apparel, CARNAVAL DE VENISE would be the first to pop
up in their minds.
During the reporting period, CARNAVAL DE VENISE ( ) and Snoopy launched a joint series that were widely
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
recognized by the market. The brand furthered cooperation with Snoopy and added the Doraemon series, a well-known Japanese IP.
In the future, the Company will launch more designer joint series and cross-brand joint series, to meet the demands of middle-class
consumers for theme and culture.
(II) Business models of the Company
1. Operation model: Being committed to high value-added links on the business chain such as product design and
development and brand promotion
As the operator of a domestic high-end fashion sportswear brand, the Company adopts the “dumbbell” business model; that is, it
focuses on the core upstream links with high value-addition such as product design and development, brand operation and sales
channel development and control, and outsources links of low value-addition such as production, transportation and distribution.
Such a business model takes on the “U-shaped smile curve” with division of labor in the industry chain as the horizontal axis and
value addition as the vertical axis.
Value addition
Design and
Brand operation
Key development
links Channel and retail
IT management
Logistics
Product
Non-key manufacturing
links
Business chain
Upstream Midstream Downstream
U-shaped smile curve
2. Design and development model: Building high-end, differentiated products with ingenuity and craftsmanship
Adhering to the product design and development concept of “three high and one innovation”, i.e. high quality, high taste and high
technology, and one innovation, the Company improves product taste and cultural connotations of brands through fabric innovation,
process innovation, plate innovation, and crossover design innovation. It strives to offer consumers with high-value products and
meet their differentiated demands in consumption upgrading.
The product design and development process of the Company mainly comprises four stages: market data analysis and forecast,
conception and initial design, plate making and review, verification on ordering meetings and design finalization
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Market data analysis Conception and Plate making and Verification on ordering
and forecast initial design review meetings and design
finalization
3. Sales model: Online + offline omni-channel layout
The Company mainly adopts a sales model of direct sales plus franchise, so it boasts obvious advantages in offline channels. Sales
outlets of the Company’s products are divided into company-operated stores and franchise stores. Currently, the Company mainly
sets up company-operated stores in the first- and second-tier cities and franchise stores in other cities.
Meanwhile, the Company makes active deployments in digital new retail channels and has opened flagship stores on Tmall, JD and
Vipshop. Livestream shopping and recommendations on Xiaohongshu (Little Red Book), TikTok and WeChat mini-programs are also
utilized to tap customers with high stickiness and products with high repurchase rates. The integration of offline and online channels
have achieved omni-channel layout.
(III) Status of the Company in the industry
1. The Company occupies a leading position in the industry with revenue and net profit growing rapidly in the year.
During the reporting period, the Company has driven growth via continued R&D investment, production innovation, brand
enhancement, marketing network upgrade, supply chain management improvement, and opening of stores at a faster speed. The
revenue and net profit attributable to shareholders of the parent company maintained an upward trend throughout the year, while
profitability ranked among the top. Compared with previous year, both revenue and net profit hit a new high.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
2. Taking up the largest comprehensive market share for four consecutive years, T-shirts have become a super category of the
Company.
According to a statistical survey on T-shirt sales of national large-scale retail enterprises conducted by the China General Chamber of
Commerce and the China National Commercial Information Center, the comprehensive market share (weighted average of market
share by volume and market coverage) of BIEM T-shirts dwarfed all other products of the same kind for four consecutive years
(2018-2021). Judging from the sales volume, T-shirts have become a super category of the Company. From 2022 onwards, the
Company will continue to tap its advantages, build itself into the “T-shirt Expert”, and drive strategic upgrading under the leadership
of a single category. This could facilitate the further open-up of market space.
3. Golf series rank first in comprehensive market share for five consecutive years (2017-2021)
According to a statistical survey on national large-scale retail enterprises conducted by the China General Chamber of Commerce and
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
the China National Commercial Information, in 2021, golf series, with a lion’s share of 62.87%, ranked the first in comprehensive
market share (weighted average of market share by volume and market coverage) among similar products, while its market share by
volume and market coverage took up 62.87% and 72.18%, respectively. The golf series have ranked the first in comprehensive
market share for five consecutive years (2017-2021).
Comprehensive
market share
62.87%
Market share by
volume
Golf series leading the
72.81%
market for five
consecutive years
Market coverage
56.25%
4. Continue to sponsor the Chinese National Golf Team and firmly occupy the commanding height of the domestic
professional golf apparel market.
The Company and the Chinese National Golf Team embarked on a journey of partnership in 2013. Now, eight years later, the two
parties have renewed the sponsorship for another eight years. The Company continuously provides professional training and
competition uniforms for the national team with constant innovations and the craftsmanship spirit. The uniforms have demonstrated
the confidence of China as a nation and the confidence of Chinese brands in international competitions such as the Olympic Games
and the World Cup. This is our way of contributing to China’s golf industry. In 2021, the Company designed the second-generation
five-star uniforms for the national team to help them compete in the Tokyo Olympics and win glory for the country. The two has
made a pact of fighting together in Paris 2024.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
III. Analysis of Core Competitiveness
(I) Competitiveness in respect of brand positioning: High-end, distinctive, unique and differentiated segment market
Targeting at quality segment tracks, the Company implements a multi-brand development strategy and a differentiated market
positioning strategy to accurately meet consumers’ differentiated dressing needs for different dressing scenarios in the context of
consumption upgrading.
The BIEM.L.FDLKK brand ( ) is positioned in the segment market combing golf sport and fashionable, leisure lifestyle
and aims to become a high-end golf casual apparel brand. Target consumers include golf enthusiasts and middle-income or above
consumers who agree with golf culture and like golf-style clothing. The products feature distinctive personality and consistent style
in design that emphasize on “resonance” with target consumers. They are committed to providing consumers with high-quality,
high-grade and high-tech wearing experience. Driven by constant product innovation, brand power enhancement and channel
expansion, the brand aims to become the foremost sports casual apparel brand in the minds of consumers.
The CARNAVAL DE VENISE brand ( ) focuses on the vacation travel market. The Company intends to build a
new brand worth tens of billions that would pop up in the minds of consumers whenever they think of vacation travel apparel.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
(II) Competitiveness in respect of product R&D: Industry-leading product development and design edges
The Company is equipped with a high-quality design and development team, who have years of experience in the design of luxury
brands and golf apparel series of international well-known brands. They are rather proficient in aspects like design concepts, color
application, process design and performance, fabric processing and grasping, etc. When it comes to design, priority is given to the
use of new technologies, new craftsmanship and high-tech fabrics. Under the guidance of cross-border design concepts, sports
elements, leisure elements and fashion elements are fused to achieve the unity of functionality and aesthetics. Each year, the
Company’s design department would come up with over a thousand designs, which is a testimony to the Company’s strong R&D and
design capabilities. Up to now, the Company owns 107 invention, utility model and design patents, of which 6 are authorized
invention patents, 69 authorized utility model patents and 32 authorized design patents. Another 7 invention patents are under
substantive examination.
In the future, the Company will continue to increase investment in research and development and build highly competitive products
through fabric innovation, plate optimization, design breakthroughs and cultural empowerment, to maintain and solidify its
competitive edges in product R&D.
Korean designer LEE HYOJEONG French design master SAFA SAHIN
(III) Competitiveness in respect of product quality: Consistently adhering to the high quality of products
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Products are the core competitiveness of brands while quality is the lifeline of brands. The pursuit of quality has been a consistent
theme of the Company. Regarding “high-quality fabrics, bright colors, novel styles and fine workmanship” as advantages of its
products, the Company strives to offer high-quality products to consumers. In order to ensure product quality, the Company insists on
strictly selecting high-grade, high-performance fabrics. For example, the selected anti-bacterial fabrics can inhibit bacteria and
deodorize for a long period of time; the elastic and quick-dry fabrics have quick-drying and breathable effect without binding feeling,
so the apparel feels refreshing and non-sticky; the diamond fiber fabrics are light, warm, wear-resistant, and environmental friendly,
being 1/3 lighter than ordinary fiber fabrics of the same thickness but 50% higher heat preservation rate; the Hungarian white goose
down has 1,000 fill power, ensuring that the down jacket is lighter and warmer.
The Company maintains stable cooperative relations will renowned fabric suppliers in Italy, South Korea and Japan that are also
partners of international top brands. Technical and R&D staff of the Company regularly exchange with fabric suppliers. Sometimes,
joint efforts are made to conduct targeted development of products based on style characteristics of the Company’s products.
(IV) Competitiveness in respect of channels: Offline channel advantages + digital new retail
Offline channels of the Company have a presence in high-end department stores, shopping centers, airport and high-speed rail hubs
and golf courses throughout the country. As of December 31, 2021, the Company’s marketing network has covered 31 provinces,
autonomous regions and municipalities, including core business districts, high-end department stores, airports, well-known golf clubs,
etc. The number of stores at the end of 2021 reached 1,100, up by 121 compared with 979 at the end of 2020, of which 532 were
Company-operated stores and 568 were franchise stores.
The number of outlet stores increased steadily year by year. Outlet stores are the main channel to digest inventories. Generally
inventories within two years of aging can be well digested. Even at 40% to 60% off, there is still large profit margin.
The middle class in third- and fourth-tier cities will become the fastest growing group in the future. Increased income has
significantly improved the consumption confidence of residents in these cities. Particularly, their demand for high-end brands has
risen significantly. The Company remains optimistic about the prospects of high-end consumer markets in lower-tier cities, and will
seize the opportunity and sink its channels to the fast-growing third- and fourth-tier cities.
Moreover, the Company actively deploys online channels and cooperates in-depth with e-commerce platforms. Through
livestreaming platforms, it steers quality VIP customers from offline to online. An “offline + online” channel layout could provide
consumers with more choices and more convenient services.
(V) Competitiveness in respect of branding and marketing strategies: Consistent with its positioning
The Company, closely revolving around main target consumer groups, implements integrated marketing from commodity planning,
product design, terminal visual image, window advertising to product display, brand endorsement and planning of marketing
activities, with a view to enhancing brand popularity and reputation. Based on its high-end positioning, the Company has analyzed
the habits of target consumer groups and adopted a series of new media marketing measures thereupon. A matrix of measures
including celebrity endorsement, sports competition sponsorship, entertainment marketing, event marketing, and contribution to
public welfare activities were carried out, to continuously consolidate brand power.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Hawick Lau Hoi-Wai was invited to BIEM stores to meet and interact with fans.
(VI) Competitiveness in respect of management: Experienced management team
The Company boasts a management team with rich experiences, consistent philosophy, aggressiveness, dedication and perseverance.
They have a deep and thorough understanding of China’s golf apparel culture and market. Core executives have been granted shares
of the Company, thereby guaranteeing the stability and sustained development of the management. Meanwhile, with years of
experience in the industry, the management has a rather clear idea about the Company’s positioning, development strategies and
management improvement. The Company has established a business process catering to brand and corporate operations, a terminal
management system with strong control, a supply chain system with fast responses, and a standardized decision-making and
execution mechanism over years of development. All these could ensure its healthy and fast development.
IV. Analysis of Principal Businesses
1. Overview
(I) Financial performances
During the reporting period, the Company recorded total revenue of RMB2.7 billion, an increase of 18.09% over the same period of
the previous year. The operating profit and total profit were RMB738 million and RMB733 million, respectively, up by 26.76% and
25.22%, respectively, over the previous year. In addition, the Company posted a net profit attributable to shareholders of the listed
company of RMB625 million and basic earnings per share of RMB1.15, a year-on-year increase of 25.20% and 21.05%, respectively.
Overall, the Company maintained steady growth during the reporting period.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
(II) Operation
1. Continue to create scarce, differentiated and high-end products with an adherence to craftsmanship and innovation.
The Company continued to invest highly into product research and development during the reporting period. Efforts were made to
integrate international high-quality fabric resources, introduce outstanding R&D and design talents both at home and abroad, and
foster a designer team with an international horizon. With craftsmanship, every product is endowed with “high quality, high taste and
high-tech content”. The Company strives to create scarce, differentiated and high-end products through constant innovations and
pursues excellence in every piece of clothes by pooling resources throughout the world.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
2. Demonstrate “China-Chic” through in-depth cross-border cooperation with the palace culture of the Forbidden City.
During the reporting period, the Company continued to co-brand with the Palace Culture IP of the Forbidden City and rolled out the
“Fu Lu Shou” (three gods of fortune, prosperity and longevity) series in spring and summer and the “Feng Tian Cheng Yun”
(Mandate from Heaven) series in fall and winter. The series are filled with the charm of traditional Chinese culture and are
well-received in the market. In 2021, the Company teamed up with French design master SAFA SAHIN and jointly launched the dad
shoe series. Reproducing the collision of classic and popular with contrasting colors and splicing designs of different materials, the
co-branded dad shoes put on a new charm and bring a new wearing experience to consumers. In the future, the Company will
continue to dip deep into traditional culture to reproduce the classics with ingenuity, show to the world what is “China-Chic”, and
demonstrate the glamor of a big country brand.
3. Continuously upgrade the monogram pattern to create a super symbol for high-end brand.
Starting from 2020, to cater to the current fashion trends, the Company introduced a distinctive monogram into its design. By
incorporating golf and green flag elements into its signature “BG” letters, the Company has created its own “BG” monogram patterns
with the collision of colors, which is both classic and retro, showing a real sense of high-end fashion. Once launched, the products
have been widely praised by the market. In 2021, the Company continued to upgrade the monogram pattern and apply the patter in
more SKUs. The Company intends to build it into a super symbol of high-end brands that can continuously inject new cultural genes
into BIEM brands.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
4. Online sales model achieves remarkable results, with VIP members exceeding 700,000.
The Company makes full use of offline channels and steers traffic online through marketing assistant, Chaojidaogou (super shopping
guide), intelligent goods tracking system, OP Retail and other systems. The Company promoted comprehensive refined management
of VIP customers combining online and offline. The new retail marketing model achieved remarkable results and sales continued to
rise. VIP members exceeded 700,000 during the reporting period.
At present, online channels of the Company mainly comprise Tmall, Vipshop, JD and WeChat mini-program. Focusing on experience
and services, the Company insists on offering convenient online shopping experiences to high-end consumers. Prices of online and
offline channels remain consistent, to facilitate the new model of accessibly luxury sales.
5. Establish a unified information platform and fully embrace digital operations.
The Company further accelerated its IT system construction during the reporting period. A unified information management system
was established covering production, distribution, inventory, procurement, supplier, membership, finance, marketing, etc. In addition,
business intelligence (BI) has been introduced to provide analytical data support for the Company’s decision making. The Company
intends to gradually realize digital, efficient and intelligent operation management and fully launch digital operations.
Distribution
Procurement
Digital
Production Finance Efficient
Intelligent
Membership
Supplier
Currently, main information systems of the Company include omni-channel middle-platform system, production management system,
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
distribution management system, warehouse management system, and membership management system.
6. Continue to consolidate brand power and demonstrate the glamor of a national brand.
The Company officially initiated the “big communication era” in 2021. While carrying out competition sponsorship, entertainment
marketing, event marketing, and contribution to public welfare activities, the Company also embraced promotion in CCTV-1 and
high-speed rail. This could deepen the cultural connotation of the brand on one hand, and accelerate brand communication on the
other.
(1) Olympics marketing: Strengthening its positioning as a professional golf brand
At the 2021 Tokyo Olympics, the Company designed the second-generation five-star uniforms for the Chinese National Golf Team,
helping famous golfers, including Feng Shanshan, Lin Xiyu, Wu Ashun and Yuan Yechun, to compete on the field. The
second-generation uniforms focus on “China-chic” elements and combine the color of the national flag with the traditional color of
the Forbidden City. In the gradation of color, the “dragon” rises into the sky hidden in the auspicious clouds, symbolizing blessings
and good luck. While helping the national team to compete in the games, the uniforms also embody the confidence of Chinese
culture and show to the world the charm of “China-chic”.
During Olympic marketing, the Company adopted an online + offline integrated communication strategy. Online-wise, focusing on
the theme of Olympic competition, it utilized the media matrix to achieve full coverage; offline-wise, pre-sales were conducted for
the five-star uniforms, to enhance consumer involvement and deepen emotional connection and interaction. The moves were widely
recognized in the industry.
(2) Entertainment marketing: Comprehensively consolidating brand momentum via a number of celebrities and KOLs
The Company increased inputs in celebrity endorsement during 2021. It cooperated in depth with a group of well-known celebrities
highly compatible with the brand to strengthen brand awareness and spread the elite dress culture.
On May 15, spokesperson of BIEM.L.FDLKK Yang Shuo appeared in Tianmei Xintiandi Square, Taiyuan and interacted in-depth
with users.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
On September 25, actor Hawick Lau, wearing the Company’s fall-winter 2021 collection, showed up in Shanxi Tianmen Shanshan
flagship store. He shared how to dress like an elite with fans and audiences at the site, which brought a unique and beautiful
experience to users.
Moreover, the Company also joined forces with a number of popular stars such as Huang Yuan, Duan Yihong, Hu Jun, Lan Yingying,
Wu Qilong, Wu Zun, Liu Ye and Miriam Yeung, to effectively enhance brand influence through continuous exposure and content
innovation.
At the same time, the Company accelerated the construction of the KOL and KOC matrix on social media platforms such as
Xiaohongshu and TikTok. On one hand, diversified topics on social media and a large number of UGC contents could attract the
attention of more users especially young users; on the other hand, strong recommendations from various dressing KOLs, knowledge
KOLs and vertical golf KOLs can further solidify its positioning as a high-end sportswear brand.
(3) Event marketing: Enhancing brand credibility with endorsement from authoritative media
On December 10, 2021, the Age of Creators was officially aired on the hot program The Growing of the Great Brand on CCTV-1.
The episode tells the story of the Company’s inheritance, innovation and tribute to the times. Being aired on CCTV as a “great brand”,
the credibility and authority of the Company are further elevated under the endorsement of the national authoritative media.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
(4) Event marketing: Contracting with Yongda Media and entering a new era of communication
On July 12, the contract signing ceremony between the Company and Yongda Media with regard to their strategic cooperation on
high-speed rail communication was successfully held in Nanjing, China. The media of high-speed rail will fuel the Company’s brand
construction process. Through screens of high-speed rail, the Company will be able to convey its brand concepts and cultural values
to hundreds of millions of users, thereby consolidating brand momentum and increasing brand exposure. This will help the Company
to reach a new brand height and usher in a new era of communication.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
(5) Contributing to public welfare undertakings: Sticking to the original intention and shouldering corporate social
responsibilities of a national brand
In October 2021, many regions in Shanxi Province suffered from heavy rain, resulting in severe waterlogging, floods and other
disasters. As a result, the province initiated provincial level 3 emergency response to geological disasters. In view of this, the
Company quickly responded and raised disaster-relief materials day and night worth millions, including cotton clothes, down jackets,
blankets and other cold-proof materials, to shoulder its corporate social responsibilities.
In November 2021, sponsored by Guangzhou Panyu District Charity Organization and BIEM.L.FDLKK Charity Fund and organized
by Panyu Qiwu Social Services Center, the Children and Adolescent Peace of Mind Project was officially launched at the Children
and Adolescent Peach of Mind Station in Nancun Town. By sponsoring the children and youth peace of mind project in the name of
its charity fund, the Company hopes to illuminate more families, which fully embodies the sense of responsibility of a national brand.
2. Revenue and cost
(1) Composition of revenue
Unit: RMB
2021 2020
Proportion in Proportion in YoY changes
Amount Amount
revenue revenue
Total revenue 2,719,989,257.14 100% 2,303,326,211.84 100% 18.09%
By industry
Garment and apparel 2,719,989,257.14 100.00% 2,303,326,211.84 100.00% 18.09%
By product
Tops 1,155,253,965.36 42.47% 1,012,743,434.04 43.97% 14.07%
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Bottoms 577,413,010.84 21.23% 526,734,820.51 22.87% 9.62%
Jackets 760,953,959.00 27.98% 585,445,807.40 25.42% 29.98%
Others 226,323,052.12 8.32% 178,376,989.51 7.74% 26.88%
Income from other
45,269.82 0.00% 25,160.38 0.00% 79.93%
businesses
By region
Northeast China 257,702,259.73 9.47% 215,148,453.18 9.34% 19.78%
North China 438,055,235.73 16.11% 343,575,868.76 14.92% 27.50%
East China 509,188,940.50 18.72% 413,696,487.92 17.96% 23.08%
South China 599,071,826.19 22.02% 532,080,821.87 23.10% 12.59%
Central China 199,039,149.25 7.32% 177,353,893.67 7.70% 12.23%
Northwest China 140,100,579.39 5.15% 111,151,396.94 4.83% 26.04%
Southwest China 454,255,647.71 16.70% 412,069,554.66 17.89% 10.24%
E-commerce 122,575,618.64 4.51% 98,249,734.84 4.27% 24.76%
By sales model
Online 122,575,618.64 4.51% 98,249,734.84 4.27% 24.76%
Direct sale 1,914,079,312.33 70.37% 1,628,792,927.31 70.71% 17.52%
Franchise 683,334,326.17 25.12% 576,283,549.69 25.02% 18.58%
(2) Industries, products, regions or sales models that accounted for over 10% of the Company’s revenue or
operating profit
√ Applicable □ Not applicable
The Company needs to comply with information disclosure requirements on the textile and garment-related industries as stipulated in
the SZSE Guidelines No. 3 for the Self-discipline and Supervision of Listed Companies — Industry Information Disclosure.
Unit: RMB
YoY changes of
Gross profit YoY changes of YoY changes of
Revenue Cost of revenue gross profit
margin revenue cost of revenue
margin
By industry
Garment and
2,719,989,257.14 634,160,601.71 76.69% 18.09% 5.42% 2.81%
apparel
By product
Tops 1,155,253,965.36 240,366,386.18 79.19% 14.07% -4.58% 4.06%
Bottoms 577,413,010.84 116,434,061.13 79.84% 9.62% -9.26% 4.20%
Jackets 760,953,959.00 190,307,785.69 74.99% 29.98% 18.53% 2.41%
Others 226,323,052.12 87,052,368.71 61.54% 26.88% 43.24% -4.39%
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Income from
45,269.82 100.00% 79.93%
other businesses
By region
Northeast China 257,702,259.73 65,875,917.73 74.44% 19.78% 10.59% 2.13%
North China 438,055,235.73 87,674,526.21 79.99% 27.50% 8.32% 3.55%
East China 509,188,940.50 106,276,965.26 79.13% 23.08% 14.13% 1.64%
South China 599,071,826.19 139,445,063.97 76.72% 12.59% 3.07% 2.15%
Central China 199,039,149.25 47,703,604.73 76.03% 12.23% -0.81% 3.15%
Northwest China 140,100,579.39 28,622,176.96 79.57% 26.04% 11.71% 2.62%
Southwest China 454,255,647.71 98,410,989.87 78.34% 10.24% 0.84% 2.02%
E-commerce 122,575,618.64 60,151,356.98 50.93% 24.76% -1.91% 13.34%
By sales model
Online 122,575,618.64 60,151,356.98 50.93% 24.76% -1.91% 13.34%
Direct sale 1,914,079,312.33 361,489,790.71 81.11% 17.52% 2.10% 2.85%
Franchise 683,334,326.17 212,519,454.02 68.90% 18.58% 14.15% 1.21%
Where the statistical standards for the Company’s principal business data were adjusted in the reporting period, principal business
data of the Company in the recent year adjusted as per statistical standards at the end of the reporting period
□ Applicable √ Not applicable
Whether the Company has physical store sales terminals
√ Yes □ No
Distribution of physical stores
Number of new Number of stores
Number of
Type of store Area of stores stores opened in closed in the Reason for close Brands involved
stores
the period period
Mainly due to
expiration of BIEM.L.FDLKK,
Company-operated
532 83,877 82 36 contract, CARNAVAL DE
stores
adjustment of VENISE
stores, etc.
Mainly due to
expiration of BIEM.L.FDLKK,
Franchise stores 568 91,975 112 37 contract, CARNAVAL DE
adjustment of VENISE
stores, etc.
Total area and efficiency of company-operated stores
Top 5 stores by income
No. Name of store Date of opening Revenue (RMB) Sales per square meter
1 Store 1 November 14, 2007 46,070,740.88 RMB50,400
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
2 Store 2 July 01, 2012 30,629,080.00 RMB97,200
3 Store 3 March 01, 2003 26,592,235.40 RMB112,700
4 Store 4 April 01, 2015 20,948,091.15 RMB162,400
5 Store 5 April 27, 2007 20,218,092.92 RMB122,500
Total -- -- 144,458,240.35 RMB82,100
New stores of the listed company
√ Yes □ No
The Company had 1,100 terminal sales stores at the end of the reporting period, an increase of 121 compared with the end of 2020. It
is expected that the new stores will not have a significant impact on the Company’s business operations.
Whether the Company discloses top 5 franchise stores
□ Yes √ No
(3) Whether the Company’s goods sales income is greater than the labor service income
√ Yes □ No
Industry Item Unit 2021 2020 YoY changes
Sales volume Pieces 3,681,850 3,606,443 2.09%
Garment and apparel
Garment Garment (RMB) 2,719,989,257.14 2,303,326,211.84 18.09%
Reasons for YoY changes of relevant data over 30%
□ Applicable √ Not applicable
(4) Performance of major sales contracts and major procurement contracts already signed by the Company
as of the end of the reporting period
□ Applicable √ Not applicable
(5) Composition of cost of revenue
By industry and product
Unit: RMB
2021 2020
Industry Item Proportion in cost Proportion in cost YoY changes
Amount Amount
of revenue of revenue
Garment and Garment and
634,160,601.71 100.00% 601,546,395.40 100.00% 5.42%
apparel apparel
Unit: RMB
2021 2020
Product Item Proportion in cost Proportion in cost YoY changes
Amount Amount
of revenue of revenue
36
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Garment and
Tops 240,366,386.18 37.90% 251,898,615.05 41.88% -4.58%
apparel
Garment and
Bottoms 116,434,061.13 18.36% 128,317,766.79 21.33% -9.26%
apparel
Garment and
Jackets 190,307,785.69 30.01% 160,555,872.81 26.69% 18.53%
apparel
Garment and
Others 87,052,368.71 13.73% 60,774,140.75 10.10% 43.24%
apparel
(6) Whether there are changes to the consolidated scope during the reporting period
√ Yes □ No
During the reporting period, one new subsidiary was added to the Company’s consolidation scope, i.e. Ningbo BIEM.L.FDLKK
Smart Technology Co., Ltd., which is a wholly-owned subsidiary of the Company established in April 21, 2021.
(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) 420,648,671.83
Proportion of sales to top five customers in total annual
15.46%
sales
Proportion of sales to related party among the top five
0.00%
customers in total annual sales
Information of the top five customers of the Company
No. Name of customer Sales amount (RMB) Proportion in total annual sales
1 Customer 1 116,042,331.58 4.27%
2 Customer 2 95,272,603.00 3.50%
3 Customer 3 93,897,752.87 3.45%
4 Customer 4 58,798,058.63 2.16%
5 Customer 5 56,637,925.75 2.08%
Total -- 420,648,671.83 15.46%
Other description of major customers
□ Applicable √ Not applicable
Major suppliers of the Company
37
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Total purchase amount from the top five suppliers (RMB) 269,552,019.07
Proportion of the total purchase amount from the top five
33.75%
suppliers in total annual purchase amount
Proportion of purchase amount from related parties
among the top five suppliers in total annual purchase 0.00%
amount
Information of the top five suppliers of the Company
Proportion in total annual purchase
No. Name of supplier Purchase amount (RMB)
amount
1 Supplier 1 62,933,640.13 7.88%
2 Supplier 2 57,001,049.09 7.14%
3 Supplier 3 55,134,523.46 6.90%
4 Supplier 4 48,271,392.90 6.04%
5 Supplier 5 46,211,413.49 5.79%
Total -- 269,552,019.07 33.75%
Other description of major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: RMB
2021 2020 YoY changes Description of significant changes
Selling expenses 1,041,052,486.14 885,368,459.26 17.58%
Administrative expenses 156,267,574.26 132,633,430.58 17.82%
Mainly owing to the increase in interest
expenses on lease liabilities arising
Finance expenses 21,805,535.69 9,699,259.37 124.82%
from the implementation of the New
Lease Standards
R&D expenses 83,388,128.67 64,804,859.36 28.68%
The Company needs to comply with information disclosure requirements on the textile and garment-related industries as stipulated in
the SZSE Guidelines No. 3 for the Self-discipline and Supervision of Listed Companies — Industry Information Disclosure.
Unit: RMB
Incurred in the Incurred in the prior YoY changes of
Item Reason of change
current period period selling expenses
Employee benefits 292,614,931.34 245,331,238.57 19.27%
Store operating expenses 359,724,699.13 461,267,036.64 -22.01%
Decoration and renovation 84,303,737.40 76,410,689.85 10.33%
expenses
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Advertising expenses 78,889,887.30 62,254,284.32 26.72%
Office and business travel 20,281,804.02 13,647,638.74 48.61% Mainly owing to the increase in sales
expenses scale
Transportation expenses 10,068,692.80 8,614,867.40 16.88%
E-commerce service fees 8,659,135.65 6,549,205.73 32.22% Mainly owing to the growth of online
business
Depreciation of 175,539,936.53 100.00% Mainly owing to the implementation of
right-of-use assets the New Lease Standards
Others 10,969,661.97 11,293,498.01 -2.87%
Total 1,041,052,486.14 885,368,459.26 17.58%
4. Other information required by guidelines for information disclosure of textile and garment related
industries
The Company needs to comply with information disclosure requirements on the textile and garment-related industries as stipulated in
the SZSE Guidelines No. 3 for the Self-discipline and Supervision of Listed Companies — Industry Information Disclosure.
(1) Production capacity
The Company’s own production capacity
Capacity utilization rate had a YoY change of more than 10%
□ Yes √ No
Whether there is overseas production capacity
□ Yes √ No
(2) Sales models and channels
Product sales channels and actual operation methods
The Company adopts an omni-channel sales model of “direct sale + franchise” and “online + offline” that cover high-end department
stores, shopping centers, airport and high-speed rail hubs and golf courses across the country and Tmall flagship stores.
Offline channels are classified into company-operated stores and franchise stores.
Direct sale refers to the model where the Company sets up counters or stores in high-end shopping malls, airports with large
passenger flow, well-known golf clubs, hotels, etc. in first- and second-tier cities to sell products. Direct sale can be divided into joint
operation and non-joint operation models. Under the joint operation model, the Company signs a joint operation agreement with the
shopping mall, airport or golf club, under which the other party provides the venue and collection services while the Company
provides products and sales management. The two parties share the sales revenue according to the agreed proportion. Under the
non-joint operation model, the Company signs a lease agreement with the provider of the business premise and obtains the use of
premise via payment of rent. The Company is responsible for product and sales management.
As for the franchise model, the franchisee signs a franchise contract with the Company to acquire the franchise qualification of BIEM
39
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
brands. The franchisee is responsible for acquiring business premises as well as daily operation and management of stores, while
enforcing product pricing, price adjustment and other policies formulated by the Company. Under the franchise model, products of
the Company are sold to the franchisee in the form of buyouts, which are then sold externally through franchise stores. The
franchisee bears benefits and risks associated with their operations.
For online sales, main channels include Tmall, JD, Vipshop, and other third-party platforms. The Company opens official flagship
stores on these platforms and pays a certain amount of platform fee or certain share of the sales according to the sales volume on the
platform.
Unit: RMB
YoY changes of
Gross profit YoY changes of YoY changes of
Sales channel Revenue Cost of revenue gross profit
margin revenue cost of revenue
margin
Online sale 122,575,618.64 60,151,356.98 50.93% 24,325,883.80 -1,170,384.82 13.34%
Direct sale 1,914,079,312.33 361,489,790.71 81.11% 285,286,385.02 7,443,148.39 2.85%
Franchise sale 683,334,326.17 212,519,454.02 68.90% 107,050,776.48 26,341,442.74 1.21%
(3) Franchise and distribution
Whether sales revenue of franchisees and distributors accounted for more than 30%
□ Yes √ No
Top 5 franchisees
Cooperation start Whether a related
No. Name of franchisee Total sales (RMB) Level of franchisee
time party
1 Franchisee 1 September 01, 2006 No 29,276,021.22 Level 1
2 Franchisee 2 December 01, 2007 No 23,401,646.06 Level 1
3 Franchisee 3 February 01, 2019 No 17,853,002.34 Level 1
4 Franchisee 4 October 01, 2011 No 16,886,763.54 Level 1
5 Franchisee 5 December 01, 2013 No 13,067,322.07 Level 1
Total -- -- -- 100,484,755.23 --
(4) Online sales
Whether sales revenue of online sales accounted for more than 30%
□ Yes √ No
Whether the Company had self-built sales platform
□ Yes √ No
Whether the Company cooperated with third-party sales platforms
√ Yes □ No
The Company opened or closed online sales channels
40
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
√ Applicable □ Not applicable
Operation
Main product
Name of channel Main brands Channel status Reason for close Opening time conditions during
categories
opening
November 08,
TikTok BIEM.L.FDLKK Garment Open Normal operation
2021
CARNAVAC DE November 08,
TikTok Garment Open Normal operation
VENISE 2021
Explanation of the impact on the current and future development of the Company
By adding online channels and carrying out in-depth cooperation with e-commerce platforms, the Company could offer more choices
to the shopping experience of consumers and further optimize channels and diversify traffic.
(5) Agent operation
Whether agent operation was involved
√ Yes □ No
Name of partner Main content of cooperation Fee payment
Provide operation services for the
Agency fee is paid based on a certain
Partner 1 Company on JD, Tmall and TikTok
percentage of the actual sales amount
platforms
(6) Inventory
Particulars of inventory
Days of inventory YoY changes of
Main product Quantity Aging Reason
turnover inventory balance
Within 1 year: Balance at the end
RMB388.5076 million of the year increased
1-2 years: by RMB52,534,400 Mainly owing to the
RMB155.1531 million or 8.65% over the increase in sales
Garment 360 3,909,789
2-3 years: RMB87.7364 end of previous scale during the
million year. period
Over 3 year:
RMB28.8171 million
Provision for inventory write-down
Methods for recognition of the net realizable value of inventories and inventory write-down
Inventories at the end of the reporting period are measured at the lower of cost and net realizable value. If the net realizable value of
inventories at the end of the reporting period is lower than the book cost, the difference is set aside as inventory write-down. Net
realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated
costs necessary to make the sale, and related taxes and fees.
41
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
1. Basis for determining the net realizable value of inventories: For materials held for production, if the net realizable value of
finished product using the material is higher than its cost, the material is still measured at cost. However, when a decline in the price
of materials indicates that the cost of the finished product exceeds net realizable value, the material is written down to net realizable
value. For inventories held to satisfy sales contracts or service contracts, their net realizable value is based on the contract price. If
the sales contracts are less than the inventory quantities held, the net realizable value of the excess part is based on general selling
prices.
2. Methods for determining inventory write-down: At the end of the reporting period, the Company determines the net realizable
value of out-of-season clothes as the estimated selling price less selling cost and related taxes and fees. If the net realizable value is
lower than the book cost, the difference is set aside as inventory write-down. The reversed inventory write-down during the reporting
period is for inventories sold in the current period but with write-down already recognized in the previous period.
For specific inventory write-downs, please refer to “Section X Financial Report” --> “VII. Notes to Items of the Consolidated
Financial Statements” --> “6. Inventory”.
Inventories of terminal channels such as franchisees or distributors
(7) Brand building
Whether the Company was involved in the production and sales of branded clothing, apparel and household textile products
√ Yes □ No
Own brands
Name of Main product Target Main sales
Name of brand Characteristics Price range City level
trademark types consumers areas
Middle class
and
above-income
High-end,
groups who
BIEM.L.FDLK BIEM.L.FDLK Casual combination of 1st-4th tier
advocate a 1500-8000 Chinese
K K sportswear leisure and cities
healthy, sunny
sports
and
comfortable
lifestyle
Family outfits,
parent-child
Middle-class
outfits and
consumers who
CARNAVAL Vocation travel couples outfits, 1st-4th tier
pursue 300-2000 Chinese
DE VENISE apparel catering to cities
high-quality
different
travels
vocation and
travel scenarios
Marketing and operation of each brand during the reporting period
42
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Targeting at quality segment tracks, the Company implements a multi-brand development strategy and a differentiated market
positioning strategy to accurately meet consumers’ differentiated dressing needs for different dressing scenarios in the context of
consumption upgrading.
The BIEM.L.FDLKK brand is positioned in the segment market combing golf sport and fashionable, leisure lifestyle and aims to
become a high-end golf casual apparel brand. Target consumers include golf enthusiasts and middle-income or above consumers who
agree with golf culture and like golf-style clothing. The products feature distinctive personality and consistent style in design that
emphasize on “resonance” with target consumers. They are committed to providing consumers with high-quality, high-grade and
high-tech wearing experience. Driven by constant product innovation, brand power enhancement and channel expansion, the brand
aims to become the foremost sports casual apparel brand in the minds of consumers.
The CARNAVAL DE VENISE brand focuses on the vacation travel market. The Company intends to build a new brand worth tens of
billions that would pop up in the minds of consumers whenever they think of vacation travel apparel.
During the reporting period, the Company continued to co-brand with the Palace Culture IP of the Forbidden City and rolled out the
“Fu Lu Shou” (three gods of fortune, prosperity and longevity) series in spring and summer and the “Feng Tian Cheng Yun”
(Mandate from Heaven) series in fall and winter. The series are filled with the charm of traditional Chinese culture and are
well-received in the market. In 2021, the Company teamed up with French design master SAFA SAHIN and jointly launched the dad
shoe series. Reproducing the collision of classic and popular with contrasting colors and splicing designs of different materials, the
co-branded dad shoes put on a new charm and bring a brand new wearing experience to consumers. In the future, the Company will
continue to dip deep into traditional culture to reproduce the classics with ingenuity, show to the world what is “China-Chic”, and
demonstrate the glamor of a big country.
The Company, closely revolving around main target consumer groups, implements integrated marketing from commodity planning,
product design, terminal visual image, window advertising to product display, brand endorsement and planning of marketing
activities, with a view to enhancing brand popularity and reputation. Based on its high-end positioning, the Company has analyzed
the habits of target consumer groups and adopted a series of new media marketing measures thereupon. A matrix of measures
including celebrity endorsement, sports competition sponsorship, entertainment marketing, event marketing, and contribution to
public welfare activities were carried out, to continuously consolidate brand power.
Trademark ownership disputes, etc. in which the Company was involved
□ Applicable √ Not applicable
(8) Others
Whether the Company was engaged in clothing design related businesses
√ Yes □ No
Number of self-owned
85 Number of contracted designers 7
designers
Operation of the built designer
Not applicable
platform
43
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Whether the Company organized order meetings
√ Yes □ No
5. R&D investment
√ Applicable □ Not applicable
Name of main R&D Expected impact on the future
Project purpose Project progress Intended goals
project development of the Company
Promote the Company’s
innovative product
design, innovative fabric
research and
development, innovative
process research and
development, and
research and
development of standards Maintain a leading position in
for innovative function the high-end fashion
Design,
testing; under the sportswear sector,
development and
research and Master the key technologies continuously expand market
research on clothes
development concept of of functional clothes with boundaries, consolidate
with Ongoing
“three high and one multi-functional composite market competitiveness and
multi-functional
innovation” — high blended materials brand influence of the
composite blended
quality, high taste and Company’s products, and lay
materials
high technology and the foundation for building a
innovation, century-old brand.
comprehensively elevate
features, performances
and images of products
and strengthen brand
awareness, so that the
Company’s products
could continue to lead the
market.
Information on R&D personnel of the Company
2021 2020 Change ratio
Number of R&D personnel 205 187 9.63%
Proportion of R&D personnel 6.47% 6.59% -0.12%
Educational structure of R&D
—— —— ——
personnel
Bachelor 76 61 24.59%
44
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Master 7 7 0.00%
Associate degree 70 62 12.90%
Others 52 57 -8.77%
Age structure of R&D
—— —— ——
personnel
Under 30 42 30 40.00%
30~40 117 114 2.63%
40~50 42 39 7.69%
Above 50 4 4 0.00%
R&D investment of the Company
2021 2020 Change ratio
Amount of R&D investment
83,388,128.67 64,804,859.36 28.68%
(RMB)
Proportion of R&D investment
3.07% 2.81% 0.26%
in total revenue
Amount of capitalized R&D
0.00 0.00 0.00%
investment (RMB)
Proportion of capitalized R&D
investment in total R&D 0.00% 0.00% 0.00%
investment
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 reasonable explanation
□ Applicable √ Not applicable
6. Cash flow
Unit: RMB
Item 2021 2020 YoY changes
Sub-total of cash inflow from
2,794,084,680.61 2,193,006,746.73 27.41%
operating activities
Sub-total of cash outflow from
1,896,561,042.54 1,556,157,147.53 21.87%
operating activities
Net cash flow from operating
897,523,638.07 636,849,599.20 40.93%
activities
Sub-total of cash inflow from 3,170,817,478.89 1,791,379,059.48 77.00%
45
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
investing activities
Sub-total of cash outflow from
3,354,579,606.23 2,835,956,575.40 18.29%
investing activities
Net cash flow from investing
-183,762,127.34 -1,044,577,515.92 82.41%
activities
Sub-total of cash inflow from
681,200,000.00 -100.00%
financing activities
Sub-total of cash outflow from
225,027,351.47 155,805,296.95 44.43%
financing activities
Net cash flow from financing
-225,027,351.47 525,394,703.05 -142.83%
activities
Net increase in cash and cash
488,734,159.26 117,666,786.33 315.35%
equivalents
Major influencing factors for significant YoY changes in relevant data
√ Applicable □ Not applicable
(1) During the reporting period, the net cash flow from operating activities recorded an increase of 40.93% compared with the same
period of the previous year, mainly owing to the expansion of sales scale and effective control of expenditures;
(2) During the reporting period, the cash inflow from investing activities recorded an increase of 77.00% compared with the same
period of the previous year, mainly owing to the increase in the income from purchasing wealth management products in the current
period;
(3) During the reporting period, the net cash flow from investing activities recorded an increase of 82.41% compared with the same
period of the previous year, mainly owing to the increase in wealth management investment in the previous period;
(4) During the reporting period, the net cash outflow from financing activities recorded an increase of 44.43% compared with the
same period of the previous year, mainly owing to the implementation of the New Lease Standards in the current period;
(5) During the reporting period, the net cash flow from financing activities recorded a decrease of 142.83% compared with the same
period of the previous year, mainly owing to the implementation of the New Lease Standards in the current period;
(6) During the reporting period, the net increase in cash and cash equivalents recorded an increase of 315.35% compared with the
same period of the previous year, mainly owing to the growth in performance.
