BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
2022 Annual Report
April 2023
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
2022 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 the 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 Zhihui, the person in
charge of the accounting department of the Company, declared that they
warrant the truthfulness, accuracy and completeness of the financia l
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 shall comply with the information disclosure requirements of
the textile and garment-related industries as stipulated in the SZSE Guidelines
No. 3 for Self-discipline and Supervision of Listed Companies — Industry
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Information Disclosure.
The Company has described the 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 December 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. 2022 Annual Report
Contents
Section I Important Notice, Contents and Definitions................................................................................................... 2
Section II Company Profile and Key Financial Indicators .......................................................................................... 7
Section III Discussion and Analysis of the Management ............................................................................................ 12
Section IV Corporate Governance ................................................................................................................................... 59
Section V Environmental and Social Responsibilities.................................................................................................. 81
Section VI Significant Events............................................................................................................................................. 83
Section VII Changes in Shareholding and Information of Shareholders ............................................................... 90
Section VIII Particulars of Preference Shares............................................................................................................... 98
Section IX Particulars of Bonds ........................................................................................................................................ 99
Section X Financial Report .............................................................................................................................................. 100
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Documents Available for Inspection
(1) Financial statements affixed with the official stamps and 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 CPA firm as well as the 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 the 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. 2022 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
Articles of Association of BIEM.L.FDLKK Garment Co.,
Articles of Association
Ltd.
RMB-denominated ordinary shares with a par value of
A shares
RMB1.00 per 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 human body,
Garment including clothes, shoes, hats, socks, gloves, scarves, ties,
bags, etc.
A model where the Company opens direct retail terminals,
Direct sale is responsible 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 period
Franchise
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
Joint operation Company after deducting a certain percentage from the
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.
Manufacturing enterprises that process fabrics and
Garment factory
accessories into garments
A collective term for fabric suppliers, accessory suppliers
Supplier
and garment factories
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 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
比音勒芬服饰股份有限公司
Company
Abbreviation of Chinese
比音勒芬
name 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.
Office address No. 608 East Xingye Avenue, Nancun Town, Panyu District, Guangzhou
Postal code of office address 511442
Company website www.biemlf.com
Email investor@biemlf.com
II. Contact Persons and Contact Methods
Secretary 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 Town, Panyu District, Guangzhou
Tel 020-39952666 020-39952666
Fax 020-39958289 020-39958289
Email investor@biemlf.com investor@biemlf.com
III. Information Disclosure and Location for Inspection of Documents
Website of the stock exchange on which the annual report is
Shenzhen Stock Exchange (http://www.szse.cn)
published
Name and website of the media on which the annual report is Securities Times, Shanghai Securities News, China Securities
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
published Journal, 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
Unified Social Credit Code 914401017462725710
Changes in the Company's main businesses since listing (if
None
any)
Changes of controlling shareholder (if any) None
V. Other Relevant Information
CPA firm engaged by the Company
Name Huaxing Certified Public Accountants LLP
Floor 7-9, Block B, Zhongshan Building, No. 152 Hudong
Office address
Road, Gulou District, Fuzhou City, Fujian Province
Name of signing accountants Chen Danyan, He Ting
Sponsor engaged by the Company to fulfill continuous supervision obligation during the reporting period
□ Applicable Not applicable
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
2022 2021 Changes over last year 2020
Revenue (RMB) 2,884,841,760.82 2,719,989,257.14 6.06% 2,303,326,211.84
Net profit attributable
to shareholders of the 727,597,822.61 624,541,483.00 16.50% 498,822,424.55
listed company (RMB)
Net profit attributable
to shareholders of the
listed company after
670,578,894.32 580,283,266.50 15.56% 463,280,686.95
deducting non-
recurring profit and
loss (RMB)
Net cash flow from
operating activities 942,236,033.82 897,523,638.07 4.98% 636,849,599.20
(RMB)
Basic earnings per
1.28 1.15 11.30% 0.95
share (RMB/share)
Diluted earnings per
1.28 1.15 11.30% 0.94
share (RMB/share)
Weighted average
19.35% 21.73% -2.38% 22.97%
return on equity
End of 2022 End of 2021 Changes over the end End of 2020
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
of last year
Total assets (RMB) 5,578,885,921.48 4,862,956,852.42 14.72% 3,748,598,697.97
Net assets attributable
to shareholders of the 4,130,033,512.93 3,245,441,596.49 27.26% 2,416,825,789.61
listed company (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
There is no such differences during the reporting period
2. Net profit and net asset differences under foreign accounting standards and Chinese Accounting
Standards (CAS)
□ Applicable Not applicable
There is no such differences during the reporting period
VIII. Major Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Revenue 810,420,572.37 502,820,028.70 911,552,297.05 660,048,862.70
Net profit attributable
to shareholders of the 212,692,757.27 82,131,719.86 278,666,725.94 154,106,619.54
listed company
Net profit attributable
to shareholders of the
listed company after
201,656,919.76 63,812,113.24 268,496,069.34 136,613,791.98
deducting non-
recurring profit and
loss
Net cash flows from
466,607,840.66 50,446,630.57 273,682,048.04 151,499,514.55
operating 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
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
IX. Non-recurring Items and Amounts
Applicable □ Not applicable
Unit: RMB
Item Amount in 2022 Amount in 2021 Amount in 2020 Description
Gains or losses from
the disposal of non-
current asset (including
1,757,902.41 -411,065.65 -54,727.43
the write-off that
accrued for impairment
of assets)
Governmental grants
reckoned into current
profits/losses
(excluding grants
enjoyed in quota or
ration according to 23,247,374.45 14,577,835.79 19,663,426.38
national standards,
which are closely
relevant to the
Company’s normal
business)
Gains or losses from
104,009.33
debt restructuring
Gains or losses 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 liabilities held 5,219,168.76 3,424,832.00 425,333.33
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 whose
1,944,412.53
impairment was tested
individually
Other non-operating
revenue and expenses
441,307.62 -4,924,109.89 -980,592.68
except for the
aforementioned items
Other profit and loss
items that qualify the
39,121,856.42 38,711,860.90 24,501,459.48
definition of non-
recurring profit and
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
loss
Less: Influence of
12,768,681.37 9,169,558.51 8,013,161.48
income tax
Total 57,018,928.29 44,258,216.50 35,541,737.60 --
Details of other profit and loss items that qualify the definition of non-recurring profit and loss:
Applicable □ Not applicable
During the reporting period, the Company had RMB39,121,856.42 of other profit and loss items that qualify the definition of n on-
recurring profit and loss, which were the income from wealth management products.
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. 2022 Annual Report
Section III Discussion and Analysis of the Management
I. Status of the Industry to Which the Company Belongs during the Reporting Period
The Company shall comply with the 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. With the continued recovery of the global luxury goods market, the domestic luxury goods market is growing strongly.
In 2022, the global luxury goods market showed continued recovery and reached a value of RMB2.545 trillion, an increase of 17%
year-on-year. The fast growth has been especially represented in leading luxury brands, with the average market size up by more
than 30% compared with 2019. Pursuant to the 2022 China Luxury Report published by Yaok Institute, a professional research and
consulting organization in the field of China’s high-end consumption, the Chinese luxury market (i.e. at home and abroad) reached
RMB956 billion in 2022, contributing a 38% share of the global luxury market. Chinese people remain the most important force in
global luxury consumption. Meanwhile, the domestic sales of luxury goods demonstrated a strong momentum.
2. Chinese garment companies are developing towards the high-end and brand-oriented trend, and there is broad room for
high-end brands and brands with high quality/price ratio.
China has experienced several decades of fast economic development, and the consumption level of Chinese residents has
improved significantly, laying a solid foundation for the development of the garment industry. According to the Investigation and
Analysis Report on the Development and Consumption Trend of China’s Garment Industry 2022 -23 recently released by the
iiMedia Research, the retail sales of apparel goods of enterprises above designated size in China reached RMB997.46 billion in
2021. Under the boost of the Outline of the 14th Five-Year Plan for Textile Industry and other policies to promote the development
and consumption of the clothing industry, sales of the clothing market improved significantly in 2021. Pursuant to data of the
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
National Bureau of Statistics, the cumulative retail sales of apparel goods of enterprises above designated size were RMB189. 48
billion in January and February 2023, up by 6.4% year-on-year; the growth rate is 14.1 percentage points higher than that of 2022.
In the future, China’s garment companies will continue to develop towards a high-end and branded trend and will be further
recognized by consumers. It is expected that the retail sales will reach RMB1.10718 trillion in 2025.
In addition, with enhanced comfort and design, domestic upmarket menswear brands are increasingly accepted by the market, so
they have accelerated the pace to open up more stores. With the gradual recovery, there will be huge market space for domestic
upmarket menswear brands with strong product quality, high brand recognition, and continuously upgraded channel formats.
3. With the rise of outdoor sports, high-end outdoor apparel brands experience a massive surge.
In recent years, under the influence and boost of various factors, short-distance tours around the local area have been booming,
driving the surge of outdoor sports such as mountaineering, hiking, cycling, Frisbee, camping, and land surfing. The camping
industry registered a growth rate of 22.2% and 62.5% in 2020 and 2021, respectively. In 2022, the camping market grew 18.6% to
RMB35.46 billion. According to the Report on China’s Camping Industry Status and Consumption Behavior 2021 -22 published by
iiMedia Research, the core market size of China's camping economy is expected to reach RMB248.32 billion in 2025, which will
drive the entire market size to RMB1.44028 trillion.
In November 2022, the Ministry of Culture and Tourism of the P.R.C., in joint efforts with other departments, promulgated the
Guiding Opinions on Promoting the Healthy and Orderly Development of Camping Tourism and Leisure , which proposes an
objective of RMB3 trillion for the outdoor sports industry in 2025, thereby hitting the “accelerator” for outdoor activities.
Data of LeadLeo Research Institute shows that China’s new middle class has swollen from 53 million in 2010 to 400 million.
According to a survey conducted by DT Finance, 86% of the new middle class participates in outdoor activities in daily life, of
which 66.2% are regular outdoor goers. As a result, with the rise of outdoor sports and the increase of the new middle class, the
concept of high-quality and refined consumption will drive the massive surge of upmarket outdoor apparel brands.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
4. As Gen Z appears on the horizon, casual wear, sportswear and “China-chic” styles enjoy high popularity.
In accordance with the Investigation and Analysis Report on the Development and Consumption Trend of China’s Garment
Industry 2022-23 released by the iiMedia Research, the young and middle-aged and Gen Z constitute the main consumers of
China’s garment industry, accounting for 84.8% in total. The top three apparel styles preferred by Chinese consumers are casual
wear, sportswear, and what’s trending in the season, taking up 59.5%, 45.6% and 29.0%, respectively.
As the per capita disposable income of Chinese residents and the proportion of urban population increase year by year, a higher
proportion of Gen Z lives in cities, who are characterized by better material conditions, greater spending power, higher values and
stronger brand viscosity. They have a greater acceptance of “China-chic” brands. “China-chic” products are embedded with the
attributes of traditional Chinese cultural IPs, which have attracted a large number of new-generation consumers, with increasingly
higher influence in the apparel industry.
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 to which the Company belongs.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
II. Principal Businesses of the Company during the Reporting Period
The Company shall 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 garment research and design, brand promotion and digital operation,
marketing network construction and supply chain management. Adhering to the positioning of a high-end fashion sportswear
brand, the Compa ny focuses on its principal businesses. The Company has established a core value of “one dedication and three
haves”, i.e. dedication to principal business and continuous innovation, and having passion, resilience and responsibility, a nd has
defined being “international, upmarket, youthful and standardized” as its goals in the current stage. It is dedicated to meeting the
multi-scenario dressing needs of the elites for the pursuit of a refined and beautiful life, with a brand design concept of “three
highs and one innovation”, i.e. “high quality, high taste, high technology and innovative spirit”. Upholding the mission of
“continuously creating values for consumers”, the Company aims to build a century-old, world-renowned clothing group.
The Company focuses on the garment sector and implements a multi-brand strategy. Priority is given to the cultivation of core
competitiveness, so as to build a leading brand in the sector. Currently, the Company owns three brands: BIEM.L.FDLKK, Golf
Fashion and CARNAVAL DE VENISE.