Reason for significant differences between the net cash flow from operating activities and the net profit of the year during the
reporting period
□ Applicable √ Not applicable
V. Analysis of Non-principal Businesses
√ Applicable □ Not applicable
Unit: RMB
Proportion in total
Amount Explanation of reason Whether it is sustainable
profit
46
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Investment income 38,815,870.23 5.30% Yes
Profit and loss from
changes in fair 3,424,832.00 0.47% Yes
value
Asset impairment -78,683,952.73 -10.74% Yes
Non-operating
531,942.90 0.07% Yes
revenue
Non-operating
5,613,342.65 0.77% No
expense
Credit impairment
314,860.76 0.04% Yes
loss
VI. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
End of 2021 Beginning of 2021
Proportion Proportion
Proportion in Description of significant changes
Amount in total Amount changes
total assets
assets
Monetary funds 1,082,712,218.58 22.26% 578,783,443.79 13.70% 8.56%
Accounts
279,717,057.14 5.75% 301,061,376.99 7.13% -1.38%
receivable
Inventory 660,214,219.41 13.58% 607,679,776.22 14.38% -0.80%
Fixed assets 244,337,754.20 5.02% 239,216,423.50 5.66% -0.64%
Construction in
148,165,548.36 3.05% 49,120,792.27 1.16% 1.89%
progress
Right-of-use
407,448,654.74 8.38% 478,604,887.71 11.33% -2.95%
assets
Contract
140,669,127.30 2.89% 81,677,368.60 1.93% 0.96%
liabilities
Lease liabilities 217,323,756.45 4.47% 298,677,940.84 7.07% -2.60%
Other current 1,377,984,359. Mainly owing to the decrease in
830,640,713.41 17.08% 32.62% -15.54%
assets 67 purchased structured deposits
Investment in
other equity 98,099,300.47 2.02% 92,785,368.67 2.20% -0.18%
instruments
Intangible assets 119,548,729.29 2.46% 114,864,801.65 2.72% -0.26%
47
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Long-term
105,243,120.55 2.16% 104,972,941.26 2.48% -0.32%
prepaid expenses
Other payables 55,878,486.28 1.15% 44,335,743.56 1.05% 0.10%
Mainly owing to the conversion of
Bonds payable 284,554,163.11 5.85% 630,982,939.14 14.94% -9.09%
convertible bonds into shares
High proportion of overseas assets
□ Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
Accumulated
Profit or loss
changes in Amount
Opening from changes Write-down Amount sold Other Closing
Item fair value purchased in
balance in fair value in the period in the period changes balance
included in the period
of the period
equity
Financial
assets
4. Investment
in other
92,785,368.67 5,313,931.80 98,099,300.47
equity
instruments
Sub-total of
financial 92,785,368.67 5,313,931.80 98,099,300.47
assets
Total 92,785,368.67 5,313,931.80 98,099,300.47
Financial
0.00 0.00
liabilities
Other changes
Whether there were significant changes to measurement attributes of the Company’s main assets during the reporting period
□ Yes √ No
3. Restriction of asset rights at the end of the reporting period
Unit: RMB
Item Book value at the end of the Reason for restriction
period
Monetary funds 13,334,484.75 Deposits for bank acceptance bills
Total 13,334,484.75
48
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
VII. Analysis of Investment
1. Overview
□ Applicable √ Not applicable
2. Major equity investment during the reporting period
□ Applicable √ Not applicable
3. Major non-equity investment during the reporting period
□ Applicable √ Not applicable
4. Financial asset investment
(1) Security investment
□ Applicable √ Not applicable
The Company did not invest in securities during the reporting period.
(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: RMB10,000
Proportion
Amount
of
Cumulativ of
Amount of cumulative
Cumulativ e amount proceeds
Total Amount of proceeds proceeds Purpose and
e amount of Amount of that
Year of Method of amount of proceeds whose use whose use whereabouts
of proceeds unused have
raising raising proceeds used in the was was of unused
proceeds whose use proceeds been
raised period changed in changed in proceeds
used was idle for
the period total
changed over two
proceeds
years
raised
49
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Wealth
management
products,
2016 IPO 62,407.7 7,604.43 52,102.16 0 22,412 35.91% 13,826.38 0
deposited in
regulatory
banks
Wealth
management
Convertible products,
2020 67,872.93 5,352.1 26,526.18 0 0 0.00% 42,634.35 0
bonds deposited in
regulatory
banks
Total -- 130,280.63 12,956.53 78,628.34 0 22,412 17.20% 56,460.73 -- 0
Description on overall use of proceeds
(1) Proceeds raised in IPO: Under “CSRC Approval [2016] No. 2860” issued by China Securities Regulatory Commission,
BIEM.L.FDLKK Garment Co., Ltd. issued 26,670,000 RMB-denominated ordinary shares (A shares) to the public, each having a
par value of RMB1.00 and an issue price of RMB26.17. The total capital raised was RMB697,953,900.00, and the net amount was
RMB624,077,000.00 after deducting the issuance fees of RMB73,876,900.00 (tax exclusive). The raised proceeds were received in
full amount on December 20, 2016, for which GP Certified Public Accountants (Limited Liability Partnership) had verified and
presented the Capital Verification Report (GP Verification Doc. [2016] No. G14002150538) As of December 31, 2021,
RMB521,021,571.05 of the proceeds had been used and RMB138,263,789.81 had not been used (including interest income less
service charge).
(2) Proceeds raised through convertible bonds: Under “CSRC Approval [2020] No. 638” issued by China Securities Regulatory
Commission, BIEM.L.FDLKK Garment Co., Ltd. issued a total of RMB689 million convertible bonds to the general public, each
having a par value of RMB100. The total capital raised was RMB689,000,000.00, and the net amount was RMB678,729,339.62
after deducting the underwriting fee, sponsor fee and other issuance fees of RMB10,270,660.38 (tax exclusive). The raised proceeds
were received in full amount on June 19, 2020, for which Zhongxinghua Certified Public Accountants (Limited Liability
Partnership) had verified and presented the Capital Verification Report (ZXH Verification Doc. [2020] No. 410005). As of
December 31, 2021, RMB265,261,784.43 of the proceeds had been used and RMB426,343,457.48 had not been used (including
interest income less service charge).
(2) Projects committed with proceeds raised
√ Applicable □ Not applicable
Unit: RMB10,000
Whether Cumulati Investme
Total Date for Whether
committe Total ve nt Whether
committe Amount the Benefits project
Committed investment d projects investme amount progress expected
d invested project is realized feasibility
projects and use of have nt after invested as of the benefits
investme in the ready for in the changed
over-raised funds been adjustme as of the end of the are
nt at period intended period significan
changed nt (1) end of the period (3) achieved
raising use tly
(includin period (2) = (2)/(1)
50
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
g partial
change)
Committed investment project
Decembe
Marketing network
Yes 52,053.82 29,641.82 0 29,641.82 100.00% r 31, 27,529 Yes No
construction project
2019
Decembe Not
Information system
No 5,383.88 5,383.88 0 5,384.03 100.00% r 31, applicabl No
improvement project
2019 e
Not
Supplementing
No 5,000 5,000 0 5,000 100.00% applicabl No
working capital
e
BIEM.L.FDLKK Decembe Not
intelligent storage Yes 0 22,412 7,604.43 12,076.31 53.88% r 31, applicabl No
center 2022 e
Marketing network
June 30,
construction and No 30,972.93 30,972.93 2,191.03 3,461.02 11.17% 1,800.18 Yes No
2023
upgrading project
Not
Supply chain park June 30,
No 14,000 14,000 1,699.69 1,740.54 12.43% applicabl No
project 2022
e
Not
R&D design center June 30,
No 4,000 4,000 1,461.38 2,424.62 60.62% applicabl No
project 2022
e
Not
Supplementing
No 18,900 18,900 0 18,900 100.00% applicabl No
working capital
e
Sub-total of committed 130,310.6 130,310.6
-- 12,956.53 78,628.34 -- -- 29,329.18 -- --
investment projects 3 3
Investment direction of over-raised funds
None
130,310.6 130,310.6
Total -- 12,956.53 78,628.34 -- -- 29,329.18 -- --
3 3
The “intelligent storage center” project of the Company progresses slowly, mainly because the land is a
Description of failure piece of land reserve won by the Company through auction; the “three supplies and one leveling” (supply
to achieve the planned of water, electricity and road and ground leveling) work of relevant departments have been delayed,
progress or expected leading to delayed project progress. The Company has applied to the national planning department to
benefits and reasons extend the construction and completion time of the land plot as well as the validity period under the
(by project) Construction Land Approval, which has been approved.
The “marketing network construction and upgrading project” is behind the expected schedule, mainly
51
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
because under the impact of COVID-19 and other factors, the Company has been advancing the investment
project cautiously so as to reduce investment risks of the proceeds.
The “supply chain park project” is behind the expected schedule, mainly because relevant departments
have made adjustments to the planning of the plot while construction progresses slowly due to prolonged
supply cycle of workers and materials under the influence of COVID-19.
Description of
significant changes in
None
project feasibility
Amount, purpose and Not applicable
progress of use of
over-raised funds
Applicable
Occurred in previous years
Changes in
implementation In July 2017, the 17th meeting of the Second Board of Directors deliberated and approved the Proposal on
locations of projects Changing the Specific Locations of Certain Projects Invested with Raised Proceeds, which agreed to
invested with raised change the locations of some stores under the “marketing network construction project”. Specific locations
proceeds of stores were adjusted by the management according to actual business needs. The change of locations
would not change the use of raised proceeds, nor would it cause any substantial impact on the
implementation of the project.
Applicable
Occurred in previous years
The “marketing network construction project” originally planned to establish 224 company-operated stores
Adjustments to across the country, including 206 joint-operation stores in shopping malls and airports and 18 stores in golf
implementation
clubs. On October 25, 2018, the 6th meeting of the Third Board of Directors and the 5th meeting of the
methods of projects
Third Board of Supervisors deliberated and approved the Proposal on Adjusting the Number of Stores
invested with raised under the Marketing Network Construction Project, which stated to increase the number of stores under the
proceeds marketing network construction project from 224 to no more than 400 under the premise of not changing
the total investment amount, investment purpose and implementation entity. Specific implementation
decisions will be made by the management according to actual business needs. The matter has been
approved by the 2018 Second Extraordinary General Meeting.
Applicable
(1) Proceeds raised in IPO: In April 2017, upon deliberation and approval at the 16th meeting of the
Second Board of Directors, in accordance with the Authentication Report of Having Used Self-raised
Advance investments Funds to Invest in Projects Planned with Raised Proceeds in Advance issued by GP Certified Public
for projects planned Accountants LLP (GP Special Doc. [2017] No. G17003810041), independent directors, the Board of
with raised funds and Supervisors and the sponsor expressed their consent to exchange the Company’s self-raised funds that had
their exchange invested in the projects planned under raised proceeds in advance at an amount of RMB99,223,778.79 on
February 28, 2017 with the raised proceeds.
(2) Proceeds raised through convertible bonds: On September 25, 2020, upon deliberation and approval at
the 28th meeting of the Third Board of Directors, in accordance with the Authentication Report of
52
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Exchanging the Self-raised Funds That Have Been Used for Projects Planned with the Raised Proceeds
and Issuance Fees with Raised Proceeds issued by Huaxing Certified Public Accountants LLP (HX Audit
Doc. [2020] No. GD-280), independent directors, the Board of Supervisors and the sponsor expressed their
consent to exchange the Company’s self-raised funds that had invested in the projects planned under raised
proceeds in advance at an amount of RMB11,826,344.79 and self-owned funds that had been used to pay
for issuance fees at an amount of RMB2,470,660.38 with the raised proceeds at an amount of
RMB14,297,005.17.
Temporary Not applicable
replenishment of
working capital with
idle proceeds
Amount of proceed Not applicable
balance after project
implementation and
reasons
The Company convened the 6th meeting of the Fourth Board of Directors and the 4th meeting of the
Fourth Board of Supervisors on September 24, 2021 and the 2021 Second Extraordinary General Meeting
on October 13, 2021. The meetings deliberated and approved the Proposal on Using Idle Proceeds and Idle
Self-owned Funds for Cash Management, which agreed to use no more than RMB650 million of
temporarily idle proceeds for cash management under the premise of not affecting the progress of the
Unused proceeds and investment projects and daily operations of the Company. The above cash management quota is valid for
their whereabouts 12 months from the date of approval by the general shareholder meeting, and, within the validity period,
the funds may be used on a rolling basis. Independent directors and the sponsor all expressed their consent.
As of December 31, 2021, the Company had used RMB100 million idle proceeds to purchase the Li Duo
Duo RMB structured corporate deposit products of Shanghai Pudong Development Bank and RMB380
million to purchase capital-guaranteed wealth management products of banks and securities companies.
Other unused proceeds are still stored in the special account for the raised funds.
Problems or other
situations in the use
and disclosure of None
proceeds
(3) Change 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. Sales of major assets
□ Applicable √ Not applicable
The Company did not sell major assets during the reporting period.
53
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
2. Sales of major equity
□ Applicable √ Not applicable
IX. Analysis of Main Holding and Joint-stock Companies
□ Applicable √ Not applicable
The Company had no main holding and joint-stock companies that should be disclosed during the reporting period.
X. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
XI. Outlook of the Company’s Future Development
2021 is a landmark year that witnessed another strategic cultural upgrade of the Company. The Company aims to build a century-old,
world-renowned clothing group. It has defined its core culture as “responsibility and ultimate experience” and has established a
corporate value of “one dedication and three haves”, i.e. dedication to principal business, continuous innovation, and having passion,
resilience and responsibility. With a mission of continuously creating values for consumers, the Company has specified a stra tegy of
leading brand development with a single category, namely “Biemlfdlkk T-shirt Expert”, to lay the foundation for further opening up
market space.
Under the macro environment of the rise of China-chic, cultural confidence and consumption upgrading, the Company will seize
opportunities to speed up the pace of development. Priority is given to the creation of product power, channel power and brand power
and the improvement of operational capabilities, to rapidly enhance brand awareness and consolidate its leading position in the
high-end fashion sportswear market.
1. Focusing on core categories with strategic upgrading and building the T-shirt Expert
According to data in the Report on Market Panoramic Survey of China’s T-shirt Industry and Investment Evaluation 2020-2025,
worldwide billions of T-shirts are sold each year. As a big consumer of T-shirts, China consumes more than 3 billion T-shirts annually.
When China’s per capita GDP exceeds US$3,000, people would raise higher demands for clothes in terms of both level and quality.
Therefore, high-end T-shirts would possess greater market space.
54
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
After 20 years of dedication in the golf apparel market, the Company boasts a great number of utility model patents regarding plates,
materials and processes of T-shirts. It has accumulated the somatic data of tens of millions of people that could enable the Company
to design fitter and more comfortable T-shirts. As a result, products of the Company are highly recognized by target consumers.
According to a statistical sales survey conducted by the China General Chamber of Commerce and the China National Commercial
Information Center, T-shirts of the Company have taken up the first place in comprehensive market share (weighted average of
market share by volume and market coverage) for four consecutive years (2018-2021). T-shirt has become a super category of the
Company. Featuring “rigid demand”, “consumable”, “cross-region” and “cross-season”, T-shirts have a high repurchase rate, with
broad market space and continuous growth potential.
Based on its own advantages, the Company has launched a strategic upgrade plan of driving development with a single category. By
focusing on T-shirts, the Company hopes to transform itself from the “first golf brand” to the “first T-shirt brand” that would pop up
in the minds of consumers whenever they think of that category.
55
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
2. Firmly grasping the trend of high-end fashion sports and opening independent stores for golf series
Under the influence of multiple factors including China’s economic development, consumption upgrading, catalytic effect of the
pandemic, and the introduction of a series of national support policies for the sports industry, the domestic high-end sports market has
become a new wind gap. High end and segmented markets are effective channels for domestic brands to overtake international
brands.
At present, BIEM.L.FDLKK has taken up the largest comprehensive share in the domestic golf apparel market for five consecutive
years. Under the leadership of the new Korean designer, the golf series are equipped with a better fashion sense and richer SKUs to
adapt to different sportswear scenarios. The products have attracted a group of loyal consumers. Considering advantages of the
product, it becomes suitable to open up independent stores for the golf series.
In 2022, the Company initiated independent operations for the golf series with independent stores. Positioning at a high-end fashion
brand, the series can be further divided into fashion and professional series. Adhering to the style of “young, fashionable and
innovative” and the R&D concept of “high quality, high taste and high technology”, the products offer high-value experience for golf
enthusiasts who value sports, fashion and functionality.
Opening independent stores for the series could further enhance the experience of high-end consumers toward fashion sportswear,
which is conducive to consolidate the Company’s status as the first and foremost golf apparel brand.
3. Increasing R&D investment to consolidate brand value
In the future, the Company will continue to increase R&D investment and, with a reliance on the self-built fabric laboratory, form a
unique style with regards to the R&D and application of new materials, innovation of fabrics, etc. It will upgrade its R&D Center,
introduce high-quality R&D and design talents, increase investment in the R&D of related materials, and cooperate with universities
and scientific research institutions. By ways of constant plate optimization, design breakthroughs and cultural empowerment, the
Company will continue to innovate, create values for consumers, and build highly competitive products to constantly enhance brand
value.
4. Upgrading both brand image and services to build signature brand culture
56
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
In the future, the Company will upgrade both brand images and services with a view to highlighting its competitive edges and forging
a signature brand culture. In terms of brand image upgrading, the Company will build the new look of terminal stores via design and
display upgrades. As for brand service upgrading, the Company will elevate the images and qualities of all employees and
comprehensively improve store services.
5. Continuous efforts in brand promotion to enhance brand power in an all-round way
Enhancing brand power is a key strategy of the Company for future development, for which the Company will continue to increase
advertising efforts. The adoption of a series of new branding channels and models is helpful for building a brand image of young,
international and high-end and enhancing brand cultural values and influences. Priority is given to two mainstream platforms,
WeChat and Xiaohongshu. Advertisements and KOL recommendations can help incubate young consumers. At the same time, the
Company has established an endorsement matrix by introducing young spokesperson. Other activities such as offline interactions
with celebrities and VIP experience activities are also conducive to boosting brand awareness and influence.
6. Optimizing talent strategy and strengthening HR management
In 2021, the Company rolled out the new promotion mechanism and the new remuneration and benefits system and established the
talent reserve mechanism. When it comes to talent training and management, the Company has introduced advanced management
philosophies. In order to give full play to the talent competition mechanism and initiative in store management, the new model of
store contracting system was piloted. In the future, the Company will continue to innovate on the traditional management models and
roll out new management models. Emphasis is placed on the cultivation of a young, diverse talent team and the improvement of
organizational capacity, so as to consolidate its overall competitiveness and promote its long-term, sustainable development.
(II) Potential risks faced by the Company
1. Risks of production outsourcing
The Company adopts the brand operation model; i.e. it focuses on links with higher added value such as design in the upstream as
well as brand operation and sales channel construction in the downstream of the business chain, and outsources production. The
outsourcing of production allows the Company to effectively reduce operating costs while enhancing core competitiveness. At
present, the garment industry chain in China boasts obvious advantages and there are many garment factories with high
manufacturing level to choose from. Meanwhile, for products with special requirements, the Company will choose some factories
overseas (such as South Korea) for production to ensure product quality. It has also established a factory selection, inspect ion and
evaluation system, and constantly strengthens and improves product quality by dispatching quality specialists to factories, inspecting
their warehouses, entrusting third-parties to conduct special tests, etc. Despite so, there is still the risk that production processes of
the factories are not up to quality requirements of the Company or production arrangement could not meet delivery schedule which
result in delayed supply, thereby affecting the promotion and sales of the Company’s products.
2. Management risks brought by marketing network expansion
Products of the Company are sold through company-operated stores and franchise stores. The expansion of marketing network is an
important way for the Company to increase market share and improve business performance. In recent years, with steady business
development, store expansion has maintained a rapid growth rate. Although the Company has accumulated strong experience in
channel expansion and management, possesses certain high-quality channel resources, has established a sound talent cultivation
57
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
mechanism, and is equipped with strong store replication capabilities, along with the availability of proceeds raised through this
offering and the unfolding of investment projects, the scale of the Company will grow rapidly and the marketing network will be
further expanded. The rapid growth of the number of stores will raise more demanding requirements on the Company’s management
and operation. If the Company’s talent reserve, HR management, selection of suitable locations for new stores and performance
management cannot adapt to its development, the profitability of the Company in the future will be impacted to a certain extent.
3. Risks of large inventory balance
For high-end clothing brands, inventory usually takes up a high proportion in total assets while the turnover rate is low, which is
consistent with their business models. This is also the case for the Company. Despite the fact inventories of the Company have been
kept at a reasonable level required for normal production and operation and the aging is mostly within 2 years, if there are changes in
the market environment or the competition is intensified in future years, it may lead to inventory backlog or impairment. Thi s will
cause adverse effects to operations of the Company.
XII. Reception of Researches, Communications, Interviews and Other Activities
√ Applicable □ Not applicable
Main content
Reception Reception Type of discussed and Index of the basic
Reception time Reception object
location method reception object information situation of the survey
provided
For details,
please refer to CNINFO
Online platform
May 14, 2021 Others Others Online investors the IR Activity (http://www.cninfo.com
(http://rs.p5w.net)
Record Form .cn).
(No. 2021-001)
58
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Section IV Corporate Governance
I. Basic Situation of Corporate Governance
During the reporting period, the Company has constantly improved its corporate governance structure and optimized its internal
management systems in strict compliance with requirements of the Company Law, the Securities Law, the Code of Corporate
Governance for Listed Companies, the Rules Governing the Listing of Shares on Shenzhen Stock Exchange, and other relevant laws,
administrative regulations and normative rules promulgated by China Securities Regulatory Commission (CSRC) and Shenzhen
Stock Exchange (SZSE).
(I) Shareholders and general meeting of shareholders
The Company has formulated the Rules of Procedure for the General Meetings of Shareholders and implements them strictly. During
the reporting period, the Company convened five general meetings of shareholders. The calling and convening procedures,
notifications, authorizations and delegations, resolutions, deliberations and announcements of the general meeting of shareholders are
all compliant with relevant laws and regulations. In addition, all the meetings conducted voting both on site and via Internet, so that
all shareholders, especially minority shareholders, can fully exercise their rights.
(II) Directors and the Board of Directors
The Board of Directors of the Company currently comprises 9 directors, among which 3 are independent directors. The number and
composition of the Board of Directors meet requirements of laws, regulations, and the Articles of Association. The Company
organized the directors to attend relevant training activities of regulatory authorities. Further study and familiarity with relevant laws
and 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 on the protection of the legitimate interests of minority shareholders, and expressing independent
opinions on material and important matters.
(III) Supervisors and the Board of Supervisors
The Board of Supervisors of the Company comprises 3 supervisors, among which 1 is an employee representative supervisor. The
number and composition of the Board of Supervisors meet requirements of laws, regulations, and the Articles of Association. All
supervisors earnestly perform their duties as per requirements of the Rules of Procedure of the Board of Supervisors and other
relevant regulations, to supervise the decision-making procedures and resolutions of the Board of Directors and the Company’s legal
operations and to effectively oversee the legality and compliance of directors, managers and other senior executives of the Company
in their duty performance.
(IV) Relationship between controlling shareholders and the Company
The controlling shareholder of the Company is a natural person, Mr. Xie Bingzheng, who is also the actual controller and the
Chairman of the Company. Mr. Xie strictly regulates his behaviors in accordance with relevant requirements on listed companies. All
major business decisions of the Company have been made in line with standardized operating procedures, and there are no
circumstances of damaging the interests of the Company and other shareholders. The Company is independent from the controlling
shareholder in terms of business, personnel, assets, institution, finance, etc. and has independent and complete business systems and
59
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
independent operation capabilities.
(V) Other stakeholders
The Company fully respects and safeguards the legitimate rights and interests of all stakeholders including shareholders, employees,
suppliers and customers. While creating the optimal profits, the Company strives to achieve a balance of interests among the society,
shareholders, employees and other relevant parties, to jointly promote its continual, sustainable development.
(VI) Information disclosure and transparency
The Board of Directors has designated the Secretary to the Board in accordance with provisions of the Measures of the Company on
Information Disclosure Management, who is responsible for investor relations management and daily information disclosure and for
receiving visits and consultations 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 Company timely and fairly.
Whether there are significant differences between the Company’s actual status of corporate governance and laws, administrative
regulations and CSRC normative documents on the governance of listed companies
□ Yes √ No
There were no significant differences between the Company’s actual conditions and laws, administrative regulations 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 and the Articles of Association. It is
entirely independent from the controlling shareholder in terms of business, personnel, assets, institution, finance, etc. and has
independent and complete business systems and independent operation capabilities.
(I) In respect of business
The Company is equipped with independent R&D design, procurement, marketing and supply systems. It faces the market and
operates independently, without any reliance on the controlling shareholder and other related parties for production and operation. Its
businesses are also independent from the controlling shareholder and other related parties.
(II) In respect of personnel
The Company has set up an independent HR Dept. with independent personnel files, recruitment, appointment and dismissal systems,
and appraisal, reward and punishment rules in accordance with relevant state laws and regulations. All employees are recruited
through standard recruitment procedures and have signed a labor contract with the Company. Directors, supervisors and senior
management of the Company have been elected and appointed in strict accordance with provisions of the Company Law and the
Articles of Association. Senior management of the Company including the Chairman, General Manager, Deputy General Manager,
Chief Financial Officer and Board Secretary serve full-time in the Company. They do not hold any positions other than directors and
supervisors in the controlling shareholder or actual controller or other companies controlled by them, nor do they receive
remuneration from the controlling shareholder or actual controller or other companies controlled by them. Finance personnel of the
Company do not moonlight in the controlling shareholder or actual controller or other companies controlled by them.
(III) In respect of assets
60
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
The Company legally owns the ownership or use rights of lands, properties, and trademark patents, and other assets relating to its
current businesses. The property rights of assets between the Company and its shareholders are clearly defined. There is no situation
where assets, equities or reputation of the Company are used as guarantees for debts of shareholders, or where controlling
shareholder and related parties embezzle funds, assets and other resources of the listed company.
(IV) In respect of institution
The Company has established and improved an independent and complete organizational structure in line with the needs of its own
business development, with clear division of labor as well as coordination and cooperation among units and departments. Funct ional
departments are completely independent from the controlling shareholder and actual controller in respects of personnel, office sites
and management systems. The Company has put in place a relatively complete corporate governance structure in accordance with
relevant laws. General meetings of shareholders, the Board of Directors and the Board of Supervisors operate standardly in strict
accordance with the Company Law and the Articles of Association. Moreover, the Company is also equipped with an independent
director system. Office premises of the Company are independent of those of the shareholder units, without any co-working or mixed
operation.
(V) In respect of finance
The Company has set up an independent finance department equipped with full-time financial personnel. It has also established an
independent accounting system and a standardized financial management system in accordance with the Accounting Law of the
People’s Republic of China and the Accounting Standards for Business Enterprises, and is able to make decisions 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 bank account with the controlling shareholder or actual controller or other companies controlled by
them.
III. Horizontal Competition
□ Applicable √ Not applicable
IV. Annual General Meeting and Extraordinary General Meetings Held during the Reporting
Period
1. Shareholder meetings during the reporting period
Ratio of investor Resolutions of the
Session of meeting Type Date of convening Date of disclosure
participation meeting
Deliberated and
approved all
2021 First Extraordinary proposals. Details
Extraordinary general meeting of 59.16% January 29, 2021 December 30, 2021 can be found in the
General Meeting shareholders Announcement on
Resolutions of 2021
First Extraordinary
61
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
General Meeting
(Announcement No.:
2021-008) on
CNINFO
(http://www.cninfo.c
om.cn).
Deliberated and
approved all
proposals. Details
can be found in the
Announcement on
Resolutions of 2020
2020 Annual General
Annual general Annual General
Meeting of 49.27% May 19, 2021 May 20, 2021
meeting Meeting of
Shareholders
Shareholders
(Announcement No.:
2021-044) on
CNINFO
(http://www.cninfo.c
om.cn).
Deliberated and
approved all
proposals. Details
can be found in the
Announcement on
Resolutions of 2021
2021 Second Extraordinary
Second
Extraordinary general meeting of 49.04% October 13, 2021 October 14, 2021
Extraordinary
General Meeting shareholders
General Meeting
(Announcement No.:
2021-080) on
CNINFO
(http://www.cninfo.c
om.cn).
2. Extraordinary general meetings of shareholders proposed to be convened by preferred shareholders
whose voting rights were resumed
□ Applicable √ Not applicable
62
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
V. Particulars of Directors, Supervisors and Senior Management
1. Basic information
Number
Number
of shares Increase Decrease
Start of shares
End date held at of shares of shares Other Reason
Position date of held at
Name Position Gender Age of term the during during changes for
status term of the end
of office beginnin the the (shares) change
office of the
g of the period period
period
period
Operatio
Xie n error of
Chairma Incumbe February January 216,172, 216,170,
Bingzhe Male 53 -1,200 the
n nt 15, 2015 28, 2024 000 800
ng securities
account
Director
Shen and Incumbe February January 19,652,0 19,652,0
Male 47
Jindong General nt 15, 2015 28, 2024 00 00
Manager
Director,
Deputy
General
Tang Manager, Incumbe February January 5,895,60 5,895,60
Female 49
Xinqiao and nt 15, 2015 28, 2024 0 0
Chief
Financial
Officer
Director,
Deputy
General
Chen Incumbe February January
Manager, Male 42
Yang nt 15, 2015 28, 2024
and
Board
Secretary
Independ
Liu February January
ent Resigned Male 62
Yueping 15, 2015 29, 2021
Director
Independ
Xu Incumbe January January
ent Female 59
Xiaoxia nt 26, 2018 28, 2024
Director
Feng Independ Resigned Female 43 January January
63
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Minhong ent 26, 2018 29, 2021
Director
Independ
Incumbe January January
Xie Qing ent Male 57
nt 29, 2021 28, 2024
Director
Independ
Zeng Incumbe January January
ent Female 43
Yamin nt 29, 2021 28, 2024
Director
Chairma
Shi n of the
Incumbe February January
Minqian Board of Male 40
nt 15, 2015 28, 2024
g Supervis
ors
Cao Supervis Incumbe February January
Male 48
Yong or nt 15, 2015 28, 2024
Employe
e
Zhou Represen Incumbe January January
Female 50
Cancan tative nt 26, 2018 28, 2024
Supervis
or
Deputy
Jin Incumbe January January
General Female 43
Fenlin nt 22, 2017 28, 2024
Manager
241,719, 241,718,
Total -- -- -- -- -- -- 0 0 -1,200 --
600 400
Whether there is any resignation of directors and supervisors or dismissal of senior management within their term of office during the
reporting period
□ Yes √ No
Changes in directors, supervisors and senior management of the Company
√ Applicable □ Not applicable
Name Position Type Date Reason
Resigned upon
Independent
Liu Yueping expiry of term of January 29, 2021 Resigned upon expiry of term of office
Director
office
Resigned upon
Independent
Feng Minhong expiry of term of January 29, 2021 Resigned upon expiry of term of office
Director
office
Independent
Xie Qing Elected January 29, 2021 Elected upon the change of board
Director
64
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Independent
Zeng Yamin Elected January 29, 2021 Elected upon the change of board
Director
2. Main working experience
Professional background, main working experience and main current responsibilities of the Company’s in-service directors,
supervisors and senior management
(I) Directors
Mr. Xie Bingzheng, born in 1969, is of Chinese nationality and has no permanent residency abroad. Mr. Xie holds an EMBA degree
from Jinan University. He is a National Textile Industry Model Worker, the Vice Chairman of China Golf Association, the Vice
President of China National Garment Association, the Vice President of China Fashion Color Association, the Vice President of
China Textile Planning Research Association, and the Vice President of Guangzhou Federation of Industry & Commerce. He started
to serve as the Executive Director (Legal Representative) of the Company in October 2007 and has been the Chairman of the
Company ever since February 2012.
Mr. Shen Jindong, born in 1975, is of Chinese nationality and has no permanent residency abroad. Mr. Shen holds an EMBA degree
from Jinan University. He is the Vice President of Guangdong Association of Garment and Garment Article Industry He became the
Executive Deputy General Manager of the Company in March 2003 and has been the director and General Manager of the Company
since February 2012.
Ms. Tang Xinqiao, born in 1973, is of Chinese nationality and has no permanent residency abroad. She has a college degree and is an
assistant accountant. Ms. Tang acted as the Deputy General Manager and Chief Financial Officer of the Company from December
2006 and currently serves as the director, Deputy General Manager, and Chief Financial Officer of the Company.
Mr. Chen Yang, born in 1980, is of Chinese nationality and has no permanent residency abroad. Mr. Chen holds a master’s degree.
He once worked as the Director of the Alumni Services Office, School of Business Administration, South China University of
Technology and the General Manager of Jiangshan Dijing Golf Club. He became the Deputy General Manager and Board Secretary
of the Company in September 2011 and currently serves as the director, Deputy General Manager and Board Secretary of the
Company.
Mr. Xie Qing, born in 1965, is of Chinese nationality and has no permanent residency abroad. He is a senior economist with a
master’s degree. He once acted as the Vice President of China National Garment Association, the Deputy Director of the Economy
and Information Technology Bureau of Xinjiang Uygur Autonomous Region (Aid Xinjiang Program), the Deputy Director-General
of the Industry and Information Technology Department of Xinjiang Uygur Autonomous Region (Aid Xinjiang Program), and the
Vice President of China Textile Enterprise Association. He has been serving as the Deputy Director of the Planning Department
(Industry Development Department), China National Textile and Apparel Council since October 2015 and as the Executive Vice
President of China Textile Enterprise Association since December 2020. Currently, he is an independent director of the Company.
Ms. Xu Xiaoxia, born in 1963, is of Chinese nationality and has no permanent residency abroad. She holds a master’s degree. Ms. Xu
once worked as an engineer in Shantou AD Photographic Material Research Institute, the Deputy General Manager of the
Electromechanical Equipment Company of Guangdong Shantou International Industrial Group, the Assistant to the Dean and
65
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Director of the Training Center of the School of Business Administration, South China University of Technology. Currently, She
serves as the Executive Director of the Research and Consultancy Center for Guangdong Small and Medium-Sized Firms, School of
Business Administration, South China University of Technology, and the Managing Director of Baibu Youth (Guangzhou)
Management Consulting Co., Ltd. She has part-timed as a director of the Guangdong Industrial Finance Holding Company since
September 2018 and a director of the Huada Capital Management (Guangdong) Co., Ltd. since February 2019. Currently she is an
independent director of the Company.
Ms. Zeng Yamin, born in 1979, is a PhD of Xiamen University and post-doctoral scholar of Tsinghua University. In 2019, she was
selected into the International high-Level Accounting Talent Training Program of the Ministry of Finance. She has presided over a
number of projects under the National Natural Science Foundation, the National Social Science Fund of China, and the Sciences and
Humanities Research Fund, the Ministry of Education. She was once an accounting lecturer at Shanghai University and Nankai
University, and has been a professor and doctoral supervisor of the Accounting Department of Jinan University since November 2014.
Meanwhile, she has served as an independent director of the Rising Nonferrous Metals Share Co., Ltd. since October 2020, an
independent director of Guangdong Anda Automation Solutions Co., Ltd. since November 2020, an independent director of
Guangdong PAK Corporation Co., Ltd. since May 2021, and an independent director of Guangdong Lin’s Home Furnishing Co., Ltd.
since October 2021. She is also an independent director of the Company at present.
(II) Supervisors
Mr. Shi Minqiang, born in 1982, is of Chinese nationality and has no permanent residency abroad. Mr. Shi has a master’s degree. He
joined the Company in October 2011 and currently serves as the Chairman of the Board of Supervisors.
Mr. Cao Yong, born in 1974, is of Chinese nationality and has no permanent residency abroad. Mr. Cao has a master ’s degree. He
once worked in Bank of China Guangdong Branch. He has been the Investment Director of the Investment Department, Guangzhou
Jinan Investment Co., Ltd. since September 2010 and part-timed as a director of Guangdong Zhongyao Kiln Stock Co., Ltd. since
August 2017. Currently he is a supervisor of the Company.
Ms. Zhou Cancan, born in 1972, is of Chinese nationality and has no permanent residency abroad. She holds a college degree and has
been working in the Company since 2008. Currently she is a supervisor of the Company.
(III) Senior management
Mr. Shen Jindong is the General Manager of the Company. For details on his resume, please refer to the above “(I) Directors”.
Ms. Tang Xinqiao is the Deputy General Manager and Chief Financial Officer of the Company. For details on her resume, please
refer to the above “(I) Directors”.
Mr. Chen Yang is the Deputy General Manager and Board Secretary of the Company. For details on his resume, please refer to the
above “(I) Directors”.
Ms. Jin Fenlin, born in 1979, is of Chinese nationality and has no permanent residency abroad. Ms. Jin holds a master’s degree and is
the Executive Director of China Fashion Color Association. She joined the Company in 2008 and currently serves as the Deputy
General Manager of the Company.
Positions in shareholder entities
66
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
√ Applicable □ Not applicable
Position held Whether receiving
in Start date of End date of term remuneration and
Name Name of shareholder entity
shareholder term of office of office allowance from
entity shareholder entity
January 01,
Xie Bingzheng Guangzhou Jinan Investment Co., Ltd. Director No
2010
Investment September 01,
Cao Yong Guangzhou Jinan Investment Co., Ltd. Yes
Director 2010
Description on
position held in
shareholder None
entity
Positions in other entities
√ Applicable □ Not applicable
Whether
receiving
Position held Start date of End date of term
Name Name of other entity remuneration and
in other entity term of office of office
allowance from
other entity
Planning Department (Industry
Deputy October 01,
Xie Qing Development Department), China National No
Director 2015
Textile and Apparel Council
Executive
December 01,
Xie Qing China Textile Enterprise Association Vice Yes
2020
President
Research and Consultancy Center for
Guangdong Small and Medium-Sized Executive January 01,
Xu Xiaoxia Yes
Firms, South China University of Director 2022
Technology
Baibu Youth (Guangzhou) Management Managing September 01,
Xu Xiaoxia No
Consulting Co., Ltd. Director 2021
Guangdong Industrial Finance Holding September 01,
Xu Xiaoxia Director No
Company 2018
Huada Capital Management (Guangdong) February 01,
Xu Xiaoxia Director No
Co., Ltd. 2019
Independent October 20,
Zeng Yamin Rising Nonferrous Metals Share Co., Ltd. Yes
Director 2020
Guangdong Anda Automation Solutions Independent November 30,
Zeng Yamin Yes
Co., Ltd. Director 2020
67
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Independent
Zeng Yamin Guangdong PAK Corporation Co., Ltd. May 12, 2021 Yes
Director
Guangdong Lin’s Home Furnishing Co., Independent November 01,
Zeng Yamin Yes
Ltd. Director 2021
Professor,
November 01,
Zeng Yamin Accounting Department of Jinan University doctoral Yes
2014
supervisor
Guangdong Quality Energy Beverage Co.,
Tang Xinqiao Director July 25, 2018 No
Ltd.
Executive
Guangzhou Chuanqi Intelligent Technology Director and
Tang Xinqiao April 26, 2019 No
Co., Ltd. General
Manager
August 01,
Cao Yong Guangdong Zhongyao Kiln Stock Co., Ltd. Director No
2017
Description on
position held in
None
other entity
Penalties by regulatory authorities on the Company’s directors, supervisors and senior management both incumbent and resigned
during the reporting period in the last three years
□ Applicable √ Not applicable
3. Remuneration of directors, supervisors and senior management
Procedures and basis for determining the remuneration of directors, supervisors and senior management and actual payment
Procedures and basis for determining the remuneration of directors, supervisors and senior management and actual payment
For the remuneration and appraisal of directors, the Remuneration and Review Committee proposes the program, which is then
submitted to the general meeting of shareholders for approval. For the remuneration and appraisal of supervisors, the Board of
Supervisors proposes the program, which is then submitted to the general meeting of shareholders for approval. For the remuneration
and appraisal of senior management, the Remuneration and Review Committee proposes the program, which is then submitted to the
Board of Directors for approval.
The annual allowance for independent directors is determined after being reviewed and approved by the general meeting of
shareholders. The standard is RMB60,000/year for each independent director, which is paid monthly.
During the reporting period, remunerations of directors, supervisors and senior management of the Company are reasonable and paid
in time, which are consistent with requirements of regulatory authorities and relevant regulations of the Company.
Remuneration of directors, supervisors and senior management of the Company during the reporting period
Unit: RMB10,000
Name Position Gender Age Position status Total Whether
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
remuneration receiving
before tax remuneration
received from the from related
Company parties of the
Company
Xie Bingzheng Chairman Male 53 Incumbent 108.68 No
Director and
Shen Jindong Male 47 Incumbent 118.84 No
General Manager
Director, Deputy
General Manager,
Tang Xinqiao Female 49 Incumbent 109.62 No
and Chief
Financial Officer
Director, Deputy
General Manager,
Chen Yang Male 42 Incumbent 69.26 No
and Board
Secretary
Independent
Liu Yueping Male 62 Resigned 0.5 No
Director
Independent
Xu Xiaoxia Female 59 Incumbent 6 No
Director
Independent
Feng Minhong Female 43 Resigned 0.5 No
Director
Chairman of the
Shi Minqiang Board of Male 40 Incumbent 29.23 No
Supervisors
Cao Yong Supervisor Male 48 Incumbent 2.4 Yes
Employee
Zhou Cancan Representative Female 50 Incumbent 44.5 No
Supervisor
Deputy General
Jin Fenlin Female 43 Incumbent 49.74 No
Manager
Independent
Xie Qing Male 57 Incumbent 0 No
Director
Independent
Zeng Yamin Female 43 Incumbent 5.5 No
Director
Total -- -- -- -- 544.77 --
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
VI. 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
No proposal was rejected at the
meeting. For details, please
32nd Meeting of the Third
January 13, 2021 January 14, 2021 refer to the announcement on
Board of Directors
CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at the
meeting. For details, please
1st Meeting of the Fourth Board
January 29, 2021 January 30, 2021 refer to the announcement on
of Directors
CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at the
meeting. For details, please
2nd Meeting of the Fourth
April 27, 2021 April 29, 2021 refer to the announcement on
Board of Directors
CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at the
meeting. For details, please
3rd Meeting of the Fourth
April 28, 2021 April 29, 2021 refer to the announcement on
Board of Directors
CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at the
meeting. For details, please
4th Meeting of the Fourth
August 17, 2021 August 18, 2021 refer to the announcement on
Board of Directors
CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at the
meeting. For details, please
5th Meeting of the Fourth
August 17, 2021 August 18, 2021 refer to the announcement on
Board of Directors
CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at the
meeting. For details, please
6th Meeting of the Fourth
September 24, 2021 September 25, 2021 refer to the announcement on
Board of Directors
CNINFO
(http://www.cninfo.com.cn).
7th Meeting of the Fourth No proposal was rejected at the
October 28, 2021 October 29, 2021
Board of Directors meeting. For details, please
70
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
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
Number of
Number of
Board Number of Number of Any failure in Number of
Board
meetings Board Board attending in general
meetings Number of
Name of director required to meetings meetings person for two shareholder
attended via absence
attend during attended in attended by consecutive meetings
communicatio
the reporting person proxy meetings attended
n methods
period
Xie Bingzheng 8 7 1 0 0 No 3
Shen Jindong 8 7 1 0 0 No 3
Tang Xinqiao 8 7 1 0 0 No 3
Chen Yang 8 7 1 0 0 No 3
Liu Yueping 1 1 0 0 0 No 1
Xu Xiaoxia 8 6 2 0 0 No 2
Feng Minhong 1 1 0 0 0 No 1
Xie Qing 7 4 3 0 0 No 2
Zeng Yamin 7 5 2 0 0 No 2
Explanation of failure in attending in person for two consecutive meetings
Not 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 □ No
Description on whether opinions from directors were adopted
During the reporting period, all the directors of the Company performed their duties faithfully and diligently in strict accordance with
the Company Law, the Securities Law, the Rules Governing the Listing of Shares on Shenzhen Stock Exchange and other relevant
71
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
laws and regulations. They paid attention to the Company’s standardized operations and reviewed various matters of the Company
scientifically and prudently, and put forward valuable, professional suggestions regarding operations and development of the
Company according to actual situations of the Company. Efforts were also made to actively protect the legitimate rights and i nterests
of the Company and all shareholders.
VII. Particulars of the Special Committees under the Board of Directors during the Reporting
Period
Important Other
Number of Specifics of
Name of Date of opinions and situations of
Members meetings Contents objections (if
committee convening suggestions duty
convened any)
raised performance
The meeting
recommended
Xie Bingzheng, Discussed and
making
Shen Jindong, reviewed the
deployment
Tang Xinqiao, Proposal on
Strategy January 13, and
Chen Yang, Xu 1 the Strategic None None
Committee 2021 development
Xiaoxia, Liu Planning of
according to
Yueping, Feng Branches in
the Company’s
Minhong 2021.
business
strategies.
Xie Bingzheng, Discussed and The meeting
Shen Jindong, reviewed the reviewed
Tang Xinqiao, Proposal on operations in
Strategy
Chen Yang, Xu 1 April 27, 2021 the 2020 Work 2020 and put
Committee
Xiaoxia, Xie Report of the forward
Qing, Zeng General prospects for
Yamin Manager. 2021.
Reviewed the
remuneration
program for
directors in
Remuneration Xu Xiaoxia, 2021; reviewed
and Review Shen Jindong, 1 April 27, 2021 the
Committee Zeng Yamin remuneration
program for
senior
management in
2021.
Nomination Liu Yueping, January 13, Reviewed the After fully
1
Committee Xie Bingzheng, 2021 Proposal on reviewing and
72
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Xu Xiaoxia the Election of considering the
Non-Independe qualifications
nt Directors of of the proposed
the Fourth candidates
Board of based on the
Directors and principle of
the Proposal professional
on the Election experience
of Independent diversification
Directors of the and
Fourth Board competence
of Directors. complementati
on of board
members, the
meeting agreed
to submit the
proposals to the
Board of
Directors for
review and
approval.
Reviewed the
Proposal on After
the considering
Appointment of that
the General qualifications
Manager, the of the
Proposal on candidates
the were up to
Appointment of requirements
the Deputy on senior
Xie Qing, Xie General management of
Nomination January 29,
Bingzheng, Xu 1 Manager, the listed
Committee 2021
Xiaoxia Proposal on companies and
the requirements of
Appointment of the post, the
the Chief meeting agreed
Financial to submit the
Offer, and the proposals to the
Proposal on Board of
the Directors for
Appointment of review and
the Secretary to approval.
the Board.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Discussed and
reviewed the
All the
March 23, 2020 Internal
proposals were
2021 Audit Work
agreed.
Report of the
Company.
Reviewed the
2020 audit
work of
Zhongxinghua
Certified
Public
Accounts LLP;
reviewed the
2020 Internal All the
April 26, 2021 Control proposals were
Self-evaluation agreed.
Report;
reviewed the
First Quarter
Report 2021;
Zeng Yamin,
Audit reviewed the
Chen Yang, Xu 5
Committee Internal Audit
Xiaoxia
Work Report of
2021 Q1.
Reviewed the
Semi-annual
Report 2021; All the
August 17,
reviewed the proposals were
2021
Internal Audit agreed.
Work Report of
2021 Q2.
The meeting
Reviewed the agreed to
Proposal on submit the
September 24, the proposal to the
2021 Engagement of Board of
the Accounting Directors for
Firm. review and
approval.
Reviewed the All the
October 28,
Third Quarter proposals were
2021
Report 2021; agreed.
74
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
reviewed the
Internal Audit
Work Report of
2021 Q3;
reviewed the
Internal Audit
Work Plan of
2022.
VIII. Work of the Board of Supervisors
Whether 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.
IX. Employees of the Company
1. Number, profession composition and education level of employees
Number of in-service employees of the Parent Company at the
530
end of the reporting period
Number of in-service employees of the major subsidiaries at the
2,637
end of the reporting period
Total number of in-service employees at the end of the reporting
3,167
period
Total number of employees receiving remuneration in the
3,167
reporting period
Number of retired employees whose expenses are borne by the
6
Parent Company and its major subsidiaries
Composition of professions
Type of professions Number of staff in the profession
Sales staff 2,631
Administrative staff 163
Operation staff 288
R&D and design staff 85
Total 3,167
Education level
Type of education level Number of persons
Postgraduates and above 9
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
University graduates 199
College graduates 689
Technical school graduates and lower 2,270
Total 3,167
2. Remuneration policy
Remunerations of the Company should be performance-oriented and encourage and give full play to the initiatives and innovations of
employees internally, and remain competitive externally. The Company pays attention to both performance and position values, and
adopts a flexible remuneration structure for different sequences of positions. The remuneration base and total amount are
dynamically managed in line with business performance of the Company. Adhering to the value proposition of people-oriented,
remuneration policy of the Company should be able to enhance the cohesion and competitiveness of the Company, to promote its
sustainable, smooth and fast development.
3. Training program
The Company values the growth of every employee and has set up different training programs for employees 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 annual training needs, to ensure the scientific nature and effectiveness of the curriculum. Catering to different
trainees, the Company has forged a series of classic training programs like the “National New Product Tour Training”, “National
Store Management Training” and “Orientation Training”. The E-learning platform developed by the Company features pocket
courses and short teaching videos, which could satisfy the learning needs of all employees throughout the country anytime,
anywhere.
The Company has established the BIEM.L.FDLKK Business Academy targeting at mid-level managers and backbone employees.
Combining offline and CEIBS online platform, the program aims to tap the potentials of employees by strengthening their strategic
management, project management and process management capabilities and solidifying their work abilities. It could help them
identify key capabilities and practical design with a focus on business pain points, stimulate their awareness of learning and
innovation, and solidify their work abilities.
4. Labor outsourcing
□ Applicable √ Not applicable
X. Profit Distribution of the Ordinary Shares and Conversion of Capital Reserve to Share
Capital of the Company
Formulation, implementation or adjustment of profit distribution policies of ordinary shares especially the cash dividend plan in the
reporting period
76
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
√ Applicable □ Not applicable
The Company has formulated the Shareholder Return Plan for the Next Three Years (2019-2021) in accordance with provisions and
requirements of the Notice on Further Implementing Issues Concerning Cash Dividends of Listed Companies released by China
Securities Regulatory Commission (CSRC Doc. [2012] No. 37), the Guidelines on the Supervision and Administration of Listed
Companies No. 3 – Cash Dividend Distribution of Listed Companies (CSRC Announcement [2013] No. 43) and the Articles of
Association. During the reporting period, the Company has strictly enforced the profit distribution policies stipulated under the
Articles of Association and the Shareholder Return Plan for the Next Three Years (2019-2021).
During the reporting period, the Board of Directors and the general shareholder meeting deliberated and approved the 2020 profit
distribution plan on April 27 and May 15, 2021, respectively, which is: Distribute a cash dividend of RMB3.0 (tax inclusive) for
every 10 shares to all shareholders based on the total share capital on the equity registration date as specified in the announcement on
2020 equity distribution implementation, with a total amount of RMB164,406,977.10. The plan was completed in July 2021.
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
Yes
shareholders’ general meeting:
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
Whether minority shareholders have sufficient opportunities to
express opinions and requests, and whether their legitimate rights
Yes
and interests were sufficiently protected:
Where the cash dividend policy undergoes any adjustment or
change, whether the conditions and procedures are compliant and
Not applicable
transparent:
The Company gained profits in the reporting period and the retained profit of the Parent Company for holders of ordinary shares is
positive, but no plan of cash dividend is proposed
□ Applicable √ Not applicable
Profit distribution and conversion of capital reserve to share capital during the reporting period
√ Applicable □ Not applicable
Number of bonus shares for every 10 shares 0
Amount of dividend for every 10 shares (tax
3.00
included) (RMB)
Basis of the shares for distribution proposal 570,707,084
Amount of cash dividends (RMB) (tax included) 171,212,125.20
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Cash dividend amount in other ways (such as share
0.00
repurchase) (RMB)
Total amount of cash dividends (including other
171,212,125.20
ways) (RMB)
Distributable profit (RMB) 1,809,851,821.97
Proportion of total cash dividends (including other
100%
ways) in distributable profit
Cash dividend of the reporting period
If the Company is in the growth period and there are major capital expenditure arrangements, when the profit is distributed, the
proportion of cash dividends in this profit distribution should be at least 20%.
Details of the profit distribution proposal or share conversion proposal from capital reserve
The Company plans to distribute a cash dividend of RMB3.0 (tax inclusive) for every 10 shares to all shareholders based on a total
share capital of 570,707,084 shares as at March 31, 2022, with a total amount of RMB171,212,125.20; 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. Where there are any changes to the Company’s total share capital after the announcement of the profit distribution
proposal and before the equity registration date for actual implementation, the Company will maintain the same distribution ratio
per share and adjusts the total distribution amount accordingly.
XI. Implementation of the Stock Incentive Plan, Employee Stock Ownership Plan, and Other
Employee Incentives of the Company
√ Applicable □ Not applicable
1. Equity incentive
None
Equity incentives granted to directors and senior management during the reporting period
□ Applicable √ Not applicable
Performance appraisal and incentives of senior management
None
2. Implementation of the employee stock ownership plan
√ Applicable □ Not applicable
All valid employee stock ownership plans during the reporting period
Proportion to the Source of funds for
Number of entitled
Scope of employees Total shares held Changes total share capital of implementing the
employees
the listed company plan
1. Directors Self-raised funds by
(excluding 851 6,494,626 None 1.18% employees and
independent borrowed funds from
78
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
directors), the controlling
supervisors and shareholder
senior management
of the Company; 2.
Other core and
backbone employees
Shareholdings of directors, supervisors and senior management in the Employee Stock Ownership Plan during the reporting period
Number of shares held at Number of shares held at Proportion to the total
Name Position the beginning of the the end of the reporting share capital of the listed
reporting period period company
Director and General
Shen Jindong 0 413,590 0.08%
Manager
Director, Deputy General
Tang Xinqiao Manager, and Chief 0 241,187 0.04%
Financial Officer
Director, Deputy General
Chen Yang Manager, and Board 0 55,500 0.01%
Secretary
Jin Fenlin Deputy General Manager 0 47,234 0.01%
Chairman of the Board of
Shi Minqiang 0 44,872 0.01%
Supervisors
Employee Representative
Zhou Cancan 0 35,425 0.01%
Supervisor
Changes in asset management institution during the reporting period
□ Applicable √ Not applicable
Changes in equity due to disposal of shares by holders during the reporting period
□ Applicable √ Not applicable
Exercise of shareholder rights during the reporting period
During the reporting period, the Employee Stock Ownership Plan exercised the shareholder right of entitlement to cash dividends in
2020, but did not exercise the right of voting on the shareholder meetings and other shareholder rights.
Other situations of the employee stock ownership plan during the reporting period and explanation
□ Applicable √ Not applicable
Changes in the members of the management committee of the employee stock ownership plan
□ Applicable √ Not applicable
Financial impact of the employee stock ownership plan on the listed company during the reporting period and related accounting
treatment
□ Applicable √ Not applicable
Termination of employee stock ownership plan during the reporting period
□ Applicable √ Not applicable
Other description
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
3. Other employee incentives
□ Applicable √ Not applicable
XII. Construction and Implementation of Internal Control Systems during the Reporting
Period
1. Internal control construction and implementation
The Company has put in place a relatively complete corporate governance structure and a relatively sound internal control system,
which are consistent with the Company’s management requirements and development needs and compliant with relevant laws,
regulations and securities regulatory requirements. Various internal systems of the Company were well implemented and further
revised and optimized in 2021, and have basically achieved the overall goal of internal control. They have played a positive rol e in
controlling and preventing operation and management risks, protecting the legitimate rights and interests of investors, and promoting
the standardized operation and healthy development of the Company. As of December 31, 2021, the design and operations of the
Company’s internal control system are effective, without any major defects.
The internal control system needs to be continuously improved with the expansion of the Company’s businesses and scale. The
Company will continue to optimize the building of the internal control system, and strengthen the awareness of standardized
operation and internal supervision mechanism, so as to promote its sustainable, stable and healthy development.
2. Particulars of material internal control defects detected during the reporting period
□ Yes √ No
XIII. Management and Control of the Company for Subsidiaries during the Reporting Period
Name of Integration Problems in Subsequent
Integration plan Solutions taken Solution progress
company progress integration solution plan
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
XIV. 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
April 16, 2022
internal control
Disclosure index of the assessment report
CNINFO (http://www.cninfo.com.cn)
on internal control
Percentage of total assets of units included
100.00%
in the assessment scope to the total assets
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
in the Company’s consolidated financial
statements
Percentage of total revenue of units
included in the assessment scope to the
100.00%
revenue in the Company’s consolidated
financial statements
Defect identification criteria
Category Financial report Non-financial report
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
Material defect: Its probability of
but not by internal control; (4) The internal
occurrence is high or the defect severely
control and supervision conducted by the
reduces work efficiency or effectiveness,
company’s audit committee and internal
or severely increases the uncertainty of
auditing units are invalid; (5) There exist one
effects or causes severe deviations from
or a combination of control defects that may
expected objectives.
cause the company to materially deviate
Major defect: Its probability of
from the objectives of internal control.
occurrence is relatively high or the defect
Major defect: (1) The company fails to select
Qualitative criteria significantly reduces work efficiency or
and apply accounting policies based on
effectiveness, or significantly increases
generally accepted accounting standards; (2)
the uncertainty of effects or causes
There are no anti-fraud procedures and
obvious deviations from expected
control measures; (3) There is no control
objectives.
mechanism for significant non-routine or
General defect: Its probability of
special transactions or the mechanism is not
occurrence is low or the defect reduces
implemented, while there is no
work efficiency or effectiveness, or
compensatory control; (4) There are one or
increases the uncertainty of effects or
multiple defects in the control of the
causes deviations from expected
financial reporting process at the end of the
objectives.
period such that the authenticity and
completeness of the prepared financial
reports could not be reasonably guaranteed.
General defect: Other internal control defects
than material defects and major defects.
Quantitative criteria take revenue and total
assets as measurement indicators.
Quantitative criteria
(1) In respect of revenue:
General defect: The misstated amount in the The quantitative criteria for non-financial
81
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
financial report arising from the defect alone report defects are subject to those of
or in combination with other defects is less financial report defects.
than 1% of revenue.
Major defect: The misstated amount is
between 1% (inclusive) and 2% of the
revenue.
Material defect: The misstated amount is
more than 2% (inclusive) of revenue.
(2) In respect of total assets:
General defect: The misstated amount in the
financial report arising from the defect alone
or in combination with other defects is less
than 0.5% of total assets.
Major defect: The misstated amount is
between 0.5% (inclusive) and a% of total
assets.
Material defect: The misstated amount is
more than 1% (inclusive) of total assets.
Number of material defects in financial
0
reports
Number of material defects in
0
non-financial reports
Number of major defects in financial
0
reports
Number of major defects in non-financial
0
reports
2. Internal control audit report
□ Applicable √ Not applicable
XV. Rectification of Detected Problems in the Corporate Governance Special Action of Listed
Companies
Not applicable
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Section V Environmental and Social Responsibilities
I. Main Environmental Protection Issues
Whether the listed company and its subsidiaries are the key pollution discharge units published by the environmental protection
department
□ Yes √ No
Administrative penalties due to environmental issues during the reporting period
Impact on
Rectification
Name of company or production and
Reason of penalty Violation Penalty result measures of the
subsidiary operation of the
Company
listed company
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
Refer to other environmental information disclosed by key pollutant discharge units
Not applicable
Measures taken to reduce carbon emissions during the reporting period and their effects
□ Applicable √ Not applicable
Reason for not disclosing other environmental information
Not applicable
The Company needs to comply with information disclosure requirements on the textile and garment-related industries as stipulated in
the SZSE Guidelines No. 3 for the Self-discipline and Supervision of Listed Companies — Industry Information Disclosure.
Environmental protection compliance of the Company during the reporting period
The Company does not belong to key pollution discharge units published by the environmental protection department.
II. Corporate Social Responsibilities
(1) Corporate governance and investor protection
Pursuant to the Company Law, the Securities Law and relevant regulatory requirements of China Securities Regulatory Commission
and Shenzhen Stock Exchange, the Company has defined a governance structure with general shareholder meetings as the organ of
authority, the Board of Directors as the decision-making body and the Board of Supervisors as the supervisory body, and has
formulated their rule of procedure and decision-making procedure. Moreover, the Articles of Association of the Company is at the
center of the Company’s governance system, which is continuously revised and improved according to new requirements.
The Company attaches great importance to the protection of rights and interests of investors and has formulated the Rules of
Procedures of the General Meeting of Shareholders and the Investor Relations Management System, to regulate the elections of
directors and supervisors, ensure full exercise of power by shareholders and safeguard the interests of minority shareholders.
(2) Contributing to social welfare undertakings and actively shouldering corporate social responsibilities
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
In October 2021, many regions in Shanxi Province suffered from heavy rain, resulting in severe waterlogging, floods and other
disasters. As a result, the province initiated provincial level 3 emergency response to geological disasters. In view of this, the
Company quickly responded and raised disaster-relief materials day and night worth millions, including cotton clothes, down jackets,
blankets and other cold-proof materials. This is a perfect combination of branding and corporate social responsibilities.
In November 2021, sponsored by Guangzhou Panyu District Charity Organization and BIEM.L.FDLKK Charity Fund and organized
by Panyu Qiwu Social Services Center, the Children and Adolescent Peace of Mind Project was officially launched at the Children
and Adolescent Peach of Mind Station in Nancun Town. By sponsoring the children and youth peace of mind project in the name of
its charity fund, the Company hopes to illuminate more families, which fully embodies the sense of responsibility of a national brand.
III. Efforts Regarding Poverty Alleviation and Rural Revitalization
The Company did not engage in any poverty alleviation and rural revitalization work during the reporting period.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Section VI Significant Events
I. Implementation of Commitments
1. Commitments completed by actual controllers, shareholders, related parties, purchasers, or the
Company within the reporting period and commitments not fulfilled by the end of the reporting period
√ Applicable □ Not applicable
Undertaking Type of Content of Time of Term of Fulfillment of
Cause of commitment
party commitment commitment commitment commitment commitment
Share reform commitment
Commitments in the acquisition report
or the equity change report
Commitments made during asset
restructuring
They promise
not to reduce
any shares
Within two
Xie held in the
years upon
Bingzheng, Commitment to Company December 23, Ongoing
expiration of
Feng share reduction within two 2016 normally
the lock-up
Lingling years upon the
period
expiration of
the lock-up
period.
He promises
that the total
Commitments made during the initial
share
public offering or refinancing
reduction in
the first year
upon the Within two
expiration of years upon
Commitment to December 23, Ongoing
Xie Ting the lock-up expiration of
share reduction 2016 normally
period will not the lock-up
exceed 80% of period
the shares he
held in the
issuer before
the issuance;
after the
85
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
reduction in
the second
year, his total
number of
shares will not
be lower than
5% of the
shares he held
in the issuer
before the
issuance; the
reduction
price will not
be lower than
the issuance
price (the
reduction
price will be
adjusted
accordingly
for any
ex-rights and
ex-dividends
of the issuer
after listing).
They promise
that during
their term as a
director,
During the
supervisor and
term when
senior
Xie they serve as
management
Bingzheng, the director,
of the
Feng supervisor and
Company,
Lingling, Commitment to December 23, senior Ongoing
they will not
Shen share reduction 2016 management normally
transfer more
Jindong, and within a
than 25% of
Tang specific period
the total
Xinqiao after reporting
shares they
for leaving
hold in the
office
Company
each year; if
they leave
office, they
86
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
will not
transfer any
shares within
six months
after leaving
office;
within 12
months upon
the expiration
of the
aforesaid 6
months after
reporting for
leaving office,
the number of
shares sold
through stock
exchange
listing will not
exceed 50% of
the total
number of
shares they
hold in the
Company.
During the
They have period when
presented the they act as the
Letter of controlling
Commitment shareholder
to Avoid and actual
Xie Horizontal controller of
Bingzheng, Not-to-compete Competition, January 15, the Company Ongoing
Feng commitment promising not 2013 and within normally
Lingling to compete three years
with the after they no
Company in longer act as
the same the controlling
business shareholder
sector. and actual
controller
Equity incentive commitments
Other commitments to minority
87
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
shareholders
Whether commitments are fulfilled on
Yes
time
If there are commitments not fulfilled
within the specified period of time,
specify reasons for failure to do so Not applicable
and follow-up work plans
2. If there are assets or projects of the Company which have profit forecast while the reporting period is
still in the forecast period, the Company should state whether the assets or projects have attained the profit
forecast and explain reasons
□ Applicable √ Not applicable
II. Appropriation of Funds for Non-operating Purposes by Controlling Shareholder and Its
Related Parties
□ Applicable √ Not applicable
During the reporting period, the Company did not have any funds appropriated for non-operating purposes 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 Latest
Period
□ Applicable √ Not applicable
V. Explanation by the Board of Directors, the Board of Supervisors, and Independent
Directors (if any) of the “Non-standard Audit Report” for the Reporting Period Issued by the
Accounting Firm
□ Applicable √ Not applicable
VI. Explanation of Changes in Accounting Policies and Estimates or Correction of Significant
Accounting Errors Compared with the Financial Report of Last Fiscal Year
√ Applicable □ Not applicable
1. Significant changes of accounting policies
Contents and reasons for changes to accounting policies Approval procedure Remarks (financial statement
88
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
items affected by such changes
and impacted amount)
On December 07, 2018, the Ministry of Finance issued the revised Reviewed and approved at
Accounting Standards for Business Enterprises No. 21 -- Leases (C.K. the 2nd meeting of the For details, see “Other
[2018] No. 35) (hereinafter referred to as the “New Lease Standards”), Fourth Board of Directors descriptions (1)”.
requiring that other enterprises that implement the Accounting and 2nd meeting of the
Standards for Business Enterprises shall implement these revised Fourth Board of
Standards from January 1, 2021. The Company starts to implement Supervisors
them from the stipulated effective date.
In January 2021, the Ministry of Finance issued the Interpretation No.
14 to Accounting Standards for Business Enterprises (C.K. [2018] No. Not applicable For details, see “Other
01) (hereinafter referred to as the “Interpretation No. 14”), which came descriptions (2)”.
into force on January 1, 2021. The Company starts to implement them
from the stipulated effective date.
In December 2021, the Ministry of Finance issued the Interpretation
No. 15 to Accounting Standards for Business Enterprises (C.K. [2018] Not applicable For details, see “Other
No. 35) (hereinafter referred to as the “Interpretation No. 15”), of descriptions (3)”.
which contents on “presentation concerning centralized management
of funds” came into force as of the date of issuance. The Company
starts to implement them from the stipulated effective date.
Other description:
(1) For specific policies of the New Lease Standards, please refer to “Note V (36)”.
The Company started to implement the New Lease Standards from January 1, 2021. Under requirements of the New Lease Standards,
the amounts of retained earnings and other relevant items in the financial statements at the beginning of the period for the first time
adoption of the new standards (i.e. January 1, 2021) are adjusted based on the accumulative impact amount at the first time adoption,
while comparative financial information for the previous accounting periods is not adjusted. For specific changes of corresponding
financial statement items, please refer to “Note V (38) (3) Description on the adjustment of relevant items in the financial statements
at the beginning of the year for the first time adoption of the New Leasing Standards since 2021”.
Pursuant to the New Lease Standards, for contracts that already exist prior to the enforcement of the new standards, the Company
chooses not to re-evaluate whether they are a lease or contain a lease on the adoption date of the new standards. For lease contracts in
which the Company is the lessee, the Company elects to only adjust the accumulative impact amount of lease contracts not yet
completed as of January 1, 2021.
For operating leases whose leased assets belong to low-value assets prior to the adoption date or whose remaining lease term is less
than 12 months, the Company adopts a simplified method and does not recognize them as right-of-use assets and lease liabilities.
Moreover, the Company adopts the following simplified treatment methods for operating leases prior to the adoption date of the new
standards:
A. When measuring lease liabilities, the same discount rate is used for leases with similar characteristics; the measurement of the
right-of-use assets excludes initial direct costs;
B. If there is an extension option or termination option, the Company determines the lease term based on the actual exercise of the
89
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
option before the adoption date and other latest conditions;
C. As an alternative to the impairment test for right-of-use assets, the Company assesses whether a contract that contains a lease is a
loss contract before the adoption date, and adjusts the right-of-use asset based on the loss amount already recognized in the balance
sheet prior to the adoption date;
D. For lease modifications before the adoption date, the Company accounts them according to their final arrangements.
The unpaid minimum lease payments of major operating leases disclosed in 2020 financial statements are adjusted based on the
difference between the present value discounted at the incremental borrowing rate on January 1, 2021 where the Company is the
lessee and the lease liabilities included in the balance sheet on January 1, 2021. The adjustment process is as follows:
Unit: RMB
Item Amount
Minimum lease payments of major operating leases on December 31, 2020 49,263,688.50
Plus: Minimum lease payments of other operating leases on December 31, 2020 472,137,522.60
Less: Minimum lease payments accounted with simplified treatment (short-term and 6,427,811.10
low-value)
Undiscounted amount of operating lease commitments on January 1, 2021 514,973,400.00
Weighted average of incremental borrowing rates on January 1, 2021 4.75%
Present value of minimum lease payments under the New Lease Standards on 476,151,493.32
January 1, 2021
Plus: Minimum lease payments of finance leases on December 31, 2020 239,296.50
Lease liabilities on January 1, 2021 476,390,789.82
Including: Non-current liabilities due within one year 177,712,848.98
(2) The Company starts to implement the Interpretation No. 14 from January 1, 2021. Under requirements of the Interpretation No.
14, the amounts of retained earnings and other relevant items in the financial statements at the beginning of the period for the first
time adoption of this interpretation (i.e. January 1, 2021) are adjusted based on the accumulative impact amount at the first time
adoption, while comparative financial information for the previous accounting periods is not adjusted. This interpretation has no
impact on the Company.
(3) On December 30, 2021, the Ministry of Finance issued the Interpretation No. 15, of which contents on “presentation concerning
centralized management of funds” came into force as of the date of issuance. The Company starts to implement this interpretation
from December 30, 2021.
The Interpretation No. 15 stipulates that where funds of the parent company and member units are centrally managed through the
internal settlement center, a financial company, etc., it shall distinguish funds of member units that are collected to accounts of the
parent company and those that are directly deposited to the financial company; the interpretation also specifies items of member units,
financial company and parent company that should be presented in the balance sheet. It also clarifies whether financial assets and
financial liabilities under centralized management funds can be offset.
The Company has implemented this interpretation from the effective date. The interpretation has no impact on the Company.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
2. Significant changes of accounting estimates
There were no significant changes to the Company’s accounting estimates during the reporting period.
VII. Description of Changes in the Scope of Consolidated Statements Compared with the
Financial Report of Last Year
√ Applicable □ Not applicable
During the reporting period, one new subsidiary was added to the Company’s consolidation scope, i.e. Ningbo BIEM.L.FDLKK
Smart Technology Co., Ltd., which is a wholly-owned subsidiary of the Company established in April 21, 2021.
VIII. Engagement and Dismissal of Accounting Firm
Accounting firm engaged
Name of the domestic accounting firm Huaxing Certified Public Accountants LLP
Remuneration for the domestic accounting firm (RMB 10,000) 138
Consecutive years of auditing service provided by the domestic
2 years
accounting firm
Name of domestic certified public accountants Hong Wenwei He Ting
Consecutive years of auditing service provided by domestic
1 year 1 year
certified public accountants
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
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 reporting period.
XI. Material Litigations and Arbitrations
□ Applicable √ Not applicable
There were no material litigations or arbitrations during the reporting period.
91
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
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 Actual
Controller
□ 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 of assets 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 outbound investment.
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 financial companies 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 financial business transactions with related
parties.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
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 applicable
Description of leasing matters
For details on leasing matters, please refer to “Section X Financial Report --> XVI. Other Significant Matters --> 3. Leases”.
Projects whose profits or losses brought to the Company reached more than 10% of the total profits of the Company during the
reporting period
□ Applicable √ Not applicable
During the reporting period, there were no leasing projects whose profits or losses brought to the Company 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 applicable
Overview of entrusted wealth management during the reporting period
Unit: RMB10,000
93
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Amount overdue but
Source of entrusted Incurred amount of
Amount overdue but not recovered with
Specific type wealth management entrusted wealth Undue balance
not recovered impairment having
funds management
been accrued
Wealth management
Proceeds 65,000 28,000 0 0
product of bank
Wealth management
product of securities Proceeds 30,000 20,000 0 0
company
Wealth management
Self-owned fund 85,000 75,000 0 0
product of bank
Wealth management
product of securities Self-owned fund 10,000 10,000 0 0
company
Total 190,000 133,000 0 0
Explanation of high-risk entrusted wealth management with large individual amount or low safety and poor liquidity
□ Applicable √ Not applicable
Entrusted wealth management is expected to fail to recover the principal or there are other circumstances 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
There were no other significant contracts during the reporting period.
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 applicable
94
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Section VII Changes in Shareholding and Information of Shareholders
I. Changes in Share Capital
1. Changes in shares
Unit: share
Before change Increase/decrease (+, -) of this change After change
Shares
New transferre
Percentag Bonus Percentag
Number shares d from Others Subtotal Number
e shares e
issued surplus
reserve
182,763,5 -1,473,89 -1,473,89 181,289,7
I. Restricted shares 34.87% 32.94%
99 9 9 00
1. Shares held by the state
2. Shares held by
state-owned legal person
3. Shares held by other 182,763,5 -1,473,89 -1,473,89 181,289,7
34.87% 32.94%
domestic shareholders 99 9 9 00
Including: Shares held
by domestic legal persons
Shares held by 182,763,5 -1,473,89 -1,473,89 181,289,7
34.87% 32.94%
domestic natural persons 99 9 9 00
4. Shares held by foreign
shareholders
Including: Shares held
by foreign legal persons
Shares held by
foreign natural persons
341,311,4 27,725,52 27,725,52 369,037,0
II. Unrestricted shares 65.13% 67.06%
86 6 6 12
1. RMB-denominated 341,311,4 27,725,52 27,725,52 369,037,0
65.13% 67.06%
ordinary shares 86 6 6 12
2. Domestic listed foreign
shares
3. Overseas listed foreign
95
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
shares
4. Others
524,075,0 26,251,62 26,251,62 550,326,7
III. Total number of shares 100.00% 100.00%
85 7 7 12
Explanation on changes in shares
√ Applicable □ Not applicable
1. Lock-up shares of senior management held by directors of the Company are lifted at a ratio of 25% of the shares held by them at
the end of the previous year for each year during their term as a director.
2. During the reporting period, 26,251,627 shares were converted from “BYZZ” convertible bonds, leading to the increase of the
Company’s total share capital.
Approval of changes in shares
√ Applicable □ Not applicable
The Company convened the 16th meeting of the Third Board of Directors on September 10, 2019 and the 2019 Third Extraordinary
General Meeting of Shareholders on September 27, 2019. The meetings deliberated and approved the Proposal on the Public
Offering of Convertible Bonds and other relevant proposals.
Under the approval of “CSRC Approval [2020] No. 638”, the Company issued 6.89 million convertible bonds to the general public,
with a par value of RMB100.00 each and a total amount of RMB689 million. Under the approval of “SZSE Listing [2020] No. 604”,
the Company listed the convertible bonds worth RMB689 million on Shenzhen Stock Exchange from July 15, 2020, with an
abbreviation of “BYZZ” and a bond code of “128113”. In accordance with relevant provisions of the laws, regulations and the
Prospectus for the Public Offering of Convertible Bonds by BIEM.L.FDLKK Garment Co., Ltd., the convertible bonds can be
converted into shares of the Company starting from December 21, 2020.
Transfer of title of changed shares
√ Applicable □ Not applicable
Convertible bonds can be converted into shares of the Company and are therefore directly credited to the securities accounts of
shareholders.
Impact of share changes on basic earnings per share and diluted earnings per share, net assets per share attributable to ordinary
shareholders of the Company, and other financial indicators in last year and the latest period
√ Applicable □ Not applicable
The conversion of convertible bonds into shares of the Company would reduce basic earnings per share, diluted earnings per share,
and net assets per share attributable to ordinary shareholders of the Company.
Other contents considered necessary by the Company or required to be disclosed by the securities regulatory authority
□ Applicable √ Not applicable
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
2. Changes in restricted shares
√ Applicable □ Not applicable
Unit: share
Number of shares
Number of Number of
Increase in released from Reason for Date of lifting
Shareholder’s restricted shares restricted shares
restricted shares selling selling selling
name at the beginning at the end of the
during the period restrictions restrictions restrictions
of the period year
during the period
Subject to
relevant
Lock-up shares
provisions on
Xie Bingzheng 162,128,999 1 162,129,000 of senior
lock-up shares of
management
senior
management
Subject to
relevant
Lock-up shares
provisions on
Shen Jindong 14,739,000 14,739,000 of senior
lock-up shares of
management
senior
management
Subject to
relevant
Lock-up shares
provisions on
Tang Xinqiao 5,895,600 1,473,900 4,421,700 of senior
lock-up shares of
management
senior
management
Total 182,763,599 1 1,473,900 181,289,700 -- --
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 liability structure of the
Company
√ Applicable □ Not applicable
The convertible bonds issued by the Company (bond abbreviation: BYZZ; bond code: 128113) can be converted into company shares
starting from December 21, 2020. As of December 31, 2021, the convertible bonds had converted into a total of 26,257,002 shares,
and the Company’s total share capital increased to 550,326,712 shares after the conversion.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
3. Internal employee shares
□ Applicable √ Not applicable
III. Information of Shareholders and Actual Controllers
1. Total number of shareholders
Unit: share
Total number of
preferred
Total number of
Total number of shareholders
preferred
Total number ordinary whose voting
shareholders
of ordinary shareholders at rights were
whose voting
shareholders at the end of the resumed at the
9,539 8,480 rights were 0 0
the end of the month preceding end of the month
resumed at the end
reporting the disclosure preceding the
of the reporting
period date of the disclosure date of
period (if any) (see
annual report the annual report
Note VIII)
(if any) (see Note
VIII)
Shareholdings of shareholders with more than 5% or the top 10 shareholders
Shares Increase/ Pledged, marked or frozen
Sharehold held at decrease Number Number
Name of Nature of ing the end of during of of
shareholder shareholder percentag the the restricted unrestricte Share status Number
e (%) reporting reporting shares d shares
period period
Domestic natural 216,170,8 162,129,0 54,041,80
Xie Bingzheng 39.28% -1200
person 00 00 0
Domestic natural 19,652,00 19,652,00
Feng Lingling 3.57% 0
person 0 0
Domestic natural 19,652,00 14,739,00
Shen Jindong 3.57% 0 4,913,000
person 0 0
Hong Kong
Foreign legal 18,250,62 18,250,62
Securities Clearing 3.32% 11757847
person 1 1
Co., Ltd.
Domestic natural 14,554,28 -1279909 14,554,28
Xie Ting 2.64%
person 48 4
National Social
12,000,37 12,000,37
Security Fund Others 2.18% 12000379
9 9
Portfolio 103
98
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
ICBC - GF Steady
11,000,00 11,000,00
Growth Securities Others 2.00% 6790084
0 0
Investment Fund
Domestic natural
Xie Bingluan 1.75% 9,627,254 -5454480 9,627,254
person
Domestic natural
Li Huiqiang 1.75% 9,622,697 -5458926 9,622,697
person
ICBC - GF Steady
Growth Hybrid
Others 1.69% 9,323,250 -676750 9,323,250
Securities
Investment Fund
Strategic investors or general legal
persons becoming top ten shareholders
None
due to private placement of new shares
(if any) (see Note 3)
Description on the related relationship
or persons acting-in-concert Xie Bingzheng and Feng Lingling are husband and wife; Xie Bingzheng and Xie Ting are
arrangements among the above brothers; Xie Bingzheng, Feng Lingling, and Xie Ting are persons acting in concert.
shareholders
Description on entrusting/being
entrusted with voting rights and waver
None
of voting rights by the aforementioned
shareholders:
Description on special repurchase
account among top 10 shareholders (if None
any) (see Note 10)
Top 10 shareholders not subject to selling restrictions
Number of unrestricted shares held at the end of Type of shares
Name of shareholder
reporting period Type of shares Number
RMB-denominat
Xie Bingzheng 54,041,800 ed ordinary 54,041,800
shares
RMB-denominat
Feng Lingling 19,652,000 ed ordinary 19,652,000
shares
RMB-denominat
Hong Kong Securities Clearing Co.,
18,250,621 ed ordinary 18,250,621
Ltd.
shares
RMB-denominat
Xie Ting 14,554,284 14,554,284
ed ordinary
99
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
shares
RMB-denominat
National Social Security Fund
12,000,379 ed ordinary 12,000,379
Portfolio 103
shares
RMB-denominat
ICBC - GF Steady Growth Securities
11,000,000 ed ordinary 11,000,000
Investment Fund
shares
RMB-denominat
Xie Bingluan 9,627,254 ed ordinary 9,627,254
shares
RMB-denominat
Li Huiqiang 9,622,697 ed ordinary 9,622,697
shares
RMB-denominat
ICBC - GF Steady Growth Hybrid
9,323,250 ed ordinary 9,323,250
Securities Investment Fund
shares
RMB-denominat
National Social Security Fund
7,952,470 ed ordinary 7,952,470
Portfolio 403
shares
Description on the related relationship
or persons acting-in-concert among the
Xie Bingzheng and Feng Lingling are husband and wife; Xie Bingzheng and Xie Ting are
top ten ordinary shareholders without
brothers; Xie Bingzheng, Feng Lingling, and Xie Ting are persons acting in concert. It is
selling restrictions and between the top
unknown to the Company whether other shareholders are related parties or persons acting
ten ordinary shareholders without
in concert as stipulated in the Administrative Measures on Acquisition of Listed Companies.
selling restrictions and the top ten
ordinary shareholders
Description on the top 10 ordinary
shareholders’ participation in margin
trading and securities lending business None
(if any) (see Note 4)
Whether the top ten ordinary shareholders and the top ten shareholders without selling restrictions conducted the agreed repurchase
transaction during the reporting period
□ Yes √ No
The Company’s top ten ordinary shareholders and top ten ordinary shareholders without selling restrictions did not conduct agreed
repurchase transactions during the reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholder: Natural person holding
Type of controlling shareholder: Natural person
Name of controlling shareholder Nationality Whether having obtained the right of abode in other
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
countries or regions
Xie Bingzheng Chinese No
Feng Lingling Chinese No
Xie Bingzheng is the Chairman of the Company; Feng Lingling is the Head of the
Main occupation and position
R&D Center of the Company.
Equity interests in other controlled and
invested companies whose shares were listed
None
in the PRC or overseas during the reporting
period
Changes of controlling shareholders during the reporting period
□ Applicable √ Not applicable
There was no change of the Company’s controlling shareholder during the reporting period.
3. Actual controller and person acting in concert
Nature of actual controller: Domestic natural person
Type of actual controller: Natural person
Relationship with Whether having obtained the right of abode in
Name Nationality
actual controller other countries or regions
Xie Bingzheng Self Chinese No
Feng Lingling Self Chinese No
Acting in concert
(including through
Xie Ting agreement, relatives, Chinese No
or under common
control)
Xie Bingzheng is the Chairman of the Company; Feng Lingling is the Head of the R&D
Main occupation and position Center of the Company. Xie Ting is the brother of the Company’s Chairman Xie Bingzheng
and holds no position in the Company.
Holding of domestic and overseas
listed companies over the past ten
None
years
Changes 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
101
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
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 concert reaching
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, restructuring parties and
other commitment subjects
□ Applicable √ Not applicable
IV. Implementation of Share Repurchase during the Reporting Period
Implementation progress of share repurchase
□ Applicable √ Not applicable
Implementation of share repurchase by centralized bidding
□ Applicable √ Not applicable
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Section VIII Particulars of Preference Shares
□ Applicable √ Not applicable
The Company had no preference shares during the reporting period.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Section IX Particulars of Bonds
√ Applicable □ Not applicable
I. Corporate Bonds
□ Applicable √ Not applicable
The Company had no corporate bonds during the reporting period.
II. Enterprise Bonds
□ Applicable √ Not applicable
The Company had no enterprise bonds during the reporting period.
III. Debt Financing Instruments of Non-financial Enterprises
□ Applicable √ Not applicable
The Company had no debt financing instruments of non-financial enterprises during the reporting period.
IV. Convertible Bonds
√ Applicable □ Not applicable
1. Adjustment of share conversion prices
Under the approval of “CSRC Approval [2020] No. 638”, the Company issued 6.89 million convertible bonds to the general public
on June 15, 2020, with a par value of RMB100.00 each and a total amount of RMB689 million. Under the approval of “SZSE Listing
[2020] No. 604”, the Company listed the publicly-offered convertible bonds worth RMB689 million on Shenzhen Stock Exchange
from July 15, 2020, with an abbreviation of “BYZZ” and a bond code of “128113”. The initial conversion price was
RMB14.90/share.
The Company implemented the 2020 equity distribution plan on July 7, 2021 and distributed RMB3.0 (tax inclusive) for every 10
shares to all shareholders. In accordance with relevant provisions of the Prospectus of the Convertible Bonds and relevant regulations
of CSRC on the offering of convertible bonds, the share conversion price of “BYZZ” was adjusted from RMB14.90/share to
RMB14.60/share. The adjusted price became effective on July 7, 2021.