1. BIEM.L.FDLKK brand
The BIEM.L.FDLKK brand targets at the segment combining golf and fashionable and casual life. Continuous product innovation,
brand power enhancement, and channel expansion have driven the high growth of the brand. The Company intends to build it into
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
an upmarket casual sportswear brand. The BIEM.L.FDLKK brand comprises Life series, Fashion series, and Palace Culture series.
(1) Life series
BIEM.L.FDLKK Life series
The Life 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 casual, comfortable, low-key and luxurious clothing, and
pay attention to their own image and influence.
(2) Fashion series
BIEM.L.FDLKK 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 with a taste for personality and accessible luxury.
(3) Palace Culture series co-branded with the Forbidden City
BIEM.L.FDLKK Palace Culture series
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 spiritua l
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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 continued, in-depth cooperation with the Palace culture of the Forbidden City and the
intangible cultural heritage of Su embroidery, the Company has successively launched a 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 o f
fortune, prosperity and longevity), “Feng Tian Cheng Yun” (Mandate from Heaven), “Rui Hu You Fu” (tiger sending blessing),
and “Yu Tu Chao Yuan” (rabbit paying respect to the moon at the beginning of the New Year). These joint products bring trendy
clothes with signature Chinese styles to consumers.
2. Golf Fashion brand
The Golf Fashion brand is positioned as a high-end fashion sportswear. Using the world’s leading functional fabrics and
integrating characteristics of golf and other outdoor sports into design, the products boast both functionality and comfort. Target
consumers are enthusiasts of golf and other outdoor sports who value sports, fashion and functionality.
Golf Fashion brand
The Golf Fashion brand is derived from the Company’s high-end fashion series and adheres to the style of being “young,
fashionable and innovative”. Under the leadership of the new Korean designer, the fashion sense of the brand has been improve d
and SKUs have been enriched. The Company has opened separate stores for the Golf Fashion brand, which will further enhance
the consumption experience of high-end consumers for fashionable sportswear.
3. CARNAVAL DE VENISE brand
The CARNAVAL DE VENISE brand ( ) is positioned to tap the blue ocean market of vacation and travel
apparel, focusing on matching clothes for families and couples. Focusing on a segmented market, the products can 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, the CARNAVAL DE VENISE 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
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
cross-brand joint series, to meet the demands of middle-class consumers for themed and cultural products.
CARNAVAL DE VENISE ( ) 2023 Spring/Summer Collection
(II) Business models of the Company
1. Operation model: committed to high value -added links on the business chain such as product design and development
and brand operation
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,
development and control of sales channels, 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.
U-shaped smile curve
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
2. Design and development model: building high-end, differentiated products with ingenuity and craftsmanship
Adhering to the product design and development concept of “three highs and one innovation”, i.e. high quality, high taste , high
technology, and innovative spirit, the Company improves the taste and cultural connotations of products 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
3. Sales model: online + offline omni-channel layout
The Company mainly adopts a sales model of direct sales plus franchise, and it boasts obvious advantages in offline channels. The
stores of the Company 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. An omni-channel layout has been
built with the integration of offline and online channels.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Channel layout of the Company
(III) Status of the Company in the industry
1. Taking up the largest market share for five 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 Cente r, the comprehensive market share (weighted average of
market share by volume and market coverage) of BIEM T-shirts dwarfed other brands of the same category for five consecutive
years (2018-2022). Judging from the sales volume for five consecutive years, T-shirts have become a super category of the
Company.
From 2022 onwards, the Company started to tap the advantages of the category and implemented strategic upgrading under the
driving of a single category, with a view to building itself into the “T-shirt Expert”. This could facilitate the further open-up of
market space. In accordance with data of the Report on Market Panoramic Survey of China's T-shirt Industry and Investment
Evaluation 2020-2025 published by ACADEMIA SINICA, billions of T-shirts are sold each year worldwide. As a major
consumption market of T-shirts, China consumes more than 3 billion T-shirts annually. When China’s per capita GDP exceeded
US$3,000, people would raise higher demands for apparels' quality and taste. Therefore, high-end T-shirts will occupy greater
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
market space.
2. Golf Fashion series rank first in overall market share for six consecutive years (2017 -2022).
According to a statistical survey on national large-scale retail enterprises conducted by the China General Chamber of Commerce
and the China National Commercial Information, the Company’s Golf Fashion series ranked the first in comprehensive market
share (weighted average of market share by volume and market coverage) among the same category in 2022, which has been
maintained for five consecutive years (2017-2022).
In 2022, the Company opened independent stores and initiated independent operations for high-end sports series. Positioned as
high-end fashion sportswear, the Golf Fashion series aim to provide high-value experience to enthusiasts of golf and other outdoor
sports who value fashion and functionality. Opening independent stores for the series could further enhance the experience of high-
end consumers toward fashion sportswear.
3. Continue to sponsor the China National Golf Team and firmly occupy the leading position in the domestic professional
golf apparel market.
The Company and the China National Golf Team embarked on a journey of partnership in 2013. Now, eight years later, the two
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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 witnessed
Chinese national confidence and Chinese brand confidence in international competitions such as the Olympic Games and the
World Cup. This is our way of contributing to China’s golf industry. In 2022, BIEM.L.FDLKK researched and designed uniforms
for the national team to help them prepare for the Hangzhou Asian Games. Next, the Company will design new five -star uniforms
for the national team to help them compete in the Paris 2024 Olympics and win glory for the country.
Themed photos featuring the China National Golf Team and BIEM.L.FDLKK products shot at the 73th anniversary of the
founding of the People’s Republic of China
Celebrating the motherland’s birthday in the name of youth and passion, and demonstrating the national responsibility of a high-
end sportswear brand
III. Analysis of Core Competitiveness
(I) Competitiveness in respect of brand: differentiated brand positioning + golf gene + multi-brand strategy
In terms of brand positioning, the Company has accurately grasped the form and spirit of the golf sport and golf apparel. The
products give a distinct golf visual cognition to consumers. The Company, with the spirit of craftsmanship, has showcased the
“sunshine, healthy, and self-confidence” culture of the golf sport in its products. By advocating the healthy and slow life concept
of golf, it has formed a unique brand tonality in terms of brands, products, styles and culture with differentiated positioning. Golf
culture has become the cultural gene of the Company’s brands. After years of accumulation, the Company has forged a n image of a
differentiated “big brand” in the minds of consumers.
Through the multi-brand development and differentiated market positioning strategy, the Company continues to focus on quality
segmented markets. The BIEM.L.FDLKK brand has formed a comprehensive and quality product system that comprises the Life
series, Fashion series and Palace Culture series. The brand provides fashionab le and trendy products with signature Chinese
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
elements to meet the differentiated needs of consumers in different scenarios.
The Golf Fashion brand targets at the professional golf apparel segment and digs deep into potentials of the high-end casual
sportswear market with professional, youthful and fashionable products.
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.
BIEM.L.FDLKK Brand Ambassador——Wu Zun
(II) Competitiveness in respect of products: innovation driven + three “highs” + proficient design and development team
Products are the core of brands while quality is the lifeline of brands. Adhering to the product design and development philosophy
of “three highs and one innovation”, i.e. high quality, high taste, high technology, and innovative spirit, the Company strives to
offer “three highs” products to consumers through innovation and pursuit of high-quality fabrics, bright colors, novel styles and
fine workmanship. In order to ensure product quality, the Company insists on strictly selecting high-grade and high-performance
fabrics and maintains stable cooperative relations with 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 communicated with fabric suppliers.
Sometimes, joint efforts are made to conduct targeted development based on style characteristics of the Company's products.
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 highly 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 techniques 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 will come up with over a thousand designs, which is a testimony to its strong R&D and design
capabilities. Up to now, the Company has 143 invention patents and utility model patents. In the future, the Company will continue
to increase investment in research and development and continuously improve the competitive edges of its products through fabric
innovation, plate optimization, design breakthroughs and cultural empowerment.
(III) Competitiveness in respect of channels: quality offline channels + digital new retail
The Company has built a marketing network with coverage of all models featuring “quality offline channels + digital new retail”.
Wherein, the quality offline channels have covered high-end department stores, shopping centers, airports, high-speed rail hubs
and golf courses throughout the country. As of December 31, 2022, the Company’s marketing network has made presence in 31
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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 2022 reached 1191, up by 91 compared with the end of 2021, of which
579 were company-operated stores and 612 were franchise stores.
Moreover, in terms of digital new retail, the Company actively deploys online channels and carries out in-depth cooperation 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.
(IV) Competitiveness in respect of marketing: integrated marketing + precision marketing
The Company, closely focusing on main target consumer groups, implements integrated marketing from commodity planning,
product design, terminal visual image, and window advertising to product display, brand endorsement and planning of marketing
activities. As products of the Company are positioned at high end, the Company has analyzed the habits of target consumer gro ups
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
implemented, to continuously enhance brand awareness and reputation.
(V) Competitiveness in respect of management: long-term stable team + experienced management
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.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
IV. Analysis of Principal Businesses
1. Overview
(I) Financial performances
During the reporting period, the Company recorded a total revenue of RMB2.885 billion, an increase of 6.06% over the previous
year. The operating profit and total profit were RMB855 million and RMB856 million, respectively, up by 15.93% and 16.78%,
respectively, over the previous year. In addition, the Company posted a net profit attributable to shareholders of the listed company
of RMB728 million and basic earnings per share of RMB1.28, a YoY increase of 16.5% and 11.30%, respectively. O verall, the
Company maintained steady growth during the reporting period.
(II) Operations
1. Strengthen the construction of corporate culture and gradually internalize “responsibility and perfection” into behavior
guidelines and standards.
Adhering to the vision of “building a century-old, world-renowned clothing group” and the mission of “continuously creating
values for consumers”, the Company has established a corporate value of “one dedication and three haves”, i.e. dedication to
principal business and continuous innovation, and having passion, resilience and responsibility. In addition, it has defined its cor e
culture as “responsibility and perfection”. During the reporting period, the Company continued to strengthen the construction of
corporate culture and gradually internalized “responsibility and perfection” into behavior guidelines and standards, thereby laying
the foundation for its long-term development.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
2. Focus on T-shirts and build the “first T-shirt brand” that would pop up in the minds of consumers whenever they think
of T-shirts.
During the reporting period, based on its own advantages, the Company has launched a strategic upgrade plan of driving
development with a single category. By introducing the new slogan “BIEM.L.FDLKK, T-shirt Expert”, the Company focuses on
the T-shirt category and hopes to build itself into the “first T-shirt brand” that would pop up in the minds of consumers whenever
they think of that category. This could help the Company to further open up market space. In 2022, the Company launched an
integrated marketing campaign for collared T-shirts and the T-shirt Festival activity. Through such activities as the creation of
bestsellers, brand festivals, and online-offline integrated marketing, collared T-shirts have become a top-selling item of the
Company. According to the statistical data of China General Chamber of Commerce and the China National Commercia l
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 five consecutive years (2018-2022). T-shirt has become a super category of the
Company.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
3. Establish the Golf BU to seize the high-end fashion sportswear market.
With the rise of outdoor sports and the support of a series of state policies, the domestic upmarket sportswear market has be come a
new opportunity. During the reporting period, the Company spun off the original high-end sports series into the Golf Fashion
brand and established the Golf BU accordingly with independent operations. Positioning at a style of being “young, fashionable
and innovative”, the Golf Fashion brand aims to offer high-value experience for golf enthusiasts who value sports, fashion and
functionality.
4. Continue to team up with the Forbidden City and explore the Palace Culture IP to shape the core of brand culture.
During the reporting period, the Company continued to co-brand with the Forbidden City to further explore the Palace Culture IP.
On August 23, 2022, BIEM.L.FDLKK and Mr. Zhang Xue, the inheritor of intangible cultural heritage Su embroidery craft,
concluded a 12-year agreement to jointly create trending high-end products with Chinese cultural characteristics. In the autumn of
2022, the two parties added another series to the Palace Culture IP — “Rui Hu You Fu” (tiger sending blessing).
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
The Company, through continued cooperation with the Palace Culture IP of the Forbidden City and Mr. Zhang Xue, intends to
launch trendy clothes with oriental charm under the inspiration of the traditional culture and Palace elements. The clothes become
a language to tell the story of “China-chic” such that consumers can feel the charm of traditional Chinese culture. In addition, this
could help shape the cultural core of the Company’s brands.