2. Accumulated share conversion
√ Applicable □ Not applicable
Abbreviation Start and end Total quantity Total amount Cumulative Cumulative Proportion of Amount of Proportion of
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
of convertible dates of share of bonds issued amount of number of the number bonds not yet the amount of
bond conversion issued shares shares of converted converted bonds not
converted converted shares to the converted to
(RMB) Company’s total amount
total issued of bonds
shares before issued
conversion
state date
December 689,000,000. 391,133,400. 297,866,600.
BYZZ 6,890,000 26,257,002 5.01% 43.23%
21, 2020 00 00 00
3. Top ten holders of convertible bonds
Unit: share
Amount of
Number of Proportion of
Nature of convertible bonds
Name of convertible convertible bonds convertible bonds
No. convertible bond held at the end of the
bond holder held at the end of the held at the end of the
holder reporting period
reporting period reporting period
(RMB)
ICBC - ZO Ruihong
Regular Open and
1 Flexible Allocation Others 275,484 27,548,400.00 9.25%
Hybrid Securities
Investment Fund
China Foreign
Economy and Trade
Trust Co., Ltd. -
2 Foreign Trade Trust - Others 242,726 24,272,600.00 8.15%
Ruijun Steady
Private Equity
Investment Fund
CCB - ChinaAMC
Convertible Bond
3 Others 206,609 20,660,900.00 6.94%
Enhanced Securities
Investment Fund
ICBC Credit Suisse
Rayleigh Hybrid
Pension Product -
4 Others 147,340 14,734,000.00 4.95%
Industrial and
Commercial Bank of
China Limited
5 ICBC Credit Suisse Others 143,948 14,394,800.00 4.83%
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Ruixi Fixed Income
Pension Product -
Bank of China
Limited
Hua Life Insurance
6 Co., Ltd. - Others 128,211 12,821,100.00 4.30%
Self-owned funds
AEGON-Industrial
Fund - Industrial
7 Others 118,190 11,819,000.00 3.97%
Bank - Industrial
Securities
BOC - Tianhong
Enhanced Return
8 Others 100,516 10,051,600.00 3.37%
Bond Securities
Investment Fund
National Social
9 Security Fund Others 94,590 9,459,000.00 3.18%
Portfolio 1005
ChinaAMC Growth
10 Securities Others 72,470 7,247,000.00 2.43%
Investment Fund
4. Significant changes in guarantor’s profitability, assets and credit standing
□ Applicable √ Not applicable
5. Liabilities and credit changes of the Company at the end of the reporting period and cash arrangement
for debt payments in the coming years
The Company boasts sound credit standing and reasonable asset-liability structure. Banks and other financial institutions have
granted sufficient comprehensive credit lines, so the Company can quickly and effectively acquire financing support from financial
institutions. Also, the Company features stable operations and good performances, and is therefore able to acquire stable cash flows
from operating activities through endogenous growth. At the same time, the Company will actively promote the implementation of
projects invested under proceeds of convertible bonds, to further enhance its profitability.
If terms on call options and put options specified in the bond prospectus are met or the Company needs to pay principle plus interest
upon maturity of the bonds, it has the ability to pay the principals plus interests to bond holders through self-owned funds and
financing.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
V. Loss in Consolidate Statements during the Reporting Period Exceeding 10% of the Net
Assets at the End of the Previous Year
□ Applicable √ Not applicable
VI. Overdue of Other Interest-Bearing Debts than Bonds at the End of the Reporting Period
□ Applicable √ Not applicable
VII. Violations of Rules and Regulations during the Reporting Period
□ Yes √ No
VIII. Main Accounting Data and Financial Indicators of the Company in the Latest Two
Years as of the End of the Reporting Period
Unit: RMB10,000
Changes over end of previous
Item End of current period End of previous year
year
Current ratio 3.37 4.61 -26.90%
Debt to asset ratio 33.24% 35.50% -2.26%
Quick ratio 2.7 3.61 -25.21%
Changes over same period of
Current period Same period of previous year
previous year
Net profits after deducting
58,028.33 46,328.07 25.26%
non-recurring profit and loss
Total Debt/EBITDA 54.31% 52.22% 2.09%
Interest coverage ratio 19.44 42.7 -54.47%
Cash interest coverage ratio 707.04 0 0.00%
EBITDA-to-Interest Coverage
22.1 42.7 -48.24%
Ratio
Loan repayment rate 100.00% 100.00% 0.00%
Interest coverage rate 100.00% 100.00% 0.00%
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Section X Financial Report
I. Audit Report
Type of auditor’s opinion Standard unqualified
Signing date of the Audit Report April 15, 2022
Name of auditing organization Huaxing Certified Public Accountants LLP
Reference number of the Audit Report Hua-Xing-Shen-Zi [2022] No. 22000460018
Name of certified public accountants Hong Wenwei, He Ting
Audit Report
I. Opinion
We have audited the accompanying financial statements of BIEM.L.FDLKK Garment Co., Ltd. (hereinafter “the Company”), which
comprise the consolidated and the Parent Company’s balance sheet as at December 31, 2021, the consolidated and the Parent
Company’s income statement, the consolidated and the Parent Company’s cash flow statement, and the consolidated and the Parent
Company’s statement of the changes in equity for 2021, and notes to the financial statements.
In our opinion, the accompanying financial statements have been prepared in accordance with the Accounting Standards for Business
Enterprises in all material aspects, and they fairly present the consolidated and the Parent Company’s financial position as of
December 31, 2021, and the consolidated and the Parent Company’s operating results and cash flows for 2021.
II. Basis of Opinion
We conducted our audit in accordance with the Auditing Standards for PRC Certified Public Accountants. Our responsibilities under
those standards are further described in the “Certified Public Accountants’ Responsibilities for the Audit of the Financial Statements”
section of our report. We are independent of the Company in accordance with the Code of Ethics for Chinese Certified Public
Accountants (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not provide a separate opinion on these matters.
(I) Inventory write-down
1. Description of the matter
With regard to inventory impairment, please refer to “Note III (14)”for accounting policies and “Note V (6) Inventories” for specific
amount.
BIEM.L.FDLKK adopts a sales model primarily based on direct chain operation and supplemented by franchise operation. As a
result, the Company needs and maintains a relatively high level of inventories. Inventories are measured at the lower of cost and net
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
realizable value. When determining whether the inventories have impaired, the management needs to make judgments and estimate s
based on conclusive evidence while taking into account purpose of holding inventories and impacts of events after the balance sheet
date. Given that the amount involved is large and the management needs to make significant judgments, we have identified inventory
write-down as a key audit matter.
2. How the matter was addressed in our audit
Our audit procedures included:
(1) We evaluated the design and implementation of internal controls relating to the Company’s inventory write-down;
(2) We counted inventories in the Company’s main warehouse and self-owned stores and inspected the quantity, condition and aging
of the inventories;
(3) We obtained the purchase-sell-stock data of the Company’s inventories and analyzed changes in unit prices of inventories and
their reasonableness.
(4) We obtained the aging list of the Company’s inventories at fiscal year-end, and compared and analyzed changes in inventory
aging with comparable periods and their reasonableness.
(5) We interviewed major responsible people of the Company to understand the pricing policies and clearance rate of out-of-season
products in the year and judged the risks of inventory impairment at the end of the period.
(6) We obtained the gross profit table of all channels of the Company, and judged the probability of the impairment of inventories of
different seasons based on product discount information, shopping mall deduction rates and other information we had learned.
(7) We obtained the Company’s calculation sheet for inventory write-down and its impairment tests for inventories, checked whether
the Company has implemented according to relevant accounting policies and whether write-down recognized in previous periods had
any changes in the current period, and analyzed whether the write-down was sufficient.
(II) Recognition of revenue
1. Description of the matter
With regard to revenue recognition, please refer to “Note III (32)”for accounting policies and “Note V (33) Revenue and cost of
revenue” for specific amount.
Since the amount of revenue is significant and a key performance indicator of the Company, there is an inherent risk that the
management may manipulate the timing of recognition in order to achieve specific goals or expectations. So, we identified the
recognition of revenue as a key audit matter.
2. How the matter was addressed in our audit
Our audit procedures included:
(1) We obtained an understanding of and evaluated the internal control design over the recognition of sales income and tested the
effectiveness of key controls;
(2) We checked the revenue recognition policies of the Company and judged whether they are consistent with the requirements of the
Accounting Standards for Business Enterprises;
(3) We obtained the store list of the Company and analyzed the distribution and changes of stores to determine whether they match
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
changes in income;
(4) We acquired the agreement signed between the Company and main franchisees and associates, and checked key terms and
conditions;
(5) We checked the industrial and commercial information of the Company’s main franchisees and associates and interviewed
relevant employees of the Company, to confirm whether there is related party relationship between the Company and the
franchisees/associates;
(6) We acquired the goods return and exchange records in the Company’s supply chain system, to confirm whether there are any
significant, abnormal returns and exchanges that affect income recognition and to review whether the Company has fully accrued
losses for returns and exchanges of franchise stores at the end of the reporting period;
(7)We sample-checked the purchase orders, delivery documents, shipping documents, accounting vouchers, payment receipts and
other information of the Company and franchise stores;
(8) We sample-checked the monthly statements and payment receipts of the Company and joint operation stores;
(9) We sampled and conducted external confirmation for current sales and current balances, and checked any subsequent payment
collections of joint operation stores;
(10) We conducted the sales cutoff test, sample-checked several original sales documents and accounting vouchers before and after
the balance sheet date, and compared the dates of the accounting vouchers and the attached shipping records, to assess whether the
revenue is included in the appropriate accounting period.
IV. Other Information
The Company’s management is responsible for other information. Other information includes the information included in the
Company’s 2021 Annual Report, but excludes the financial statements and our audit report.
Our audit opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit process
or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that if there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
V. Responsibilities of Management and Governance Layer for Financial Statements
The management of BIEM.L.FDLKK Garment Co., Ltd. (hereinafter the “Management”) is responsible for preparing financial
statements in accordance with the Accounting Standards for Business Enterprises, and fairly presenting them; the Management also
needs to design, implement and maintain necessary internal control to enable that the financial statements are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing matters in relation to going concern (if applicable) and applying the going-concern assumption unless the
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Management intends to liquidate the Company, cease operations, or have no realistic alternative but to do so.
The governance layer is responsible for overseeing the financial reporting process of the Company.
VI. Certified Public Accountants’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether these financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with CSAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit work in accordance with CSAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
(IV) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions 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 drawing attention in our
audit report to the related disclosures in these financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within
the Company to express an audit opinion on the financial statements. We are responsible for the direction, supervision and
performance of the group audit, and remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we comply with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and related safeguards (if applicable).
From the matters communicated with those charged with governance, we determine those matters that were of most significance in
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
the audit of the financial statements of the period and are therefore the key audit matters. We describe these matters in our audit
report unless law or regulation precludes public disclosure about the matter or when, in tiny minority circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
II. Financial Statements
Unit of financial statements: RMB
1. Consolidated balance sheet
Prepared by: BIEM.L.FDLKK GARMENT CO., LTD.
December 31, 2021
Unit: RMB
Item December 31, 2021 December 31, 2020
Current assets:
Monetary funds 1,082,712,218.58 578,783,443.79
Settlement reserve
Lending funds
Financial assets held for trading 634,763,818.96 100,425,333.33
Derivative financial assets
Notes receivable
Accounts receivable 279,717,057.14 301,061,376.99
Accounts receivable financing
Prepayments 67,028,355.09 59,678,780.04
Premium receivable
Reinsurance payables
Reinsurance contract reserves
receivable
Other receivables 89,889,485.22 53,587,328.86
Including: Interest receivable
Dividends receivable
Financial assets held under resale
agreements
Inventory 660,214,219.41 607,679,776.22
Contract assets
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Assets held for sale
Non-current assets due within one
year
Other current assets 830,640,713.41 1,377,984,359.67
Total current assets 3,644,965,867.81 3,079,200,398.90
Non-current assets:
Loans and advances
Debt investments
Other debt investments
Long-term receivable
Long-term equity investment
Investment in other equity
98,099,300.47 92,785,368.67
instruments
Other non-current financial assets
Investment property
Fixed assets 244,337,754.20 239,216,423.50
Construction in progress 148,165,548.36 49,120,792.27
Productive biological assets
Oil & gas assets
Right-of-use assets 407,448,654.74
Intangible assets 119,548,729.29 114,864,801.65
Development expenses
Goodwill
Long-term prepaid expenses 105,243,120.55 104,972,941.26
Deferred income tax assets 93,314,368.55 65,802,510.71
Other non-current assets 1,833,508.45 2,635,461.01
Total non-current assets 1,217,990,984.61 669,398,299.07
Total assets 4,862,956,852.42 3,748,598,697.97
Current liabilities:
Short-term loans
Borrowings from PBC
Placements from banks and other
financial institutions
Financial liabilities held for trading
Derivative financial liabilities
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Notes payable 38,098,527.79 27,139,705.66
Accounts payable 126,522,502.78 107,698,978.83
Payments received in advance
Contract liabilities 140,669,127.30 81,677,368.60
Proceeds from financial assets sold
under repo
Deposits from customers and
interbank
Funds from securities trading
agency
Funds from securities underwriting
agency
Employee benefits payable 64,027,461.27 52,788,749.44
Taxes payable 130,969,262.60 102,577,815.02
Other payables 55,878,486.28 44,335,743.56
Including: Interests payable
Dividends payable
Service charge and commission
receivable
Reinsurance payable
Liabilities held for sale
Non-current liabilities due within
197,019,114.42
one year
Other current liabilities 328,630,853.34 251,166,311.70
Total current liabilities 1,081,815,335.78 667,384,672.81
Non-current liabilities:
Insurance contract reserves
Long-term loans
Bonds payable 284,554,163.11 630,982,939.14
Including: Preference shares
Perpetual bonds
Lease liabilities 217,323,756.45
Long-term payable 239,296.50
Long-term employee benefits
payable
Provision
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Deferred income 30,000,000.00 30,000,000.00
Deferred income tax liabilities 2,854,265.46 2,253,279.00
Other non-current liabilities
Total non-current liabilities 534,732,185.02 663,475,514.64
Total liabilities 1,616,547,520.80 1,330,860,187.45
Owner’s equity:
Share capital 550,326,712.00 524,075,085.00
Other equity instruments 27,524,454.16 63,661,135.54
Including: Preference shares
Perpetual bonds
Capital reserve 600,470,446.15 226,927,846.51
Less: Treasury shares
Other comprehensive income -842,173.72 -6,249,160.64
Special reserves
Surplus reserves 258,110,335.93 194,828,010.62
General reserves
Retained earnings 1,809,851,821.97 1,413,582,872.58
Total equity attributable to owners of
3,245,441,596.49 2,416,825,789.61
the parent company
Equities of minority shareholders 967,735.13 912,720.91
Total owner’s equity 3,246,409,331.62 2,417,738,510.52
Total liabilities and owners’ equity 4,862,956,852.42 3,748,598,697.97
Legal representative: Xie Bingzheng Person in charge of accounting: Tang Xinqiao Person in charge of accounting
department: Chen Shaobing
2. Balance sheet of the Parent Company
Unit: RMB
Item December 31, 2021 December 31, 2020
Current assets:
Monetary funds 1,001,684,939.89 540,424,839.01
Financial assets held for trading 634,763,818.96 100,425,333.33
Derivative financial assets
Notes receivable
Accounts receivable 279,717,057.14 301,061,376.99
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Accounts receivable financing
Prepayments 46,156,432.50 32,532,816.93
Other receivables 93,306,779.94 60,685,628.95
Including: Interest receivable
Dividends receivable
Inventory 921,517,571.29 804,477,022.56
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 861,560,189.31 1,400,727,863.45
Total current assets 3,838,706,789.03 3,240,334,881.22
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity investment 111,000,000.00 111,000,000.00
Investment in other equity
instruments
Other non-current financial assets
Investment property
Fixed assets 244,337,754.20 239,216,423.50
Construction in progress 148,165,548.36 49,120,792.27
Productive biological assets
Oil & gas assets
Right-of-use assets 381,889,568.21
Intangible assets 119,548,729.29 114,864,801.65
Development expenses
Goodwill
Long-term prepaid expenses 99,655,978.73 90,663,986.71
Deferred income tax assets 52,843,305.91 35,049,787.12
Other non-current assets 1,833,508.45 2,635,461.01
Total non-current assets 1,159,274,393.15 642,551,252.26
Total assets 4,997,981,182.18 3,882,886,133.48
Current liabilities:
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Short-term loans
Financial liabilities held for trading
Derivative financial liabilities
Notes payable 38,098,527.79 27,139,705.66
Accounts payable 231,476,161.90 146,213,104.37
Payments received in advance
Contract liabilities 140,669,127.30 81,677,368.60
Employee benefits payable 3,243,444.48 2,785,243.25
Taxes payable 93,757,929.83 96,992,722.80
Other payables 54,674,918.89 43,079,684.64
Including: Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within
183,853,949.82
one year
Other current liabilities 328,630,853.34 251,166,311.70
Total current liabilities 1,074,404,913.35 649,054,141.02
Non-current liabilities:
Long-term loans
Bonds payable 284,554,163.11 630,982,939.14
Including: Preference shares
Perpetual bonds
Lease liabilities 204,320,772.36
Long-term payable 239,296.50
Long-term employee benefits
payable
Provision
Deferred income 30,000,000.00 30,000,000.00
Deferred income tax liabilities 2,854,265.46 2,253,279.00
Other non-current liabilities
Total non-current liabilities 521,729,200.93 663,475,514.64
Total liabilities 1,596,134,114.28 1,312,529,655.66
Owner’s equity:
Share capital 550,326,712.00 524,075,085.00
Other equity instruments 27,524,454.16 63,661,135.54
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Including: Preference shares
Perpetual bonds
Capital reserve 600,470,446.15 226,927,846.51
Less: Treasury shares
Other comprehensive income
Special reserves
Surplus reserves 258,110,335.93 194,828,010.62
Retained earnings 1,965,415,119.66 1,560,864,400.15
Total owner’s equity 3,401,847,067.90 2,570,356,477.82
Total liabilities and owners’ equity 4,997,981,182.18 3,882,886,133.48
3. Consolidated income statement
Unit: RMB
Item 2021 2020
I. Total Revenue 2,719,989,257.14 2,303,326,211.84
Including: Revenue 2,719,989,257.14 2,303,326,211.84
Interest income
Insurance premiums earned
Service charge and
commission income
II. Costs and Expenses 1,960,636,804.05 1,708,035,736.04
Including: Cost of revenue 634,160,601.71 601,546,395.40
Interest expenses
Service charge and
commission expenses
Surrender value
Net compensation expenses
Net appropriation of
insurance reserve
Commissions on insurance
policies
Reinsurance costs
Tax and surcharges 23,962,477.58 13,983,332.07
Selling expenses 1,041,052,486.14 885,368,459.26
Administrative expenses 156,267,574.26 132,633,430.58
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
R&D expenses 83,388,128.67 64,804,859.36
Finance expenses 21,805,535.69 9,699,259.37
Including: Interest fees 39,729,487.13 15,998,242.73
Interest income 18,147,338.76 6,842,458.41
Plus: Other income 14,781,618.40 15,496,701.82
Return on investment (“-”
38,815,870.23 24,501,459.48
indicates loss)
Including: Return on
investment in associates and joint
ventures
Income from the
derecognition of financial assets
measured at amortized cost
Exchange gains (“-” indicates
loss)
Gains from net exposure
hedging (“-” indicates loss)
Gains from changes in fair
3,424,832.00 425,333.33
value (“-” indicates loss)
Credit impairment losses (“-”
314,860.76 -5,259,711.60
indicates loss)
Asset impairment losses (“-”
-78,683,952.73 -48,457,945.87
indicates loss)
Return on disposal of assets
-253,775.79 -2,728.63
(“-” indicates loss)
III. Operating Profit (“-” indicates loss) 737,751,905.96 581,993,584.33
Plus: Non-operating revenue 531,942.90 4,790,100.02
Less: Non-operating expenses 5,613,342.65 1,655,966.94
IV. Total Profit (“-” indicates total loss) 732,670,506.21 585,127,717.41
Less: Income tax expense 108,129,572.76 86,325,344.93
V. Net Profit (“-” indicates net loss) 624,540,933.45 498,802,372.48
i. Classified by operation sustainability
1. Net profit from continued
624,540,933.45 498,802,372.48
operation (“-” indicates net loss)
2. Net profit from discontinued
operation (“-” indicates net loss)
ii. Classified by attribution of
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
ownership
1. Net profit attributable to
624,541,483.00 498,822,424.55
shareholders of the parent company
2. Minority shareholders’ profits and
-549.55 -20,052.07
losses
VI. Net Amount of Other Comprehensive
5,462,550.69 -6,613,201.70
Income after Tax
Total other comprehensive after-tax net
income attributable to owners of the 5,406,986.92 -6,547,731.01
parent company
i. Other comprehensive income not
5,406,986.92 -6,547,731.01
able to be reclassified into profit or loss
1. Changes of
remeasurement of the defined benefit
plan
2. Other comprehensive
income that cannot be transferred into 5,406,986.92 -6,547,731.01
profit or loss under equity method
3. Changes in fair value of
investment in other equity instruments
4. Changes in fair value of
credit risk of the enterprise
5. Others
ii. Other comprehensive income
reclassified into profit or loss
1. Other comprehensive
income to be transferred into profit or
loss under equity method
2. Changes in fair value of
other debt investments
3. Financial assets
reclassified into other comprehensive
income
4. Provision for credit
impairment of other debt investments
5. Reserve of cash flow
hedge
6. Converted difference in
foreign currency financial statements
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
7. Others
Total other comprehensive after-tax net
income attributable to minority 55,563.77 -65,470.69
shareholders
VII. Total Comprehensive Income 630,003,484.14 492,189,170.78
Total comprehensive income
attributable to owners of the parent 629,948,469.92 492,274,693.54
company
Total comprehensive income
55,014.22 -85,522.76
attributable to minority shareholders
VIII. Earnings per Share:
i. Basic earnings per share 1.15 0.95
ii. Diluted earnings per share 1.15 0.94
For business combinations under common control in the reporting period, the net profit realized by the combined party before the
combination is: RMB; the net profit realized by the combined party in the previous period is: RMB.
Legal representative: Xie Bingzheng Person in charge of accounting: Tang Xinqiao Person in charge of accounting
department: Chen Shaobing
4. Income statement of the Parent Company
Unit: RMB
Item 2021 2020
I. Revenue 2,719,989,257.14 2,303,326,211.84
Less: Cost of revenue 908,931,832.35 750,466,115.63
Tax and surcharges 18,989,718.37 10,441,205.54
Selling expenses 832,868,004.50 720,086,941.36
Administrative expenses 81,338,858.08 70,825,642.56
R&D expenses 83,388,128.67 64,804,859.36
Finance expenses 21,048,966.28 10,190,092.39
Including: Interest fees 38,214,760.84 15,998,242.73
Interest income 17,369,687.41 6,346,728.96
Plus: Other income 3,268,741.44 831,339.48
Return on investment (“-”
38,815,870.23 24,501,459.48
indicates loss)
Including: Return on
investment in associates and joint
ventures
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Profits from
derecognition of financial assets at
amortized cost
Gains from net exposure
hedging (“-” indicates loss)
Gains from changes in fair
3,424,832.00 425,333.33
value (“-” indicates loss)
Credit impairment losses (“-”
330,127.11 -5,256,151.43
indicates loss)
Asset impairment losses (“-”
-78,683,952.73 -48,457,945.87
indicates loss)
Return on disposal of assets
-253,775.79 -2,728.63
(“-” indicates loss)
II. Operating Profit (“-” indicates loss) 740,325,591.15 648,552,661.36
Plus: Non-operating revenue 514,429.16 4,663,957.39
Less: Non-operating expenses 5,613,342.65 1,655,966.94
III. Total Profit (“-” indicates total loss) 735,226,677.66 651,560,651.81
Less: Income tax expense 102,403,424.54 92,626,189.57
IV. Net Profit (“-” indicates net loss) 632,823,253.12 558,934,462.24
i. Net profit from continued
632,823,253.12 558,934,462.24
operation (“-” indicates net loss)
ii. Net profit from discontinued
operation (“-” indicates net loss)
V. Net Amount of Other Comprehensive
Income after Tax
i. Other comprehensive income not
able to be reclassified into profit or loss
1. Changes of
remeasurement of the defined benefit
plan
2. Other comprehensive
income that cannot be transferred into
profit or loss under equity method
3. Changes in fair value of
investment in other equity instruments
4. Changes in fair value of
credit risk of the enterprise
5. Others
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ii. Other comprehensive income
reclassified into profit or loss
1. Other comprehensive
income to be transferred into the profit
or loss under equity method
2. Changes in fair value of
other debt investments
3. Financial assets
reclassified into other comprehensive
income
4. Provision for credit
impairment of other debt investments
5. Reserve of cash flow
hedge
6. Converted difference in
foreign currency financial statements
7. Others
VI. Total Comprehensive Income 632,823,253.12 558,934,462.24
VII. Earnings per Share:
i. Basic earnings per share
ii. Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item 2021 2020
I. Cash Flows from Operating
Activities:
Cash received from sale of goods
2,753,544,575.74 2,138,794,296.89
or rendering of services
Net increase in deposits from
customers, banks and non-bank
financial institutions
Net increase in borrowings from
central bank
Net increase in placements from
other financial institutions
Cash received from the premium
of direct insurance contracts
123
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Net cash from reinsurance business
Net increase in deposits and
investment of the insured
Cash obtained from interest, net
fee and commission
Net increase in placements from
banks and other financial institutions
Net increase in repo service fund
Net cash from agent securities
trading
Tax rebates
Cash received related to other
40,540,104.87 54,212,449.84
operating activities
Sub-total of cash inflow from operating
2,794,084,680.61 2,193,006,746.73
activities
Cash paid for goods purchased and
796,569,983.10 772,357,223.81
services rendered
Net loans and advances
Net increase in deposits with the
central bank, banks and non-bank
financial institutions
Cash paid for claims of direct
insurance contracts
Net increase in placements with
banks and non-bank financial
institutions
Cash paid for interest, fee and
commission
Cash paid for dividends of the
insured
Cash paid to and on behalf of
409,595,105.86 327,235,510.71
employees
Payments of all types of taxes 308,402,214.51 195,947,543.83
Cash payments related to other
381,993,739.07 260,616,869.18
operating activities
Sub-total of cash outflow from
1,896,561,042.54 1,556,157,147.53
operating activities
Net cash flow from operating activities 897,523,638.07 636,849,599.20
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
II. Cash Flows from Investing
Activities:
Cash received from recovery of
investment
Cash received from the return on
40,700,749.76 21,071,459.48
investments
Net cash received from the
disposal of fixed assets, intangible 116,729.13 307,600.00
assets, and other long-lived assets
Net amount of cash received from
the disposal of subsidiaries and other
operating organizations
Cash received related to other
3,130,000,000.00 1,770,000,000.00
investing activities
Sub-total of cash inflow from investing
3,170,817,478.89 1,791,379,059.48
activities
Cash paid for the acquisition and
construction of fixed assets, intangible 215,579,606.23 95,261,251.30
assets, and other long-lived assets
Cash paid for investments
Net increase in pledged loans
Net amount of cash paid for
acquisition of subsidiaries and other
operating organizations
Cash payments related to other
3,139,000,000.00 2,740,695,324.10
investing activities
Sub-total of cash outflow from
3,354,579,606.23 2,835,956,575.40
investing activities
Net cash flows from investing activities -183,762,127.34 -1,044,577,515.92
III. Cash Flows from Financing
Activities:
Cash received from capital
contribution
Including: Proceeds received by
subsidiaries from minority
shareholders’ investment
Cash received from borrowings 681,200,000.00
Cash received related to other
financing activities
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Sub-total of cash inflow from financing
681,200,000.00
activities
Cash paid for repayments of
borrowings
Cash payment for interest expenses
166,432,183.18 154,138,150.00
and distribution of dividends or profits
Including: Dividend and profit
paid by subsidiaries to minority
shareholders
Cash payments related to other
58,595,168.29 1,667,146.95
financing activities
Sub-total of cash outflow from
225,027,351.47 155,805,296.95
financing activities
Net cash flows from financing activities -225,027,351.47 525,394,703.05
IV. Effect of Exchange Rate Changes on
Cash and Cash Equivalents
V. Net Increase in Cash and Cash
488,734,159.26 117,666,786.33
Equivalents
Plus: Opening balance of cash and
569,284,546.79 451,617,760.46
cash equivalents
VI. Closing Balance of Cash and Cash
1,058,018,706.05 569,284,546.79
Equivalents
6. Cash flow statement of the Parent Company
Unit: RMB
Item 2021 2020
I. Cash Flows from Operating
Activities:
Cash received from sale of goods
2,753,005,028.87 2,139,745,579.93
or rendering of services
Tax rebates
Cash received related to other
28,232,062.82 39,051,358.04
operating activities
Sub-total of cash inflow from operating
2,781,237,091.69 2,178,796,937.97
activities
Cash paid for goods purchased and
1,270,471,067.33 970,401,547.36
services rendered
Cash paid to and on behalf of 57,528,684.66 57,065,643.64
126
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
employees
Payments of all types of taxes 268,948,328.65 160,740,642.35
Cash payments related to other
351,748,141.22 342,948,378.12
operating activities
Sub-total of cash outflow from
1,948,696,221.86 1,531,156,211.47
operating activities
Net cash flow from operating activities 832,540,869.83 647,640,726.50
II. Cash Flows from Investing
Activities:
Cash received from recovery of
investment
Cash received from the return on
40,700,749.76 21,071,459.48
investments
Net cash received from the
disposal of fixed assets, intangible 116,729.13 307,600.00
assets, and other long-lived assets
Net amount of cash received from
the disposal of subsidiaries and other
operating organizations
Cash received related to other
3,130,000,000.00 1,770,000,000.00
investing activities
Sub-total of cash inflow from investing
3,170,817,478.89 1,791,379,059.48
activities
Cash paid for the acquisition and
construction of fixed assets, intangible 209,979,606.23 95,261,251.30
assets, and other long-lived assets
Cash paid for investments
Net amount of cash paid for
acquisition of subsidiaries and other
operating organizations
Cash payments related to other
3,139,000,000.00 2,745,695,324.10
investing activities
Sub-total of cash outflow from
3,348,979,606.23 2,840,956,575.40
investing activities
Net cash flows from investing activities -178,162,127.34 -1,049,577,515.92
III. Cash Flows from Financing
Activities:
Cash received from capital
contribution
127
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Cash received from borrowings 681,200,000.00
Cash received related to other
3,363,413.96 10,140,096.03
financing activities
Sub-total of cash inflow from financing
3,363,413.96 691,340,096.03
activities
Cash paid for repayments of
borrowings
Cash payment for interest expenses
166,432,183.18 154,138,150.00
and distribution of dividends or profits
Cash payments related to other
45,244,487.92 1,667,146.95
financing activities
Sub-total of cash outflow from
211,676,671.10 155,805,296.95
financing activities
Net cash flows from financing activities -208,313,257.14 535,534,799.08
IV. Effect of Exchange Rate Changes on
Cash and Cash Equivalents
V. Net Increase in Cash and Cash
446,065,485.35 133,598,009.66
Equivalents
Plus: Opening balance of cash and
530,925,942.01 397,327,932.35
cash equivalents
VI. Closing Balance of Cash and Cash
976,991,427.36 530,925,942.01
Equivalents
7. Consolidated statement of changes in owner’s equity
Amount of the current period
Unit: RMB
2021
Owner’s equity attributable to the Parent Company
Equity
Other equity Other
of Total
instruments Less: compr Specia Surplu Genera Retain
Item Share minori owner’
Prefe Perpe Capital Treasu ehensi l s l ed Subtot
capita Others ty s
rence tual Other reserve ry ve reserve reserve reserve earnin al
l shareh equity
share bond s shares incom s s s gs
olders
s s e
I. Closing 524,0 63,66 226,92 194,82 1,413, 2,416, 2,417,
-6,249, 912,72
Balance of 75,08 1,135 7,846. 8,010. 582,87 825,78 738,51
160.64 0.91
Previous Year 5.00 .54 51 62 2.58 9.61 0.52
Plus:
128
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Changes in
accounting
policies
Correction of
previous period
errors
Business
combinations
under common
control
Others
II. Opening 524,0 63,66 226,92 194,82 1,413, 2,416, 2,417,
-6,249, 912,72
Balance of 75,08 1,135 7,846. 8,010. 582,87 825,78 738,51
160.64 0.91
Current Year 5.00 .54 51 62 2.58 9.61 0.52
III. Changes in
26,25 -36,1 373,54 63,282 396,26 828,61 828,67
the Period (“-” 5,406, 55,014
1,627 36,68 2,599. ,325.3 8,949. 5,806. 0,821.
Indicates 986.92 .22
.00 1.38 64 1 39 88 10
Decrease)
i. Total 624,54 629,94 630,00
5,406, 55,014
comprehensive 1,483. 8,469. 3,484.
986.92 .22
income 00 92 14
ii. Capital
26,25 -36,1 373,54 363,65 363,65
contributed or
1,627 36,68 2,599. 7,545. 7,545.
reduced by
.00 1.38 64 26 26
owners
1. Ordinary
shares
contributed by
owners
2. Capital
contributed by 26,25 -36,1 373,54 363,65 363,65
owners of other 1,627 36,68 2,599. 7,545. 7,545.
equity .00 1.38 64 26 26
instruments
3. Share-based
payments
recognized as
owner’s equity
129
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
4. Others
63,282 -228,2 -164,9 -164,9
iii. Profit
,325.3 72,533 90,208 90,208
distribution
1 .61 .30 .30
1. Appropriation 63,282 -63,28
of surplus ,325.3 2,325.
reserves 1 31
2. Appropriation
of general risk
reserves
3. Distribution -164,9 -164,9 -164,9
to owners (or 90,208 90,208 90,208
shareholders) .30 .30 .30
4. Others
iv. Internal
carry-over of
owner’s equity
1. Capital (or
share capital)
increased from
capital reserves
2. Capital (or
share capital)
increased from
surplus reserves
3. Surplus
reserve
offsetting losses
4. Retained
earnings carried
over from
changes in
defined benefit
plans
5. Retained
earnings carried
over from other
comprehensive
income
6. Others
130
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
v. Special
reserves
1. Appropriation
for the period
2. Use for the
period
vi. Others
IV. Closing 550,3 27,52 600,47 258,11 1,809, 3,245, 3,246,
-842,1 967,73
Balance of the 26,71 4,454 0,446. 0,335. 851,82 441,59 409,33
73.72 5.13
Period 2.00 .16 15 93 1.97 6.49 1.62
Amount of last period
Unit: RMB
2020
Owner’s equity attributable to the Parent Company
Equity
Other equity Other
of
instruments Less: compr Specia Surplu Genera Retain Total
Item Share minorit
Capital Treasu ehensi l s l ed Subtot owner’s
Prefe Perp y
capita Others
rence etual Other reserve ry ve reserve reserve reserve earnin al equity
l shareho
share bond s shares incom s s s gs
lders
s s e
I. Closing 308,2 442,64 133,17 1,072, 1,957, 1,958,3
298,57 998,243
Balance of 76,30 7,168. 7,418. 977,72 377,18 75,429.
0.37 .67
Previous Year 0.00 74 18 8.32 5.61 28
Plus:
Alternation to
accounting
policies
51,814 57,571
Correction of 5,757, 57,571,
,315.9 ,462.1
previous period 146.22 462.15
3 5
errors
Business
combinations
under common
control
Others
II. Opening 308,2 442,64 138,93 1,124, 2,014, 2,015,9
298,57 998,243
Balance of 76,30 7,168. 4,564. 792,04 948,64 46,891.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Current Year 0.00 74 0.37 40 4.25 7.76 .67 43
III. Changes in
215,7 63,66 -215,7 55,893 288,79 401,87
the Period (“-” -6,547, -85,522 401,791
98,78 1,135 19,322 ,446.2 0,828. 7,141.
Indicates 731.01 .76 ,619.09
5.00 .54 .23 2 33 85
Decrease)
i. Total 498,82 492,27
-6,547, -85,522 492,189
comprehensive 2,424. 4,693.
731.01 .76 ,170.78
income 55 54
ii. Capital
63,66 63,740
contributed or 5,375 74,087 63,740,
1,135 ,598.3
reduced by .00 .77 598.31
.54 1
owners
1. Ordinary
shares
contributed by
owners
2. Capital
contributed by 63,66 63,740
5,375 74,087 63,740,
owners of other 1,135 ,598.3
.00 .77 598.31
equity .54 1
instruments
3. Share-based
payments
recognized as
owner’s equity
4 Others
55,893 -210,0 -154,1 -154,13
iii. Profit
,446.2 31,596 38,150 8,150.0
distribution
2 .22 .00 0
1.
55,893 -55,89
Appropriation
,446.2 3,446.
of surplus
2 22
reserves
2.
Appropriation
of general risk
reserves
3. Distribution -154,1 -154,1 -154,13
to owners (or 38,150 38,150 8,150.0
shareholders) .00 .00 0
4. Others
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
iv. Internal 215,7 -215,7
carry-over of 93,41 93,410
owner’s equity 0.00 .00
1. Capital (or
215,7 -215,7
share capital)
93,41 93,410
increased from
0.00 .00
capital reserves
2. Capital (or
share capital)
increased from
surplus reserves
3. Surplus
reserve
offsetting
losses
4. Retained
earnings carried
over from
changes in
defined benefit
plans
5. Retained
earnings carried
over from other
comprehensive
income
6. Others
v. Special
reserves
1.
Appropriation
for the period
2. Use for the
period
vi. Others
IV. Closing 524,0 63,66 226,92 194,82 1,413, 2,416, 2,417,7
-6,249, 912,720
Balance of the 75,08 1,135 7,846. 8,010. 582,87 825,78 38,510.
160.64 .91
Period 5.00 .54 51 62 2.58 9.61 52
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
8. Statement of changes in owner’s equity of the Parent Company
Amount of the current period
Unit: RMB
2021
Other equity
Other Retaine
instruments Less: Total
Item Share Capital compreh Special Surplus d
Prefere Perpet Treasury Others owner’s
capital reserve ensive reserves reserves earning
nce ual Others shares equity
income s
shares bonds
I. Closing 524,07 1,560,8
63,661, 226,927, 194,828, 2,570,356,
Balance of 5,085.0 64,400.
135.54 846.51 010.62 477.82
Previous Year 0 15
Plus:
Alternation to
accounting
policies
Correction of
previous period
errors
Others
II. Opening 524,07 1,560,8
63,661, 226,927, 194,828, 2,570,356,
Balance of 5,085.0 64,400.
135.54 846.51 010.62 477.82
Current Year 0 15
III. Changes in
-36,13 404,55
the Period (“-” 26,251, 373,542, 63,282,3 831,490,5
6,681.3 0,719.5
Indicates 627.00 599.64 25.31 90.08
8 1
Decrease)
i. Total 632,82
632,823,2
comprehensive 3,253.1
53.12
income 2
ii. Capital
-36,13
contributed or 26,251, 373,542, 363,657,5
6,681.3
reduced by 627.00 599.64 45.26
8
owners
1. Ordinary
shares
contributed by
owners
134
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
2. Capital
contributed by -36,13
26,251, 373,542, 363,657,5
owners of other 6,681.3
627.00 599.64 45.26
equity 8
instruments
3. Share-based
payments
recognized as
owner’s equity
4. Others
-228,27
iii. Profit 63,282,3 -164,990,2
2,533.6
distribution 25.31 08.30
1
1. Appropriation
63,282,3 -63,282
of surplus
25.31 ,325.31
reserves
2. Distribution to -164,99
-164,990,2
owners (or 0,208.3
08.30
shareholders) 0
3. Others
iv. Internal
carry-over of
owner’s equity
1. Capital (or
share capital)
increased from
capital reserves
2. Capital (or
share capital)
increased from
surplus reserves
3. Surplus
reserve
offsetting losses
4. Retained
earnings carried
over from
changes in
defined benefit
plans
135
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
5. Retained
earnings carried
over from other
comprehensive
income
6 Others
v. Special
reserves
1. Appropriation
for the period
2. Use for the
period
vi. Others
IV. Closing 550,32 1,965,4
27,524, 600,470, 258,110, 3,401,847,
Balance of the 6,712.0 15,119.
454.16 446.15 335.93 067.90
Period 0 66
Amount of last period
Unit: RMB
2020
Other equity
Other
instruments Less: Total
Item Share Capital compre Special Surplus Retained
Prefer Perpet Treasur Others owner’s
capital reserve hensive reserves reserves earnings
ence ual Others y shares equity
income
shares bonds
I. Closing 308,27
442,647 133,177 1,160,147 2,044,248,1
Balance of 6,300.
,168.74 ,418.18 ,218.20 05.12
Previous Year 00
Plus:
Alternation to
accounting
policies
Correction of 5,757,1 51,814,31 57,571,462.
previous period 46.22 5.93 15
errors
Others
II. Opening 308,27 442,647 138,934 1,211,961 2,101,819,5
Balance of 6,300. ,168.74 ,564.40 ,534.13 67.27
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Current Year 00
III. Changes in
215,79 63,661 -215,71
the Period (“-” 55,893, 348,902,8 468,536,91
8,785. ,135.5 9,322.2
Indicates 446.22 66.02 0.55
00 4 3
Decrease)
i. Total
558,934,4 558,934,46
comprehensive
62.24 2.24
income
ii. Capital
63,661
contributed or 5,375. 74,087. 63,740,598.
,135.5
reduced by 00 77 31
4
owners
1. Ordinary
shares
contributed by
owners
2. Capital
contributed by 63,661
5,375. 74,087. 63,740,598.
owners of other ,135.5
00 77 31
equity 4
instruments
3. Share-based
payments
recognized as
owner’s equity
4. Others
iii. Profit 55,893, -210,031, -154,138,15
distribution 446.22 596.22 0.00
1.
Appropriation 55,893, -55,893,4
of surplus 446.22 46.22
reserves
2. Distribution
-154,138, -154,138,15
to owners (or
150.00 0.00
shareholders)
3 Others
iv. Internal 215,79 -215,79
carry-over of 3,410. 3,410.0
owner’s equity 00 0
1. Capital (or 215,79 -215,79
137
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
share capital) 3,410. 3,410.0
increased from 00 0
capital reserves
2. Capital (or
share capital)
increased from
surplus reserves
3. Surplus
reserve
offsetting losses
4. Retained
earnings carried
over from
changes in
defined benefit
plans
5. Retained
earnings carried
over from other
comprehensive
income
6 Others
v. Special
reserves
1.