5. Build products of “three highs” quality and differentiation with craftsmanship spirit.
The Company continued to invest highly into product research and development during the reporting period. Efforts have been
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 qua lity,
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.
In the winter of 2022, the Company again teamed up with French design master SAFA SAHIN and jointly launched the Dad Shoes
2.0 series. As a continuation of the classics but with innovations, the new series adopt contrasting colors and splicing designs of
different materials and bring a new wearing experience to consumers.
In 2022, the Company continued to upgrade the monogram patters and incorporated golf and green flag elements into its signature
“BG” letters. There are infinite possibilities for the combinations of golf elements and the “BG” letters. By fusing brand features
and classic imprinting techniques, combined with exquisite weaving details and matching sports style tailoring, the products can
inherit the classics while setting trend with subtle changes. The Company intends to build the series into a super symbol of high-
end brands that can continuously inject new cultural genes into brands.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
BIEM.L.FDLKK x SAFA SAHIN Dad Shoes
6. Continue to consolidate brand power, enhance brand awareness and reputation, and demonstrate the glamor of a
national brand.
In 2022, in order to deepen the core of brand culture and enhance brand influence, the Company conducted strategic upgrade. A
variety of initiatives were taken, such as focusing on the core category of T-shirts, defining the new slogan of “BIEM.L.FDLKK,
T-shirt Expert”, and implementing a multi-pronged approach including event promotion, advertising, entertainment marketing,
event marketing, etc.
(1) Event promotion: promoting brand influence through multiple channels and dimensions
1) Mr. Xie Bingzheng, Chairman of the Board, was invited to a program of CCTV Finance and told the story behind the
growth of both revenue and net profit in eleven consecutive years.
On May 20, 2022, Chairman of the Company Mr. Xie Bingzheng a ppeared on “Finance Interview Reading Financial Reports”, a
program of CCTV Finance. Being aired on the national authoritative media has further elevated the credibility and authority of the
Company.
2) Strengthen the construction of culture -based brand spirit.
During the reporting period, the Company joined forces with the Forbidden City and Mr. Zhang Xue, the inheritor of intangible
cultural heritage Su embroidery, and created the Palace Culture series under the inspiration of the traditional culture and Palace
29
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
elements. The clothes become a language to tell the story of “China-chic”. Meanwhile, the Company cemented a 12-year
agreement with Mr. Zhang Xue, to convey the beauty of traditional Chinese culture with works and craftsmanship of masters.
3) Hold fast to tradition while being innovative, win over time and achieve high growth across cycles with long -term
insistence.
On December 30, 2022, Wu Xiaobo, a well-known financial expert, made an in-depth analysis of BIEM.L.FDLKK in his year-end
show, believing that the reason for BIEM.L.FDLKK’s high growth across cycles in 20 years was long-term insistence on tradition
and innovation.
4) Strengthen bonds with VIPs using emotion as the link.
The Company launched the country’s first salon themed on the intangible cultural heritage Su embroidery in 2022. Mr. Zhang Xue,
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
the inheritor of Su embroidery, was invited to the site to demonstrate the skills and techniques of Su embroidery. Such activities
could create exclusive royal cultural experience and thereby deepen the core of its cultural spirit.
5) Enhance consumer experience and brand stickiness with creative activities.
In the first half of 2022, the Company held the “Making Leather by Hand” activity in stores across the country. A variety of VIP
activities at terminal stores have enhanced consumer loyalty.
(2) Entertainment marketing: comprehensively consolidating brand awareness and reputation via the matrix of celebrities
and KOLs
During the reporting period, the Company carried out in-depth cooperation with a number of celebrities including Wang Yaoqing,
Wu Xuanyi, Wu Zun, Li Xiaoran, and Liu Mintao, and worked with well-known fashion media such as Shang Cheng Shi and
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Voyage to improve brand awareness and disseminate the elite dressing culture. The linkages of multiple dimensions including
celebrity matrix communication, celebrity endorsement, and celebrity street style photos have enhanced brand reputation and
popularity.
1) Promote brand influence through the matrix communication of celebrities.
2) Promote brand recognition through recommendations of KOLs from various dimensions and channels especially
knowledge KOLs and dressing KOLs.
During the reporting period, the Company further improved the KOL matrix on social media platforms such as Xiaohongshu and
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
TikTok. Diversified topics on social media and a large number of UGC contents could attract the attention of more users,
especially the young people.
3) Enhance brand influence and popularity through cooperating with popular films and TV drams such as The Lion's
Secret.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
(3) Enhance brand exposure by increasing advertising efforts.
In 2022, the Company increased advertising efforts on high-speed rail. Through screens at railway stations and on trains, the
Company is able to convey its brand concepts and cultural values to hundreds of millions of users, thereby increasing brand
exposure.
(4) Event marketing: digging deep in the golf category and further consolidating brand positioning
The Company has continuously consolidated its brand status by helping the national team prepare for international events such as
Hangzhou Asian Games and cooperating with a number of well-known domestic amateur events.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
2. Revenue and cost
(1) Composition of revenue
Unit: RMB
2022 2021
Proportion in Proportion in YoY changes
Amount Amount
revenue revenue
Total revenue 2,884,841,760.82 100% 2,719,989,257.14 100% 6.06%
By industry
Garment and
2,884,841,760.82 100.00% 2,719,989,257.14 100.00% 6.06%
apparel
By product
Tops 1,262,647,306.22 43.77% 1,155,253,965.36 42.47% 9.30%
Bottoms 613,119,968.34 21.25% 577,413,010.84 21.23% 6.18%
Jackets 761,869,806.27 26.41% 760,953,959.00 27.98% 0.12%
Others 247,144,658.56 8.57% 226,323,052.12 8.32% 9.20%
Revenue from
60,021.43 0.00% 45,269.82 0.00% 32.59%
other businesses
By region
Northeast China 285,802,804.81 9.91% 257,702,259.73 9.47% 10.90%
North China 455,529,568.34 15.79% 438,055,235.73 16.11% 3.99%
East China 558,880,108.12 19.37% 509,188,940.50 18.72% 9.76%
South China 571,773,995.27 19.82% 599,071,826.19 22.02% -4.56%
Central China 234,916,443.89 8.14% 199,039,149.25 7.32% 18.03%
Northwest China 132,822,171.31 4.60% 140,100,579.39 5.15% -5.20%
Southwest China 477,160,024.28 16.54% 454,255,647.71 16.70% 5.04%
E-commerce 167,956,644.80 5.82% 122,575,618.64 4.51% 37.02%
By sales model
Online sale 167,956,644.80 5.82% 122,575,618.64 4.51% 37.02%
Direct sale 1,779,943,248.67 61.70% 1,914,079,312.33 70.37% -7.01%
Franchise sale 936,941,867.35 32.48% 683,334,326.17 25.12% 37.11%
(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 shall 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 YoY changes
Gross profit YoY changes
Revenue Cost of revenue of cost of of gross profit
margin of revenue
revenue margin
By industry
Garment and
2,884,841,760.82 652,016,624.24 77.40% 6.06% 2.82% 0.71%
apparel
By product
Tops 1,262,647,306.22 253,822,996.18 79.90% 9.30% 5.60% 0.71%
Bottoms 613,119,968.34 124,278,398.85 79.73% 6.18% 6.74% -0.11%
Jackets 761,869,806.27 183,833,850.51 75.87% 0.12% -3.40% 0.88%
Others 247,144,658.56 90,081,378.70 63.55% 9.20% 3.48% 2.01%
Revenue from 60,021.43 100.00% 32.59%
35
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
other
businesses
By region
Northeast
285,802,804.81 68,013,238.57 76.20% 10.90% 3.24% 1.76%
China
North China 455,529,568.34 90,796,796.40 80.07% 3.99% 3.56% 0.08%
East China 558,880,108.12 108,188,132.90 80.64% 9.76% 1.80% 1.51%
South China 571,773,995.27 140,865,110.31 75.36% -4.56% 1.02% -1.36%
Central China 234,916,443.89 52,149,408.42 77.80% 18.03% 9.32% 1.77%
Northwest
132,822,171.31 25,617,061.98 80.71% -5.20% -10.50% 1.14%
China
Southwest
477,160,024.28 104,956,701.00 78.00% 5.04% 6.65% -0.34%
China
E-commerce 167,956,644.80 61,430,174.66 63.42% 37.02% 2.13% 12.49%
By sales model
Online sale 167,956,644.80 61,430,174.66 63.42% 37.02% 2.13% 12.49%
Direct sale 1,779,943,248.67 318,595,594.74 82.10% -7.01% -11.87% 0.99%
Franchise sale 936,941,867.35 271,990,854.84 70.97% 37.11% 27.98% 2.07%
Where the statistical standards for the Company’s principal business data were adjusted in the reporting period, and, if yes,
principal business data of the Company in the recent year after being adjusted as per the new statistical standards
□ Applicable Not applicable
Whether the Company has physical stores and sales terminals
Yes □ No
Distribution of physical stores
Number of new Number of
Number of Reason for Brands
Type of store Area of stores stores opened stores closed in
stores close involved
in the period the period
Mainly due to
BIEM.L.FDLK
expiration of
Company- K,
579 86,458 84 37 contract,
operated stores CARNAVAL
adjustment of
DE VENISE
stores, etc.
Mainly due to
BIEM.L.FDLK
expiration of
Franchise K,
612 100,313 80 36 contract,
stores CARNAVAL
adjustment of
DE VENISE
stores, etc.
Total area and efficiency of company-operated stores
Top 5 stores by revenue
Sales per square meter
No. Name of store Date of opening Revenue (RMB)
(RMB)
1 Store 1 November 14, 2007 40,309,759.25 44,100
2 Store 2 July 01, 2012 31,413,278.76 99,700
3 Store 3 April 27, 2007 19,995,361.06 121,200
4 Store 4 April 01, 2015 19,320,246.90 149,800
5 Store 5 March 01, 2003 18,646,838.05 79,000
Total 129,685,484.02 73,700
Where there were new stores of the listed company
Yes □ No
36
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
The Company had 1191 terminal sales stores by the end of the reporting period, an increase of 91 compared with the end of 2021.
It is expected that the new stores will not have a significant impact on the Company's business operations.
Whether the Company disclosed 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 2022 2021 YoY changes
Sales volume Pieces 4,328,824 3,681,850 17.57%
Garment and Production volume
apparel Inventory
Garment Garment (RMB) 2,884,841,760.82 2,719,989,257.14 6.06%
Reasons for YoY changes of relevant data over 30%
□ Applicable Not applicable
(4) Performance of major sales contracts and major procurement contracts already signed 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
2022 2021
Industry Item Proportion in Proportion in YoY changes
Amount Amount
cost of revenue cost of revenue
Garment and Garment and
652,016,624.24 100.00% 634,160,601.71 100.00% 2.82%
apparel apparel
Unit: RMB
2022 2021
Product Item Proportion in Proportion in YoY changes
Amount Amount
cost of revenue cost of revenue
Garment and
Tops 253,822,996.18 38.93% 240,366,386.18 37.90% 5.60%
apparel
Garment and
Bottoms 124,278,398.85 19.06% 116,434,061.13 18.36% 6.74%
apparel
Garment and
Jackets 183,833,850.51 28.19% 190,307,785.69 30.01% -3.40%
apparel
Garment and
Others 90,081,378.70 13.82% 87,052,368.71 13.73% 3.48%
apparel
(6) Whether there are changes to the consolidated scope during the reporting period
Yes □ No
Newly established holding subsidiary/second-tier subsidiary
37
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Period of
Name of company Reason of change Date of establishment Nature of company
consolidation
Guangzhou Houde Zaiwu
Industrial Investment Fund Newly established in the
December 07, 2022 2022 Holding subsidiary
Partnership (Limited period
Partnership)
Newly established in the Holding second-tier
Hong Kong Carritt Limited December 30, 2022 2022
period subsidiary
Hong Kong Plentiful Shiny Newly established in the Holding second-tier
December 30, 2022 2022
Limited period subsidiary
(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) 348,841,370.03
Proportion of sales to top five customers in total annual sales 12.09%
Proportion of sales to related parties among the top five
0.00%
customers in total annual sales
Information of the top five customers of the Company
Proportion in total annual
No. Name of customer Sales amount (RMB)
sales
1 Customer 1 92,110,487.08 3.19%
2 Customer 2 79,433,798.08 2.75%
3 Customer 3 61,192,252.59 2.12%
4 Customer 4 59,344,906.93 2.06%
5 Customer 5 56,759,925.35 1.97%
Total -- 348,841,370.03 12.09%
Other description of major customers
□ Applicable Not applicable
Major suppliers of the Company
Total purchase amount from the top five suppliers (RMB) 280,226,619.42
Proportion of the total purchase amount from the top five
33.53%
suppliers in total annual purchase amount
Proportion of purchase amount from related parties among the
0.00%
top five suppliers in total annual purchase amount
Information of the top five suppliers of the Company
Proportion in total annual
No. Name of supplier Purchase amount (RMB)
purchase amount
1 Supplier 1 64,828,936.32 7.76%
2 Supplier 2 58,473,428.24 7.00%
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
3 Supplier 3 56,419,104.70 6.75%
4 Supplier 4 53,425,803.61 6.39%
5 Supplier 5 47,079,346.55 5.63%
Total -- 280,226,619.42 33.53%
Other description of major suppliers
□ Applicable Not applicable
3. Expenses
Unit: RMB
Description of
2022 2021 YoY changes
significant changes
Selling expenses 1,036,372,556.97 1,041,052,486.14 -0.45%
Administrative
195,632,058.12 156,267,574.26 25.19%
expenses
Mainly owing to the
decrease in interest
expense due to the
Finance expenses -7,782,554.63 21,805,535.69 -135.69% conversion of
convertible bonds into
shares in the current
period
R&D expenses 100,182,947.69 83,388,128.67 20.14%
The Company shall comply with the 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
Amount incurred in Amount incurred in YoY changes of
Item Reason of change
the current period the prior period selling expenses
Employee benefits 296,637,808.88 292,614,931.34 1.37%
Store operating
287,914,059.48 359,724,699.13 -19.96%
expenses
Depreciation of
208,991,072.66 175,539,936.53 19.06%
right-of-use assets
Decoration and
107,756,159.43 84,303,737.40 27.82%
renovation expenses
Advertising fee 73,427,178.68 78,889,887.30 -6.92%
Office and business
20,388,057.96 20,281,804.02 0.52%
travel expenses
Transportation
12,078,098.60 10,068,692.80 19.96%
expenses
E-commerce service Mainly owing to the growth of online
13,620,502.48 8,659,135.65 57.30%
fees business
Mainly owing to the increase in sales
Others 15,559,618.80 10,969,661.97 41.84%
scale
Total 1,036,372,556.97 1,041,052,486.14 -0.45%
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
4. Other information required by guidelines for information disclosure of textile and garment related
industries
The Company shall comply with the 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, airports, 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 brands. The franchisee is responsible for acquiring business premises as well as daily operation and management of store s,
while enforcing product pricing, price adjustment and other policies formulated by the Compa ny. 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 s tores.
The franchisee bears benefits and risks associated with their operations.
For online sales, the main channels include Tmall, JD, Vipshop, and other third-party platforms. The Company opens officia l
flagship shops 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 YoY changes of
Gross profit YoY changes of
Sales channel Revenue Cost of revenue cost of revenue gross profit
margin revenue (%)
(%) margin (%)
Online sale 167,956,644.80 61,430,174.66 63.42% 37.02% 2.13% 12.49%
40
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
1,779,943,248.
Direct sale 318,595,594.74 82.10% -7.01% -11.87% 0.99%
67
Franchise sale 936,941,867.35 271,990,854.84 70.97% 37.11% 27.98% 2.07%
(3) Franchise and distribution
Whether sales revenue of franchisees and distributors accounted for more than 30%
Yes □ No
Franchise is a business model with franchise rights as the core. Under the franchise model, 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 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, bears channel expenses, and
directly purchases goods from the Company and sells them to consumers at retail prices. As at the end of the reporting period, the
Company had 612 franchise stores.
Currently, the Company’s sales to franchisees are mainly achieved through two modes: order and rep lenishment, with order as the
primary mode and replenishment as a supplement. The order mode refers to the mode where the franchisee attends the order
meeting and place orders; the replenishment mode refers to the mode where the franchisee places a supplementary order according
to the sales situation after the product is launched.
Under the franchise model, the Company recognizes sales revenue when the goods are delivered to the franchisee and receives t he
confirmation receipt from the franchisee. In the event that the franchisee picks up goods by itself, the handover of the goods by the
Company to the carrier is regarded as having been confirmed by the franchisee. The Company has formulated replacement policie s
for franchisees. It makes reasonable estimates of the replacement rate of goods based on the replacement ratio agreed in the
replacement policy and the actual historical replacement conditions. The estimated replacement revenue offsets the sales reve nue
of the period and is included in other current liabilities; the estimated replacement cost offsets the sales cost of the period and is
included in other current assets.
Top 5 franchisees
Name of Cooperation start Whether a related
No. Total sales (RMB) Level of franchisee
franchisee time party
September 01,
1 Franchisee 1 No 38,056,865.62 Level 1
2006
December 01,
2 Franchisee 2 No 30,350,937.02 Level 1
2007
3 Franchisee 3 August 01, 2019 No 23,318,115.10 Level 1
4 Franchisee 4 October 01, 2011 No 22,922,104.01 Level 1
December 01,
5 Franchisee 5 No 14,649,261.06 Level 1
2013
Total -- -- -- 129,297,282.81 --
(4) Online sales
Whether sales revenue of online sales accounted for more than 30%
41
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
□ Yes No
Whether the Company had self-built sales platform
□ Yes No
Whether the Company cooperated with third-party sales platforms
Yes □ No
Whether the Company opened or closed online sales channels
Applicable □ Not applicable
Operation
Name of Main product Reason for
Main brands Channel status Opening time conditions
channel categories close
during opening
Garment and Normal
Taobao BIEM.L.FDLKK Open May 20, 2022
apparel operation
BIEM.L.FDLKK
Garment and August 01, Normal
TikTok Female Garment Open
apparel 2022 operation
Flagship Shop
CARNAVAC DE Garment and December 01, Normal
Taobao Open
VENISE apparel 2022 operation
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 TikTok percentage of the actual sales amount
(6) Inventory
Particulars of inventory
Days of
YoY changes of
Main product inventory Quantity Aging Reason
inventory balance
turnover
Within 1 year: Balance at the end
RMB460.4254 million of the year Mainly owing to
1-2 years: RMB208.0606 increased by the increase in
million
Garment 388 4,424,372 2-3 years: RMB110.1252 RMB85.3910 sales scale
million million or 12.93% during the
Over 3 year: over the end of period
RMB66.4065 million previous year.
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.
42
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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 va lue 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 pa rt 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 Name of Main product Target Main sales
Characteristics Price range City level
brand trademark types consumers area
Middle class
and above-
income
High-end,
groups who
BIEM.L.FD BIEM.L.FD Casual combination of 1st-4th tier
advocate a 1500-8000 China
LKK LKK sportswear leisure and cities
healthy,
sports
sunny and
comfortable
lifestyle
Matching
outfits for
families, Middle-
parents- class
CARNAVAL CARNAVAL Outdoor children, and consumers 1st-4th tier
300-2000 China
DE VENISE DE VENISE travel apparel couples, who pursue cities
catering to high-quality
different travels
outdoor travel
scenarios
Marketing and operation of each brand during the reporting period
43
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
The Company focuses on the garment sector and implements a multi-brand strategy. Priority is given to the cultivation of core
competitiveness, so as to build a leading brand in the sector. Currently, the Company owns three brands: BIEM.L.FDLKK, Golf
Fashion and CARNAVAL DE VENISE.
The BIEM.L.FDLKK brand targets at the segment combining golf and fashionable and casual life. Continuous product innovation,
brand power enhancement, and channel expansion have driven the high growth of the brand. The Company intends to build it into
an upmarket casual sportswear brand. The BIEM.L.FDLKK brand comprises Life series, Fashion series, and Palace Culture series.
The Golf Fashion brand is positioned as a high-end fashion sportswear. Using the world’s leading functional fabrics and
integrating characteristics of golf and other outdoor sports into design, the products boast both functionality and comfort. Target
consumers are enthusiasts of golf and other outdoor sports who value sports, fashion and functionality.
The CARNAVAL DE VENISE brand is positioned to tap the blue ocean market of vacation and travel apparel, focusing on
matching clothes for families and couples. Focusing on a segmented market, the products can 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, based on its own advantages, the Company has launched a strategic upgrade plan of driving
development with a single category. By introducing the new slogan “BIEM.L.FDLKK, T-shirt Expert”, the Company focuses on
the T-shirt category and hopes to build itself into the “first T-shirt brand” that would pop up in the minds of consumers whenever
they think of that category. This could help the Company to further open up market space. In 2022, the Company launched the
integrated marketing campaign for collared T-shirts and the T-shirt Festival activity. Through activities such as the creation of
bestsellers, brand festivals, and online-offline integrated marketing, collared T-shirts have become a top-selling item of the
Company.
The Company continued to co-brand with the Forbidden City to further explore the Palace Culture IP. On August 23, 2022,
BIEM.L.FDLKK and Mr. Zhang Xue, the inheritor of intangible cultural heritage Su embroidery craft, concluded a 12-year
agreement to jointly create trending high-end products with Chinese culture characteristics. In the autumn of 2022, the two parties
added another series to the Palace Culture IP — “Rui Hu You Fu” (tiger sending blessing).
During the reporting period, the CARNAVAL DE VENISE 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.
In 2022, in order to deepen the core of brand culture and enhance brand influence, the Company conducted strategic upgrade. A
variety of efforts were taken, such as focusing on the core category of T-shirts, defining the new slogan of “BIEM.L.FDLKK, T-
shirt Expert”, and implementing a multi-pronged approach including event promotion, advertising, entertainment marketing, event
marketing, etc.
Trademark ownership disputes, etc. in which the Company was involved
□ Applicable Not applicable
44
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
(8) Others
Whether the Company was engaged in clothing design related businesses
Yes □ No
Number of self-owned Number of contracted
79 7
designers designers
Operation of the built
Not applicable
designer platform
Whether the Company organized order meetings
Yes □ No
5. R&D investment
Applicable □ Not applicable
Expected impact on the
Name of main R&D
Project purpose Project progress Intended goals future development of
project
the Company
Promote the
Company’s innovative
product design,
innovative fabric
research and
development,
innovative process
research and
development, and
research and Maintain a leading
development of position in the high-
standards for end fashion sportswear
innovative function Master the key sector, continuously
Design, development
testing; under the technologies of expand market
and research on clothes
research and functional clothes with boundaries, consolidate
with multi-functional Ongoing
development concept multi-functional market competitiveness
composite blended
of “three high and one composite blended and brand influence of
materials
innovation” — high materials the Company's
quality, high taste, high products, and lay the
technology and foundation for building
innovative spirit, a 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
2022 2021 Change ratio
Number of R&D personnel 207 205 0.98%
Proportion of R&D personnel 6.26% 6.47% -0.21%
Educational structure of R&D personnel
University graduates 80 76 5.26%
45
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Master 6 7 -14.29%
College graduates 71 70 1.43%
Others 50 52 -3.85%
Age structure of R&D personnel
Under 30 41 42 -2.38%
30~40 119 117 1.71%
40~50 43 42 2.38%
Above 50 4 4 0.00%
R&D investment of the Company
2022 2021 Change ratio
Amount of R&D investment
100,182,947.69 83,388,128.67 20.14%
(RMB)
Proportion of R&D
3.47% 3.07% 0.40%
investment in total revenue
Amount of capitalized R&D
0.00 0.00 0.00%
investment (RMB)
Proportion of capitalized
R&D investment in total 0.00% 0.00% 0.00%
R&D 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 2022 2021 YoY changes
Subtotal of cash inflow from
2,988,994,363.45 2,794,084,680.61 6.98%
operating activities
Subtotal of cash outflow from
2,046,758,329.63 1,896,561,042.54 7.92%
operating activities
Net cash flow from operating
942,236,033.82 897,523,638.07 4.98%
activities
Subtotal of cash inflow from
5,233,116,445.27 3,170,817,478.89 65.04%
investing activities
Subtotal of cash outflow from
5,916,079,305.06 3,354,579,606.23 76.36%
investing activities
Net cash flow from investing
-682,962,859.79 -183,762,127.34 -271.66%
activities
Subtotal of cash outflow from
218,200,364.75 225,027,351.47 -3.03%
financing activities
Net cash flow from financing
-218,200,364.75 -225,027,351.47 3.03%
activities
Net increase in cash and cash 41,072,809.28 488,734,159.26 -91.60%
46
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
equivalents
Major influencing factors for significant YoY changes in relevant data
Applicable □ Not applicable
(1) During the reporting period, the cash inflow from investing activities recorded an increase of 65.04% compared with the s ame
period of the previous year, mainly owing to the increase in the redemption of mature wealth management products in the current
period;
(2) During the reporting period, the cash outflow from investing activities recorded an increase of 76.36% compared with the same
period of the previous year, mainly owing to the increase in the purchase of wealth management products and the payment of the
land purchase price in the current period;
(3) During the reporting period, the net cash flow from investing activities recorded a decrease of 271.66% compared with the
same period of the previous year, mainly ow ing to the increase in the purchase of wealth management products and the payment of
the land purchase price in the current period;
(4) During the reporting period, the net increase in cash and cash equivalents recorded a decrease of 91.6% compared with the
same period of the previous year, mainly owing to the increase in the purchase of wealth management products and the payment of
the land purchase price in the current period.