Appropriation
for the period
2. Use for the
period
vi. Others
IV. Closing 524,07 63,661
226,927 194,828 1,560,864 2,570,356,4
Balance of the 5,085. ,135.5
,846.51 ,010.62 ,400.15 77.82
Period 00 4
III. Basic Information of the Company
Registered address of the Company and office address of the headquarters: No. 608 East Xingye Avenue, Nancun Town, Panyu
District, Guangzhou City
Principal business activities: R&D and design of brand clothing, brand promotion, marketing network construction and supply chain
management
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Date of approval for the issue of the financial statements: April 15, 2022
In the reporting period, the Company has 6 subsidiaries that are included in the consolidated scope, as detailed in “Note IX Equities
in Other Entities”. Compared with previous period, one new subsidiary has been established and added, which is detailed in “Note
VIII Changes in Consolidated Scope”.
IV. Preparation Basis for Financial Statements
1. Basis of preparation
The Company has prepared the financial statements on a going concern based on actual transactions and events that are recognized
and measured in accordance with the Accounting Standards for Business Enterprises - Basic Standards as well as other specific
accounting standards, application guidelines, standard interpretations and other relevant regulations (hereinafter collectively referred
to as “Accounting Standards for Business Enterprises”) and in combination with provisions set out in Rules No. 15 on the
Preparation of Information Disclosure Documents by Companies That Offer Securities to the Public - General Rules for Financial
Statements (2014 Revision) issued by China Securities Regulatory Commission.
2. Going concern
The Company has the ability to continue as a going concern for at least 12 months following the end of the reporting period. There
are no material events that will affect the Company’s going concern.
V. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates:
The Company has set out specific accounting policies and accounting estimates for transactions and events with relation to the
depreciation of fixed assets, amortization of intangible assets, income recognition, etc. based on its production and operation
characteristics in accordance with relevant Accounting Standards for Business Enterprises.
1. Statement of compliance with the accounting standards for business enterprises
The financial statements of the Company conform to the requirements set out in the Accounting Standards for Business Enterprises
and truthfully and completely reflect the financial status, operating results, changes in owner’s equity, cash flow, and other relevant
information of the Company.
2. Accounting period
The accounting year of the Company is from January 1 to December 31 of each calendar year.
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3. Operating cycle
The Company sets 12 months as a full operating cycle.
4. Standard currency for accounting
The Company uses RMB as the standard currency for bookkeeping.
5. Accounting treatment measures of business combinations of entities under common control and business
combinations of entities not under common control
1. Business combinations of entities under common control: Assets and liabilities acquired by the Company in the business
combination are measured at the book value of the combined party’s assets and liabilities (including the goodwill incurred to the
ultimate controlling party from the acquisition of the combined party) in the financial statements of the ultimate controlling party on
the combination date. If there are differences between the book values of the net assets acquired and the book values of the
combination consideration paid (or the par values of the issued shares), the difference will be used to adjust capital reserves or share
premiums. Where capital reserves or share premiums are insufficient to offset, retained earnings will be adjusted.
2. Business combinations of entities not under common control: Assets paid by the Company as the consideration of business
combination on the acquisition date or liabilities incurred to or assumed by the Company are measured at fair value, and the
difference between their fair value and book value is included in the profit and loss of the current period. If the costs of business
combinations are higher than the fair values of identifiable net assets of the acquiree on the acquisition date, the gap between them is
confirmed as goodwill. If the costs of business combinations are lower than the fair values of the identifiable net assets of the
acquiree on the acquisition date, the fair values of identifiable assets and liabilities obtained as well as the fair values of the non-cash
assets or equity securities issued that are used as the consideration of the combination are reassessed; if, upon reassessment, the
determined fair values of the identifiable assets and liabilities are defined as reasonable, the difference between the business
combination costs and the fair values of the identifiable net assets of the acquiree is included in the non-operating revenue of the
period when the combination occurs.
For business combinations not under common control that are achieved in stages, the business combination costs shall be the sum of
the consideration paid on the acquisition date and fair values of the equities in the acquiree held before the acquisition date.
Meanwhile, the equities in the acquiree held before the acquisition date shall be remeasured at the fair value on the acquisition date,
and the difference between the fair value and the book value is recognized as the return on investment of the current period. For other
comprehensive income incurred from the long-term equity investment of equities in the acquiree held before the acquisition date as
calculated under the equity model, accounting processing shall be done by adopting the same basis for directly disposing relevant
assets or liabilities of the acquiree. That is, other changes in shareholders’ equity, except for net profit and loss, other comprehensive
income and profit distribution, shall be transferred to the return on investment of the current period For other equity instrument
investments in the acquiree held before the acquisition date, the changes in the fair value of the equity instrument investments
accumulated under other comprehensive income before the acquisition date are transferred to retained profits and losses.
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3. Treatment of relevant expenses in business combination: Intermediary fees for auditing, legal services, evaluation, consultation, etc.
and other relevant management expenses incurred for the business combination are included in the profit and loss of the period when
they occur; the transaction fees of the equity securities or debt securities issued as the consideration for the combination are included
in the initial recognition amount of the equity securities or debt securities.
6. Methods for preparation of consolidated financial statements
1. Scope of consolidated financial statements
The consolidation scope of consolidated financial statements shall be subject to the basis of control, which includes not only
subsidiaries determined based on voting rights (or similar rights) themselves or in combination with other arrangements, but also
structured entities determined based on one or more contractual arrangements. Control refers to the power the investor owns against
the investee which allows the investor to enjoy the variable return by attending relevant activities of the investee and to be capable of
using such power to affect the amount of return.
2. Combination procedures
The consolidated financial statements are prepared based on the financial statements of the Company and its subsidiaries and other
relevant information.
The Company unifies the accounting policies and accounting periods adopted by its subsidiaries, so that they are consistent with
those adopted by the Company. During the preparation of consolidated financial statements, the materiality principle is followed; i.e.
internal transactions and equity investment projects between the parent company and the subsidiary and between subsidiaries are
offset.
The equities and profits and losses attributable to minority shareholders of subsidiaries are listed separately under the item of
“owner’s equity” in the consolidated balance sheet and under the item of “net profit” in the consolidated income statement. If the loss
of a subsidiary which is shared by its minority shareholders exceeds the minority shareholders’ share in the owner’s equity of the
subsidiary at the beginning of the period, the equity of minority shareholders shall be reduced.
(1) Addition of subsidiary and business
If subsidiaries and businesses are added due to business combinations of enterprises under the same control during the reporting
period, the opening balance of the consolidated balance sheet should be adjusted; the consolidated income statement should include
the incomes, expenses and profits of these subsidiaries and businesses from the beginning to the end of the reporting period when the
combination occurs; the consolidated cash flow statement should include cash flows of these subsidiaries and businesses from the
begging to the end of the reporting period when the combination occurs. Meanwhile, relevant items in the comparative statements
should be adjusted, as if the consolidated reporting entity had been existing since the time when the ultimate controlling party began
to have control.
If subsidiaries and businesses are added due to business combinations of enterprises not under the same control during the reporting
period, the opening balance of the consolidated balance sheet are not adjusted; the consolidated income statement should include the
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incomes, expenses and profits of these subsidiaries and businesses from the acquisition date to the end of the reporting period; the
consolidated cash flow statement should include cash flows of these subsidiaries and businesses from the acquisition date to the end
of the reporting period.
The Company prepares consolidated financial statements based on the amount of identifiable assets, liabilities and contingent
liabilities on the balance sheet date of the current period as determined on the basis of their fair values in the individual financial
statements of the subsidiary on the acquisition date. If the costs of business combinations are higher than the identifiable net assets of
the acquiree, the gap between them is confirmed as goodwill. If the costs of business combinations are lower than the identifiable net
assets of the acquiree, the gap between them, upon reassessment, is included in the profit and loss of the current period.
For business combinations not under common control that are achieved through multiple transactions in stages, when compiling the
consolidated financial statements, the equities in the acquiree held before the acquisition date should be remeasured at the fair value
on the acquisition date, and the difference between the fair value and the book value is recognized as the return on investment of the
current period. For other comprehensive income incurred from the long-term equity investment of equities in the acquiree held before
the acquisition date as calculated under the equity model, accounting processing shall be done by adopting the same basis for directly
disposing relevant assets or liabilities of the acquiree. That is, other changes in shareholders’ equity, except for net profit and loss,
other comprehensive income and profit distribution, shall be transferred to the return on investment of the current period For other
equity instrument investments in the acquiree held before the acquisition date, the changes in the fair value of the equity instrument
investments accumulated under other comprehensive income before the acquisition date are transferred to retained profits and losses.
(2) Disposal of subsidiaries and businesses
A. General disposal methods
Where the Company disposes subsidiaries and businesses during the reporting period, the incomes, expenses and profits of these
subsidiaries and businesses from the beginning of the reporting period to the disposition date are included in the consolidated income
statement, while their cash flows from the beginning of the period to the disposition date are included in the consolidated cash flow
statement.
If the Company loses control of a subsidiary due to partial disposal of equity investment or other reasons, the remaining equity
should be remeasured in the consolidated financial statements at fair value on the date of loss of control. The sum of consideration
obtained from equity disposal and fair value of the remaining equity, minus the Company’s share in the subsidiary’s net assets
proportional to its original shareholding percentage that is continuously calculated from the acquisition date or acquisition date, is
recognized as return on investment of the reporting period when the loss of control takes place. For other comprehensive income
incurred from the equity investment in the subsidiary, accounting processing is done by adopting the same basis for directly disposing
relevant assets or liabilities of the subsidiary at the loss of control. That is, other changes in shareholders’ equity, except for net profit
and loss, other comprehensive income and profit distribution, shall be transferred to the return on investment of the period when the
control is lost.
B. Disposal of equities in steps until loss of control
Where the Company loses control of a subsidiary by disposing equity investments in the subsidiary in steps, if those transactions of
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equity disposal are a package deal, each transaction shall be treated as a transaction that results in loss of control of the subsidiary in
accounting processing. However, the difference between each disposal price before loss of control and the Company’s share in the
subsidiary’s net assets proportional to the disposed equity shall be recognized as other comprehensive income in the consolidated
financial statements and, upon loss of control, transferred to the profit and loss of the current period.
If the terms, conditions, and economic effects of transactions of disposing equity investment in the subsidiary conform to one or more
of the following circumstances, that means these multiple transactions should be treated as package deals in accounting processing:
(A) those transactions are reached at the same time or after taking into consideration the influence of each other;
(B) those transactions together produce a complete commercial outcome;
(C) the occurrence of one transaction depends on the occurrence of at least one other transaction;
(D) one transaction alone does not seem to be economical, but all those transactions are economical when are considered as a whole.
(3) Purchase of minority stakes in subsidiaries
The difference between the long-term equity investment newly acquired by the Company due to the purchase of minority stakes and
its share in the identifiable net assets of the subsidiary proportional to the increased shareholding ratio as continuously calculated
from the acquisition date (or combination date) is used to adjust the capital premium or share premium under capital reserve in the
consolidated balance sheet; if the capital premium or share premium is insufficient to offset, retained earnings will be adjusted.
(4) Partial disposal of equity investment in subsidiaries without losing control
The consideration received by the Company for disposing the long-term equity investments in a subsidiary without losing control and
its share in the identifiable net assets of the subsidiary proportional to the disposed equity ratio as continuously calculat ed from the
acquisition date (or combination date) is used to adjust the capital premium or share premium under capital reserve in the
consolidated balance sheet; if the capital premium or share premium is insufficient to offset, retained earnings will be adjusted.
7. Classification of joint arrangements and accounting treatment methods
A joint arrangement is an arrangement over which two or more parties have joint control. Joint arrangements are required to be
classified as either a joint operation or a joint venture.
1. A joint operation is the joint arrangement where the Company has the rights to the assets and the obligations for the liabilities of
the arrangement. The Company recognizes in relation to its interest in a joint operation:
(1) its assets, including its share of any assets held jointly;
(2) its liabilities, including its share of any liabilities incurred jointly;
(3) its revenue from the sale of its share of the output of the joint operation;
(4) its share of the revenue from the sale of the output by the joint operation; and
(5) its expenses, including its share of any expenses incurred jointly.
2. A joint venture is a joint arrangement where the Company only has an interest to the net assets of the arrangement. The Company
accounts for its interest in a joint venture using the equity method.
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8. Criteria for recognition of cash and cash equivalents
The Company recognizes cash on hand and deposits that can be used for payment at any time as cash when compiling the cash flow
statement. Meanwhile, short-term (due within three months from the acquisition date) investments held by the Company with high
liquidity, easy to convert to cash in a known amount, and low risk of value changes are recognized as cash equivalents. Restricted
bank deposits are not recognized as cash and cash equivalents in the cash flow statement.
9. Translation of transactions and financial statements denominated in foreign currencies
1. Foreign currency transactions
Upon the occurrence of foreign currency transactions, the amount of foreign currency is accounted by translating into RMB at the
approximate spot exchange rate on the transaction date, while foreign currency monetary items and non-monetary items are treated
according to the following methods at the end of the reporting period:
(1) Foreign currency monetary items are translated at the spot exchange rate on the balance sheet date. Exchange difference resulting
from the difference between the spot exchange rate on the balance sheet date and that at the initial recognition or on the previous
balance sheet date is recognized as the profit and loss of the current period.
(2) Foreign currency non-monetary items that are measured at historical cost shall still be converted at the spot exchange rate on the
transaction date, without changing the amount of the standard bookkeeping currency.
(3) Foreign currency non-monetary items that are measured at fair value are translated using the foreign exchange rate at the date
when the fair value is recognized. The difference arising therefrom is recognized as profit and loss or other comprehensive income.
(4) Exchange gains and losses, except for those arising from special foreign-currency borrowings related to the purchase or
production of assets eligible for capitalization, are included in the cost of the asset eligible for capitalization before the asset is ready
for its intended use or sale, while others are included in the profit and loss of the current period.
2. Translation of foreign-currency financial statements
(1) Assets and liabilities in the balance sheet shall be converted at the spot exchange rate on the balance sheet date; except for the
“undistributed profits” item, all the other items under “owner’s equity” are converted at the spot exchange rate at the time of
occurrence.
(2) Income and expense items in the income statement shall be translated using the foreign exchange rate ruling at the date of the
transaction.
(3) Difference resulting from translation of foreign-currency financial statements by the above methods shall be included in other
comprehensive income. When disposing an overseas operation, the difference resulting from the conversion of foreign currency
statements relating to the operation is transferred from the owner’s equity item to the profit and loss of the current period.
(4) The cash flow statement is converted at the spot exchange rate on the date of cash flow occurrence. The impact of exchange rate
changes on cash is regarded as an adjustment item and listed separately in the cash flow statement.
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10. Financial instruments
When the Company becomes a party to a financial instrument contract, the financial instrument is confirmed to be either a financial
asset or financial liability.
1. Classification, recognition, and measurement of financial assets
According to the business model of managing financial assets and the contractual cash flow characteristics of financial assets, the
Company classifies financial assets into the following three categories: financial assets measured at the amortized cost, financial
assets measured at fair value where gains and losses are recognized in other comprehensive income (hereinafter, fair value through
other comprehensive income), and financial assets measured at fair value where gains and losses are recognized in profit or l oss of
the current period (hereinafter, fair value through profit or loss).
Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair value through profit or loss,
transaction costs are directly included in profit and loss of the current period. For other types of financial assets, related transaction
costs are included in their initial recognized amounts. Where the accounts receivable initially recognized by the Company does not
contain significant financing components as defined in the Accounting Standards for Business Enterprises No. 14 -- Revenue or the
accounts receivable does not consider financing components in contacts whose term is less than a year pursuant to provisions of the
Accounting Standards for Business Enterprises No. 14 -- Revenue, the initial measurement shall be made according to the price of
transactions that are expected to be entitled to receive consideration.
(1) Financial assets measured at amortized cost
A financial asset is classified as being subsequently measured at amortized cost if the asset is held within a business model whose
objective is to collect contractual cash flows, and the contractual terms of the financial asset give rise to cash flows that are solely
payments of principal and interest on the principal amount outstanding. This kind of financial assets is subsequently measured at
amortized cost using the effective interest method. Gains or losses arising from amortization or impairment are recognized in profit
and loss of the current period.
(2) Financial assets measured at fair value through other comprehensive income
A financial asset is classified as being subsequently measured at fair value through other comprehensive income if the asset is held
within a business model whose objective is to both collect contractual cash flows and sell the financial asset, and the cont ractual
terms of the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amou nt
outstanding. The Company measures this kind of financial assets at fair value where gains and losses are recognized in other
comprehensive income, but the impairment losses or gains, exchange profits or losses, and interest income calculated by the effective
interest method are recognized as the profit and loss of the current period.
If an equity investment is not held for trading, the Company can make an irrevocable election at initial recognition to measure it at
fair value through other comprehensive income. The designation hereof is made on an individual investment basis, and the relevant
investment meets the definition of an equity instrument from the perspective of the issuer. The Company recognizes relevant
dividend income from such financial assets as the profit and loss of the current period, and changes in fair value as other
comprehensive income. When such financial assets are derecognized, the accumulated gains or losses previously recognized as other
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comprehensive income shall be transferred from other comprehensive income to retained earnings and not recognized as the profit
and loss of the current period.
(3) Financial assets measured at fair value through profit or loss
All financial assets other than the other two preceding types are classified as financial assets measured at fair value throu gh profit or
loss. Moreover, at initial recognition, to eliminate or significantly reduce accounting mismatches that would otherwise arise, the
Company may designate a financial asset as financial asset measured at fair value through profit or loss. Such financial assets are
subsequently measured at fair value, and changes in fair value are recognized as the profit and loss of the current period.
2. Classification, recognition, and measurement of financial liabilities
At initial recognition, financial liabilities are classified into financial liabilities measured at fair value through profit or loss and other
financial liabilities. For financial liabilities measured at fair value through profit or loss, transaction costs are directl y included in
profit and loss of the current period. For other types of financial liabilities, related transaction costs are included in their initial
recognition amounts.
(1) Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss include financial liabilities held for trading (including derivatives
belonging to financial liabilities) and financial liabilities designated to be measured at fair value where changes in fair value are
included in the profit and loss of the current period.
Financial liabilities held for trading (including derivatives belong to financial liabilities) are subsequently measured at fair value, and
changes in fair value, except for those related to hedge accounting, are recognized as profit and loss of the current period.
For those that are designated as financial liabilities measured at fair value through profit or loss, the amount of change in fair value
attributable to changes in the credit risk of the Company is presented in other comprehensive income; cumulative gains or losses of
change in fair value attributable to changes in the credit risk of the Company are transferred to retained earnings at the derecognition
of the financial liability. Other changes in fair value shall be recognized as the profit and loss of the current period. If the accounting
treatment of the credit risk changes in such financial liabilities by the above methods will create or expand the accounting mismatch
in the profit and loss, the Company shall recognize all gains or losses in such financial liabilities (including the amount attributable to
changes in the credit risk of the Company) as the profit and loss of the current period.
(2) Other financial liabilities
Except for financial liabilities that continue to be recognized when a transfer of a financial asset does not qualify for derecognition or
continue to be recognized to the extent of continuing involvement, or financial guarantee contracts, other financial liabilit ies shall be
classified into the financial liabilities measured at amortized cost, which are subsequently measured at amortized cost, and the gains
or losses resulting from derecognition or amortization shall be recognized as the profit and loss of the current period.
3. Methods for determining the fair value of financial assets and financial liabilities
If there are active markets for a financial instrument, the Company establishes its fair value by using quoted price in the active
markets. If there is no active market, valuation techniques is used to measure fair value. During valuation, the Company adopts the
valuation techniques that are applicable under current circumstances and supported by sufficient available data and other information,
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selects the input values that are consistent with the characteristics of the assets or liabilities considered by the market participants in
the transaction of the relevant assets or liabilities, and preferentially uses the relevant observable inputs. Unobservable i nput values
are used only when relevant observable input values are not available or are not practicable.
4. Recognition and measurement of financial asset transfer
Recognition of financial asset transfer
Circumstance Result of confirmation
Transferring substantially all of the risks and rewards of ownership of Derecognize the financial asset (recognize new
the asset asset/liability)
Neither transferring nor retaining Give up control of the transferred
substantially all the risks and asset
rewards of ownership of the asset Retain control of the transferred Continue to recognize the transferred asset and liability
asset to the extent of continuing involvement
Retaining substantially all the Continue to recognize the financial asset and recognize the consideration received as
risks and rewards of ownership financial liability
of the asset
The Company distinguishes financial asset transfer into transfer in entirety and transfer in part.
(1) If a financial asset is qualified for derecognition in its entirety, the difference between the following two shall be recognized in
profit and loss of the current period: the book value of the financial asset at the date of derecognition; and the consideration received,
plus the cumulated amount of changes in fair value directly included in other comprehensive income (only for financial assets
measured at fair value through other comprehensive income as classified in accordance with Article 18 of the Accounting Standards
for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments).
(2) If the transferred asset is part of a larger financial asset, when the part transferred qualifies for derecognition in its entirety, the
previous book value of the larger financial asset shall be allocated between the part that continues to be recognized and the part that
is derecognized (for this purpose, a retained serving asset should be treated as the part continuing to be recognized), on the basis of
the relative fair values of those parts on the date of the transfer. The difference between the following two shall be recognized in
profit and loss of the current period: the book value allocated to the part derecognized at the date of derecognition; and the
consideration received for the part derecognized (including any new asset obtained less any new liability assumed), plus the
cumulated amount of changes in fair value proportionate to the part derecognized directly included in other comprehensive income
(only for financial assets measured at fair value through other comprehensive income as classified in accordance with Article 18 of
the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments).
If the transferred financial asset does not qualify for derecognition, the Company continues to recognize the financial asset in its
entirety and the consideration received as a financial liability.
5. Derecognition of financial liabilities
The Company removes a financial liability (or a part of it) from its financial statements when the obligation specified in th e contract
is discharged or canceled or expires. For the following circumstances:
(1) If the Company transfers the asset to repay a financial liability to an institution or establish a trust thereof, while the repayment
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obligation still exists, the financial liability should not be derecognized.
(2) If the Company (borrower) and the lender sign an agreement under which the Company assumes a new financial liability to
replace the original financial liability (or a part of it), while contractual terms of the two are different in substance, the Company shall
derecognize the original financial liability (or a part of it) and recognize a new financial liability.
If a financial liability is derecognized in whole (or in part), the difference between the book value of the derecognized portion and the
consideration paid (including the non-cash assets transferred out or the new financial liability assumed) is recognized as the profit
and loss of the current period.
6. Impairment of financial assets
(1) Methods for recognizing impairment provision
Financial assets measured at amortized cost (including receivables), investments in debt instruments measured at fair value through
other comprehensive income, and lease receivables are measured using the expected credit loss (ECL) approach. In addition, for
contract assets, loan commitments and financial guarantee contracts, loss allowance and credit impairment loss are recognized
according to the above accounting policies.
Expected credit loss (ECL) is the weighted average of credit losses with the respective risks of a default occurring as the weightings.
Credit loss refers to the difference between the present value of all contractual cash flows discounted at the original inter est rate and
the present value of expected future cash flows, i.e. the “cash shortfall”.
With the exception of purchased or originated credit-impaired financial assets, the Company assesses whether the credit risk of
relevant financial assets has been significantly increased since initial recognition. If the credit risk has not increased si gnificantly
since initial recognition, it is in Stage 1; the Company recognizes loss allowance based on the 12-month ECL of the financial asset. If
the credit risk increases significantly since initial recognition but the financial asset is not considered credit-impaired, it is in Stage 2;
the Company measures loss allowance based on the lifetime ECL of the financial asset. If the credit risk of a financial asset increases
to the point that is considered credit-impaired, it is in Stage 3; the Company measures the loss allowance based on the lifetime ECL
of the financial asset. When assessing expected credit loss, the Company considers reasonable and evidence-based information,
including forward-looking information, which is available at the balance sheet date without undue additional cost or effort regarding
past events, current conditions and forecasts of future economic conditions.
The 12-month ECL refers to expected credit losses that result from those default events on the financial instrument that are possible
within 12 months after the reporting date (or the lifetime if the expected duration of a finical asset is less than 12 months). The
12-Month ECL constitutes a part of the lifetime ECL.
For financial assets with a low credit risk, the Company assumes that their credit risk has not increased significantly since initial
recognition and elects to measure their loss allowance through 12-month ECL.
For financial assets in Stage 1 and Stage 2 and those with a low credit risk, interest revenue is calculated based on the gross carrying
amount and effective interest rate without deduction for loss allowance. For financial assets in Stage 3, interest revenue is calculated
based on the amortized coast (i.e. the gross carrying amount less the loss allowance) and the effective interest rate.
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(2) Credit-impaired financial assets
An asset is recognized as credit-impaired if one or more events have occurred that have a detrimental impact on the estimated future
cash flows of the asset. Evidences for credit-impaired asset include the following observable data:
A. significant financial difficulty of the issuer or borrower;
B. a breach of contract of the borrower, such as a default or past-due payment of interest or principal;
C. the lenders for economic or contractual reasons relating to the borrower’s financial difficulty granted the borrower a concession
that would not otherwise be considered;
D. it becoming probable that the borrower will enter bankruptcy or other financial reorganization;
E. the disappearance of an active market for the financial asset because of financial difficulties of the issuer or borrower; or
F. the purchase or origination of a financial asset at a deep discount that reflects incurred credit losses.
It may not be possible to identify a single discrete event. Instead, the combined effect of several events may cause financial assets to
become credit-impaired.
(3) Purchased or originated credit-impaired financial assets
For purchased or originated credit-impaired financial assets, the Company recognizes cumulative changes in lifetime expected losses
since initial recognition as a loss allowance on the balance sheet date. On each balance sheet date, changes in lifetime expected losses
are included in profit and loss of the current period as impairment loss or gain. Any favorable changes for such assets are an
impairment gain even if the resulting expected cash flows of a financial asset exceed the estimated cash flows on initial recognition
as determined on the balance sheet date.
(4) Standards for judging whether credit risk has increased significantly
If the probability of default (PD) of a financial asset in the expected duration recognized on the balance sheet date is significantly
higher than that in the expected duration recognized at the time of initial recognition, the credit risk of the financial asset has
increased significantly. Except for special circumstances, the Company determines whether credit risk has increased significantly
since initial recognition by using PD changes in the coming 12 months as reasonable estimates for PD changes in lifetime.
(5) Methods for assessing ECL of financial assets
The Company assesses ECLs of financial assets on an individual basis or at a portfolio level. Financial assets with significantly
different credit risks are assessed individually, such as receivables for which there are obvious signs that the debtor is very unlikely to
fulfill the repayment obligation.
In addition to financial assets whose credit losses are measured on an individual level, the Company classifies financial assets into
groups based on shared credit risk characteristics and measures the expected credit losses on a collective basis.
(6) Accounting methods for impairment of financial assets
The Company calculates the expected credit losses of various financial assets on the balance sheet date. The addition or reversal of
loss allowance resulting therefrom is included in the profit and loss of the current period as impairment loss or gain.
If the Company suffers actual credit losses and determines that the relevant financial asset cannot be recovered, while the asset is
written off upon approval, the book value of the financial asset will be directly written down. If the written-down financial asset is
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recovered later, it is included in the profit and loss of the current period as reversal of impairment loss.
7. Financial guarantee contract
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it
incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt
instrument. Financial guarantee contracts are initially recognized at fair value. Subsequent measurement for financial guarantee
contracts is at the higher of the amount of the loss allowable and the amount initially recognized less cumulative amortization in
accordance with revenue recognition principles.
8. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset against each other. However, a
financial asset and a financial liability shall be offset and the net amount is present in the balance sheet if the following two
conditions are both met:
(1) The Company has a legally enforceable right to set off the recognized amount; and
(2) The Company intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
9. Equity instruments
An equity instrument refers to a contract that can prove the Company owns the remaining equity in the assets after deducting all
liabilities. The Company’s issuance (including refinancing), repurchase, sales or cancellation of equity instruments are treated as
changes in equities. The Company does not recognize changes in the fair value of equity instruments. Transaction costs related to
equity transactions are deducted from equities.
The Company’s various distributions to holders of equity instruments (excluding share dividends) are recognized as profit
distribution to reduce owner’s equity. The share dividends issued do not affect the total owner’s equity.
11. Accounts receivable
The Company measures the loss allowance of receivables without a major financing component as defined in the Accounting
Standards for Business Enterprises -- Revenue (including cases where the contract containing the financial component has a term less
than one year according to the above Standard) at an amount equivalent to lifetime ECL.
The Company classifies accounts receivables into different groups by common credit risk characteristics such as customer type:
Item Basis for determining the portfolio
Portfolio of clothing sales business Clothing sales business as the credit risk characteristic
Portfolio of related parties Related parties within the consolidation scope
For accounts receivables classified into portfolios, the Company prepares a comparison table between the aging of the accounts
receivables and the ECL rate and calculates ECL with a reference to historical credit loss experience and in combination with current
situation and forecast of future economic conditions. For details, please refer to “Note V (10) Financial instruments -- Impairment of
financial assets”.
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12. Accounts receivable financing
Accounts receivable financing reflects bills receivable and accounts receivable that are measured at fair value while changes in fair
value are included in other comprehensive income. For their accounting methods, please refer to “Note V (10) Financial instruments
-- Financial assets measured at fair value through other comprehensive income”.
13. Other receivables
Recognition and accounting methods for ECLs of other receivables
ECLs of other receivables are determined based on historical experience data and forward-looking information. The Company uses
the 12-month ECL or lifetime ECL to measure impairment loss according to whether the credit risk of other receivables has
significantly increased since initial recognition.
Other receivables are classified into groups based on common risk characteristics:
Item Basis for determining the portfolio
Margins and deposits Deposits receivable
Employee reserve fund Reserve funds receivable
Related-party amount within the consolidated scope Amounts of related parties within the consolidation scope
Others Other amounts receivable
14. Inventory
1. Classification of inventories
Inventories of the Company refer to assets held for sale in the ordinary course of business, or in the process of production for such
sale, or in the form of materials or supplies to be consumed in the production process or in the rendering of services, including raw
materials, materials for consigned processing, stock commodities, etc.
2. Pricing methods for inventory acquisition and delivery
Inventories are initially measured at cost. The cost of inventories comprises purchase costs, processing costs, and other costs.
Borrowing costs that should be included in the cost of inventories are handled in accordance with the Accounting Standards for
Business Enterprises No. 17 - Borrowing Costs. The cost of investing in inventories by investors shall be determined according to the
value stipulated in the investment contract or agreement, unless the value thereof is not fair.
Valuation method of delivered inventories: weighted average.
3. Inventory counting system
Perpetual inventory system is adopted.
4. Methods for recognition of the net realizable value of inventories and inventory write-down
Inventories at the end of the reporting period shall be measured at the lower of cost and net realizable value. If the net realizable
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value of inventories at the end of the reporting period is lower than the book cost, the difference is set aside as inventory write-down.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the
estimated costs necessary to make the sale, and related taxes and fees.
(1) Basis for determining the net realizable value of inventories: For materials held for production, if the net realizable value of
finished product using the material is higher than its cost, the material is still measured at cost. However, when a decline in the price
of materials indicates that the cost of the finished product exceeds net realizable value, the material is written down to net realizable
value.
For inventories held to satisfy sales contracts or service contracts, their net realizable value is based on the contract pri ce. If the sales
contracts are less than the inventory quantities held, the net realizable value of the excess part is based on general selling prices.
(2) Method of inventory write-down: Inventories are written down according to the lower of the cost and the net realizable value item
by item. However, inventories with large quantities and low unit value are written down according to inventory category.
15. Contract assets
1. Recognition methods and standards of contract assets
Contract assets refer to the Company’s right to consideration in exchange for goods or services that the entity has transferred to a
customer when that right is conditioned on something other than the passage of time. For example, if the Company sells two cl early
distinguishable commodities to the customer and has the right to consideration as one of them has been delivered, but the receipt of
payment depends on the delivery of the other commodity, the right to consideration hereof is recognized as a contract asset.
2. Recognition and accounting methods for ECLs of contract assets
The Company always measures the loss allowance of contract assets based on lifetime ECL, regardless of whether they contain
significant financing components or not. The increase or reversal of loss allowance therefrom is included in the profit and l oss of the
current period as impairment loss or gain.
The Company calculates the ECL of a contract asset at the balance sheet date. If the ECL is higher than the carrying amount of the
current provision for the impairment of the contract asset, the difference is recognized as impairment loss. Afterwards, the Company
remeasures the ECL on each balance sheet date, and any reversal of loss allowance is recognized as impairment gain.
16. Assets held for sale
1. Basis for classifying an asset as held for sale
The Company classifies a disposal group (or non-current asset) as held for sale if the following conditions are simultaneously met:
(1) the asset or disposal group is available for immediate sale in its present condition according to customs of similar transactions;
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(2) the sale is high probable, i.e. the company has made the resolution for the sale and received a firm purchase commitment, and the
sale is expected to be completed within one year. If relevant regulations require that the sale can be made only after approval of
competent governing bodies of the company or competent regulatory authorities, the approval has been obtained.
A firm purchase commitment refers to a legally binding purchase agreement signed between the Company and other entities, which
contains important terms such as transaction price, time and sufficiently severe breach of contract penalties such that the possibility
of major adjustment or revocation of the agreement is extremely unlikely.
2. Accounting methods of assets held for sale
During initial measurement or remeasurement of the non-current assets or disposal groups classified into held-for-sale assets on the
balance sheet date, the difference between the book value and fair value less costs to sell is confirmed as the impairment loss and
recognized in profit or loss of the current period, while impairment provision is set aside for the asset held for sale. In the event of
any gains for any increase in fair value less cost to sell of a non-current asset held for sale on subsequent balance sheet dates, the
recognized impairment losses can be reversed but not in excess of the cumulative impairment losses that have been recognized since
it was classified as held for sale, and the reversal amount is included in profit or loss. Impairment losses recognized before the asset
was classified as held for sale cannot be reversed.
The impairment loss recognized for a disposal group held for sale shall first reduce the book value of the goodwill in the disposal
group, and then the book values of other non-current assets in the disposal group proportionate to their percentage in the book value
of the disposal group. If the impairment loss recognized for a disposal group held for sale is subsequently reversed, the book values
of non-current assets other than goodwill in the disposal group are increased proportionate to their percentage in the disposal group.
The Company does not depreciate (or amortize) a non-current asset while it is classified as held for sale or while it is part of a
disposal group classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group shall continue to
be recognized.
When a non-current asset or a disposal group held for sale is derecognized, the un-recognized gains or losses are included in the
profit and loss of the current period.
The Company measures a non-current asset that ceases to be classified as held for sale or ceases to be included in a disposal group
classified as held for sale at the lower of:
(1) its book value before the asset (or disposal group) was classified as held for sale, adjusted for any depreciation, amortization or
revaluation that would have been recognized had the asset (or disposal group) not been classified as held for sale, and
(2) its recoverable amount.
17. Debt investments
The Company determines the ECL of debt investments on each balance sheet date based on the type of counterparty and risk
exposure while taking into consideration historical defaults and industry forward-looking information or various external actual and
expected economic information. For recognition and accounting methods of ECLs, please refer to “Note V (10) Financial
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instruments”.
18. Long-term receivables
1. Basis of determining joint control and significant influence over the investee
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require the unanimous consent of the parties sharing the control. When judging whether there is joint control, firstly,
determine whether all participants or a group of participants collectively control the arrangement. If all participants or a group of
participants must act in unison to decide relevant activities of an arrangement, it is considered that all participants or the group of
participants collectively control the arrangement. Secondly, determine whether decisions of relevant activities of the arrangement
must be unanimously agreed by all parties sharing the collective control of the arrangement. The joint control is formed when and
only when decisions of relevant activities must be unanimously agreed by all parties sharing the collective control. If the combination
of two or more participants is needed to collectively control an arrangement, it does not constitute joint control. Protective rights
enjoyed are not considered when judging whether there is joint control.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or
joint control of those policies. When assessing whether there is significant influence over the investee, existence and effect of
potential voting rights that are currently exercisable or convertible, including potential voting rights held by other entities, are
considered, including warrants, share call options, debt or equity instruments that are convertible into ordinary shares or other similar
instruments issue by the investee. An entity is regarded as having significant influence over the investee if the external investment
meets the following conditions: (1) representation on the board of directors or equivalent governing body of the investee; (2)
participation in the decision-making processes of the investee’s financial and operational policies; (3) material transactions between
the entity and its investee; (4) designation of managerial personnel to the investee; (e) provision of essential technical information to
the investee. If an entity holds, directly or indirectly, more than 20% but less than 50% of the voting power of the investee, it is
generally considered as having significant influence over the investee.
2. Determination of initial investment cost
(1) Long-term equity investment formed by business combination
A. For long-term equity investments formed from business combination of entities under common control, if the consideration takes
the form of cash, transfer of non-cash assets, debt assumption or issuance of equity securities, the book value of the owner’s equity of
the combined party in the consolidated financial statements of the ultimate controlling party on the combination date shall be
regarded as the initial investment cost of the long-term equity investment. For acquiring control of the investee under common
control by ways of additional investment, the book value of the investee’s net assets attributable to the investor in the consolidated
financial statements of the ultimate controlling party on the combination date shall be regarded as the initial investment cost of the
long-term equity investment. Capital surplus or share surplus is written down based on the difference between the initial investment
cost of the long-term equity investment and the carrying amount of the investment before combination plus the carrying amount of
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consideration paid to obtain the new shares on the combination date; if it is insufficient for offsetting, retained earnings are reduced.
B. For long-term equity investments formed from business combinations of entities not under common control, the combination cost
determined on the acquisition date in accordance with the Accounting Standards for Business Enterprises No. 20 - Business
Combinations is used as the initial investment cost of the long-term equity investment. For acquiring control of the investee not under
common control by ways of additional investment, the sum of the carrying amount of the equity investment original held and the cost
of additional investment is used as the initial investment cost upon adoption of the cost method.
(2) Except for long-term equity investments formed through business combinations, the initial investment cost of other long-term
equity investments is determined as follows:
A. For long-term equity investment obtained by paying cash, the consideration actually paid is the initial investment cost. The initial
investment cost includes expenses, taxes, and other necessary expenditures directly related to the acquisition of the long-term equity
investment.
B. For long-term equity investments obtained by issuing equity securities, the fair value of the equity securities issued is the initial
investment cost.
C. For long-term equity investments obtained through the exchange of non-monetary assets, the initial investment cost is determined
pursuant to the Accounting Standards for Business Enterprises No. 7 - Exchange of non-monetary assets.
D. For long-term equity investments obtained through debt restructuring, the initial investment cost is determined pursuant to the
Accounting Standards for Business Enterprises No. 12 - Debt restructuring.
3. Subsequent measurement and recognition of profit and loss
(1) Cost method: If the Company can make control of the investee through the long-term equity investments, the cost method is used.
When the cost method is used, additional or recovered investment will adjust the cost of the long-term equity investment. For
long-term equity investments accounted using the cost method, with the exception of the price actually paid at the acquisition of
investment or cash dividends or profits included in consideration, declared but not issued yet, the return on investment of the current
period shall be recognized according to the cash dividends or profits declared to be issued by the investee, without distinguishing
whether the net profit is realized before or after the investment.
(2) Equity method: When the Company has an investment in an associate, a portion of which is held indirectly through a venture
capital organization, or a mutual fund, unit trust and similar entities including investment-linked insurance funds, the Company elects
to measure that portion of the investment in the associate at fair value through profit or loss using the equity method in accor dance
with provisions of Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments,
regardless of whether the venture capital organization, or the mutual fund, unit trust and similar entities including investment-linked
insurance funds, has significant influence over that portion of the investment. When the equity method is used, after the Company
obtains the long-term equity investments, return on investment and other comprehensive income shall be respectively determined
based on the share of net profit or loss and other comprehensive income realized by the investee that shall be attributable to or
assumed by the Company, and the book value of long-term equity investments shall be adjusted at the same time. Attributable share
shall be calculated based on the profit or cash dividends declared by the investee and the book value of long-term equity investments
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shall be accordingly decreased. In respect to other changes of owner’s equity of the investee in addition to net profit or loss, other
comprehensive income and profit distribution, the book value of long-term equity investments shall be adjusted and recognized as
owner’s equity. When the Company confirms the limit of net loss incurred by the investee, the limit is the extent that the book val ue
of the long-term equity investments and other long-term equity that substantially constitutes a long-term equity in the investment
target is written down to zero, unless the Company is obliged to bear additional losses. Where the investee records net profit in the
future, the Company resumes and recognizes the profit-sharing amount after such amount makes up the unrecognized loss-sharing
amount. When confirming the share of the investee’s net profit and loss, the Company shall confirm the investee’s net profit after
adjustment based on the fair value of the identifiable net assets of the investee at the acquisition of the investment, and set off profit
or loss of internal transactions with the associates and joint ventures and recognize investment gain or loss thereupon. If l osses of
internal transactions between the Company and the investee belong to asset impairment losses in accordance with the Accounting
Standards for Business Enterprises No. 8 -- Impairment of assets, the full amount is recognized. If the investee uses accounting
policies and periods that differ from those of the Company, financial statements of the investee should be adjusted in accordance with
those of the Company to reflect investment gain or loss.
For long-term equity investments in associates and joint ventures held before the date of initial adoption, if there is a debit balance of
equity investment, it shall be amortized over the original remaining period on a straight-line basis, and the amortization amount is
included in profit or loss of the period.
(3) For the disposal of long-term equity investments, the difference between the carrying amount and actual consideration is included
in profit or loss of the period. For long-term equity investments accounted using the equity method, with regard to any changes in
equity other than the net profit or loss of the investee, the portion originally included in owner’s equity is transferred to profit or loss
of the period at the disposal of the investment, except for other comprehensive income arising from changes in net assets or liabilities
of defined benefit plans remeasured by the investee.
19. Fixed assets
(1) Recognition conditions
Fixed assets are tangible assets with a useful life of more than one accounting year that are held for production or supply of goods or
labor services, for rental to third parties, or for use in the organizations.
(2) Depreciation method
Category Depreciation method Depreciation life Residual value rate Annual depreciation rate
Properties and buildings Straight-line depreciation 20-40 5 2.38-4.75
Equipment Straight-line depreciation 3-5 5 19.00-31.67
Motor vehicles Straight-line depreciation 5 5 19.00
Office equipment Straight-line depreciation 3-5 5 19.00-31.67
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The Company reassesses the useful life, estimated net residual value and depreciation method of fixed assets at the end of each fiscal
year.
20. Construction in process
Construction in progress is measured at actual cost. Borrowing costs and foreign currency translation differences associated with
loans for engineering construction projects are capitalized in accordance with relevant provisions of the Accounting Standards for
Business Enterprises No. 17 - Borrowing Costs or included in profit or loss. Construction in progress is transferred to fixed assets
from the date when it reaches the intended use, regardless of whether the project has completed the final account. Meanwhile,
adjustments will be made upon completion of the final account.