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 Whether it is
Amount Explanation of reason
profit sustainable
Investment income 39,390,949.38 4.60% Yes
Profit and loss from
4,950,075.80 0.58% Yes
changes in fair value
Asset impairment -99,445,469.97 -11.62% Yes
Non-operating revenue 3,017,693.32 0.35% No
Non-operating expense 2,681,429.95 0.31% No
Credit impairment loss 2,269,925.82 0.27% Yes
VI. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
End of 2022 Beginning of 2022 Description of
Proportion
Proportion in Proportion in significant
Amount Amount changes
total assets total assets changes
47
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
1,144,693,949. 1,082,712,218.
Monetary funds 20.52% 22.26% -1.74%
57 58
Accounts
252,544,886.96 4.53% 279,717,057.14 5.75% -1.22%
receivable
Inventory 745,605,174.25 13.36% 660,214,219.41 13.58% -0.22%
Mainly owing to
the transfer of the
intelligent storage
Property, plant center from
461,506,954.62 8.27% 244,337,754.20 5.02% 3.25%
and equipment construction in
progress to
property, plant
and equipment
Construction in
70,114,185.76 1.26% 148,165,548.36 3.05% -1.79%
process
Right-of-use
332,568,088.84 5.96% 407,448,654.74 8.38% -2.42%
assets
Contract
168,876,645.17 3.03% 140,669,127.30 2.89% 0.14%
liabilities
Lease liabilities 141,295,857.16 2.53% 217,323,756.45 4.47% -1.94%
Mainly owing to
the decrease in
Other current
364,286,702.97 6.53% 830,640,713.41 17.08% -10.55% purchased
assets
structured
deposits
Investment in
other equity 10,499,383.76 0.19% 98,099,300.47 2.02% -1.83%
instruments
Intangible
129,012,724.85 2.31% 119,548,729.29 2.46% -0.15%
assets
Long-term
deferred 111,489,073.31 2.00% 105,243,120.55 2.16% -0.16%
expenses
Other payables 90,368,389.42 1.62% 55,878,486.28 1.15% 0.47%
Mainly owing to
the conversion of
Bonds payable 284,554,163.11 5.85% -5.85%
convertible bonds
into shares
Mainly owning to
the
reclassification of
the other equity
Assets held for
137,859,613.49 2.47% 2.47% instrument
sale
investments in
Fast Fashion
(Guangzhou) Co.,
Ltd.
High proportion of overseas assets
□ Applicable Not applicable
2. Assets and liabilities measured at fair value
Applicable □ Not applicable
48
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Unit: RMB
Profit or
Accumulated
loss from Amount
changes in Write- Amount
Opening changes in purchased Other Closing
Item fair value down in sold in the
balance fair value in the changes balance
included in the period period
of the period
equity
period
Financial assets
1. Financial
assets held
for trading
634,763,81 3,992,979.9 2,360,000,0 1,620,000,0 1,378,756,7
(excluding
8.96 1 00.00 00.00 98.87
derivative
financial
assets)
4.
Investment -
98,099,300. 10,499,383.
in other 1,500,083.29 89,100,000.
47 76
equity 00
instruments
5. Assets
48,570,000.0 89,100,000. 137,670,00
held for
0 00 0.00
sale
732,863,11 3,992,979.9 50,070,083.2 2,360,000,0 1,620,000,0 1,526,926,1
Total
9.43 1 9 00.00 00.00 82.63
Financial
0.00 0.00
liabilities
Other changes
Other changes herein refer to the reclassification of the investment in Fast Fashion (Guangzhou) Co., Ltd. From other equity
instruments to assets held for sale.
Whether there were significant changes to measurements of the Company’s main assets during the reporting period
□ Yes No
3. Restriction of asset rights at the end of the reporting period
Book value at the end of the
Item Reason for restriction
period (RMB)
Security deposits for bank acceptance bills and project
Monetary funds 28,568,760.06
performance guarantees
Total 28,568,760.06
VII. Analysis of Investment
1. Overview
□ Applicable Not applicable
49
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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
Unit: RMB
Profit Accu
or mulat
Book
loss ed Amou Profit Book
Meas value Amou
Securi from chang nt or value Accou
Initial urem at the nt
Security Security ty chang es in purch loss at the nting Source
investm ent begin sold
type code abbrev es in fair ased during end of subjec of fund
ent cost mod ning in the
iation fair value in the the the t
el of the period
value includ period period period
period
of the ed in
period equity
Finan
Meas cial
Domesti Debt
ured 1,338, assets
c and ST 1,338,98 425,8 812,0 425,8 952,7 repaym
000564 at 986.9 held
foreign Daji 6.96 11.00 00.00 11.00 97.96 ent by
fair 6 for
stocks the mall
value tradin
g
1,338,
1,338,98 425,8 812,0 425,8 952,7
Total -- 986.9 0.00 0.00 -- --
6.96 11.00 00.00 11.00 97.96
6
(2) Derivative investment
□ Applicable Not applicable
The Company did not invest in derivatives during the reporting period.
5. Use of proceeds
Applicable □Not applicable
50
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
(1) Overall use of proceeds
Applicable □Not applicable
Unit: RMB10,000
Proporti
on of
Amount Cumulati Amount
cumulati
of ve Purpose of
Amount ve
Total Cumulative proceeds amount Amount and proceeds
Year Method of proceeds
amount of amount of whose use of of whereab that have
of of proceeds whose
proceeds proceeds was proceeds unused outs of been idle
raising raising used in use was
raised used changed whose proceeds unused for over
the period changed
in the use was proceeds two
in total
period changed years
proceeds
raised
Deposite
d in
2016 IPO 62,407.7 10,340.88 62,443.03 0 22,412 35.91% 3,787.22 0
regulator
y banks
Wealth
manage
ment
Converti products
28,405.4
2020 ble 67,872.93 15,348.79 41,874.97 13,900 13,900 20.48% , 0
1
bonds deposite
d in
regulator
y banks
130,280.6 32,192.6
Total -- 25,689.67 104,318 13,900 36,312 27.87% -- 0
3 3
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, 2022, RMB624,430,321.13 of
the proceeds had been used and RMB37,872,239.17 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, 2022,
RMB418,749,741.54 of the proceeds had been used and RMB284,054,111.84 had not been used (including interest income less service
charge).
(2) Projects committed with proceeds raised
Applicable □Not applicable
Unit: RMB10,000
51
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Whether
Cumulat Investme
committ
ive nt Date for
ed Total Whether
Committed Total amount progress the Whether
projects committ Amount Benefits project
investment investme invested as of the project expected
have ed invested realized feasibility
projects and nt after as of the end of is ready benefits
been investme in the in the changed
use of over- adjustme end of the for are
changed nt at period period significant
raised funds nt (1) the period intended achieved
(includin raising ly
period (3) = use
g partial
(2) (2)/(1)
change)
Committed investment project
Marketing
Decemb
network 52,053.8 29,641.8 29,641.8 21,318.1
Yes 0 100.00% er 31, Yes No
construction 2 2 2 4
2019
project
Information
Decemb Not
system
No 5,383.88 5,383.88 0 5,384.03 100.00% er 31, applicabl No
improvemen
2019 e
t project
Supplementi Not
ng working No 5,000 5,000 0 5,000 100.00% applicabl No
capital e
BIEM.L.FD
LKK Decemb Not
10,340.8 22,417.1
intelligent Yes 0 22,412 100.00% er 31, applicabl No
8 8
storage 2022 e
center
Marketing
network
construction 30,972.9 17,072.9 13,167.8 June 30,
Yes 9,706.81 77.13% 751.34 Yes No
and 3 3 3 2023
upgrading
project
Supply Not
June 30,
chain park Yes 14,000 27,900 5,192.66 6,933.2 24.85% applicabl No
2024
project e
R&D design Not
June 30,
center No 4,000 4,000 449.32 2,873.94 71.85% applicabl No
2023
project e
Supplementi Not
ng working No 18,900 18,900 0 18,900 100.00% applicabl No
capital e
Subtotal of
committed 130,310. 130,310. 25,689.6 22,069.4
-- 104,318 -- -- -- --
investment 63 63 7 8
projects
Investment direction of over-raised funds
None
Repaying
bank loans -- 0 0 0 0 0.00% -- -- -- --
(if any)
Supplementi
ng working
-- 0 0 0 0 0.00% -- -- -- --
capital (if
any)
52
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Subtotal of
investment
direction of -- 0 0 0 0 -- -- 0 -- --
over-raised
funds
130,310. 130,310. 25,689.6 22,069.4
Total -- 104,318 -- -- -- --
63 63 7 8
Explain the
situation and
reasons for
failure to
achieve the
planned The “marketing network construction and upgrading project” is behind the expected schedule, mainly because, under
progress and the impact of the economic downturn, the Company has been advancing the investment project cautiously, so as to
expected reduce investment risks of the proceeds.
benefits by The “supply chain park project” is behind the expected schedule mainly because relevant departments have made
project adjustments to the planning of the plot, resulting in slow construction progress. Meanwhile, considering long-term
(including development and planning, the Company added an investment of RMB139 million from the proceeds in July 2022, so
“whether the time of reaching the intended use is adjusted accordingly.
expected The “R&D design center project” is behind the expected schedule mainly because the decoration part progresses slowly,
benefits are and the installation and commissioning of some equipment have been postponed since the equipment arrived late,
achieved” resulting in slowdown of the project.
and the
reason for
choosing
“not
applicable”)
Description
of
significant
None
changes in
project
feasibility
Amount,
purpose and
progress of Not applicable
use of over-
raised funds
Changes in Applicable
implementat Occurred in previous years
ion locations In July 2017, the 17th meeting of the Second Board of Directors deliberated and approved the Proposal on Changing
of projects the Specific Locations of Certain Projects Invested with Raised Proceeds, which agreed to change the locations of some
invested stores under the “marketing network construction project”. Specific locations of stores were adjusted by the
with raised management according to actual business needs. The change of locations would not change the use of raised proceeds,
proceeds nor would it cause any substantial impact on the implementation of the project.
Applicable
Adjustments Occurred in previous years
to The “marketing network construction project” originally planned to establish 224 company-operated stores across the
implementat country, including 206 joint-operation stores in shopping malls and airports and 18 stores in golf clubs. On October 25,
ion methods 2018, the 6th meeting of the Third Board of Directors and the 5th meeting of the Third Board of Supervisors deliberated
of projects and approved the Proposal on Adjusting the Number of Stores under the Marketing Network Construction Project,
invested which stated to increase the number of stores under the marketing network construction project from 224 to no more
with raised than 400 under the premise of not changing the total investment amount, investment purpose and implementation entity.
proceeds 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.
Advance Applicable
53
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
investments (1) Proceeds raised in IPO: In April 2017, upon deliberation and approval at the 16th meeting of the Second Board of
for projects Directors, in accordance with the Authentication Report of Having Used Self-raised Funds to Invest in Projects Planned
planned with with Raised Proceeds in Advance issued by GP Certified Public Accountants LLP (GP Special Doc. [2017] No.
raised funds G17003810041), independent directors, the Board of Supervisors and the sponsor expressed their consent to exchange
and their the Company's self-raised funds that had invested in the projects planned under raised proceeds in advance at an amount
exchange 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 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
replenishme
nt of
working Not applicable
capital with
idle
proceeds
Amount of
proceed
balance after
project Not applicable
implementat
ion and
reasons
The Company convened the 13th meeting of the Fourth Board of Directors and the 10th meeting of the Fourth Board of
Supervisors on August 29, 2022 and the 2022 Second Extraordinary General Meeting on October 10, 2022. The
meetings deliberated and approved the Proposal on Using Idle Proceeds and Idle Self -owned Funds for Cash
Unused Management, which agreed to use no more than RMB400 million of temporarily idle proceeds for cash management
proceeds under the premise of not affecting the progress of the investment projects and daily operations of the Company. The
and their above cash management quota is valid for 12 months from the date of approval by the general shareholder meeting, and,
whereabouts 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, 2022, the Company had used RMB270 million idle proceeds to purchase the capital-
guaranteed wealth management products of banks and securities companies. Other unused proceeds are still stored in
the special account for the raised proceeds.
Problems or
other
situations in
None
the use and
disclosure of
proceeds
(3) Changing the use of proceeds
Applicable □Not applicable
Unit: RMB10,000
Total Cumulative Date for Whether
Amount Investment Whether
amount of amount the Benefits feasibility
Project Original actually progress as expected
proceeds invested as project realized of the
after committed invested of the end of benefits
to be of the end of is ready in the project after
change project in the the period are
invested the period for period change had
period (3) = (2)/(1) achieved
in project (2) intended any
54
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
after use significant
change (1) changes
Marketing
network
Supply
constructi June 30, Not
chain park 27,900 5,192.66 6,933.2 24.85% No
on and 2024 applicable
project
upgrading
project
Total -- 27,900 5,192.66 6,933.2 -- -- 0 -- --
The Company issued the Announcement of BIEM.L.FDLKK Garment Co., Ltd. on Changing
the Use of Some Raised Proceeds and the Postponement of the Projects Invested with the
Proceeds (Announcement No.: 2022-056) on July 16, 2022. The Company convened the
12th Meeting of the Fourth Board of Directors and the 9th Meeting of the Fourth Board of
Supervisors on July 15, 2022, which deliberated and approved the Proposal on Changing the
Reasons for the change, decision-
Use of Some Raised Proceeds and Postponing the Project Invested with the Proceeds. Under
making procedures and information
the impact of economic downturn as well as strategic development needs, the Company
disclosure (by project)
planned to adjust the use of a portion of the proceeds at RMB139 million raised through the
issuance of convertible bonds from the “marketing network construction and upgrading
project” to the “R&D design center project”, another intended investment project under the
issuance of convertible bonds. Meanwhile, the Company plans to extend the t ime for
reaching the intended use of both of the above projects.
The “supply chain park project” is behind the expected schedule mainly because relevant
Description of failure to achieve the departments have made adjustments to the planning of the plot, resulting in slow
planned progress or expected benefits construction progress. Meanwhile, considering long-term development and planning, the
and reasons (by project) Company added an investment of RMB139 million from the proceeds in July 2022, so the
time of reaching the intended use is adjusted accordingly.
Description of significant changes in
the feasibility of the project after None
change
VIII. Major Assets and Equity Sales
1. Sales of major assets
□ Applicable Not applicable
The Company did not sell major assets during the reporting period.
2. Sales of major equities
□ Applicable Not applicable
IX. Major Holding and Joint-stock Companies
□ Applicable Not applicable
The Company had no major holding and joint-stock companies that should be disclosed during the reporting period.
X. Structured Entities Controlled by the Company
□ Applicable Not applicable
55
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
XI. Outlook of the Company’s Future Development
(I) Future outlook
As many internationally-renowned clothing brands have started to make layout in the Chinese market, BIEM.L.FDLKK will
officially compete with international peers on the same stage in the future. Along with changes in market competition, the
Company will fight for the right of say in the international arena on behalf of Chinese upmarket apparel brands. The Company will
go all out and strive to transform from a pioneer to a leader in China's high-end apparel segment.
1. Upgrading ways of thinking and actions
The Company will upgrade its ways of thinking and actions from domestic competition to international competition and from
product sales to brand marketing, with a focus on being international, high-end, youthful, and standardized.
2. Upgrading product R&D
The Company will continue to step up R&D efforts and strengthen technologica l innovation and patent R&D with a R&D concept
of “three highs and one innovation”, i.e. “high quality, high taste, high technology and innovative spirit”, so as to create products
with competitive edges in the international market.
3. Upgrading marketing management
The Company will carefully study the marketing management experience of international brands, optimize operation management
and expand marketing ideas in combination with its corporate strategies. It will strive to improve performance of single stores,
strengthen the idea of creating hot-selling items, and build BIEM.L.FDLKK into the first brand that would pop up in the minds of
consumers when they think of T-shirts.
4. Upgrading brand building
The Company will continue to increase advertising efforts, integrate global marketing channels, and further improve brand
awareness and reputation through a series of new channels and models for brand promotion. It will strengthen the cultura l
connotations for its brands, build signature brand culture, and tell a good brand story, to comprehensively enhance brand equity.
5. Upgrading brand image
In terms of brand image upgrading, the Company will build the new look of terminal stores via design and display upgrades. It will
optimize the online web design and comprehensively shape a brand vision of being international, high-end and youthful.
6. Upgrading services
As for brand service upgrading, the Company will comprehensively improve the soft power of competition by elevating the
images and qualities of all employees and comprehensively improving store services.
7. Upgrading organizational management
The Company will build an excellent corporate culture with “responsibility and perfection” at the core. In order to attract more
outstanding talents and create a team with international vision and competitiveness, it will improve career development channels
and training mechanisms and introduce a talent competition mechanism with both promotion and demotion incentives.
8. Upgrading digital technologies
56
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
The Company will step up efforts in digital construction and achieve process streamline, cost reduction and high synergy through
big data and AI innovation, which could greatly improve its operating efficiency as well as profitability and lay the foundation for
international development.
(II) Potential risks faced by the Company and countermeasures
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. The Company has taken a variety of measures to
strengthen and improve product quality. Despite so, there is still the risk that production processes of the factories are not up to the
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. Countermeasures: The Company may take measures such as
establishing a factory selection, inspection and evaluation system, dispatching quality specialists to factories, inspecting their
warehouses, entrusting third-parties to conduct special tests, etc.
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 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. Countermeasures: The Company may take measures such as analyzing the effectiveness of opening a
certain store through big data researches, establishing a talent reserve and iteration system, and improving the performance
appraisal system.
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 that inventories of the Company have
remained 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 impa irment.
57
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
This will cause adverse effects to operations of the Company. Countermeasures: The Company may take measures such as
diversifying channel layout, strengthening digital management through the data middle platform, etc.
XII. Reception of Researches, Communications, Interviews and Other Activities
Applicable □ Not applicable
Main content
Index of the
Reception Reception Type of Reception discussed and
Reception time basic situation
location method reception object object information
of the survey
provided
For details,
Online platform please refer to CNINFO
Online
April 27, 2022 (http://rs.p5w.n Others Others the IR Activity (http://www.cni
investors
et) Record Form nfo.com.cn).
(No. 2022-001)
For details,
Online platform please refer to CNINFO
September 22, Online
(http://rs.p5w.n Others Others the IR Activity (http://www.cni
2022 investors
et) Record Form nfo.com.cn).
(No. 2022-002)
58
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Section IV Corporate Governance
I. Basic Information of Corporate Governance
During the reporting period, the Company has constantly improved its corporate governance structure and optimized its interna l
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 implemented them strictly.
During the reporting period, the Company convened three general meetings of shareholders. The calling and convening procedure s,
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 seven directors, among which three 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 overal l
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 three supervisors, among which one 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 se nior 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
59
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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 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 were significant differences between the Company’s actual status of corporate governance and requirements of
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 requirements of 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, market ing 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 a nd
senior management of the Company have been elected and appointed in strict accordance wit h 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
60
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
personnel of the Company do not moonlight in the controlling shareholder or actual controller or other companies controlled b y
them.
(III) In respect of assets
The Company legally owns the ownership or use rights of lands, properties, and trademark patents, and other assets relating to its
current businesses. 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.
Functional 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, and 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
2021 Annual approved all
Annual general
General Meeting 47.20% May 13, 2022 May 14, 2022 proposals. Details
meeting
of Shareholders can be found in the
Announcement on
61
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Resolutions of
2021 Annual
General Meeting
of Shareholders
(Announcement
No.: 2022-047) on
CNINFO
(http://www.cninfo
.com.cn).
Deliberated and
approved all
proposals. Details
can be found in the
Announcement on
Resolutions of
2022 First Extraordinary
2022 First
Extraordinary general meeting of 47.40% August 02, 2022 August 03, 2022
Extraordinary
General Meeting shareholders
General Meeting
(Announcement
No.: 2022-060) on
CNINFO
(http://www.cninfo
.com.cn).
Deliberated and
approved all
proposals. Details
can be found in the
Announcement on
Resolutions of
2022 Second Extraordinary
2022 Second
Extraordinary general meeting of 45.64% October 12, 2022 October 13, 2022
Extraordinary
General Meeting shareholders
General Meeting
(Announcement
No.: 2022-074) on
CNINFO
(http://www.cninfo
.com.cn).
2. Extraordinary general meetings of shareholders proposed to be convened by preferred shareholders
whose voting rights were resumed
□ Applicable Not applicable
V. Particulars of Directors, Supervisors and Senior Management
1. Basic information
Numb
Numb
er of Increase Decrea
er of
Start End shares of se of
Other shares Reaso
Position Gende date of date of held at shares shares
Name Position Age changes held at n for
status r term of term of the during during
(shares) the end change
office office beginn the the
of the
ing of period period
period
the
62
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
period
Februa Januar
Xie Chairm Incumbe 216,17 216,17
Male 54 ry 15, y 28,
Bingzheng an nt 0,800 0,800
2015 2024
Director
and Februa Januar
Shen Incumbe 19,652 19,652
General Male 48 ry 15, y 28,
Jindong nt ,000 ,000
Manage 2015 2024
r
Director
,
Deputy
General
Februa Januar
Tang Manage Incumbe Femal 5,895, 5,895,
50 ry 15, y 28,
Xinqiao r, and nt e 600 600
2015 2024
Chief
Financi
al
Officer
Director
,
Deputy
General Februa Januar
Incumbe
Chen Yang Manage Male 43 ry 15, y 28,
nt
r, and 2015 2024
Board
Secretar
y
Indepen Januar Januar
Xu Incumbe Femal
dent 60 y 26, y 28,
Xiaoxia nt e
Director 2018 2024
Indepen Januar Januar
Incumbe
Xie Qing dent Male 58 y 29, y 28,
nt
Director 2021 2024
Indepen Januar August
Zeng Resigne Femal
dent 44 y 29, 02,
Yamin d e
Director 2021 2022
Indepen August Januar
He Incumbe
dent Male 52 02, y 28,
Chunhai nt
Director 2022 2024
Chairm
an of
the Februa Januar
Shi Incumbe
Board Male 41 ry 15, y 28,
Minqiang nt
of 2015 2024
Supervi
sors
Februa Januar
Supervi Incumbe
Cao Yong Male 49 ry 15, y 28,
sor nt
2015 2024
Employ
ee
Januar Januar
Zhou Represe Incumbe Femal
51 y 26, y 28,
Cancan ntative nt e
2018 2024
Supervi
sor
Deputy Incumbe Femal 44 Januar Januar
63
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Jin Fenlin General nt e y 22, y 28,
Manage 2017 2024
r
Deputy
Octobe Januar
General Incumbe
Lu Haibo Male 48 r 17, y 28,
Manage nt
2022 2024
r
241,71 241,71
Total -- -- -- -- -- -- 0 0 0 --
8,400 8,400
Whether there was any resignation of directors and supervisors or dismissal of senior management within their term of office
during the reporting period
Yes □ No
During the reporting period, Ms. Zeng Yamin resigned from the independent director of the Company due to personal reasons.
After resignation, she no longer holds any position in the Company.