21. Borrowing costs
1. Principles for borrowing cost capitalization
Borrowing costs include interest in connection with the borrowing of funds, amortizations of discounts or premiums, incidental
expenses, exchange differences arising from foreign-currency borrowings, etc. Borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset should be capitalized and included in the cost of that asset. Other
borrowing costs are recognized as an expense in the period in which it incurs them.
Qualifying asset refers to fixed assets, investment properties, inventories and other assets that necessarily take a substantial period of
time to get ready for its intended use or sale.
The Company begins capitalizing borrowing costs if all of the following conditions are met:
(1) it incurs expenditures for the asset; expenditures on a qualifying asset include only those expenditures that have resulted in
payments of cash, transfers of other assets or the assumption of interest-bearing liabilities.
(2) it incurs borrowing costs; and
(3) it undertakes activities that are necessary to prepare the asset for its intended use or sale.
2. Period for borrowing cost capitalization
Borrowing costs incurred for the acquisition, construction or production of a qualifying asset, when meeting the above capitalization
conditions, are included in the cost of the asset before the asset reaches its intended use or sale. If acquisition or production activities
of the asset are interrupted abnormally and the interruption period thereof lasts for more than 3 months, the capitalization of
borrowing costs should be suspended, while the borrowing costs are recognized as an expense in the period until the acquisition or
production activities of the asset resume. Moreover, capitalization is ceased when the qualifying asset reaches its intended use or sale.
Borrowing costs incurred after the asset reaches its intended use or sale are included in the financial expenses of the period when they
incur.
3. Calculation methods for the amount of borrowing costs eligible for capitalization
During the capitalization period, the amount of interests eligible for capitalization (including amortization of discount or premium)
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for each reporting period shall be determined in accordance with the following:
(1) To the extent that the Company borrows funds specially for the purpose of acquiring or producing a qualifying asset, the amount
of interests for capitalization is determined as the actual interest expense incurred on that borrowing during the period less any
investment income obtained by depositing the unused borrowings in the bank or any investment income from temporary investments.
(2) To the extent that the Company borrows funds generally and uses them for the purpose of acquiring or producing a qualifying
asset, the Company determines the amount of interests eligible for capitalization by applying a capitalization rate of the general
borrowings to the weighted average of the cumulative asset expenditure over the specific borrowing portion.
22. Right-of-use assets
Except for short-term leases or low-value asset leases, the Company, as the lessee, may recognize the right to use the leased asset
during the lease term as a right-of-use asset.
1. Basis for determining right-of-use assets
At the commencement date, the Company measures the right-of-use asset at cost, which includes:
(1) the amount of the initial measurement of the lease liability;
(2) any lease payment made at or before the commencement date, less any lease incentives received;
(3) any initial direct costs incurred;
(4) any estimate of costs to be incurred in dismantling and removing the underlying asset, restoring the site on which it is located or
restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to
produce inventories.
2. Depreciation and impairment of right-of-use assets
(1) The Company applies a cost model for the subsequent measurement of the right-of-use asset.
(2) The Company depreciates right-of-use assets through the straight-line method.
If it can be reasonably ascertained that the ownership of the asset leased can be obtained by the expiration of the tenancy, the asset is
depreciated over its useful life; if not, the asset is depreciated over the shorter of the tenancy and the useful life of the leased asset. If
the right-of-use asset is impaired, the Company measures subsequent depreciation according to the book value less the impairment
loss.
(3) When the Company remeasures the lease liability according to the present value of the changed lease payments and adjusts the
book value of the right-of-use asset accordingly, if the book value of the right-of-use asset has been reduced to zero but the lease
liability still needs to be further reduced, the remaining amount is included in the profit and loss of the current period.
(4) Impairment test method and impairment provision method for right-of-use assets are detailed in “Note V (24) Impairment of
long-lived assets”.
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23. Intangible assets
(1) Pricing method, service life, and impairment test
An intangible asset is initially measured at cost. The cost of a separately acquired intangible asset comprises its purchase price,
related taxes and fees, and any directly attributable cost of preparing the asset for its intended use. For intangible assets purchased by
installment, if the payment is deferred beyond normal credit terms, the asset has a financing component in nature and its cost is the
present value of the purchase price. The cost of purchasing intangible assets by investors shall be determined according to the value
stipulated in the investment contract or agreement; if the value in the investment contract or agreement is not fair, the fair value of the
intangible asset is used. For intangible assets obtained through the exchange of non-monetary assets, the initial investment cost is
determined pursuant to Accounting Standards for Business Enterprises No. 7 - Exchange of non-monetary assets. For intangible
assets obtained through debt restructuring, the initial investment cost is determined pursuant to Accounting Standards for Business
Enterprises No. 12 - Debt restructuring. If an intangible asset is acquired in a business combination of entities under common control,
the cost of that intangible asset is book value of the combined party; if an intangible asset is acquired in a business combi nation of
entities not under common control, the cost of that intangible asset is its fair value at the acquisition date.
The Company assesses the useful life of an intangible asset at acquisition. For intangible assets with a finite useful life, the
amortization begins when the asset is available for use and ceases when it is derecognized by using the straight-line method, which is
recognized in profit or loss. An intangible asset with an indefinite useful life is not amortized. Intangible assets of the Company
include land use rights, trademarks and software. Among them, the land use rights are amortized equally over the period of use,
trademarks are amortized over 10 years, and software over 3 years.
The Company reviews the useful life and amortization method of intangible assets with finite useful life at each financial year-end. If
the expected useful life and amortization method of an intangible asset is different from previous estimates, the amortization period
and method should be changed accordingly. The Company reviews the useful life of intangible assets with indefinite useful life at
each accounting period. If evidence shows that the useful life of the asset is changed from indefinite to finite, its useful life is
estimated and the accounting is handled as per the above provisions.
Impairment test method and impairment provision method for intangible assets are detailed in “Note V (24) Impairment of long-lived
assets”.
(2) Accounting policy for expenditure on internal research and development
For internally generated intangible assets, expenditure on the research phase is recognized as profit and loss of the current period
when incurred. Expenditure on the development phase can be recognized as an intangible asset if and only if all the following
conditions are met:
(1) technically feasible to complete the intangible asset so that it will be available for use or sale;
(2) the intention to complete the intangible asset and use or sell it;
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(3) how the intangible asset will generate probable future economic benefits; among other things, the Company can demonstrate the
existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internall y, the usefulness
of the intangible asset;
(4) the availability of adequate technical, financial and other resources to complete the development and the ability to use or sell the
intangible asset;
(5) the ability to measure reliably the expenditure attributable to the intangible asset during the development.
Expenditure previously recognized as an expense is not adjusted.
24. Impairment of long-lived assets
The Company performs an impairment test for long-lived assets such as long-term equity investments, investment properties, fixed
assets, construction in progress, intangible assets, right-of-use assets if there is any sign of impairment on the balance sheet date. If
the impairment test shows that the recoverable amount of an asset is lower than its book value, the difference is recognized as a
provision for impairment and recognized as the impairment loss. The recoverable amount is determined based on the higher of (1) the
asset’s fair value less costs of disposal and (2) the present value of the asset’s expected future cash flows. Provisions for asset
impairment are calculated and recognized on an individual basis. If it is difficult to estimate the recoverable amount of individual
assets, the Company will determine the recoverable amount on the basis of the asset group to which the asset belongs. Asset group
refers to the smallest a group of assets that can independently generate cash flows.
Goodwill is tested for impairment at least at each fiscal year-end. The Company performs impairment tests for goodwill. Goodwill
acquired in a business combination shall, from the acquisition date, be reasonably allocated to the relevant asset group or, if
improbable, a combination of asset groups. Carrying amount of goodwill is allocated to relevant asset group or asset groups based on
the proportion of their respective fair values in the group or groups. Where the fair value cannot be reliably measured, the allocation
should be based on the proportion of their respective carrying amounts in the group or groups. When performing impairment tests for
relevant asset group or asset groups to which goodwill has been allocated, if there is an indication that the asset group or asset groups
may be impaired, the asset group or asset groups not containing the goodwill should be tested before the asset group or asset groups
containing the goodwill. The recoverable amount is calculated and compared with the relevant carrying amount to recognize
impairment loss. Then, the asset group or asset groups containing the goodwill are tested for impairment. Their carrying amounts
(including the carrying amount of the goodwill apportioned) and the recoverable amount are compared. If the recoverable amount is
lower than the carrying amount, impairment loss for goodwill is recognized.
The above impairment losses, once recognized, will not be reversed in subsequent accounting periods.
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25. Long-term prepaid expenses
Long-term paid expenses are expenditures that are paid in one accounting period but will be amortized over 1 year that cover the
current period and future accounting periods. They include renovation expenditures for fixed assets leased in through operating lease.
Long-term prepaid expenses shall be amortized equally over the expected benefit period.
26. Contract liabilities
The Company has the performance obligation to transfer goods or services to the customer and the right to collect consideration for
the goods transferred or services provided. A contract liability is the Company’s obligation to transfer goods or services to a customer
for which the Company has received consideration from the customer.
Contract assets and contract liabilities under the same contract are presented on a net basis; contract assets and contract liabilities
under different contracts are not offset.
27. Employee benefits
(1) Accounting treatment method for short-term benefits
Employee benefits refer to various forms of remuneration or compensation given by the Company for obtaining services provided by
employees or for terminating labor relations. Benefits offered to employees’ spouses, children, dependents or to survivors or other
beneficiaries of deceased employees are also considered employee benefits. Employee benefits include short-term benefits,
post-employment benefits, termination benefits and other long-term benefits.
Short-term employee benefits are those expected to be settled wholly before twelve months after the end of the annual reporting
period during which employee services are rendered, but do not include post-employment benefits and termination benefits. During
the accounting period when employees provide services, the actually incurred short-term benefits are recognized as a liability and
included in the cost and expense of relevant assets according to beneficiaries of the services rendered.
(2) Accounting treatment method for post-employment benefits
Post-employment benefits are various forms of remuneration and benefits provided by the Company after employee retirement or
upon termination of labor relations with the Company, but do not include short-term benefits and termination benefits.
Post-employment benefit plan is classified as either a defined contribution plan or a defined benefit plan. Under a defined
contribution plan, the Company pays fixed contributions into a fund but has no legal or constructive obligation to make further
payments. Other post-employment benefit plans than defined contribution plans are defined benefit plans.
(1) Defined contribution plan
Defined contribution plans include basic pension insurance and unemployment insurance. The Company shall, within the accounting
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period when employees provide service, contribute relevant amounts based on the contribution base and ration prescribed by the
local government, which are recognized as a liability and included in profit or loss or relevant asset costs.
Contributions to a defined contribution plan during the accounting period when employees provide service are recognized as a
liability and included in profit or loss or relevant asset costs.
(2) Defined benefit plan
The obligation arising from the defined benefit plan is attributed to accounting periods when employees provide service through the
benefit formula determined according to the projected unit credit method and included in profit or loss or relevant asset costs. Costs
arising from the Company’s defined benefit plans contain the following components:
A. Service costs, including current service costs, past service costs and gain or loss on settlement Among them, current service cost
refers to the increase in the present value of the defined benefit obligation resulting from employee service in the current period. Past
service cost refers to the change in the present value of the defined benefit obligation for employee service in prior periods, resulting
from a plan amendment.
B. Net interest on the net defined benefit liability (asset), including interest income on plan assets, interest cost on the defined benefit
obligation and interest on the effect of the asset ceiling
C. Re-measurements of the net defined benefit liability (asset)
Unless other accounting standards require or permit employee benefit costs to be recognized as asset costs, the Company includes the
above items A and B in profit or loss and item C in other comprehensive income. Amounts recognized in other comprehensive
income will not be reclassified to profit or loss in a subsequent period; however, amounts recognized in other comprehensive income
may be transferred within equity.
(3) Accounting treatment method for termination benefits
Termination benefits refer to compensation given to employees for terminating the labor relations with the employee before the
expiration of the labor contract or for encouraging employees to accept an offer of benefits in exchange for the termination of
employment. The Company recognizes a liability for termination benefits at the earlier of the following dates, which is included in
profit or loss: (a) when the company can no longer unilaterally withdraw the offer of those benefits; and (b) when the Company
recognizes costs for a restructuring that involves the payment of termination benefits.
(4) Accounting treatment method for other long-term employee benefits
Other long-term employee benefits refer to all other employee benefits than short-term benefits, post-employment benefits and
termination benefits, including long-term paid absences, long-term disability benefits, and long-term profit sharing plans. For other
long-term benefits offered by the Company to employees, if they meet the conditions of a defined contribution plan, they are
accounted in accordance with relevant provisions of defined contribution plans; the remaining are accounted in accordance with
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defined benefit plans to recognize and measure their net liability or asset. At the end of the reporting period, obligations of other
long-term benefit plans are attributed to accounting periods when employees provide service and included in profit or loss or relevant
asset costs.
28. Lease liabilities
Except for short-term leases or low-value asset leases, the Company recognizes the right to use the leased asset during the lease term
as a right-of-use asset and recognizes the present value of unpaid lease payments as a lease liability.
When calculating the present value of lease payments, the Company adopts the interest rate implicit in the lease as the discount rate;
if the interest rate implicit in the lease cannot be determined, the Company’s incremental borrowing rate is used as the discount rate.
For lease liabilities, the Company calculates its interest expenses in each period of the lease term at a fixed periodic inte rest rate
which is included in the profit and loss of the current period. Variable lease payments that are not included in the measurement of
lease liabilities are included in the current profit and loss when they are actually incurred.
After the commencement date of the lease term, when there is a change in the actual fixed payment amount, a change in the
estimated payable amount of the guaranteed residual value, a change in the index or ratio used to determine the lease payment
amount, or a change in the evaluation results or actual exercise of the purchase option, renewal option or termination option, the
Company remeasures the lease liability according to the present value of the changed lease payments and adjusts the book value of
the right-of-use asset accordingly.
29. Provision
A provision is a liability of uncertain timing or amount, and is recognized when all the following are met: (1) it is present obligation
of the Company; (2) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;
and (3) a reliable estimate can be made of the amount of the obligation.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by a third party, the reimbursement is
treated as a separate asset when it is virtually certain that reimbursement will be received; the amount recognized for the
reimbursement shall not exceed the amount of the provision. The amount recognized as a provision should be the best estimate of the
expenditure required to settle the present obligation at the end of the reporting period, while taking risks, uncertainties and time value
relating to the matter into account. Where the effect of the time value of money is material, the best estimate is the determined by
discounting the relevant future cash outflows.
The Company reviews provisions on each balance sheet date. If there is conclusive evidence that the book value of the provisi on can
no longer truly reflect the current best estimate, the current best estimate is used to adjust the book value of the provision.
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30. Share-based payment
1. Types of share-based payment
The Company’s share-based payment transactions include equity-settled share-based payment and cash-settled share-based payment.
Equity-settled share-based payment transactions are measured at the fair value of the equity instruments granted to the employees. If
the granted equity instruments vest immediately, the vested equity instruments are recognized into relevant costs or expenses based
on fair value at the grant date and capital reserve is increased accordingly. If the granted equity instruments vest conditional upon the
completion of a specified period of service or upon the achievement of a performance condition, based on the best available estimate
of the number of equity instruments expected to vest, services rendered in the period are recognized into relevant costs or expenses
based on fair value of the vested equities on the grant date, and capital reserve is increased accordingly. No subsequent adjustment
will be made to recognized relevant costs or expenses and total equity after vesting date.
For cash-settled share-based payment transactions, the Company measures the fair value of the liabilities to be assumed by the
Company as determined based on the number of shares or other equity instruments. If the shares are vested immediately, the vested
shares are recognized into relevant costs or expenses based on the fair value of the liabilities assumed by the Company, and liabilities
are increased accordingly. If the cash-settled share-based payment transaction vests conditional upon the completion of a specified
period of service or upon the achievement of a performance condition, services rendered in the period are recognized as the fair value
of the liability assumed by the Company based on the best available estimates of the number of share options expected to vest at each
balance sheet during the vesting period, and included in costs or expenses and corresponding liability. The Company remeasures the
fair value of the liability at each balance sheet date prior to the settlement of the liability and at the date of settlement, wit h any
changes in fair value recognized in profit or loss for the period.
2. Accounting of modifications to share-based payment transactions, including cancellations and settlements
The Company shall recognize, as s minimum, the services received measured at the grant date fair value of the equity instruments
granted, unless those equity instruments do not vest because of failure to satisfy a vesting condition (other than a market condition).
This applies irrespective of any modifications to the terms and conditions on which the equity instruments were granted, or a
cancellation or settlement of that grant of equity instruments.
If the Company cancels or settles a grant of equity instruments during the vesting period (other than a grant canceled by forfeiture
when the vesting conditions are not satisfied), it will handle as follows:
(1) account for the cancellation or settlement as an acceleration of vesting and therefore recognize immediately the amount that
otherwise would have been recognized over the remainder of the vesting period;
(2) any payment made to the employee on the cancellation or settlement of the grant shall be accounted for as the repurchase of an
equity interest, i.e. as a deduction from equity, except to the extent that the payment exceeds the fair value of the equity instruments
granted, measured at the repurchase date. Any such excess shall be recognized as an expense.
(3) if new equity instruments are granted to the employee and, on the date when those new equity instruments are granted, the
Company identifies the new equity instruments granted as replacement equity instruments for the canceled equity instruments,
accounts for the granting of replacement equity instruments in the same way as a modification to the original grant of equity
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instruments.
31. Other financial instruments such as preference shares and perpetual bonds
Financial instruments issued by the Company are initially recognized and measured in accordance with relevant accounting standards
for financial instruments and distinction between financial liabilities and equity instruments. Afterwards, the Company accounts for
the interest expense or dividend distribution of the instrument based on its classification. For financial instruments classified as
equity instruments, interest expense or dividend distribution is recognized as profit distribution of the issuer, and their repurchase and
redemption as changes in equity. For financial instruments classified as financial liability, interest expense or dividend distribution is
allocated to borrowing costs in principle, and gains or losses from their repurchase or redemption are included in profit or loss.
Transaction costs arising from the issuance of the financial instruments, such as handling fees and commissions, are measured at
amortized cost and included in their initial recognition amount if the instrument is classified as a debt instrument, and are deducted
from equity if the instrument is classified as an equity instrument.
32. Revenue
Accounting policy for recognition and measurement of revenue
1. Accounting policy for recognition and measurement of revenue
Revenue is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases
of liabilities that result in an increase in equity, other than those relating to contributions from equity participants
The Company recognizes revenue when it satisfies a performance obligation, which is when the customer obtains control of the good.
Obtaining control of the good means being able to direct the use of the good and obtain almost all economic benefits therefrom and
to prevent others from directing the use of the good and obtaining almost all economic benefits therefrom.
The transaction price is the amount of consideration in a contract to which the Company expects to be entitled in exchange for
transferring promised goods, excluding amounts collected on behalf of third parties or amounts expected to be refunded to the
customer. If the consideration promised in a contract includes a variable amount, the Company estimates the amount of consideration
based on the expected value or the most likely amount of the variable consideration, to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable
consideration is subsequently resolved. If the contract contains a significant financing component, the Company recognizes
transaction price at an amount that reflects the price that a customer would have paid for the promised goods if the customer has paid
cash for those goods when they transfer to the customer (i.e. cash selling price). The difference between the amount of promised
consideration and the cash selling price is amortized using the effective interest method during the contractual term. Howeve r, if the
period between when the Company transfers of a promised good to a customer and when the customer pays for that good is one year
or less, the Company does not consider the financing component. For contracts in which a customer promises consideration in a form
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other than cash, the Company measures the non-cash consideration at fair value at the contract commencement date. If the fair value
of the non-cash consideration cannot be reasonably estimated, the Company measures the transaction price indirectly by reference to
the stand-alone selling price of the goods promised to the customer. Amounts to be refunded to the customer are used to reduce the
transaction price, unless the payment to the customer is in exchange for a distinct good that the customer transfers to the Company. If
the amount of consideration payable to the customer exceeds fair value of the distinct good that the Company receives from the
customer, then such an excess is accounted as reduction of the transaction price. If the Company cannot reasonable estimate the fair
value of the good received from the customer, it accounts for all of the consideration payable to the customer as a reduction of the
transaction price. If consideration payable to a customer is accounted for as a reduction of the transaction price, the Company
recognizes the reduction of the revenue when the later of either of the two following events occurs: transfer of the related goods to
the customer; and pay or promise to pay the consideration.
If the contract contains one or more performance obligations, the Company allocates the transaction price to each performance
obligation on a relative stand-alone selling price basis at contract inception in proportion to stand-alone selling prices of the distinct
good underlying each performance obligation. Where the transaction price changes after contract inception, the Company allocates
these subsequent changes to the performance obligations in the contract on the same basis as at contract inception. For changes in
stand-alone selling prices after contract inception, the transaction price is not re-allocated.
A performance obligation is one satisfied over time if one of the following criteria is met; otherwise, it is a performance obligations
satisfied at a point in time:
(1) the customer simultaneously receives and consumes the benefits provided by the Company’s performance as the entity performs;
(2) the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced;
(3) the Company’s performance does not create an asset with an alternative use to the Company and the Company has an enforceable
right to payment for performance completed to date.
For performance obligations satisfied over time, the Company recognizes revenue over the period based on performance progress,
unless the performance progress cannot be reasonably determined. The Company measures the progress of service provision based
on input methods. When the performance progress cannot be reasonably determined, if the costs incurred are expected to be
compensated, the Company recognizes revenue based on the amount of costs incurred, until the progress of performance can be
reasonably determined.
For performance obligations satisfied at a point in time, the Company recognizes revenue when the customer obtains control of the
promised good. The Company considers the following indicators when judging whether the customer has obtained control of the
good:
(1) the Company has a present right to payment for the good, i.e. the customer is presently to pay for the good;
(2) the Company has transferred the legal title to the customer, i.e. the customer has legal title of the good;
(3) the Company has transferred physical possession of the good, i.e. the customer physically possesses the good;
(4) the Company has transferred significant risks and rewards of ownership of the good to the customer, i.e. the customer has the
obtained significant risks and rewards of ownership of the good;
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(5) the customer has accepted the good.
2. Recognition methods for the Company’s main activities of revenue generation
The Company’s revenue primarily comes from clothing sales, which is divided into two models: direct operation (including joint
operation and non-joint operation) model and franchise model. The recognition methods for revenue are as follows:
For the joint operation model, the Company signs an agreement with the joint operation party (such as shopping malls, airports and
golf clubs), and the joint operation party collects all the money from the customer when delivering the goods to the customer. Under
this model, the Company recognizes revenue based on the total consideration received or receivable from the customer.
Under the non-joint operation model, the Company recognizes sales revenue when the goods are delivered to the customer and
payment is received.
Under the franchise model, the Company recognizes sales revenue when the goods are delivered to the customer and receives the
confirmation receipt from the customer.
Different operation models are adopted for the same business, which may lead to the differences in the accounting policy for
recognition of revenue.
Not applicable
33. Contract costs
Contract costs comprise incremental costs of obtaining a contract and costs to fulfill a contract.
The incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customer that would
not have incurred if the contract had not been obtained (for example, a sales commission). If the incremental cost incurred by the
Company for obtaining a contract is expected to be recovered, the cost of obtaining the contract is recognized as an asset. Other costs
for obtaining a contract than incremental costs that are expected to be recovered are recognized as profit or loss when they incur.
If the costs incurred in fulfilling a contract with a customer are not within the scope of standards for inventories, fixed assets or
intangible assets, the Company regards them as costs to fulfill a contract and recognizes them as an asset when all of the following
criteria are met:
(1) the costs relate directly to a contract or to an anticipated contract, including direct labor cost, direct material cost, manufacturing
overhead (or similar expenses), costs specifically to be borne by the customer and other costs incurred solely as a result of the
contract;
(2) the costs generate or enhance resources of the Company that will be used in satisfying performance obligation in the future;
(3) the costs are expected to be recovered.
An asset recognized in accordance with incremental costs of obtaining a contract and costs incurred to fulfill a contract shall be
amortized on a basis that is consistent with the transfer to the customer of the goods or services to which the asset relates.
If the carrying amount of assets recognized in accordance with contract costs is higher than the difference of the following tow, the
excess portion will be reserved for impairment and recognized as impairment:
(1) the remaining amount of consideration that the Company expects to receive in exchange for the goods to which the asset relates;
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(2) the costs that relate directly to providing the goods.
The Company shall recognize in profit or loss a reversal of some or all of an impairment loss previously recognized in accordance the
above (1) and (2) when the impairment conditions on longer exist or have improved. The increased carrying amount of the asset shall
not exceed the amount that would have been determined if no impairment loss had been recognized previously.
34. Government grants
1. Types of government grants
Government grants refer to monetary and non-monetary assets received from the government free of charge, including grants related
to assets and grants related to income.
Grants related to assets are government grants obtained by the Company from the government for purchasing, constructing or
otherwise acquiring long-lived assets.
Grants related to income are government grants other than those related to assets.
2. Recognition principle and timing for government grants
Principle for recognizing government grants:
(1) the Company will comply with the conditions attaching to them; and
(2) the grants will be received.
Government grants are recognized when and only when the above two criteria are met.
3. Measurement of government grants
(1) Monetary government grants are measured at the amount received or receivable;
(2) Non-monetary government grants are measured at fair value; if the fair value cannot be obtained reliably, they are measured at a
nominal amount (which is RMB1).
4. Accounting treatment methods of government grants
(1) Government grants related to assets are presented by deducting the grant in arriving at the carrying amount of the asset or setting
up the grant as deferred income. If the grant is presented as deferred income, it is recognized as income on a systemic and rational
basis over the useful life of the asset. The government grants measured at the nominal amount shall be directly accounted as profit or
loss.
(2) Grants related to income are handled as follows:
A. Government grants related to income as compensation for expenses or losses incurred in future periods are recognized as deferred
income when they are obtained, and are included in profit or loss or reduce income during the periods when the related expenses or
losses are recognized.
B. Government grants related to income as compensation for expenses or losses incurred in a previous period are recognized as
income of the period in which they are obtained or reduce relevant costs.
(3) Government grants related to both assets and income are accounted for by distinguishing different parts; if it is difficult to
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distinguish, they shall be, as a whole, classified as income-related government grants.
(4) Government grants related to the Company’s daily activities are recognized as other profit and loss or write down relevant costs
according to the essence of economic business. Those unrelated to the Company’s daily activities are recognized as non-operating
revenue and expenditure. If the treasury directly allocates interest subsidies to the Company, the interest subsidies will be used to set
off relevant borrowing costs.
(5) Repayment of recognized government grants is handled as follows:
A. If the grant was recognized by reducing the carrying amount of relevant asset, the carrying amount of the asset is adjusted;
B. If the grant was recognized as deferred income, the carrying amount of deferred income is adjusted and the excess is recognized as
profit and loss of the current period.
C. For other situations, the repayment is directly included in profit or loss of the period.
35. Deferred income tax assets/deferred tax liabilities
The Company determines its tax base when obtaining an asset or liability. If there is a temporary difference between the carr ying
amount of the asset or liability and its tax base, a deferred tax asset or liability is recognized in accordance with relevant provisions.
1. Recognition of deferred tax assets
(1) The Company recognizes a deferred tax asset to the extent that it is probable that taxable profit will be available against which the
deductible temporary difference can be utilized, unless the deferred tax asset arises from the initial recognition of an asset or liability
in a transaction that: (a) is not a business combination; and (b) at the time of the transaction, affects neither accounting profit nor
taxable profit (tax loss).
(2) The Company shall recognize a deferred tax liability for deductible temporary differences associated with investments in
subsidiaries, branches and associates, and interests in joint ventures to the extent that, and only to the extent that, it is probable that:
(a) the temporary difference will reverse in the foreseeable future; and (b) taxable profit will be available against which the
temporary difference can be utilized.
(3) A deferred tax asset shall be recognized for the carryforward of unused tax losses and unused tax credits to the extent that it is
probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilized.
2. Recognition of deferred tax liabilities
(1) A deferred tax liability shall be recognized for all taxable temporary differences, except to the extent that the deferred tax liability
arises from: (a) the initial recognition of goodwill; or (b) the initial recognition of an asset or liability in a transaction which: is not a
business combination; and at the time of the transaction, affects neither accounting profit or taxable profit (tax loss).
(2) A deferred tax liability is recognized for taxable temporary differences associated with investments in subsidiaries, branches and
associates, and interests in joint ventures. However, circumstances if both of the following conditions are satisfied are excluded: (a)
the investor is able to control the timing of the reversal of the temporary difference; and (b) it is probable that the temporary
difference will not reverse in the foreseeable future.
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(3) Offsetting
When the Company has a legally enforceable right of set-off and an intention to settle net, it sets off a current tax asset against a
current tax liability and presents it in a net amount.
When the Company has a legally enforceable right of set off current assets against current liabilities, it presents them on a net amount
if the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either: (i) the
same taxable entity; or (ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to
realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities
or assets are expected to be settled or removed.
36. Leases
(1) Accounting treatment method for operating lease
Effective from January 1, 2021
A contract is, or contains, a lease if the contract provides a customer with the right to control the use of an asset in exchange for
consideration.
1. Identifying a lease
At inception of a contract, the Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use of an identified asset for a period of time, the Company assesses:
(1) the contract involves the use of an identified asset An asset is typically identified by being explicitly specified in a contract or by
being implicitly specified at the time that the asset is made available for use by the customer. A capacity portion of an asset is an
identified asset if it is physically distinct. A capacity or other portion of an asset that is not physical distinct is not a n identified asset,
unless it represents substantially all of the capacity of the asset and thereby provides the customer with the right to obtai n
substantially all of the economic benefits from use of the asset. If the supplier has the substantive right to substitute the asset
throughout of use, the asset is not an identified asset.
(2) the right to obtain substantially all of the economic benefits from use of the identified asset;
(3) has the right to direct the use of an identified asset throughout the period of use.
2. Separating and combining components of a contract
If a contract contains multiple separate leases, the Company separates components of the contract and accounts for each separ ate
lease individually.
The right to use an underlying asset is a separate lease component if both:
(1) the lessee can benefit from use of the underlying asset either on its own or together with other resources that are readily available
to the lessee.
(2) the underlying asset is neither highly dependent on, nor highly interrelated with, the other underlying assets in the contract.
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3. The Company as the lessee
(1) Right-of-use assets
Recognition and accounting treatment methods for right-of-use assets are detailed in “Note V (22) Right-of-use assets”.
(2) Lease liabilities
Recognition and accounting treatment methods of lease liabilities are detailed in “Note V (28) Lease liabilities”.
(3) Lease term
Lease term refers to the non-cancellable period for which a lessee has the right to use an underlying asset.
The lease term includes periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option.
The lease term includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that
option.
The Company reassesses whether it is reasonably certain to exercise an extension option, or not to exercise a termination option,
upon the occurrence of either a significant event or a significant change in circumstances.
(4) Lease modifications
The Company accounts for a lease modification as a separate lease if both of the following criteria are met:
A. the modification increases the scope of the lease by adding the right to use one or more underlying assets; and
B. the consideration for the lease increase by an amount commensurate with the stand-alone price for the increase in scope and any
appropriate adjustments to that stand-alone price.
(5) Short-term leases and low-value asset leases
Short-term lease is a lease that, at the commencement date, has a lease term of 12 months or less. Low-value asset lease refers to
leases whose underlying asset is of low value when new. If the Company subleases an asset, or expects to sublease an asset, t he head
lease does not qualify as a lease of a low-value asset.
The Company elects not to recognize short-term leases or low-value asset leases as the right-of-use assets and lease liabilities, but
recognizes the lease payments associated with those leases as an expense on a straight-lien basis over the lease term, which is
included in the profit or loss or relevant asset costs.
4. The Company as the lessor
The Company classifies each of its leases as either an operating lease or a finance lease from the lease inception date. A lease is
classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. Title
may or may not eventually be transferred. Other leases than the finance leases are classified as operating leases. If the Company is
the intermediate lessor, the sublease is classified as a right-of-use asset arising from the head lease.
(1) Accounting treatment methods for operating lease
Lease payments from operating leases are recognized as income on a straight-line basis over the lease term. The Company capitalizes
initial direct costs incurred in obtaining an operating lease and recognizes those costs as an expense over the lease term on the same
basis as the lease income. Variable lease payments related to operating leases that are not included in lease receipts are included in the
current profit and loss when they are actually incurred.
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(2) Accounting treatment methods for finance lease
The Company recognizes the finance lease receivable and derecognizes the finance lease asset on the commencement date of the
lease term. The financial lease receivables are initially measured by the net investment in the lease. The net investment in the lease is
the sum of the unguaranteed residual value and the present value of the lease receipts not yet received at the beginning of the lease
term, discounted at the interest rate implicit in the lease.
Interest income is calculated and recognized according to the fixed periodic interest rate in each period of the lease term. For details
on derecognition and impairment of finance lease receivables, please refer to “Note V (10) Financial instruments”.
Variable lease payments that are not included in the measurement of the net investment in the lease are included in the curre nt profit
and loss when they are actually incurred.
At the commencement date, a manufacturer or dealer lessor shall recognize revenue at the lower of the fair value of the underlying
asset and the present value of the lease payments accruing to the lessor, discounted using a market rate of interest; it s hall also
recognize the cost of sale as the carrying amount of the underlying asset less the present value of the unguaranteed residual value.
Costs arising from obtaining a finance lease are recognized as profit or loss of the period at the lease commencement date.
5. Leaseback transactions
The Company determines whether the transfer of an asset in the leaseback transaction is accounted for as a sale of that asset.
(1) The Company as the lessee
If the transfer of an asset arising from the leaseback is accounted for as a sale of that asset, the Company measures the right-of-use
asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained,
and recognizes only the amount of any gain or less that relates to the rights transferred.
If the fair value of the consideration for the sale of an asset does not equal the fair value of the asset, or if the payment s for the lease
are not at market rates, the Company accounts any below-market terms as a prepayment of lease payments and any above-market
terms as additional financing provided by the lessor to the Company. Meanwhile, fair value is used to adjust any sales gain or loss.
If the transfer of an asset in the leaseback transaction is not accounted for as a sale of the asset, the Company continues to recognize
the transferred asset and recognizes a financial liability equal to the transfer proceeds.
(2) The Company as the lessor
If the transfer of an asset arising from the leaseback is accounted for as a sale of that asset, the Company accounts for the purchase of
the asset in accordance with applicable standards.
If the fair value of the consideration for the sale of an asset does not equal the fair value of the asset, or if the payment s for the lease
are not at market rates, the Company accounts any below-market terms as a prepayment of lease payments and any above-market
terms as additional financing provided by the Company to the lessee. Meanwhile, market rates are used to adjust lease payments.
If the transfer of an asset in the leaseback transaction is not accounted for as a sale of the asset, the Company recognizes a financial
asset equal to the transfer proceeds.
6. Rent concessions triggered by COVID-19
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For any rent concessions such as rent reductions and deferred payments between by the Company and the lessor or lessee directly
caused by COVID-19, if all of the following conditions are met, the Company adopts a simplified approach for leases of properties
and buildings:
(1) the lease consideration after concession is reduced or basically unchanged from that before the concession, of which the lease
consideration may be undiscounted or discounted at the same rate as before the concession;
(2) the concession is only for lease payments due before June 30, 2022;
(3) there are no significant changes to other lease terms and conditions after comprehensively considering qualitative and quantitative
factors.
The Company does not assess whether there are lease modifications.
When the Company acts as the lessee, it continues to calculate the interest expenses of lease liabilities at the same discount rate as
before the concession, and depreciate and subsequently measure right-of-use assets according to the same method as before the
concession. In the event of any rent reduction or exemption, the Company treats the reduced amount as variable lease payment and
writes down relevant asset costs or expenses at an undiscounted amount or a discounted amount using the same discount rate as
before the rent reduction when the Company and the lessor reach a concession agreement for relieving the original rent payment
obligation. In the event of deferred rent payment, the Company reduces recognized lease liabilities when the payment is actual made.
For short-term leases and low-value asset leases that adopt simplified accounting methods, the Company continues to recognize the
rents for the original contract as relevant asset cost or expense in the same way as before the concession. In the event of a ny rent
reduction or exemption, the Company treats the reduced amount as variable lease payment and writes down relevant asset costs or
expenses during the reduction and exemption period. In the event of deferred rent payment, the Company recognizes the rent payable
as a payable during the original payment period and reduces the recognized payable when the payment is actual made.
When the Company acts as the lessor, for operating leases, the Company continues to recognize rents of the original contract as lease
income in the same way as before the concession. In the event of any rent reduction or exemption, the Company treats the reduced
amount as variable lease payment and writes down lease payments during the reduction and exemption period. In the event of
deferred rent payment, the Company recognizes the rent receivable as a receivable during the original collection period and reduces
the recognized receivable when the payment is actual made. For finance leases, the Company continues to calculate interest income
and recognize as lease income in the same way as before the concession. In the event of any rent reduction or exemption, the
Company treats the reduced amount as variable lease payment and writes down the recognized lease income at an undiscounted
amount or a discounted amount using the same discount rate as before the rent reduction when the Company and the lessee reach a
concession agreement for wavering the original rent collection obligation; if it is insufficient for offsetting, the gap is i ncluded in
investment income and the finance lease receivables are adjusted at the same time. In the event of deferred rent payment, the
Company reduces recognized lease receivables when the payment is actual made.
Effective before January 1, 2021
1. Accounting treatment methods for operating lease
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
For rents under an operating lease, the lessor and the lessee shall recognize them on a straight-line basis over the lease term and
include them in profit and loss of the current period. Initial direct costs incurred to the lessor and the lessee shall be included in profit
or loss. Contingent rentals are included in profit or loss when they are actually incurred.
(2) Accounting treatment methods for finance lease
(1) The Company as the lessee
At the lease commencement date, the Company takes the lower of the fair value of the rented asset and the present value of the
minimum lease payments as the entry value of the rented asset, the minimum lease payments as the entry value of the long-term
payable, and the difference as unrecognized financing cost. Initial direct costs (same for below) attributable to the lease project
incurred during the lease negotiations and signing of the lease contract, such as handling fees, attorney fees and travel expenses, are
included in the value of the leased asset. When calculating the present value of the minimum lease payments, if the interest rate
implicit in the lease of the lessor can be readily determined, the interest rate implicit in the lease is used as the discount rate; if not,
the interest rate stipulated in the lease contract is used as the discount rate. If the interest rate implicit in the lease of the lessor cannot
be readily determined while the lease contract does not stipulate an interest rate, the bank loan interest rate of the same p eriod is used
as the discount rate. Unrecognized financing expenses are calculated and recognized as financing expense in the lease term using the
effective interest method.
The leased-in fixed assets adopt the same depreciation policy as self-owned fixed assets. For leased assets, if it is reasonably
ascertained that the ownership of the asset will be transferred to the lessee at the end of the lease term, then depreciation period runs
to the end of the useful life of the asset. If it cannot be reasonably ascertained that the ownership of the leased asset will be
transferred to the lessee at the end of the lease term, then depreciation period runs to the earlier of the end of the useful life of the
asset or the end of the lease term. Contingent rentals are included in profit or loss when they are actually incurred.
(2) The Company as the lessor
At the lease commencement date, the Company takes the sum of the minimum lease payments and initial direct costs on the inception
date as the entry value of the finance lease receivable, and records the unguaranteed residual value at the same time. Meanwhile, the
difference between the sum of the minimum lease payments, initial direct costs and unguaranteed residual value and the sum of their
present values is recognized as unrealized financing income.
The unrealized financing income is calculated and recognized as financing income during the lease term using the effective interest
method.
Contingent rentals are included in profit or loss when they are actually incurred.
37. Other important accounting policies and accounting estimates
Discontinued operation
A discontinued operation is a component of an entity that either has been disposed of or is classified as held for sale, and meets any
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
of the following: (1) represents either a separate major line of business or a geographical area of operations; (2) is part of a single
co-ordinated plan to dispose of a separate major line of business or geographical area of operations; (3) is a subsidiary acquired
exclusively with a view to resale.
38. Significant changes of accounting policies and accounting estimates
(1) Significant changes of accounting policies
√ Applicable □ Not applicable
Contents and reasons for changes to
Approval procedure Remarks
accounting policies
On December 07, 2018, the Ministry of
Finance issued the revised Accounting
Standards for Business Enterprises No. 21
-- Leases (C.K. [2018] No. 35) (hereinafter
Reviewed and approved at the 2nd meeting
referred to as the “New Lease Standards”),
of the Fourth Board of Directors and 2nd
requiring that other enterprises that For details, see “Other descriptions (1)”.
meeting of the Fourth Board of
implement the Accounting Standards for
Supervisors
Business Enterprises shall implement these
revised Standards from January 1, 2021.
The Company starts to implement them
from the stipulated effective date.
In January 2021, the Ministry of Finance
issued the Interpretation No. 14 to
Accounting Standards for Business
Enterprises (C.K. [2021] No. 01)
(hereinafter referred to as the Not applicable For details, see “Other descriptions (2)”.
“Interpretation No. 14”), which came into
force on January 1, 2021. The Company
starts to implement them from the
stipulated effective date.
In December 2021, the Ministry of Finance
issued the Interpretation No. 15 to
Accounting Standards for Business
Enterprises (C.K. [2021] No. 35)
(hereinafter referred to as the
Not applicable For details, see “Other descriptions (3)”.
“Interpretation No. 15”), of which contents
on “presentation concerning centralized
management of funds” came into force as
of the date of issuance. The Company
starts to implement them from the
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
stipulated effective date.
Other descriptions:
(1) For specific policies of the New Lease Standards, please refer to “Note V (36)”.
The Company started to implement the New Lease Standards from January 1, 2021. Under requirements of the New Lease Standards,
the amounts of retained earnings and other relevant items in the financial statements at the beginning of the period for the first time
adoption of the new standards (i.e. January 1, 2021) are adjusted based on the accumulative impact amount at the first time adoption,
while comparative financial information for the previous accounting periods is not adjusted. For specific changes of corresponding
financial statement items, please refer to “Note V (38) (3) Description on the adjustment of relevant items in the financial statements
at the beginning of the year for the first time adoption of the New Leasing Standards since 2021”.
Pursuant to the New Lease Standards, for contracts that already exist prior to the enforcement of the new standards, the Company
chooses not to re-evaluate whether they are a lease or contain a lease on the adoption date of the new standards. For lease contracts in
which the Company is the lessee, the Company elects to only adjust the accumulative impact amount of lease contracts not yet
completed as of January 1, 2021.
For operating leases whose leased assets belong to low-value assets prior to the adoption date or whose remaining lease term is less
than 12 months, the Company adopts a simplified method and does not recognize them as right-of-use assets and lease liabilities.
Moreover, the Company adopts the following simplified treatment methods for operating leases prior to the adoption date of the new
standards:
A. When measuring lease liabilities, the same discount rate is used for leases with similar characteristics; the measurement of the
right-of-use assets excludes initial direct costs;
B. If there is an extension option or termination option, the Company determines the lease term based on the actual exercise of the
option before the adoption date and other latest conditions;
C. As an alternative to the impairment test for right-of-use assets, the Company assesses whether a contract that contains a lease is a
loss contract before the adoption date, and adjusts the right-of-use asset based on the loss amount already recognized in the balance
sheet prior to the adoption date;
D. For lease modifications before the adoption date, the Company accounts them according to the their final arrangements.
The unpaid minimum lease payments of major operating leases disclosed in 2020 financial statements are adjusted based on the
difference between the present value discounted at the incremental borrowing rate on January 1, 2021 where the Company is the
lessee and the lease liabilities included in the balance sheet on January 1, 2021. The adjustment process is as follows:
Unit: RMB
Item Amount
Minimum lease payments of major operating leases on December 31, 2020 49,263,688.50
Plus: Minimum lease payments of other operating leases on December 31, 2020 472,137,522.60
Less: Minimum lease payments accounted with simplified treatment (short-term and 6,427,811.10
low-value)
Undiscounted amount of operating lease commitments on January 1, 2021 514,973,400.00
Weighted average of incremental borrowing rates on January 1, 2021 4.75%
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Present value of minimum lease payments under the New Lease Standards on 476,151,493.32
January 1, 2021
Plus: Minimum lease payments of finance leases on December 31, 2020 239,296.50
Lease liabilities on January 1, 2021 476,390,789.82
Including: Non-current liabilities due within one year 177,712,848.98
(2) The Company starts to implement the Interpretation No. 14 from January 1, 2021. Under requirements of the Interpretation No.
14, the amounts of retained earnings and other relevant items in the financial statements at the beginning of the period for the first
time adoption of this interpretation (i.e. January 1, 2021) are adjusted based on the accumulative impact amount at the first time
adoption, while comparative financial information for the previous accounting periods is not adjusted. This interpretation has no
impact on the Company.
(3) On December 30, 2021, the Ministry of Finance issued the Interpretation No. 15, of which contents on “presentation concerning
centralized management of funds” came into force as of the date of issuance. The Company starts to implement this interpretation
from December 30, 2021.
The Interpretation No. 15 stipulates that where funds of the parent company and member units are centrally managed through the
internal settlement center, a financial company, etc., it shall distinguish funds of member units that are collected to accounts of the
parent company and those that are directly deposited to the financial company; the interpretation also specifies items of member units,
financial company and parent company that should be presented in the balance sheet. It also clarifies whether financial assets and
financial liabilities under centralized management funds can be offset.
The Company has implemented this interpretation from the effective date. The interpretation has no impact on the Company.
(2) Significant changes of accounting estimates
□ Applicable √ Not applicable
(3) Description on the adjustment of relevant items in the financial statements at the beginning of the year
for the first time adoption of the new leasing standards since 2021
√ Applicable □ Not applicable
Whether to adjust the subjects of the balance sheet at the beginning of the year
√ Yes □ No
Consolidated balance sheet
Unit: RMB
Item December 31, 2020 January 01, 2021 Adjustment number
Current assets:
Monetary funds 578,783,443.79 578,783,443.79
Settlement reserve
Lending funds
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Financial assets held for
100,425,333.33 100,425,333.33
trading
Derivative financial
assets
Notes receivable
Accounts receivable 301,061,376.99 301,061,376.99
Accounts receivable
financing
Prepayments 59,678,780.04 57,225,385.65 -2,453,394.39
Premium receivable
Reinsurance payables
Reinsurance contract
reserves receivable
Other receivables 53,587,328.86 53,587,328.86
Including: Interest
receivable
Dividends
receivable
Financial assets held
under resale agreements
Inventory 607,679,776.22 607,679,776.22
Contract assets
Assets held for sale
Non-current assets due
within one year
Other current assets 1,377,984,359.67 1,377,984,359.67
Total current assets 3,079,200,398.90 3,076,747,004.51 -2,453,394.39
Non-current assets:
Loans and advances
Debt investments
Other debt investments
Long-term receivable
Long-term equity
investment
Investment in other
92,785,368.67 92,785,368.67
equity instruments
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Other non-current
financial assets
Investment property
Fixed assets 239,216,423.50 239,216,423.50
Construction in progress 49,120,792.27 49,120,792.27
Productive biological
assets
Oil & gas assets
Right-of-use assets 478,604,887.71 478,604,887.71
Intangible assets 114,864,801.65 114,864,801.65
Development expenses
Goodwill
Long-term prepaid
104,972,941.26 104,972,941.26
expenses
Deferred income tax
65,802,510.71 65,802,510.71
assets
Other non-current assets 2,635,461.01 2,635,461.01
Total non-current assets 669,398,299.07 1,148,003,186.78 478,604,887.71
Total assets 3,748,598,697.97 4,224,750,191.29 476,151,493.32
Current liabilities:
Short-term loans
Borrowings from PBC
Placements from banks
and other financial
institutions
Financial liabilities held
for trading
Derivative financial
liabilities
Notes payable 27,139,705.66 27,139,705.66
Accounts payable 107,698,978.83 107,698,978.83
Payments received in
advance
Contract liabilities 81,677,368.60 81,677,368.60
Proceeds from financial
assets sold under repo
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Deposits from
customers and interbank
Funds from securities
trading agency
Funds from securities
underwriting agency
Employee benefits
52,788,749.44 52,788,749.44
payable
Taxes payable 102,577,815.02 102,577,815.02
Other payables 44,335,743.56 44,335,743.56
Including: Interests
payable
Dividends
payable
Service charge and
commission receivable
Reinsurance payable
Liabilities held for sale
Non-current liabilities
177,712,848.98 177,712,848.98
due within one year
Other current liabilities 251,166,311.70 251,166,311.70
Total current liabilities 667,384,672.81 845,097,521.79 177,712,848.98
Non-current liabilities:
Insurance contract
reserves
Long-term loans
Bonds payable 630,982,939.14 630,982,939.14
Including: Preference
shares
Perpetual
bonds
Lease liabilities 298,677,940.84 298,677,940.84
Long-term payable 239,296.50 -239,296.50
Long-term employee
benefits payable
Provision
Deferred income 30,000,000.00 30,000,000.00
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Deferred income tax
2,253,279.00 2,253,279.00
liabilities
Other non-current
liabilities
Total non-current liabilities 663,475,514.64 961,914,158.98 298,438,644.34
Total liabilities 1,330,860,187.45 1,807,011,680.77 476,151,493.32
Owner’s equity:
Share capital 524,075,085.00 524,075,085.00
Other equity instruments 63,661,135.54 63,661,135.54
Including: Preference
shares
Perpetual
bonds
Capital reserve 226,927,846.51 226,927,846.51
Less: Treasury shares
Other comprehensive
-6,249,160.64 -6,249,160.64
income
Special reserves
Surplus reserves 194,828,010.62 194,828,010.62
General reserves
Retained earnings 1,413,582,872.58 1,413,582,872.58
Total equity attributable to
owners of the parent 2,416,825,789.61 2,416,825,789.61
company
Equities of minority
912,720.91 912,720.91
shareholders
Total owner’s equity 2,417,738,510.52 2,417,738,510.52
Total liabilities and owners’
3,748,598,697.97 4,224,750,191.29 476,151,493.32
equity
Explanation of adjustment
The impact of the New Lease Standards on the consolidated balance sheet on the adoption date is as follows:
Unit: RMB
Item In accordance with the Original In accordance with the New Impacted amount
Lease Standards Lease Standards (January 1, 2021)
Prepayments 59,678,780.04 57,225,385.65 -2,453,394.39
Right-of-use assets 478,604,887.71 478,604,887.71
Non-current liabilities due within 177,712,848.98 177,712,848.98
one year
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Lease liabilities 298,677,940.84 298,677,940.84
Long-term payable 239,296.50 -239,296.50
Balance sheet of the Parent Company
Unit: RMB
Item December 31, 2020 January 01, 2021 Adjustment number
Current assets:
Monetary funds 540,424,839.01 540,424,839.01
Financial assets held for
100,425,333.33 100,425,333.33
trading
Derivative financial
assets
Notes receivable
Accounts receivable 301,061,376.99 301,061,376.99
Accounts receivable
financing
Prepayments 32,532,816.93 30,079,422.54 -2,453,394.39
Other receivables 60,685,628.95 60,685,628.95
Including: Interest
receivable
Dividends
receivable
Inventory 804,477,022.56 804,477,022.56
Contract assets
Assets held for sale
Non-current assets due
within one year
Other current assets 1,400,727,863.45 1,400,727,863.45
Total current assets 3,240,334,881.22 3,237,881,486.83 -2,453,394.39
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity
111,000,000.00 111,000,000.00
investment
Investment in other
equity instruments
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Other non-current
financial assets
Investment property
Fixed assets 239,216,423.50 239,216,423.50
Construction in progress 49,120,792.27 49,120,792.27
Productive biological
assets
Oil & gas assets
Right-of-use assets 440,183,237.33 440,183,237.33
Intangible assets 114,864,801.65 114,864,801.65
Development expenses
Goodwill
Long-term prepaid
90,663,986.71 90,663,986.71
expenses
Deferred income tax
35,049,787.12 35,049,787.12
assets
Other non-current assets 2,635,461.01 2,635,461.01
Total non-current assets 642,551,252.26 1,082,734,489.59 440,183,237.33
Total assets 3,882,886,133.48 4,320,615,976.42 437,729,842.94
Current liabilities:
Short-term loans
Financial liabilities held
for trading
Derivative financial
liabilities
Notes payable 27,139,705.66 27,139,705.66
Accounts payable 146,213,104.37 146,213,104.37
Payments received in
advance
Contract liabilities 81,677,368.60 81,677,368.60
Employee benefits
2,785,243.25 2,785,243.25
payable
Taxes payable 96,992,722.80 96,992,722.80
Other payables 43,079,684.64 43,079,684.64
Including: Interests
payable
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Dividends
payable
Liabilities held for sale
Non-current liabilities
164,345,303.54 164,345,303.54
due within one year
Other current liabilities 251,166,311.70 251,166,311.70
Total current liabilities 649,054,141.02 813,399,444.56 164,345,303.54
Non-current liabilities:
Long-term loans
Bonds payable 630,982,939.14 630,982,939.14
Including: Preference
shares
Perpetual
bonds
Lease liabilities 273,623,835.90 273,623,835.90
Long-term payable 239,296.50 -239,296.50
Long-term employee
benefits payable
Provision
Deferred income 30,000,000.00 30,000,000.00
Deferred income tax
2,253,279.00 2,253,279.00
liabilities
Other non-current
liabilities
Total non-current liabilities 663,475,514.64 936,860,054.04 273,384,539.40
Total liabilities 1,312,529,655.66 1,750,259,498.60 437,729,842.94
Owner’s equity:
Share capital 524,075,085.00 524,075,085.00
Other equity instruments 63,661,135.54 63,661,135.54
Including: Preference
shares
Perpetual
bonds
Capital reserve 226,927,846.51 226,927,846.51
Less: Treasury shares
Other comprehensive
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
income
Special reserves
Surplus reserves 194,828,010.62 194,828,010.62
Retained earnings 1,560,864,400.15 1,560,864,400.15
Total owner’s equity 2,570,356,477.82 2,570,356,477.82
Total liabilities and owners’
3,882,886,133.48 4,320,615,976.42 437,729,842.94
equity
Explanation of adjustment
The impact of the New Lease Standards on the parent company’s balance sheet on the adoption date is as follows:
Unit: RMB
Item In accordance with the Original In accordance with the New Impacted amount
Lease Standards Lease Standards (January 1, 2021)
Prepayments 32,532,816.93 30,079,422.54 -2,453,394.39
Right-of-use assets 440,183,237.33 440,183,237.33
Non-current liabilities due within 164,345,303.54 164,345,303.54
one year
Lease liabilities 273,623,835.90 273,623,835.90
Long-term payable 239,296.50 -239,296.50
(4) Description on the retrospective adjustment of previous comparable data at the first time adoption of
the new leasing standards in 2021
□ Applicable √ Not applicable
VI. Taxes
1. Main tax types and tax rates
Tax Tax basis Tax rate
Value added during the sale of goods or
Value-added tax 13%, 6%
provision of taxable services
City construction and maintenance tax Turnover tax payable 7%
Corporate income tax Income tax payable 25%, 20%, 15%
Education surcharges Turnover tax payable 3%
Local education surcharges Turnover tax payable 2%
Description of disclosure if different income tax rates apply to different corporate taxpayers
Name of taxpayer Income tax rate
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
BIEM.L.FDLKK Garment Co., Ltd. 15%
Guangzhou BIEM.L.FDLKK Business Consulting Co., Ltd. 25%
Guangzhou BIEM.L.FDLKK Supply Chain Management Co.,
20%
Ltd.
Ningbo BIEM.L.FDLKK Supply Chain Management Co., Ltd. 25%
Guangzhou BIEM.L.FDLKK Ejam Equity Investment
5%- 35%
Partnership (Limited Partnership)
Xuzhou BIEM.L.FDLKK Supply Chain Management Co., Ltd. 25%
Ningbo BIEM.L.FDLKK Smart Technology Co., Ltd. 25%
2. Tax incentive
(1) BIEM.L.FDLKK Garment Co., Ltd.
BIEM.L.FDLKK Garment Co., Ltd. was certified as a high-tech enterprise on December 20, 2021 and was awarded the Certificate of
High-tech Enterprise (No. GR202144002604). In accordance with relevant provisions of the Enterprise Income Tax Law of the
People’s Republic of China promulgated in 2007 and the Administrative Measures for the Certification of High-tech Enterprises, the
corporate income tax of the company is calculated at a tax rate of 15% in 2021.
(2) Guangzhou BIEM.L.FDLKK Supply Chain Management Co., Ltd.
Pursuant to relevant provisions of the Announcement of the State Administration of Taxation on Matters Concerning the
Implementation of Preferential Income Tax Policies for Small and Low-profit Enterprises and Individual Industrial and Commercial
Households (SAT Doc. No. 2021 [008]), if the annual taxable income of a small and low-profit enterprise does not exceed RMB1
million, the taxable income is calculated at a reduced rate of 12.5% with a corporate income tax rate of 20%. These standards are
valid from January 1, 2021 to December 31, 2022. Guangzhou BIEM.L.FDLKK Supply Chain Management Co., Ltd. meets the
standard of small and low-profit enterprises, so the applicable corporate income tax rate is 20%.
VII. Notes to Items of the Consolidated Financial Statements
1. Monetary fund
Unit: RMB
Item Closing balance Opening balance
Cash on hand 142,548.00 135,833.35
Bank deposits 1,069,235,185.83 569,148,713.44
Other monetary funds 13,334,484.75 9,498,897.00
Total 1,082,712,218.58 578,783,443.79
Total amount of funds with use
13,334,484.75 9,498,897.00
restrictions due to mortgage, pledge or
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
freezing
Other description
— Balance of other monetary funds at the end of the reporting period is the security deposit for issuing bank acceptance bills.
— All bank deposits are in bank accounts opened in banks and other relevant financial institutions in the name of the Company and
subsidiaries/second-tier subsidiaries included in the consolidated scope of financial statements.
— As of December 31, 2021, except for other monetary funds whose use is restricted with a total amount of RMB13,334,484.75, the
Company had no funds whose use is restricted due to mortgage, pledge or freezing or which are deposited overseas or have the
potential risk of recovery.
2. Financial assets held for trading
Unit: RMB
Item Closing balance Opening balance
Financial assets measured at fair value
634,763,818.96 100,425,333.33
through profit or loss
Including:
Wealth management products 633,424,832.00 100,425,333.33
Others 1,338,986.96
Including:
Total 634,763,818.96 100,425,333.33
Other description:
— The closing balance of the financial assets held for trading increased by RMB534,338,485.63 or 532.08% compared with the
opening balance in 2021, mainly owing to the increase in the purchased wealth management products.
3. Accounts receivable
(1) Accounts receivable disclosure by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt reserve Book balance Bad debt reserve
Category Book
Percenta Provision Percentag Provision Book value
Amount Amount value Amount Amount
ge ratio e ratio
Accounts receivable
for which bad debt 618,282. 618,282. 3,026,981 2,562,695
0.21% 100.00% 0.94% 84.66% 464,286.72
reserve is set aside 56 56 .81 .09
individually
Including:
Accounts receivable 295,013, 99.79% 15,296,6 5.19% 279,717,0 318,875,6 99.06% 18,278,51 5.73% 300,597,09
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
for which bad debt 683.59 26.45 57.14 01.30 1.03 0.27
reserve is set aside in
portfolios
Including:
Clothing sales 295,013, 15,296,6 279,717,0 318,875,6 18,278,51 300,597,09
99.79% 5.19% 99.06% 5.73%
business 683.59 26.45 57.14 01.30 1.03 0.27
295,631, 15,914,9 279,717,0 321,902,5 20,841,20 301,061,37
Total 100.00% 5.38% 100.00% 6.47%
966.15 09.01 57.14 83.11 6.12 6.99
Bad debt reserve by item:
Unit: RMB
Closing balance
Name
Book balance Bad debt reserve Ratio of provision Reason for provision
It is expected that the
Institution 1 618,282.56 618,282.56 100.00% amount cannot be
recovered.
Total 618,282.56 618,282.56 -- --
Bad debt reserve by portfolio:
Unit: RMB
Closing balance
Name
Book balance Bad debt reserve Ratio of provision
Within 1 year 294,480,218.78 14,763,161.64 5.01%
1-2 years 190,299.54 190,299.54 100.00%
Over 3 years 343,165.27 343,165.27 100.00%
Total 295,013,683.59 15,296,626.45 --
Description of reason for the portfolio:
If the bad debt reserve of accounts receivable is set aside according to general model of expected credit loss, please refer to the
disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 294,480,218.78
1 to 2 years 808,582.10
Over 3 years 343,165.27
3 to 4 years 2,173.75
4 to 5 years 132,467.43
Over 5 years 208,524.09
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Total 295,631,966.15
(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Bad debt reserve of the reporting period:
Unit: RMB
Amount of change in the reporting period
Category Opening balance Recovery or Closing balance
Provision Write-off Others
reversal
Bad debt reserve
for accounts 20,841,206.12 2,224,051.58 2,702,245.53 15,914,909.01
receivable
Total 20,841,206.12 2,224,051.58 2,702,245.53 15,914,909.01
Due to debt restructuring, the Company wrote off bad debt reserve for accounts receivable at an amount of RMB2,702,245.53 in
2021.
(3) Accounts receivable actually written off in the reporting period
Unit: RMB
Item Write-off amount
Write-offs of important accounts receivable:
Unit: RMB
Whether the amount
Nature of accounts
Name of institution Write-off amount Write-off reason Write-off procedures is caused by related
receivable
party transaction
Description on the write-offs of accounts receivables:
As of December 31, 2021, the Company did not write off any accounts receivable.
(4) Top five debtors in closing balance of accounts receivable
Unit: RMB
Percentage in total balance of
Balance of accounts receivable at Balance for bad debt reserve at
Name of institution accounts receivable at the end of
the end of the period the end of the period
the period
Institution 1 17,159,920.18 5.80% 858,111.72
Institution 2 7,928,133.02 2.68% 400,747.57
Institution 3 7,847,238.43 2.65% 392,361.92
Institution 4 6,665,554.40 2.25% 333,423.95
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Institution 5 5,171,664.81 1.75% 258,583.24
Total 44,772,510.84 15.13%
(5) Amounts of assets and liabilities that are formed by the transfer of accounts receivable and the
Company’s continuing involvement
As of December 31, 2021, the Company had no assets and liabilities that were formed by the transfer of accounts receivable and its
continuing involvement.
(6) Accounts receivable derecognized due to transfer of financial assets
As of December 31, 2021, no accounts receivable was derecognized due to transfer of financial assets.
4. Prepayments
(1) Prepayments presentation by aging
Unit: RMB
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 66,490,875.59 99.20% 56,817,241.39 99.29%
1 to 2 years 426,940.68 0.64% 408,144.26 0.71%
2 to 3 years 110,538.82 0.16%
Total 67,028,355.09 -- 57,225,385.65 --
Explanation on the reason of untimely settlement of prepayments whose age exceeds one year with significant amount:
(2) Top five payees in closing balance of prepayment
Unit: RMB
Name of institution Closing balance Percentage in total balance of prepayments at the end of the
period
Institution 1 17,737,138.98 26.46
Institution 2 7,029,494.67 10.49
Institution 3 4,175,089.92 6.23
Institution 4 3,361,681.45 5.02
Institution 5 2,311,555.65 3.45
Total 34,614,960.67 51.65
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5. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 89,889,485.22 53,587,328.86
Total 89,889,485.22 53,587,328.86
(1) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Book balance at the beginning of the
Nature Book balance at the end of the period
period
Margins and deposits 88,691,812.02 52,061,952.75
Employee reserve fund 3,069,483.92 2,348,617.12
Other amounts 2,857,765.83 1,997,144.72
Total 94,619,061.77 56,407,714.59
2) Bad debt reserve
Unit: RMB
Phase I Phase II Phase III
Bad debt reserve Lifetime ECL (without Lifetime ECL (with credit Total
12-month ECL
credit impairment) impairment)
Balance as at January 1,
2,820,385.73 2,820,385.73
2021
Balance as at January 1,
2021 in the reporting —— —— —— ——
period
Provision in the reporting
1,909,190.82 1,909,190.82
period
Balance as at December
4,729,576.55 4,729,576.55
31, 2021
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
Aging Book balance
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Within 1 year (inclusive) 94,619,061.77
Total 94,619,061.77
3) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Bad debt reserve of the reporting period:
Unit: RMB
Amount of change in the reporting period
Opening
Category Recovery or Closing balance
balance Provision Write-off Others
reversal
Bad debt reserve
2,820,385.73 1,909,190.82 4,729,576.55
by portfolio
Total 2,820,385.73 1,909,190.82 4,729,576.55
4) Top five debtors in closing balance of other accounts receivable
Unit: RMB
Percentage in total
Balance of bad debt
balance of other
Name of institution Nature of the amount Closing balance Aging reserve at the end of
receivables at the
the period
end of the period
Institution 1 Margins and deposits 29,000,000.00 Within 1 year 30.65% 1,450,000.00
Institution 2 Margins and deposits 7,441,978.00 Within 1 year 7.87% 372,098.90
Institution 3 Margins and deposits 5,560,610.00 Within 1 year 5.88% 278,030.50
Institution 4 Margins and deposits 4,288,619.00 Within 1 year 4.53% 214,430.95
Institution 5 Margins and deposits 3,150,000.00 Within 1 year 3.33% 157,500.00
Total -- 49,441,207.00 -- 52.26% 2,472,060.35
5) Other receivables derecognized due to the transfer of financial assets
As of December 31, 2021, no other receivable was derecognized due to transfer of financial assets.
6) Amount of assets and liabilities that are formed by the transfer of other receivables and the Company’s
continuing involvement
As of December 31, 2021, the Company had no assets and liabilities that were formed by the transfer of other receivables and its
continuing involvement.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
6. Inventory
Whether the Company needs to comply with requirements for disclosure in the real estate industry
No
(1) Classification of inventories
Unit: RMB
Closing balance Opening balance
Provision for Provision for
impairment of impairment of
Item
Book balance inventories and Book value Book balance inventories and Book value
contract contract
performance cost performance cost
Raw materials 18,331,168.60 18,331,168.60 9,633,505.86 9,633,505.86
Commodity
735,027,540.76 106,428,861.75 628,598,679.01 654,339,389.50 65,159,344.75 589,180,044.75
stocks
Materials for
consigned 13,284,371.80 13,284,371.80 8,866,225.61 8,866,225.61
processing
Total 766,643,081.16 106,428,861.75 660,214,219.41 672,839,120.97 65,159,344.75 607,679,776.22
(2) Provision for impairment of inventories and contract performance cost
Unit: RMB
Increase in the current period Decrease in the current period
Item Opening balance Reversal or Closing balance
Provision Others Others
written off
Commodity
65,159,344.75 78,683,952.73 37,414,435.73 106,428,861.75
stocks
Total 65,159,344.75 78,683,952.73 37,414,435.73 106,428,861.75
7. Other current assets
Unit: RMB
Item Closing balance Opening balance
Return cost receivable 99,103,788.91 66,756,179.30
Structured deposit 704,879,722.24 1,256,445,833.33
Large-denomination Certificate of Deposit 20,117,555.56 20,115,000.00
Input tax credits and input tax creditable 6,539,646.70 34,667,347.04
193
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
within subsequent periods
Total 830,640,713.41 1,377,984,359.67
Other description:
Return cost receivable is the adjustment to the clothing selling costs of franchise stores made by the Company based on the return
and exchange policies and estimated return and exchange rate.
— The closing balance of other current assets decreased by RMB547,343,646.26 or 39.72% compared with the opening balance in
2021, mainly owing to the decrease in the purchased structured deposits.
8. Investment in other equity instruments
Unit: RMB
Item Closing balance Opening balance
Shenzhen Youanmi Technology Co., Ltd. 8,999,300.47 3,685,368.67
Fast Fashion (Guangzhou) Co., Ltd. 89,100,000.00 89,100,000.00
Total 98,099,300.47 92,785,368.67
Disclosure of investments in equity instruments not held for trading in the reporting period item by item
Unit: RMB
Reason for
Amount of Reason for
designation as
retained earnings transferring from
measured at fair
Recognized transferred from other
Project Cumulative gain Cumulative loss value through
dividend income other comprehensive
other
comprehensive income to
comprehensive
income retained earnings
income
Shenzhen
Long-term
Youanmi
1,000,699.53 holding for Not applicable
Technology Co.,
strategic purposes
Ltd.
Fast Fashion Long-term
(Guangzhou) Co., holding for Not applicable
Ltd. strategic purposes
9. Fixed assets
Unit: RMB
Item Closing balance Opening balance
Fixed assets 244,337,754.20 239,216,423.50
Total 244,337,754.20 239,216,423.50
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
(1) Information on fixed assets
Unit: RMB
Properties and
Item Equipment Motor vehicles Office equipment Total
buildings
I. Original Book
Value
1. Opening
228,574,129.51 5,983,488.04 4,777,800.08 34,086,740.34 273,422,157.97
balance
2. Increase in the
19,194,513.66 77,679.61 1,110,796.46 8,771,910.01 29,154,899.74
current period
(1) Procurement 77,679.61 1,110,796.46 8,771,910.01 9,960,386.08
(2) Transfer
from construction in 19,194,513.66 19,194,513.66
progress
(3) Increase in
business
combination
3. Decrease in the
701,845.15 530,808.00 1,965,857.54 3,198,510.69
current period
(1) Disposal or
701,845.15 530,808.00 1,965,857.54 3,198,510.69
scrap
4. Closing balance 247,768,643.17 5,359,322.50 5,357,788.54 40,892,792.81 299,378,547.02
II. Accumulated
Depreciation
1. Opening
10,529,677.04 507,784.23 3,832,802.80 19,335,470.40 34,205,734.47
balance
2. Increase in the
12,897,772.86 1,104,103.16 266,389.88 9,178,593.74 23,446,859.64
current period
(1) Provision 12,897,772.86 1,104,103.16 266,389.88 9,178,593.74 23,446,859.64
3. Decrease in the
210,722.57 504,267.60 1,896,811.12 2,611,801.29
current period
(1) Disposal or
210,722.57 504,267.60 1,896,811.12 2,611,801.29
scrap
195
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
4. Closing balance 23,427,449.90 1,401,164.82 3,594,925.08 26,617,253.02 55,040,792.82
III. Impairment
Provision
1. Opening
balance
2. Increase in the
current period
(1) Provision
3. Decrease in the
current period
(1) Disposal or
scrap
4. Closing balance
IV. Book Value
1. Book value at
224,341,193.27 3,958,157.68 1,762,863.46 14,275,539.79 244,337,754.20
the end of the period
2. Book value at
the beginning of the 218,044,452.47 5,475,703.81 944,997.28 14,751,269.94 239,216,423.50
period
(2) Fixed assets that the certificate of title has not been issued
Other description
--- The Company had no fixed assets whose certificate of title had not been issued at the end of the reporting period.
10. Construction in process
Unit: RMB
Item Closing balance Opening balance
Construction in process 148,165,548.36 49,120,792.27
Total 148,165,548.36 49,120,792.27
(1) Information on construction in progress
Unit: RMB
Item Closing balance Opening balance
196
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Intelligent storage
130,966,928.76 130,966,928.76 48,013,204.45 48,013,204.45
center
Supply chain park 17,198,619.60 17,198,619.60 1,107,587.82 1,107,587.82
Total 148,165,548.36 148,165,548.36 49,120,792.27 49,120,792.27
(2) Changes of significant construction in progress in the current period
Unit: RMB
Includin
Amount Proporti Accumul g:
Interest
of fixed on of the ative Amount
Increase Decrease capitaliz
assets cumulati Construc amount of
Budget Opening in the in the Closing ation rate Source
Project transferr ve tion of interest
number balance current current balance in the of fund
ed in the construct progress interest capitaliz
period period current
current ion input capitaliz ation in
period
period in budget ation the
period
Intellige
nt 224,120, 48,013,2 82,953,7 130,966, Proceeds
58.44% 58.44%
storage 000.00 04.45 24.31 928.76 raised
center
Supply
149,607, 1,107,58 16,091,0 17,198,6 Proceeds
chain 11.50% 11.50%
224.00 7.82 31.78 19.60 raised
park
19,194,5 19,194,5 Proceeds
Others
13.66 13.66 raised
373,727, 49,120,7 118,239, 19,194,5 148,165,
Total -- -- --
224.00 92.27 269.75 13.66 548.36
11. Right-of-use assets
Unit: RMB
Item Properties and buildings Total
I. Original Book Value
1. Opening balance 478,604,887.71 478,604,887.71
2. Increase in the current period 123,036,592.73 123,036,592.73
(1) New lease 84,208,913.97 84,208,913.97
(2) Modification 38,827,678.76 38,827,678.76
197
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
3. Decrease in the current period 7,515,067.64 7,515,067.64
(1) Modification 7,515,067.64 7,515,067.64
(2) Termination
4. Closing balance 594,126,412.80 594,126,412.80
II. Accumulated Depreciation
1. Opening balance
2. Increase in the current period 187,984,952.77 187,984,952.77
(1) Provision 187,984,952.77 187,984,952.77
(2) Modification
3. Decrease in the current period 1,307,194.71 1,307,194.71
(1) Disposal
(2) Modification 1,307,194.71 1,307,194.71
4. Closing balance 186,677,758.06 186,677,758.06
III. Impairment Provision
1. Opening balance
2. Increase in the current period
(1) Provision
3. Decrease in the current period
(1) Disposal
4. Closing balance
IV. Book Value
1. Book value at the end of the period 407,448,654.74 407,448,654.74
2. Book value at the beginning of the
478,604,887.71 478,604,887.71
period
12. Intangible assets
(1) Intangible assets
Unit: RMB
Non-patented
Item Land use right Patent right Software Trademark Total
technology
I. Original Book
Value
198
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
1. Opening
120,559,562.12 20,081,557.10 436,252.84 141,077,372.06
balance
2. Increase
in the current 14,862,616.07 14,862,616.07
period
(1)
14,862,616.07 14,862,616.07
Procurement
(2)
Internal R&D
(3)
Increase in
business
combination
3. Decrease in
1,749,482.29 1,749,482.29
the current period
(1)
1,749,482.29 1,749,482.29
Disposal
4. Closing
120,559,562.12 33,194,690.88 436,252.84 154,190,505.84
balance
II. Accumulated
Amortization
1. Opening
14,588,830.46 11,408,433.05 215,306.90 26,212,570.41
balance
2. Increase
in the current 2,645,340.68 7,492,542.47 40,805.28 10,178,688.43
period
(1)
2,645,340.68 7,492,542.47 40,805.28 10,178,688.43
Provision
3. Decrease
in the current 1,749,482.29 1,749,482.29
period
(1)
1,749,482.29 1,749,482.29
Disposal
4. Closing
17,234,171.14 17,151,493.23 256,112.18 34,641,776.55
balance
199
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
III. Impairment
Provision
1. Opening
balance
2. Increase
in the current
period
(1)
Provision
3. Decrease
in the current
period
(1) Disposal
4. Closing
balance
IV. Book Value
1. Book
value at the end 103,325,390.98 16,043,197.65 180,140.66 119,548,729.29
of the period
2. Book
value at the
105,970,731.66 8,673,124.05 220,945.94 114,864,801.65
beginning of the
period
Percentage of the intangible assets generated through internal R&D of the Company in the balance of intangible assets at the end of
the reporting period
13. Long-term prepaid expenses
Unit: RMB
Increase in the Amortized amount
Item Opening balance Other decreases Closing balance
current period of the current period
Store decoration fee 83,645,692.08 64,616,297.07 52,092,090.97 96,169,898.18
Warehouse
1,128,704.24 967,436.85 161,267.39
decoration fee
Advertising fee 15,807,555.11 7,341,352.16 16,190,069.45 6,958,837.82
Software rental fee 3,920,692.84 292,896.23 2,354,531.22 1,859,057.85
Others 470,296.99 376,237.68 94,059.31
200
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Total 104,972,941.26 72,250,545.46 71,980,366.17 105,243,120.55
14. Deferred tax assets/deferred tax liabilities
(1) Deferred income tax assets that were not offset
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
differences assets differences assets
Provision for asset
127,073,347.31 19,068,898.59 91,665,747.53 13,329,510.35
impairment
Deductible loss 3,819,736.80 954,934.20 4,868,848.00 1,217,212.00
Intangible asset
623,224.29 93,483.64
amortization
Gross profits temporarily
unrecognized due to 215,096,618.75 32,264,492.81 144,284,785.12 21,642,717.77
expected goods exchange
Unrealized profit in
261,303,351.88 39,195,502.78 196,797,246.34 29,519,586.95
internal transaction
Tax-accounting
difference for 10,806,767.10 1,681,921.28
right-of-use assets
Changes in fair value of
investments in other 990,792.60 148,618.89
equity instruments
Total 619,090,614.44 93,314,368.55 438,239,851.28 65,802,510.71
(2) Deferred income tax liabilities that were not offset
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
Depreciation of fixed
15,603,604.41 2,340,540.66 14,596,526.68 2,189,479.00
assets
Valuation of financial
instruments and
3,424,832.00 513,724.80 425,333.33 63,800.00
derivatives measured at
fair value through profit
201
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
or loss
Total 19,028,436.41 2,854,265.46 15,021,860.01 2,253,279.00
(3) Presentation of deferred tax assets or liabilities by the net amount after offset
Unit: RMB
Offset amount of the Balance of the deferred
Offset amount of the Balance of the deferred
deferred tax assets and tax assets or liabilities
deferred tax assets and tax assets or liabilities
Item liabilities at the after offset at the
liabilities at the end of after offset at the end of
beginning of the beginning of the
the reporting period the reporting period
reporting period reporting period
Deferred income tax
93,314,368.55 65,802,510.71
assets
Deferred income tax
2,854,265.46 2,253,279.00
liabilities
(4) Breakdown of unconfirmed deferred tax assets
Unit: RMB
Item Closing balance Opening balance
15. Other non-current assets
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Prepayment for construction work 1,130,640.00 1,130,640.00 2,635,461.01 2,635,461.01
Prepayment for acquisition of long-lived
702,868.45 702,868.45
assets
Total 1,833,508.45 1,833,508.45 2,635,461.01 2,635,461.01
Other description:
— The closing balance of other non-current assets decreased by RMB801,952.56 or 30.43% compared with the opening balance in
2021, mainly owing to the decrease in the prepayments for construction work.
16. Notes payable
Unit: RMB
Category Closing balance Opening balance
Banker’s acceptance 38,098,527.79 27,139,705.66
202
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Total 38,098,527.79 27,139,705.66
17. Accounts payable
(1) List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Accounts payable 126,522,502.78 107,698,978.83
Total 126,522,502.78 107,698,978.83
18. Contract liabilities
Unit: RMB
Item Closing balance Opening balance
Product sales 140,669,127.30 81,677,368.60
Total 140,669,127.30 81,677,368.60
Amount with significant changes in book value during the reporting period and reason
Unit: RMB
Item Change amount Reason of change
19. Employee benefits payable
(1) List of employee benefits payable
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
I. Short-term Benefits 52,788,749.44 399,443,448.13 388,204,736.30 64,027,461.27
II. Post-employment
Benefits - Defined 21,195,870.31 21,195,870.31
Contribution Plan
III. Termination Benefits 593,908.00 593,908.00
Total 52,788,749.44 421,233,226.44 409,994,514.61 64,027,461.27
(2) List of short-term benefits
Unit: RMB
Item Opening balance Increase in the current Decrease in the current Closing balance
203
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
period period
1. Salary, bonus and
52,788,749.44 364,677,995.12 353,439,283.29 64,027,461.27
subsidy
2. Employee welfare 10,704,713.61 10,704,713.61
3. Social insurance
14,571,967.86 14,571,967.86
premiums
Including: Medical
13,495,938.93 13,495,938.93
insurance
Employment
412,523.07 412,523.07
injury insurance
Maternity
663,505.86 663,505.86
insurance
4. Housing provident
7,347,924.98 7,347,924.98
fund
5. Labor union fee and
2,140,846.56 2,140,846.56
staff education fee
Total 52,788,749.44 399,443,448.13 388,204,736.30 64,027,461.27
(3) List of defined contribution plans
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Basic endowment
20,570,802.95 20,570,802.95
insurance
2. Unemployment
625,067.36 625,067.36
insurance
Total 21,195,870.31 21,195,870.31
Other description:
20. Taxes payable
Unit: RMB
Item Closing balance Opening balance
Value-added tax 36,201,763.85 30,271,977.65
Corporate income tax 91,276,509.31 70,175,903.75
City construction and maintenance tax 1,329,110.07 910,458.57
Education surcharges 949,697.81 651,088.07
204
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Others 1,212,181.56 568,386.98
Total 130,969,262.60 102,577,815.02
Other description:
21. Other payables
Unit: RMB
Item Closing balance Opening balance
Other payables 55,878,486.28 44,335,743.56
Total 55,878,486.28 44,335,743.56
(1) Other payables
1) Other payables based on amount nature
Unit: RMB
Item Closing balance Opening balance
Margins and deposits 34,064,534.19 27,387,628.54
Fees payable 21,016,130.22 16,410,510.42
Others 797,821.87 537,604.60
Total 55,878,486.28 44,335,743.56
22. Non-current liabilities due within one year
Unit: RMB
Item Closing balance Opening balance
Lease liabilities due within one year 197,019,114.42 177,712,848.98
Total 197,019,114.42 177,712,848.98
Other description:
23. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Refunds payable 314,200,407.66 211,040,964.42
Output tax pending carryforward 14,430,445.68 40,125,347.28
Total 328,630,853.34 251,166,311.70
Changes in short-term bonds payable:
Unit: RMB
205
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Amortizat
Balance
Issuance Interest ion of Repayme
Name of Date of Term of Amount Opening at the end
Par value in the accrued at premiums nt in the
bond issuance bond issued balance of the
period par value and period
period
discounts
Total -- -- --
Other description:
— Refunds payable is the adjustment to the clothing selling income of franchise stores made by the Company based on the return and
exchange policies and estimated return and exchange rate.
— The closing balance of other current liabilities increased by RMB77,464,541.64 or 30.84% compared with the opening balance in
2021, mainly owing to the increase in expected payments for returns and exchanges of franchise stores.
24. Bonds payable
(1) Bonds payable
Unit: RMB
Item Closing balance Opening balance
Convertible bonds 284,554,163.11 630,982,939.14
Total 284,554,163.11 630,982,939.14
(2) Changes in the increase and decrease of the bonds payable (excluding other financial instruments such
as preference shares and perpetual bonds that are divided into financial liabilities)
Unit: RMB
Amortizat
Conversio
Issuance Interest ion of Repayme
Name of Date of Term of Amount Opening n to Closing
Par value in the accrued at premiums nt in the
bond issuance bond issued balance shares in balance
period par value and period
the period
discounts
689,000,0 June 15, 689,000,0 630,982,9 2,256,312 -43,798,2 1,430,176 391,053,2 284,554,1
BYZZ 6
00.00 2020 00.00 39.14 .02 88.75 .80 00.00 63.11
689,000,0 630,982,9 2,256,312 -43,798,2 1,430,176 391,053,2 284,554,1
Total -- -- --
00.00 39.14 .02 88.75 .80 00.00 63.11
(3) Conversion conditions and time
The China Securities Regulatory Commission issued the Reply on Approving the Public Listing of Convertible Bonds by
BIEM.L.FDLKK Garment Co., Ltd. (CSRC Approval [2020] No. 638) in June 2020, according to which the Company issued 6.89
206
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
million convertible bonds to the general public (“BYZZ”). The par value of each bond is RMB100.00 and total offered amount is
RMB689 million, with a term of six years.
In accordance with relevant provisions of the Prospectus for the Public Offering of Convertible Bonds by BIEM.L.FDLKK Garment
Co., Ltd., the convertible bonds may be converted into shares of the Company from the first trading day after six months upon the
end date of bond issuance (June 19, 2020) to the maturity date of the bond, namely from December 21, 2020 to June 14, 2026. The
initial conversion price was RMB14.90/share.
The Company implemented its 2020 profit distribution plan on July 7, 2021. Pursuant to relevant terms regarding share conversion
price of the convertible bonds, the conversion price of “BYZZ” was adjusted from RMB14.90/share to RMB14.60/share.
25. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Lease liabilities 217,323,756.45 298,677,940.84
Total 217,323,756.45 298,677,940.84
Other description
26. Deferred income
Unit: RMB
Increase in the Decrease in the
Item Opening balance Closing balance Reason
current period current period
Government grants 30,000,000.00 30,000,000.00 Related to asset
Total 30,000,000.00 30,000,000.00 --
Projects involving government grants:
Unit: RMB
Amount Amount
Increased Amount of
included in included in
amount of offset costs
Liability Opening non-operatin other income Other Related to
grants in the in the Closing balance
item balance g revenue in in the changes asset/income
current current
the current current
period period
period period
Support
funds for the
construction Related to
30,000,000.00 30,000,000.00
of intelligent asset
storage
center
207
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
27. Share capital
Unit: RMB
Increase and decrease of this change (+ and -)
Shares
Opening Closing
Issuance of transferred
balance Bonus shares Others Subtotal balance
new shares from surplus
reserve
Total number
524,075,085.00 26,251,627.00 26,251,627.00 550,326,712.00
of shares
Other description:
— The increase under “others”: As stated in Note VII (24) of this financial report, the Company issued convertible bonds. As of
December 31, 2021, 26,257,002.00 shares had been converted from “BYZZ” convertible bonds, of which 26,251,627.00 shares were
converted in 2021.