Changes in directors, supervisors and senior management of the Company
Applicable □ Not applicable
Name Position Type Date Reason
Resignation due to
Zeng Yamin Independent Director Resigned August 02, 2022
personal reasons
Elected by the general
He Chunhai Independent Director Elected August 02, 2022 meeting of
shareholders
Deputy General Appointed by the board
Lu Haibo Appointed October 17, 2022
Manager of directors
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,
Vice President of China National Garment Association, Vice President of China Fashion Color Association, Vice President of
China Textile Planning Research Association, and 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 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.
64
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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 directo r
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
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 Guangdong Industrial Finance Holding Company since
September 2018 and the manager of the Huada Capital Management (Guangdong) Co., Ltd. since March 2022. Currently she is an
independent director of the Company.
Mr. He Chunhai, born in 1971, is of Chinese nationality and has no permanent residency abroad. He has a bachelor degree and is a
certified public accountant, with expertise in accounting and auditing. He used to be the PM of Guangdong Kangyuan Certified
Public Accountants Co., Ltd., the Senior Manager of Zhonghe Zhengxin Certified Public Accountants Co., Ltd., and the Senior
Manager and Partner of Tianjian Zhengxin Certified Public Accountants Co., Ltd. Currently, he is the Partner of ShineWing
Certified Public Accountants (LLP) and part-times as the independent director of Hainan Strait Shipping Co., Ltd., the
independent director of GMG International Tendering Co., Ltd., and the independent director of Higold Group Co., Ltd. Currently,
he is an independent director of the Company.
(II) Supervisors
Mr. Shi Minqiang, born in 1982, is of Chinese nationality and has no permanent residency abroad. Mr. Shi has a master’s degre e.
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. H e
once worked in Bank of China Guangdong Branch. He served as the Investment Director of the Investment Department,
65
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Guangzhou Jinan Investment Co., Ltd. between September 2010 and August 2022 and part-timed as a director of Guangdong
Zhongyao Kiln Stock Co., Ltd. between August 2017 and August 2022. 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 degre e and
is currently the Executive Director of China Fashion Color Association. She joined the Company in 2008 and currently serves a s
the Deputy General Manager of the Company.
Mr. Lu Haibo, born in 1975, is of Chinese nationality and has no permanent residency abroad. He holds a doctorate in
management. Mr. Lu once served as the Partner of Jiangsu U-Choice Consulting Co., Ltd., the Senior Partner of Shanghai Baiyan
Enterprise Management Consulting Co., Ltd., the Deputy Director of Human Resources of Suzhou Broadcasting System, and the
Vice President of Human Resources of Sanpower Group. He joined the Company in 2022 and currently serves as the Deputy
General Manager of the Company.
Positions in shareholder entities
□ Applicable Not applicable
Positions in other entities
Applicable □Not applicable
Whether receiving
Name of other Position held in Start date of term End date of term remuneration and
Name
entity other entity of office of office allowance from
other entity
Planning
Department
(Industry
Development
Xie Qing Deputy Director October 01, 2015 No
Department),
China National
Textile and
Apparel Council
China Textile
Executive Vice December 01,
Xie Qing Enterprise Yes
President 2020
Association
Research and
Consultancy
Center for
Xu Xiaoxia Executive Director January 01, 2022 Yes
Guangdong Small
and Medium-Sized
Firms, South
66
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
China University
of Technology
Baibu Youth
(Guangzhou)
September 01,
Xu Xiaoxia Management Managing Director No
2021
Consulting Co.,
Ltd.
Guangdong
September 01,
Xu Xiaoxia Industrial Finance Director No
2018
Holding Company
Huada Capital
Management
Xu Xiaoxia Manager March 01, 2022 No
(Guangdong) Co.,
Ltd.
ShineWing
He Chunhai Certified Public Partner August 01, 2011 Yes
Accountants (LLP)
Hainan Strait Independent
He Chunhai January 17, 2017 Yes
Shipping Co., Ltd. Director
GMG International
Independent
He Chunhai Tendering Co., June 23, 2020 Yes
Director
Ltd.
Higold Group Co., Independent September 01,
He Chunhai Yes
Ltd. Director 2020
Guangzhou
Nanyue
Mingchuang
Private Equity
Xie Bingzheng Director February 25, 2021 No
Securities
Investment Fund
Management Co.,
Ltd.
Guangdong
Tang Xinqiao Quality Energy Director July 25, 2018 No
Beverage Co., Ltd.
Guangzhou
Chuanqi Executive Director
Tang Xinqiao Intelligent and General April 26, 2019 No
Technology Co., Manager
Ltd.
Guangzhou Wanqi
Business September 07,
Tang Xinqiao Supervisor No
Management Co., 2021
Ltd.
Guangzhou Wanye
Business
Tang Xinqiao Supervisor February 28, 2022 No
Management Co.,
Ltd.
Guangdong
Cao Yong Zhongyao Kiln Director August 01, 2017 August 01, 2022 No
Stock Co., Ltd.
Penalties by regulatory authorities on the Company’s directors, supervisors and senior management both incumbent and resigned
during the reporting period over the past three years
□ Applicable Not applicable
67
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
3. Remuneration of directors, supervisors and senior management
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
Whether
Total
receiving
remuneration
remuneration
Name Position Gender Age Position status before tax
from related
received from
parties of the
the Company
Company
Xie Bingzheng Chairman Male 54 Incumbent 107.93 No
Director and
Shen Jindong General Male 48 Incumbent 115.33 No
Manager
Director,
Deputy General
Tang Xinqiao Manager, and Female 50 Incumbent 108.41 No
Chief Financial
Officer
Director,
Deputy General
Chen Yang Manager, and Male 43 Incumbent 74.96 No
Board
Secretary
Independent
Xu Xiaoxia Female 60 Incumbent 6 No
Director
Independent
Xie Qing Male 58 Incumbent No
Director
Independent
Zeng Yamin Female 44 Resigned 3.54 No
Director
Independent
He Chunhai Male 52 Incumbent 2.46 No
Director
Chairman of
Shi Minqiang the Board of Male 41 Incumbent 32.45 No
Supervisors
Cao Yong Supervisor Male 49 Incumbent 2.4 No
Employee
Zhou Cancan Representative Female 51 Incumbent 43.11 No
Supervisor
68
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Deputy General
Jin Fenlin Female 44 Incumbent 50.62 No
Manager
Deputy General
Lu Haibo Male 48 Incumbent 119.67 No
Manager
Total -- -- -- -- 666.88 --
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,
8th Meeting of the Fourth
January 13, 2022 January 15, 2022 please refer to the
Board of Directors
announcement on CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at
the meeting. For details,
9th Meeting of the Fourth
January 24, 2022 January 25, 2022 please refer to the
Board of Directors
announcement on CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at
the meeting. For details,
10th Meeting of the Fourth
March 09, 2022 March 10, 2022 please refer to the
Board of Directors
announcement on CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at
the meeting. For details,
11th Meeting of the Fourth
April 15, 2022 April 16, 2022 please refer to the
Board of Directors
announcement on CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at
the meeting. For details,
12th Meeting of the Fourth
July 15, 2022 July 16, 2022 please refer to the
Board of Directors
announcement on CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at
the meeting. For details,
13th Meeting of the Fourth
August 29, 2022 August 30, 2022 please refer to the
Board of Directors
announcement on CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at
the meeting. For details,
14th Meeting of the Fourth
October 17, 2022 October 18, 2022 please refer to the
Board of Directors
announcement on CNINFO
(http://www.cninfo.com.cn).
No proposal was rejected at
the meeting. For details,
15th Meeting of the Fourth
December 30, 2022 December 31, 2022 please refer to the
Board of Directors
announcement on CNINFO
(http://www.cninfo.com.cn).
69
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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 Any failure
Board Number of Number of Number of
Board in attending
meetings Board Board general
Name of meetings Number of in person for
required to meetings meetings shareholder
director attended via absence two
attend during attended in attended by meetings
communicati consecutive
the reporting person proxy attended
on methods meetings
period
Xie
8 6 2 0 0 No 3
Bingzheng
Shen Jindong 8 7 1 0 0 No 3
Tang Xinqiao 8 7 1 0 0 No 3
Chen Yang 8 6 2 0 0 No 3
Xu Xiaoxia 8 6 2 0 0 No 3
Xie Qing 8 1 7 0 0 No 3
Zeng Yamin 5 2 3 0 0 No 2
He Chunhai 3 2 1 0 0 No 1
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 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
interests of the Company and all shareholders.
VII. Particulars of the Special Committees under the Board of Directors during the
Reporting Period
Number of Important Other Specifics
Name of Date of
Members meetings Contents opinions and situations of of
committee convening
convened suggestions duty objections
70
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
raised performance (if any)
Discussed and
reviewed the
Xie Proposal on
The meeting
Bingzheng, the Strategic
reviewed
Shen Jindong, Planning of
operations in
Strategy Tang Xinqiao, April 15, Branches in
1 2021 and put None None
Committee Chen Yang, 2022 2022 and the
forward
Xu Xiaoxia, Proposal on
prospects for
Xie Qing, the 2021 Work
2022.
Zeng Yamin Report of the
General
Manager
Reviewed the
remuneration
program for Participants
directors in raised no
Remuneration Xu Xiaoxia, 2022; objection to the
April 15,
and Review Shen Jindong, 1 reviewed the proposals, and None None
2022
Committee Zeng Yamin remuneration all proposals
program for were approved
senior at the meeting.
management
in 2022
After fully
reviewing and
considering the
qualifications of
the proposed
candidates
based on the
principle of
professional
Proposal on experience
Xie Qing, Xie
Nomination By-election of diversification
Bingzheng, 2 July 15, 2022
Committee Independent and competence
Xu Xiaoxia
Directors complementatio
n of board
members, the
meeting agreed
to submit the
proposal to the
Board of
Directors for
review and
approval.
After
considering that
qualifications of
Proposal on
the candidates
Appointing
Xie Qing, Xie were up to
Nomination October 17, the Deputy
Bingzheng, 2 requirements on
Committee 2022 General
Xu Xiaoxia senior
Manager of
management of
the Company
listed
companies and
requirements of
71
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
the post, the
meeting agreed
to submit the
proposal to the
Board of
Directors for
review and
approval.
Proposal on
Corrections to
Accounting
The meeting
Errors in
agreed to submit
Previous
the proposal to
March 09, Periods;
the Board of
2022 discussed and
Directors for
reviewed the
review and
2021 Internal
approval.
Audit Work
Report of the
Company
Reviewed the
Zeng Yamin, 2021 Audit
Audit
Chen Yang, Report
Committee 2
Xu Xiaoxia presented by
the CPA firm;
reviewed the
Participants
2021 Internal
raised no
Control Self-
objection to the
April 11, evaluation
proposals, and
2022 Report;
all proposals
reviewed the
were approved
2022 First
at the meeting.
Quarter
Report;
reviewed the
Internal Audit
Work Report
of 2022 Q1.
Reviewed the
Company's
2022 Semi-
Annual
Report;
reviewed the
Proposal on
Participants
the Continued
He Chunhai, raised no
Audit Engagement
Chen Yang, objection to the
Committee August 29, of the CPA
Xu Xiaoxia 3 proposals, and
2022 Firm in 2022;
all proposals
reviewed the
were approved
Special
at the meeting.
Report on the
Deposit and
Use of
Proceeds in
H1 2022;
listened to the
Company's
72
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
internal audit
work report in
Q2 2022
Reviewed the
2022 Third Participants
Quarter raised no
Report; listed objection to the
October 17,
to the proposals, and
2022
Company's all proposals
internal audit were approved
work report in at the meeting.
Q3 2022
Reviewed and
deliberated
the All the
December
Company's proposals were
30, 2022
internal audit agreed.
work plan in
2023
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
533
end of the reporting period
Number of in-service employees of the major subsidiaries at
2,769
the end of the reporting period
Total number of in-service employees at the end of the
3,302
reporting period
Total number of employees receiving remuneration in the
3,302
reporting period
Number of retired employees whose expenses are borne by the
7
Parent Company and its major subsidiaries
Composition of professions
Type of profession Number of persons
Sales staff 2,756
Administrative staff 164
Operation staff 303
R&D and design staff 79
Total 3,302
Education level
Type of education level Number of persons
Postgraduates and above 15
73
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
University graduates 226
College graduates 760
Technical school graduates and lower 2,301
Total 3,302
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 value s,
and adopts a flexible remuneration structure for different sequences of positions. The remuneration base and total amount are
dynamically managed in line with the 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 anyt ime,
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 so lidifying 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
Applicable □ Not applicable
74
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
The Company implemented profit distribution in strict accordance with relevant requirements of the Articles of Association in the
reporting period.