28. Other equity instruments
(1) Basic information on other financial instruments in issue at the end of the reporting period, such as the
preference shares and perpetual bonds
For basic information on other financial instruments in issue at the end of the reporting period such as the preference shar es and
perpetual bonds, please refer to Note VII (24) Bonds payable.
(2) Table of changes in other financial instruments in issue at the end of the reporting period, such as the
preference shares and perpetual bonds
Unit: RMB
Financial Increase in the current Decrease in the current
Beginning of the period End of the period
instruments period period
in issue Number Book value Number Book value Number Book value Number Book value
63,661,135.5 36,136,681.3 27,524,454.1
BYZZ 6,889,198 3,910,532 2,978,666
4 8 6
63,661,135.5 36,136,681.3 27,524,454.1
Total 6,889,198 3,910,532 2,978,666
4 8 6
Description of increase/decrease of other equity instruments in the reporting period, reasons of change, and accounting basis:
— Other equity instruments decreased by RMB36,136,681.38 in the reporting period, owing to the conversion of convertible bonds
into shares. For details, please refer to “Note VII (27) Share capital”.
29. Capital reserve
Unit: RMB
208
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Capital premium (share
226,927,846.51 373,542,599.64 600,470,446.15
premium)
Total 226,927,846.51 373,542,599.64 600,470,446.15
Other descriptions, including increase/decrease in the reporting period and reasons of change:
Capital reserve increased by RMB373,542,599.64 in the reporting period, owing to the conversion of convertible bonds into shares.
30. Other comprehensive income
Unit: RMB
Incurred in the current period
Less:
Less: Amount
Amount previously
previously included
Amount Amount
Amount included in in other
Less: attributabl attributabl
Opening before other comprehe Closing
Item Income e to the e to
balance income tax comprehensi nsive balance
tax Parent minority
in the ve income income
expense Company shareholde
period and and
after tax rs after tax
transferred to transferred
profit or loss to retained
in the period earnings in
the period
I. Other comprehensive income
-6,249,160.6 5,313,931. -148,618.8 5,406,986. -842,173
that cannot be reclassified into 55,563.77
4 80 9 92 .72
profit or loss
Changes in fair value of
-6,249,160.6 5,313,931. -148,618.8 5,406,986. -842,173
investments in other equity 55,563.77
4 80 9 92 .72
instruments
Total of other comprehensive -6,249,160.6 5,313,931. -148,618.8 5,406,986. -842,173
55,563.77
income 4 80 9 92 .72
Other description, including adjustments arising from transferring the effective portion of gains and losses on cash flow hedges to the
initial recognition amount of the hedged item:
31. Surplus reserve
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
209
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Statutory surplus reserve 194,828,010.62 63,282,325.31 258,110,335.93
Total 194,828,010.62 63,282,325.31 258,110,335.93
Explanation of surplus reserve, including increase/decrease in the reporting period and reasons of change:
— The increase in the Company’s surplus reserve in the reporting period is due to the appropriation of the statutory surplus reserve at
10% of the Parent Company’s net profit in the period.
32. Retained earnings
Unit: RMB
Item Current period Last period
Retained earnings before adjustment at the end of
1,413,582,872.58 1,072,977,728.32
the last period
Total adjustment of retained earnings at the
beginning of the period (“+” for increase and “-” 51,814,315.93
for decrease)
Retained earnings at the beginning of the period
1,413,582,872.58 1,124,792,044.25
after adjustment
Plus: Net profit attributable to owners of the
624,541,483.00 498,822,424.55
parent company of the current period
Less: Appropriated statutory surplus reserve 63,282,325.31 55,893,446.22
Dividends on ordinary shares payable 164,990,208.30 154,138,150.00
Retained earnings at the end of the period 1,809,851,821.97 1,413,582,872.58
Details on adjusting retained earnings at the beginning of the period:
(1) Due to retrospective adjustments according to the Accounting Standards for Business Enterprises and its related new provisions,
retained earnings at the beginning of the period was impacted by RMBXX.
(2) Due to the changes in accounting policies, retained earnings at the beginning of the period were impacted by RMBXX.
(3) Due to the correction of material accounting errors, retained earnings at the beginning of the period were impacted by RMBXX.
(4) Due to the changes in the consolidated scope arising from business combinations under same control, retained earnings at the
beginning of the period was impacted by RMBXX.
(5) Other adjustments affected retained earnings at the beginning of the period by RMBXX.
33. Revenue and cost of revenue
Unit: RMB
Incurred in the current period Incurred in the prior period
Item
Revenue Cost Revenue Cost
Principal business 2,719,943,987.32 634,160,601.71 2,303,301,051.46 601,546,395.40
Other businesses 45,269.82 25,160.38
210
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Total 2,719,989,257.14 634,160,601.71 2,303,326,211.84 601,546,395.40
Whether lower of the audited net profits before and after deducting the non-recurring profit and loss is negative
□ Yes √ No
34. Tax and surcharges
Unit: RMB
Item Incurred in the current period Incurred in the prior period
City construction and maintenance tax 12,273,316.92 6,854,156.18
Education surcharges 5,319,074.54 2,939,830.36
Local education surcharges 3,546,047.89 1,959,772.09
Other taxes and fees 2,824,038.23 2,229,573.44
Total 23,962,477.58 13,983,332.07
Other description:
35. Selling expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Store operating expenses 359,724,699.13 461,267,036.64
Employee benefits 292,614,931.34 245,331,238.57
Depreciation of right-of-use assets 175,539,936.53
Decoration and renovation expenses 84,303,737.40 76,410,689.85
Advertising expenses 78,889,887.30 62,254,284.32
Office and business travel expenses 20,281,804.02 13,647,638.74
Transportation expenses 10,068,692.80 8,614,867.40
E-commerce service fees 8,659,135.65 6,549,205.73
Others 10,969,661.97 11,293,498.01
Total 1,041,052,486.14 885,368,459.26
36. Administrative expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee benefits 74,442,596.47 51,016,526.18
Depreciation and amortization 26,494,225.47 22,794,914.22
Agency fee 13,936,114.88 13,580,832.39
211
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Depreciation of right-of-use assets 12,445,016.24
Office and business travel expenses 11,700,066.13 12,814,603.95
Office premise usage fee 9,838,670.93 27,080,769.82
Others 7,410,884.14 5,345,784.02
Total 156,267,574.26 132,633,430.58
37. R&D expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee benefits 54,175,698.63 41,907,397.53
New product R&D 22,525,478.10 17,127,163.13
Depreciation and amortization 3,769,157.59 1,747,718.17
Office and business travel expenses 2,616,395.96 3,888,847.71
Others 301,398.39 133,732.82
Total 83,388,128.67 64,804,859.36
38. Finance expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Interest expense of convertible bonds 18,670,744.11 15,998,242.73
Interest expense of lease liabilities 21,058,743.02
Less: Interest income 18,147,338.76 6,842,458.41
Others 223,387.32 543,475.05
Total 21,805,535.69 9,699,259.37
Other description:
— Interest income in 2021 increased by RMB11,304,880.35 or 165.22% compared with 2020, owing to interests accrued by the
purchased large-denomination Certificate of Deposit.
— Interest expense on lease liabilities in 2021 increased by RMB21,058,743.02 compared with 2020, owing to the Company’s
adoption of the New Lease Standards.
39. Other income
Unit: RMB
Sources of other income Incurred in the current period Incurred in the prior period
Government grants 14,577,835.79 15,349,526.38
212
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Others 203,782.61 147,175.44
Total 14,781,618.40 15,496,701.82
40. Return on investment
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Gain from debt restructuring 104,009.33
Income from wealth management products 38,711,860.90 24,501,459.48
Total 38,815,870.23 24,501,459.48
41. Income from changes in fair value
Unit: RMB
Source of income from changes in fair
Incurred in the current period Incurred in the prior period
value
Financial assets held for trading - wealth
3,424,832.00 425,333.33
management products
Total 3,424,832.00 425,333.33
42. Credit impairment loss
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Bad debt loss 314,860.76 -5,259,711.60
Total 314,860.76 -5,259,711.60
43. Asset impairment loss
Unit: RMB
Item Incurred in the current period Incurred in the prior period
II. Impairment Loss of Inventories and
-78,683,952.73 -48,457,945.87
Contract Performance Cost
Total -78,683,952.73 -48,457,945.87
44. Return on disposal of assets
Unit: RMB
Source Incurred in the current period Incurred in the prior period
213
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Profits/losses from the disposal of
-253,775.79 -2,728.63
non-current asset
Total -253,775.79 -2,728.63
45. Non-operating revenue
Unit: RMB
Amount recognized as profit or
Item Incurred in the current period Incurred in the prior period
loss of the current period
Government grants 4,313,900.00
Others 531,942.90 476,200.02 531,942.90
Total 531,942.90 4,790,100.02 531,942.90
Government grants recognized as profit and loss of the current period:
Unit: RMB
Whether the
Amount Amount
grant affected
Nature and Whether a incurred in incurred in Related to
Grants Issuer Reason the profit and
type special grant the current the last asset/income
loss of the
period period
year
Grants
received as a
result of
Reward for Panyu compliance
local District with local
contributions Bureau of government Related to
Reward No No 4,313,900.00
of Development policies such income
headquarter and Reform, as investment
enterprises Guangzhou attraction and
other local
support
policies
46. Non-operating expenses
Unit: RMB
Amount recognized as profit or
Item Incurred in the current period Incurred in the prior period
loss of the current period
External donations 5,175,531.18 253,840.00 5,175,531.18
Loss from retirement of
157,289.86 51,998.80 157,289.86
non-current assets
214
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Loss of deposit for early
101,400.00 950,297.51 101,400.00
termination of lease
Others 179,121.61 399,830.63 179,121.61
Total 5,613,342.65 1,655,966.94 5,613,342.65
47. Income tax expenses
(1) Table of income tax expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Current income tax expense 134,891,825.25 108,367,291.57
Deferred income tax expense -26,762,252.49 -22,041,946.64
Total 108,129,572.76 86,325,344.93
(2) Adjustment process of accounting profits and income tax expenses
Unit: RMB
Item Incurred in the current period
Total profit 732,670,506.21
Income tax expenses calculated at the statutory/applicable tax
109,900,575.95
rate
Impacts of different tax rates applied to subsidiaries 6,099,398.29
Impacts of adjustments to income taxes during the prior period -197,758.56
Impacts of non-deductible costs, expenses and losses 1,512,686.15
Impact of above-rate deduction of R&D expenses -9,185,329.07
Income tax expenses 108,129,572.76
Other description
48. Other comprehensive income
Please refer to Note VII (30) for details.
49. Items of the cash flow statement
(1) Cash received related to other operating activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
215
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Government grants 14,577,835.79 19,663,426.38
Deposits for bank acceptance bills 14,313,046.91
Interest income 6,788,310.98 7,092,258.43
Operation-related deposits 18,438,232.59 12,845,131.44
Others 735,725.51 298,586.68
Total 40,540,104.87 54,212,449.84
Description of cash received related to other operating activities:
(2) Cash payments related to other operating activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Margins and deposits 16,301,529.53 11,194,741.99
Period expense for cash payment 356,681,090.61 249,168,287.19
Deposits for bank acceptance bills 3,835,587.75
External donations 5,175,531.18 253,840.00
Total 381,993,739.07 260,616,869.18
(3) Cash received related to other investing activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Structured deposits and wealth
3,130,000,000.00 1,770,000,000.00
management products
Total 3,130,000,000.00 1,770,000,000.00
(4) Cash payments related to other investing activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Structured deposits, time deposits and
3,110,000,000.00 2,740,000,000.00
wealth management products
Security deposits 29,000,000.00 695,324.10
Total 3,139,000,000.00 2,740,695,324.10
(5) Cash payments related to other financing activities
Unit: RMB
216
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Item Incurred in the current period Incurred in the prior period
Rental fees 58,595,168.29
Service charge for dividend distribution 275,573.01
Others 1,391,573.94
Total 58,595,168.29 1,667,146.95
Description of cash paid related to other financing activities:
50. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
Unit: RMB
Supplementary information Amount of the current period Amount of last period
1 Reconciliation of net profit to cash flows
-- --
from operating activities:
Net Profit 624,540,933.45 498,802,372.48
Plus: Provisions for asset impairment 78,369,091.97 53,717,657.47
Depreciation of fixed assets, oil
and gas assets and productive biological 23,446,859.64 19,595,615.37
assets
Depreciation of right-of-use assets 187,984,952.77
Intangible asset amortization 10,178,688.43 8,488,245.63
Amortization of long-term prepaid
71,980,366.17 65,468,237.02
expenses
Losses from disposal of fixed
assets, intangible assets and other long-lived 253,775.79 2,728.63
assets (“-” indicates income)
Losses from fixed assets write-off
157,289.86 51,998.80
(“-” indicates income)
Losses from changes in fair value
-3,424,832.00 -425,333.33
(“-” indicates income)
Finance expenses (“-” indicates
39,729,487.13 16,273,815.74
income)
Investment losses (“-” indicates
-38,815,870.23 -24,501,459.48
income)
Decrease in deferred tax assets (“-”
-27,363,238.95 -22,900,322.13
indicates increase)
Increase in deferred tax liabilities 600,986.46 858,375.49
217
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
(“-” indicates decrease)
Decrease in inventories (“-”
-131,218,395.92 -15,618,773.41
indicates increase)
Decrease in operating receivables
-17,729,808.30 -96,113,948.24
(“-” indicates increase)
Increase in operating payables (“-”
78,833,351.80 133,150,389.16
indicates decrease)
Others
Net cash flow from operating
897,523,638.07 636,849,599.20
activities
2 Significant investment and financing
-- --
activities not involving cash:
Conversion of debt to capital
Convertible corporate bonds due within
one year
Fixed assets acquired under finance
lease
Right-of-use assets added in the period 123,036,592.73
3 Net changes in cash and cash equivalents: -- --
Balance of cash at the end of the period 1,058,018,706.05 569,284,546.79
Less: Balance of cash at the beginning
569,284,546.79 451,617,760.46
of the period
Plus: Balance of cash equivalents at the
end of the period
Less: Balance of cash equivalents at the
beginning of the period
Net increase in cash and cash
488,734,159.26 117,666,786.33
equivalents
(2) Composition of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 1,058,018,706.05 569,284,546.79
Including: Cash on hand 142,548.00 135,833.35
Bank deposits always available for
1,057,876,158.05 569,148,713.44
payment
III. Balance of Cash and Cash Equivalents at 1,058,018,706.05 569,284,546.79
218
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
the End of the Period
Other description:
—The balance of cash and cash equivalents at the end of the period has deducted interests receivable from bank deposits at
RMB11,359,027.78 and security deposits for bank acceptance bills at RMB13,334,484.75.
51. Assets with restricted right to use or ownership
Unit: RMB
Item Book value at the end of the period Reason for restriction
Monetary funds 13,334,484.75 Deposits for bank acceptance bills
Total 13,334,484.75 --
52. Government grants
(1) Basic information on government grants
Unit: RMB
Amount recognized as profit or
Category Amount Reporting items
loss for the current period
Award for innovation park 5,994,749.00 Other income 5,994,749.00
Financial support fund 3,217,416.00 Other income 3,217,416.00
Tax subsidy 1,834,000.00 Other income 1,834,000.00
Subsidy for industrial
innovation capacity building
987,300.00 Other income 987,300.00
(industrial design capacity
improvement)
Subsidy for office space rental 909,784.00 Other income 909,784.00
Award for leading innovation
500,000.00 Other income 500,000.00
team
Special fund for the
development of medium, small 409,000.00 Other income 409,000.00
and micro enterprises
Award for high-tech enterprise
400,000.00 Other income 400,000.00
certification
Award for high-tech enterprise 200,000.00 Other income 200,000.00
Subsidy for job stabilization 65,586.79 Other income 65,586.79
Award for headquarter
enterprises (award for mid-level 60,000.00 Other income 60,000.00
and senior managers)
219
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Total 14,577,835.79 - 14,577,835.79
VIII. Changes in the Consolidated Scope
1. Disposal of subsidiaries
Whether there is situation that one disposal of investment in a subsidiary leads to a loss of control
□ Yes √ No
Whether there is situation that the disposal of investment in a subsidiary is achieved in stages through multiple transactions while the
control is lost in the reporting period
□ Yes √ No
2. Changes in the scope of consolidation due to other reasons
Newly established subsidiaries
During the reporting period, one new subsidiary was added to the Company’s consolidation scope, i.e. Ningbo BIEM.L.FDLKK
Smart Technology Co., Ltd., which is a wholly-owned subsidiary of the Company established in April 21, 2021.
IX. Equities in Other Entities
1. Equities in subsidiaries
(1) Composition of the enterprise group
Name of Main business Registered Principal Shareholding percentage
Obtaining method
subsidiary address address businesses Direct Indirect
Guangzhou
BIEM.L.FDLKK
Rental and Investment and
Business Guangzhou Guangzhou 100.00%
business services establishment
Consulting Co.,
Ltd.
Guangzhou
BIEM.L.FDLKK
Rental and Investment and
Supply Chain Guangzhou Guangzhou 100.00%
business services establishment
Management Co.,
Ltd.
Ningbo
BIEM.L.FDLKK Supply chain
Investment and
Supply Chain Ningbo Ningbo management and 100.00%
establishment
Management Co., business services
Ltd.
220
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Xuzhou
BIEM.L.FDLKK Supply chain
Investment and
Supply Chain Xuzhou Xuzhou management and 100.00%
establishment
Management Co., business services
Ltd.
Ningbo
BIEM.L.FDLKK Supply chain
Investment and
Smart Ningbo Ningbo management and 100.00%
establishment
Technology Co., business services
Ltd.
Guangzhou
BIEM.L.FDLKK
Ejam Equity
Investment and
Investment Guangzhou Guangzhou Finance industry 99.01%
establishment
Partnership
(Limited
Partnership)
Description of the difference between the percentage of shares held in a subsidiary and the percentage of voting rights
Basis for holding 50% or less than of the voting rights but controlling the investee, or holding 50% or more of the voting rights but
not controlling the investee:
(2) Important non-wholly-owned subsidiaries
Unit: RMB
Profit and loss
Dividends declared to
Shareholding percentage attributable to minority Closing balance of equity
Name of subsidiary minority shareholders in
of minority shareholders shareholders in the of minority shareholders
the period
period
Guangzhou
BIEM.L.FDLKK Ejam
Equity Investment 0.99% -549.55 967,735.13
Partnership (Limited
Partnership)
(3) Main financial information of important non-wholly-owned subsidiaries
Unit: RMB
Closing balance Opening balance
Name of
Non-curr Non-curr Non-curr Non-curr
subsidiar Current Total Current Total Current Total Current Total
ent ent ent ent
y assets assets liabilities liabilities assets assets liabilities liabilities
assets liabilities assets liabilities
221
BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Guangzh
ou
BIEM.L.
FDLKK
Ejam
Equity
822,722. 98,099,3 98,922,0 1,181,10 1,181,10 876,232. 92,785,3 93,661,6 1,179,10 1,179,10
Investme
25 00.47 22.72 1.00 1.00 68 68.67 01.35 1.00 1.00
nt
Partnersh
ip
(Limited
Partnersh
ip)
Unit: RMB
Incurred in the current period Incurred in the prior period
Cash flows Cash flows
Name of Total Total
from from
subsidiary Revenue Net Profit comprehensi Revenue Net Profit comprehensi
operating operating
ve income ve income
activities activities
Guangzhou
BIEM.L.FDL
KK Ejam
Equity
-55,510.43 5,258,421.37 -53,510.43 -2,025,461.62 -8,638,663.32 -6,461.62
Investment
Partnership
(Limited
Partnership)
Other description:
X. Risks Associated with Financial Instruments
The Company may face various risks related to financial instruments in the course of operations, mainly including credit risks,
market risks and liquidity risks. The management of the Company is fully responsible for determining risk management objectives
and policies, and assumes ultimate responsibility for the risk management objectives and policies. The overall goal of risk
management is to develop risk management policies that minimize risks without unduly affecting the Company’s competitiveness
and resilience. The goal and policies of the Company’s risk management is to strike a proper balance between risks and gains and to
minimize the negative impact of risks on the business performance of the Company while maximizing the interests of shareholders
and other equity investors. Based on this risk management goal, the basic strategy of the Company’s risk management is to determine
and analyze all kinds of risks faced by the Company, clarify the minimum of risk acceptance and conduct risk management, and
monitor risks of all kinds in a timely and reliable manner to control risks within the limits.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
(I) Credit risk
Credit risk refers to the risk of financial losses of one party caused by the failure of the other party to perform its obligations. To
reduce credit risk, the Company has established relevant internal control policies responsible for determining credit limits,
conducting credit approvals, including external credit ratings and, in some cases, bank credit certificates (when such information is
available), and performing other monitoring procedures to ensure that necessary action is taken to recover overdue claims. Therefore,
the management of the Company believes that the credit risk assumed by the Company has been greatly reduced.
The Company’s credit risk mainly arises from bank deposits, financial assets held for trading, accounts receivable, other receivables,
etc. The credit risk of these financial assets originates from the default of the counterparty, and the maximum risk exposure is equal
to the book value of these instruments.
1. Liquid funds of the Company are deposited in banks with high credit ratings, so the credit risk of liquid funds is low.
2. The Company has set aside bad debt reserves according to accounting policies on the balance sheet date.
(II) Liquidity risk
Liquidity risk refers to the risk of capital shortage when an enterprise fulfills its obligation to settle accounts by delivering cash or
other financial assets. The Company has formulated an internal control system related to cash management, regularly prepares rolling
fund budgets, and monitors short-term and long-term liquidity needs in real time. The goal is to use bank loans, commercial credits
and other means to maintain a balance between financing continuity and flexibility.
XI. Disclosure of Fair Value
1. Closing fair values of assets and liabilities measured at fair value
Unit: RMB
Closing fair value
Item Fair value measurement Fair value measurement Fair value measurement
Total
with Level 1 inputs with Level 2 inputs with Level 3 inputs
I. Recurring Fair Value
-- -- -- --
Measurement
(I) Financial assets held
1,338,986.96 633,424,832.00 634,763,818.96
for trading
1. Financial assets
measured at fair value 1,338,986.96 633,424,832.00 634,763,818.96
through profit or loss
(III) Investment in other
98,099,300.47 98,099,300.47
equity instruments
Total recurring assets
1,338,986.96 633,424,832.00 98,099,300.47 732,863,119.43
measured at fair value
II. Non-recurring Fair -- -- -- --
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Value Measurement
2. Basis for determining the market price of recurring and non-recurring fair value measurements with
Level 1 inputs
If there is an active market for a financial instrument, the Company establishes its fair value by using quoted price in the active
market.
3. Qualitative and quantitative information on important parameters and valuation techniques used for
recurring and non-recurring fair value measurements with Level 2 inputs
The fair value of wealth management products of banks with recurring and non-recurring measurements is determined based on the
expected rate of return of the product.
4. Qualitative and quantitative information on important parameters and valuation techniques used for
recurring and non-recurring fair value measurements with Level 3 inputs
If there is no active market, the Company establishes fair value by using valuation techniques. Valuation models mainly include the
discounted cash flow model and market comparable company model. Important parameters of valuation techniques mainly include
risk-free interest rate, benchmark interest rate, exchange rate, credit spread, liquidity premium, EBIDA multiplier, etc.
The fair value of equity investments in Shenzhen Youanmi Technology Co., Ltd.is measured using the latest financing price method.
For equity investments in Fast Fashion (Guangzhou) Co., Ltd., considering that there have been no significant changes in its assets,
liabilities and operations, the cost method is used to reasonably estimate the fair value.
5. Adjustment information and sensitivity analysis of unobservable parameters between the opening and
closing values of recurring fair value measurements with Level 3 inputs
None
6. For recurring fair value measurements with change of levels in the period, reasons for such change and
policies for determining the time of change
There was no change of levels for recurring fair value measurements during the reporting period.
7. Changes in valuation techniques within the reporting period and reasons for such changes
None
8. Fair values of financial assets and financial liabilities not measured at fair value
Financial assets and financial liabilities of the Company not measured at fair value mainly comprise monetary funds, accounts
receivable, other receivables, notes payable, accounts payable, other payables, etc. For such assets and liabilities, their carrying
amount is very close to their fair value.
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XII. Related Parties and Related Party Transactions
1. Information on the Parent Company of the Company
(I) Actual controller of the Company
Name Relationship with Shareholding percentage in the Percentage of voting right in the Company
related party Company (%) (%)
Xie Bingzheng Shareholder 39.28 39.28
Feng Lingling Shareholder 3.57 3.57
Xie Bingzheng and Feng Lingling, who are a couple, directly hold 42.85% of the Company’s shares, and Xie Bingzheng indirectly
holds 0.04% through Guangzhou Jinan Investment Co., Ltd.; Xie Bingzheng and Feng Lingling are the actual controllers of the
Company.
2. Information on subsidiaries of the Company
See “Note IX. 1. Equities in Other Entities” for detailed information on the subsidiaries of the Company.
3. Information on other related parties
Name of other related parties Relationship between other related parties and the Company
A company controlled by the relative of the Company’s actual
Hongzhou Xindu Trading Co., Ltd.
controller
A company controlled by the relative of the Company’s actual
Hongzhou Gejiu Xuecheng Garment Co., Ltd.
controller
A company controlled by the relative of the Company’s actual
Guangzhou Yixiang Garment Co., Ltd.
controller
4. Information on related party transactions
(1) Related party transactions for procurement and sale of goods, and provision and acceptance of labor
services
Procurement of goods/acceptance of labor services
Unit: RMB
Content of related Incurred in the Approved transaction Whether to outstrip Incurred in the prior
Related party
party transaction current period limit the transaction limit period
Guangzhou Yixiang Procurement of
34,420,367.36 46,000,000.00 No 18,973,179.55
Garment Co., Ltd. goods
Table of sale of goods/provision of labor services
Unit: RMB
Related party Content of related party Incurred in the current period Incurred in the prior period
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
transaction
Hongzhou Xindu Trading Co.,
Garment 1,287,126.22 9,780,908.58
Ltd.
Hongzhou Gejiu Xuecheng
Garment 7,258,812.08
Garment Co., Ltd.
Explanation of the related party transactions for purchase and sale of goods, and provision and acceptance of labor services
(2) Remuneration for key managers
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Remuneration for key managers 5,447,666.46 4,724,160.13
5. Receivables from and payables to related parties
(1) Receivables
Unit: RMB
Closing balance Opening balance
Project Related party Impairment Impairment
Book balance Book balance
provision provision
Guangzhou Yixiang
Prepayments 642,690.33 2,307,459.87
Garment Co., Ltd.
(2) Payables
Unit: RMB
Book balance at the end of the Book balance at the beginning
Project Related party
period of the period
Guangzhou Yixiang Garment
Accounts payable 908,712.66
Co., Ltd.
Hongzhou Xindu Trading Co.,
Contract liabilities 1,288,607.60
Ltd.
Hongzhou Gejiu Xuecheng
Contract liabilities 1,568,366.50
Garment Co., Ltd.
Hongzhou Xindu Trading Co.,
Other payables 554,909.00
Ltd.
Hongzhou Gejiu Xuecheng
Other payables 206,668.66
Garment Co., Ltd.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
XIII. Share-based Payment
1. Overall information on share-based payment
□ Applicable √ Not applicable
2. Equity-settled share-based payment
□ Applicable √ Not applicable
3. Cash-settled share-based payment
□ Applicable √ Not applicable
4. Revision and termination of share-based payment
Not applicable
5. Others
Not applicable
XIV. Commitments and Contingencies
1. Significant commitments
Significant commitments on the balance sheet date
As of December 31, 2021, significant capital expenditure commitments that the Company has signed but do not need to present
on the balance sheet are as follows:
Unit: RMB
Item December 31, 2021
Properties and buildings 123,245,923.28
Total 123,245,923.28
2. Contingencies
(1) Significant contingent matters on the balance sheet date
The Company had no significant contingent matters that need to be disclosed as at December 31, 2021.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
(2) Explanations are also necessary if the Company has no significant contingent matters to be disclosed
There are no significant contingent matters to be disclosed in the Company.
XV. Events after Balance Sheet Date
1. Profit distribution
Unit: RMB
Profits or dividends proposed to be distributed 171,212,125.20
Profits or dividends distributed after deliberation, approval and
171,212,125.20
announcement
2. Explanation on other events after the balance sheet date
(I) Profit distribution
The Company convened a Board meeting on April 15, 2022, which deliberated and approve the Proposal on 2020 Profit Distribution
Plan. According to the proposal, the Company plans to distribute a cash dividend of RMB3.0 (tax inclusive) for every 10 shares to all
shareholders based on a total share capital of 570,707,084 shares as at March 31, 2022, with a total amount of RMB171,212,125.20;
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. Where there are any changes to the Company’s total share capital after the announcement of the
profit distribution proposal and before the equity registration date for actual implementation, the Company will maintain the same
distribution ratio per share and adjusts the total distribution amount accordingly. The profit distribution proposal can be implemented
only after being approved by the general meeting of shareholders.
(II) Explanation on other events after the balance sheet date
The Company convened the 9th meeting of the Fourth Board of Directors on January 24, 2022, which deliberated and approved the
Proposal on Early Call of “BYZZ”. The Company decided to exercise the conditional call option and redeem all “BYZZ” that are
registered in the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited and not converted into shares
after the closing of the market on the redemption registration date at a price of bond par value plus accrued interest of the current
period. As at the market closing on February 22, 2022, still 3,058 “BIEM convertible bonds” were not converted to shares, so the
Company redeemed 3,058 bonds. At a call price of RMB100.42 per bond (face value plus current accrued interest; the interest rate of
the period was 0.6% and the accrued interest included tax; the call price after tax deduction was subject to the price approved by
China Securities Depository and Clearing Corporation Limited), the Company paid totally RMB307,084.36 for the redemption. The
total face value of the redeemed “BIEM convertible bonds” is RMB305,800.00, accounting for 0.04% of the total bonds issued. Upon
completion, all the convertible bonds have been redeemed and the BIEM convertible bonds were delisted as they were no longer
qualified for listing.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
XVI. Other Significant Matters
1. Corrections to previous accounting errors
The Company convened the 10th meeting of the Fourth Board of Directors and the 7th meeting of the Fourth Board of Supervisors
on March 9, 2022, which deliberated and approved the Proposal on Corrections to Previous Accounting Errors. The proposal agreed
to make corrections to relevant account errors in accordance with relevant provisions of the Accounting Standards for Business
Enterprises No. 28 - Changes in accounting policies and estimates, and correction of errors and the Rules No. 19 on the Preparation
of Information Disclosure Documents by Companies That Offer Securities to the Public - Correction of Financial Information and
Relevant Disclosure, which involves the 2020 consolidated financial statements and financial statements of the parent company.
Huaxing Certified Public Accountants LLP engaged by the Company has issued a special explanation on the corrections to the 2002
financial statements. For details, please refer to the Audit Report of the Special Explanation on Correction of Accounting Errors in
Previous Accounting Periods of BIEM.L.FDLKK Garment Co., Ltd. (HX Special Doc. [2022] No.22000460028), which was
published on www.cninfo.com.cn on March 9, 2022.
2. Segment information
(1) Other descriptions
The Company has no distinguishable business segment or regional segment that independently assumes risks and awards different
from other segments.
3. Leases
Information disclosure of the Lessee
(1) Information of the lessee
Unit: RMB
Item Amount
Interest expense of lease liabilities 21,058,743.02
Expenses of short-term leases included in relevant asset cost or profit or loss through the simplified 1,933,629.00
treatment method
Expenses of low-value asset leases included in relevant asset cost or profit or loss through the 2,645,168.54
simplified treatment method (except for the short-term lease expenses of low-value assets)
Variable lease payments that are not included in the measurement of lease liabilities but profit or 282,671,218.34
loss
Including: Proportion from leaseback transactions
Income from sublease of right-of-use assets
Total cash outflow related to leases 62,889,025.21
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Gain or loss from leaseback transactions
Cash inflow from leaseback transactions
Cash outflow from leaseback transactions
Others
4. Others
The Company had no other significant matters that need to be disclosed during the reporting period.
XVII. Notes to Major Items of Financial Statements of the Parent Company
1. Accounts receivable
(1) Accounts receivable disclosure by category
Unit: RMB
Closing balance Opening balance
Impairment Impairment
Book balance Book balance
Category provision Book provision
Book value
Percenta Provision value Percentag Provision
Amount Amount Amount Amount
ge ratio e ratio
Accounts receivable
for which bad debt 618,282. 618,282. 3,026,981 2,562,695
0.21% 100.00% 0.94% 84.66% 464,286.72
reserve is set aside 56 56 .81 .09
individually
Including:
Accounts receivable
for which bad debt 295,013, 15,296,6 279,717,0 318,875,6 18,278,51 300,597,09
99.79% 5.19% 99.06% 5.73%
reserve is set aside in 683.59 26.45 57.14 01.30 1.03 0.27
portfolios
Including:
Clothing sales 295,013, 15,296,6 279,717,0 318,875,6 18,278,51 300,597,09
99.79% 5.19% 99.06% 5.73%
business 683.59 26.45 57.14 01.30 1.03 0.27
295,631, 15,914,9 279,717,0 321,902,5 20,841,20 301,061,37
Total 100.00% 5.38% 100.00% 6.47%
966.15 09.01 57.14 83.11 6.12 6.99
Bad debt reserve by item:
Unit: RMB
Closing balance
Name
Book balance Impairment provision Ratio of provision Reason for provision
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
It is expected that the
Institution 1 618,282.56 618,282.56 100.00% amount cannot be
recovered.
Total 618,282.56 618,282.56 -- --
Bad debt reserve by portfolio:
Unit: RMB
Closing balance
Name
Book balance Impairment provision Ratio of provision
Within 1 year 294,480,218.78 14,763,161.64 5.01%
1-2 years 190,299.54 190,299.54 100.00%
2-3 years
Over 3 years 343,165.27 343,165.27 100.00%
Total 295,013,683.59 15,296,626.45 --
Description of reason for the portfolio:
If the bad debt reserve of accounts receivable is set aside according to general model of expected credit loss, please refer to the
disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 294,480,218.78
1 to 2 years 808,582.10
Over 3 years 343,165.27
3 to 4 years 2,173.75
4 to 5 years 132,467.43
Over 5 years 208,524.09
Total 295,631,966.15
(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Bad debt reserve of the reporting period:
Unit: RMB
Amount of change in the reporting period
Category Opening balance Recovery or Closing balance
Provision Write-off Others
reversal
Bad debt reserve
20,841,206.12 2,224,051.58 2,702,245.53 15,914,909.01
for accounts
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
receivable
Total 20,841,206.12 2,224,051.58 2,702,245.53 15,914,909.01
— Due to debt restructuring, the Company wrote off bad debt reserve for accounts receivable at an amount of RMB2,702,245.53 in
2021.
(3) Accounts receivable actually written off in the reporting period
Unit: RMB
Item Write-off amount
Write-offs of important accounts receivable:
Unit: RMB
Whether the amount
Nature of accounts
Name of institution Write-off amount Write-off reason Write-off procedures is caused by related
receivable
party transaction
Description on the write-offs of accounts receivables:
As of December 31, 2021, the Company did not write off any accounts receivable.
(4) Top five debtors in closing balance of accounts receivable
Unit: RMB
Percentage in total balance of
Balance of accounts receivable Balance for bad debt reserve at
Name of institution accounts receivable at the end
at the end of the period the end of the period
of the period
Institution 1 17,159,920.18 5.80% 858,111.72
Institution 2 7,928,133.02 2.68% 400,747.57
Institution 3 7,847,238.43 2.65% 392,361.92
Institution 4 6,665,554.40 2.25% 333,423.95
Institution 5 5,171,664.81 1.75% 258,583.24
Total 44,772,510.84 15.13% --
(5) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of accounts
receivable
As of December 31, 2021, the Company had no assets and liabilities that were formed by the transfer of accounts receivable and its
continuing involvement.
(6) Accounts receivable derecognized due to transfer of financial assets
As of December 31, 2021, no accounts receivable was derecognized due to transfer of financial assets.
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
2. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 93,306,779.94 60,685,628.95
Total 93,306,779.94 60,685,628.95
(1) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Book balance at the beginning of the
Nature Book balance at the end of the period
period
Margins and deposits 88,690,812.02 52,061,452.75
Related-party amount within the
4,945,158.86 8,308,572.82
consolidated scope
Employee reserve fund 3,069,483.92 2,348,617.12
Others 1,251,936.78 723,673.43
Total 97,957,391.58 63,442,316.12
2) Bad debt reserve
Unit: RMB
Phase I Phase II Phase III
Bad debt reserve Lifetime ECL (without Lifetime ECL (with credit Total
12-month ECL
credit impairment) impairment)
Balance as at January 1,
2,756,687.17 2,756,687.17
2021
Balance as at January 1,
2021 in the reporting —— —— —— ——
period
Provision in the reporting
1,893,924.47 1,893,924.47
period
Balance as at December
4,650,611.64 4,650,611.64
31, 2021
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Disclose by aging
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 97,957,391.58
Total 97,957,391.58
3) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Bad debt reserve of the reporting period:
Unit: RMB
Amount of change in the reporting period
Opening
Category Recovery or Closing balance
balance Provision Write-off Others
reversal
Bad debt reserve by
2,756,687.17 1,893,924.47 4,650,611.64
portfolio
Total 2,756,687.17 1,893,924.47 4,650,611.64
4) Other receivables actually written off in the reporting period
Unit: RMB
Item Write-off amount
Description of write-offs of important other receivables:
Unit: RMB
Whether the amount
Nature of other
Name of institution Write-off amount Write-off reason Write-off procedures is caused by related
receivables
party transaction
Description on the write-offs of other receivables:
No other receivables were written off during the reporting period.
5) Top five debtors in closing balance of other accounts receivable
Unit: RMB
Percentage in total
Balance of bad debt
Nature of the balance of other
Name of institution Closing balance Aging reserve at the end of
amount receivables at the end
the period
of the period
Margins and
Institution 1 29,000,000.00 Within 1 year 29.60% 1,450,000.00
deposits
Margins and
Institution 2 7,441,978.00 Within 1 year 7.60% 372,098.90
deposits
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
Margins and
Institution 3 5,560,610.00 Within 1 year 5.68% 278,030.50
deposits
Margins and
Institution 4 4,288,619.00 Within 1 year 4.38% 214,430.95
deposits
Related-party
Wholly-owned
amount within the 3,936,779.90 Within 1 year 4.02%
subsidiary
consolidated scope
Total -- 50,227,986.90 -- 51.28% 2,314,560.35
6) Receivables involving government grants
As of December 31, 2021, the Company had no receivables involving government grants.
7) Other receivables derecognized due to the transfer of financial assets
As of December 31, 2021, no other receivable was derecognized due to transfer of financial assets.
8) Amount of assets and liabilities that are formed by the transfer of other receivables and the Company’s
continuing involvement
As of December 31, 2021, the Company had no assets and liabilities that were formed by the transfer of other receivables and its
continuing involvement.
3. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment in
111,000,000.00 111,000,000.00 111,000,000.00 111,000,000.00
subsidiaries
Total 111,000,000.00 111,000,000.00 111,000,000.00 111,000,000.00
(1) Investment in subsidiaries
Unit: RMB
Opening Increase/decrease in the period Closing balance
Closing balance
Investee balance (book Increase in Decrease in Impairment of impairment
Others (book value)
value) investment investment Provision provision
Guangzhou
1,000,000.00 1,000,000.00
BIEM.L.FDLK
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
K Business
Consulting Co.,
Ltd.
Guangzhou
BIEM.L.FDLK
K Supply Chain 5,000,000.00 5,000,000.00
Management
Co., Ltd.
Guangzhou
BIEM.L.FDLK
K Ejam Equity
100,000,000.0
Investment 100,000,000.00
0
Partnership
(Limited
Partnership)
Xuzhou
BIEM.L.FDLK
K Supply Chain 5,000,000.00 5,000,000.00
Management
Co., Ltd.
111,000,000.0
Total 111,000,000.00
0
4. Revenue and cost of revenue
Unit: RMB
Incurred in the current period Incurred in the prior period
Item
Revenue Cost Revenue Cost
Principal business 2,719,943,987.32 908,931,832.35 2,303,301,051.46 750,466,115.63
Other businesses 45,269.82 25,160.38
Total 2,719,989,257.14 908,931,832.35 2,303,326,211.84 750,466,115.63
5. Return on investment
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Income from wealth management products 38,711,860.90 24,501,459.48
Gain from debt restructuring 104,009.33
Total 38,815,870.23 24,501,459.48
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
XVIII. Supplementary Information
1.List of non-recurring profits and losses of the reporting period
√ Applicable □ Not applicable
Unit: RMB
Item Amount Description
Profits/losses from the disposal of
-411,065.65
non-current asset
Governmental grants reckoned into current
profits/losses (not including grants enjoyed
in quota or ration according to national 14,577,835.79
standards, which are closely relevant to the
company’s normal business)
Gain or loss from debt restructuring 104,009.33
Gain or loss from changes in fair value of
financial assets and financial liabilities held
for trading, and investment income from the
disposal of financial assets and financial
3,424,832.00
liabilities held for trading and
available-for-sale financial assets, excluding
the effective hedging business related to the
normal operation of the Company
Reversal of write-down for receivables
1,944,412.53
whose impairment was tested individually
Other non-operating revenue and expenses
-4,924,109.89
except for the aforementioned items
Other profit and loss items that meet the
38,711,860.90
definition of non-recurring profit and loss
Less: Influence of income tax 9,169,558.51
Total 44,258,216.50 --
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 and loss.
Descriptions where the Company defines any non-recurring profit and loss items listed in the No. 1 Explanatory 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
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BIEM.L.FDLKK GARMENT CO., LTD. 2021 Annual Report
2. Return on net assets and earnings per share
Earnings per share
Profit in the reporting period Weighted average return on net assets Basic earnings per share Diluted earnings per
(RMB/share) share (RMB/share)
Net profit attributable to the
ordinary shareholders of the 21.73% 1.15 1.15
Company
Net profit attributable to the
ordinary shareholders of the
20.19% 1.07 1.07
Company after excluding
non-recurring profit and loss
3. 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
(2) Net profit and net asset differences under foreign accounting standards and Chinese Accounting
Standards (CAS)
□ Applicable √ Not applicable
(3) Explanation of reasons for the differences between accounting data disclosed under domestic and
overseas accounting standards. If differences are adjusted based on data audited by overseas audit
institutions, the name of the institution should be noted.
4. Others
BIEM.L.FDLKK Garment Co., Ltd.
Chairman: Xie Bingzheng
April 15, 2022
238