During the reporting period, the Board of Directors and the general shareholder meeting deliberated and approved the 2021 profit
distribution plan on April 15 and May 13, 2022, 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 of 570,707,084 shares as at the end of March 31, 2022, with a
total amount of RMB171,212,125.20. The plan was completed in July 2022.
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
Yes
are well-established:
Whether independent directors have performed duties and
Yes
played their roles properly:
Whether minority shareholders have sufficient opportunities to
express opinions and requests, and whether their legitimate Yes
rights and interests were sufficiently protected:
Where the cash dividend policy undergoes any adjustment or
change, whether the conditions and procedures are compliant Not applicable
and transparent:
The Company gained profits in the reporting period and the retained profit of the Parent Company for holders of ordinary shares
was positive, but no plan of cash dividend was 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 (RMB) (tax included) 3.00
Basis of the shares for distribution proposal 570,707,084
Amount of cash dividends (RMB) (tax included) 171,212,125.20
Cash dividend amount in other ways (such as share repurchase)
0.00
(RMB)
Total amount of cash dividends (including other ways) (RMB) 171,212,125.20
Distributable profit (RMB) 2,338,994,313.31
Proportion of total cash dividends (including other ways) in
100%
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 December 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 forwa rd 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 r atio
75
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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
Number of entitled Total number of total share capital
Scope of employees Changes for implementing
employees shares held of the listed
the plan
company
1. Directors
(excluding
independent Self-raised funds
directors), by employees and
supervisors and borrowed funds
851 6,494,626 None 1.14%
senior management from the
of the Company; controlling
2. Other core and shareholder
backbone
employees
Shareholdings of directors, supervisors and senior management in the Employee Stock Ownership Plan during the reporting period
Number of shares held Number of shares held Proportion to the total
Name Position at the beginning of the at the end of the share capital of the
reporting period reporting period listed company
Director and General
Shen Jindong 413,590 0 0.00%
Manager
Director, Deputy
Tang Xinqiao General Manager, and 241,187 0 0.00%
Chief Financial Officer
Director, Deputy
Chen Yang General Manager, and 55,500 0 0.00%
Board Secretary
Deputy General
Jin Fenlin 47,234 0 0.00%
Manager
Chairman of the Board
Shi Minqiang 44,872 0 0.00%
of Supervisors
Zhou Cancan Employee 35,425 0 0.00%
76
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Representative
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
None
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
On May 13, 2022, the Company issued the Announcement on the Completion of the Sale of the Phase III Employee Stock
Ownership Plan and Termination of the Plan. All the 6,494,626 shares under the Plan were sold through centralized bidding.
Accordingly, the Phase III Employee Stock Ownership Plan was terminated. For details, please refer to the announcement on
CNINFO (http://www.cninfo.com.cn).
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 sys tem,
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 2022, and have basically achieved the overall goal of internal control. They have played a positive role 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, 2022, the design and
operations of the Company’s internal control system are effective, without any major defects.
77
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
The internal control system should 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 Solution Subsequent
Integration plan Solutions taken
company progress integration progress 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 self-assessment
April 28, 2023
report on internal control
Disclosure index of the self-assessment
CNINFO (http://www.cninfo.com.cn)
report on internal control
Percentage of total assets of units
included in the assessment scope to the
100.00%
Company’s total assets in its
consolidated financial statements
Percentage of total revenue of units
included in the assessment scope to the
100.00%
Company’s revenue in its consolidated
financial statements
Defect identification criteria
Category Financial report Non-financial report
Material defect: (1) The internal control Material defect: Its probability of
is invalid; (2) Directors, supervisors and occurrence is high or the defect severely
senior management have committed reduces work efficiency or effectiveness,
fraud and caused serious losses and or severely increases the uncertainty of
severe adverse impacts to the company; effects or causes severe deviations from
(3) Significant errors in the current expected objectives.
financial reports were identified by the Major defect: Its probability of
certified public accountants but not by occurrence is relatively high or the defect
Qualitative criteria internal control; (4) The internal control significantly reduces work efficiency or
and supervision conducted by the effectiveness, or significantly increases
company’s audit committee and internal the uncertainty of effects or causes
auditing units are invalid; (5) There exist obvious deviations from expected
one or a combination of control defects objectives.
that may cause the company to General defect: Its probability of
materially deviate from the objectives of occurrence is low or the defect reduces
internal control. Major defect: (1) The work efficiency or effectiveness, or
company fails to select and apply increases the uncertainty of effects or
78
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
accounting policies based on generally causes deviations from expected
accepted accounting standards; (2) There objectives.
are no anti-fraud procedures and control
measures; (3) There is no control
mechanism for significant non-routine or
special transactions or the mechanism is
not implemented, while there is no
compensatory control; (4) There are one
or multiple defects in the control of the
financial reporting process at the end of
the period such that the authenticity and
completeness of the prepared financial
reports could not be reasonably
guaranteed. General defect: Other
internal control defects than material
defects and major defects.
Quantitative criteria take revenue and
total assets as measurement indicators.
(1) In respect of revenue: General defect:
The misstated amount in the financial
report arising from the defect alone or in
combination with other defects is less
than 1% of revenue; Major defect: The
misstated amount is between 1%
(inclusive) and 2% of the
revenue; Material defect: The misstated The quantitative criteria for non-financial
Quantitative criteria amount is more than 2% (inclusive) of report defects are subject to those of
revenue. (2) In respect of total assets: financial report defects.
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
1% 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 non-
0
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
Audit Opinions in the Internal Control Audit Report
We believe that the Company has maintained effective internal control over financial reporting in all material aspects in
accordance with requirements of the Basic Norms for the Internal Control of Enterprises and other relevant control standards as at
December 31, 2022.
Disclosure of the Internal Control Audit Report Disclosed
79
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Disclosure date of the Internal Control Audit Report April 28, 2023
Disclosure index of the Internal Control Audit Report 2022 Internal Control Audit Report on CNINFO
Type of opinion of the Internal Control Audit Report Standard unqualified
Whether there were material defects in non-financial reports No
Whether the CPA firm issued an Internal Control Audit Report with qualified opinions
□ Yes No
Whether opinions of the Internal Control Audit Report issued by the CPA firm were consistent with the self-assessment report of
the Board
Yes □ No
XV. Rectification of Detected Problems in the Corporate Governance Special Action of
Listed Companies
Not applicable
80
BIEM.L.FDLKK GARMENT CO., LTD. 2022 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 production and
Reason of penalty Violation Penalty result measures of the
or subsidiary operation of the
Company
listed company
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
Other environmental information to be disclosed with a reference to 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 shall 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.
Occurrence of environmental accidents of the listed company
Not applicable
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) Protection of employee rights and interests
Adhering to the principle of people-oriented, the Company actively provides employees with a development platform and
environment to realize their self-worth. In addition, the Company has established a sound and harmonious corporate culture that
81
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
facilities the common deve lopment of the Company and employees, such that employees can share the Company’s operating
results. Pursuant to the Labor Law and other relevant laws and regulations, the Company has put in place a sound HR system and
offers a safe and comfortable workplace environment to employees. It listens to voices of the employees, pays close attention to
their health, safety and satisfaction, and actively carries out trainings to improve the overall quality of the workforce.
(3) Relationship with other stakeholders
The Company actively builds and develops the strategic partnership with suppliers and customers and provides quality products
and services to customers under the principles of “voluntariness, equality and mutual benefit”. It strengthens communication and
cooperation with suppliers to achieve win-win and strictly controls product quality to protect the interests of consumers. The sound
communication and coordination with relevant stakeholders to build a platform of trust and cooperation can properly guarante e the
rights and interests of all parties. In terms of social welfare undertakings, the Company actively fulfills its corporate soc ia l
responsibilities and creates values for stakeholders and the society as a whole.
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. 2022 Annual Report
Section VI Significant Events
I. Implementation of Commitments
1. Commitments fulfilled 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
Cause of Undertaking Type of Time of Term of Fulfillment of
Content of commitment
commitment party commitment commitment commitment commitment
They promise that
during their term as a
director, supervisor and
senior management of
the Company, they will
not transfer more than
25% of the total shares
During the
they hold in the
term when
Company each year; if
they serve as
they leave office, they
the director,
will not transfer any
Xie Bingzheng, supervisor and
shares within six
Feng Lingling, Commitment to December senior Ongoing
months after leaving
Shen Jindong, share reduction 23, 2016 management normally
office; within 12
Tang Xinqiao and within a
months upon the
specific
expiration of the
period after
aforesaid 6 months after
reporting for
reporting for leaving
leaving office
office, the number of
Commitments
shares sold through
made during
stock exchange listing
IPO or
will not exceed 50% of
refinancing
the total number of
shares they hold in the
Company.
During the
period when
they act as the
controlling
They have presented shareholder
the Letter of and actual
Commitment to Avoid controller of
Xie Bingzheng, Not-to-compete Horizontal January 15, the Company Ongoing
Feng Lingling commitment Competition, promising 2013 and within normally
not to compete with the three years
Company in the same after they no
business sector. longer act as
the controlling
shareholder
and actual
controller
Whether
Yes
commitments
83
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
are fulfilled on
time
If there are
commitments
not fulfilled
within the
specified period
Not applicable
of time, specify
reasons for
failure to do so
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 could still achieve 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 CPA Firm
□ Applicable Not applicable
VI. Changes in Accounting Policies and Estimates Compared with the Financial Report of
Last Fiscal Year or Correction of Significant Accounting Errors
Applicable □Not applicable
(1) Implementation of the Interpretation No. 15 to Accounting Standards for Business Enterprises
84
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
In December 2021, the Ministry of Finance issued the Interpretation No. 15 to Accounting Standards for Business Enterprises (Cai
Kuai [2021] No. 35) (hereinafter referred to as the “Interpretation No.”), which stipulated that contents regarding “accounting
treatment for the external sales of products or by-products before they reach intended use or produced during the research and
development process” and “judgment of loss contracts” shall be implemented from January 1, 2022.
The Company started to implement the provisions regarding “accounting treatment for the external sales of products or by-
products before they reach intended use or produced during the research and development process” and “judgment of loss
contracts” from January 1, 2022. The above changes in accounting policies have no impact on the Company’s financial statements.
(2) Implementation of the Interpretation No. 16 to Accounting Standards for Business Enterprises
In November 2022, the Ministry of Finance issued the Interpretation No. 16 to Accounting Standards for Business Enterprises
(Cai Kuai [2022] No. 31) (hereinafter referred to as the “Interpretation No. 16”), which stipulated that contents regarding
“accounting treatment for the dividends of financial instruments classified as equity instruments by the issuer” and “account ing
treatment for the change of cash-settled share-based payment transaction to equity-settled shared-based payment transaction” shall
come into force as of the date of issuance.
The Company started to implement the provisions regarding “accounting treatment for the dividends of financial instruments
classified as equity instruments by the issuer” and “accounting treatment for the change of cash-settled share-based payment
transaction to equity-settled shared-based payment transaction” as of the date of issuance. The above changes in accounting
policies have no impact on the Company’s financial statements.
VII. Changes in the Scope of Consolidated Statements Compared with the Financial Report
of Last Year
Applicable □ Not applicable
In December 2022, three new companies were incorporated into the consolidated scope due to business needs, including one
holing subsidiary Guangzhou Houde Zaiwu Industrial Investment Fund Partnership (Limited Partnership) and two second-tier
subsidiaries of Hong Kong Carritt Limited and Hong Kong Plentiful Shiny Limited.
VIII. Engagement and Dismissal of CPA Firm
CPA firm engaged
Name of the domestic CPA firm Huaxing Certified Public Accountants LLP
Remuneration for the domestic CPA firm (RMB 10,000) 150
Consecutive years of auditing service provided by the domestic
3 years
CPA firm
Name of domestic certified public accountants Chen Danyan, He Ting
Consecutive years of auditing service provided by domestic
1 year, 2 years
certified public accountants
Whether the CPA firm was changed in the reporting period
□ Yes No
85
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Appointment of CPA firm, financial advisor or sponsor for internal control audit
Applicable □Not applicable
During the reporting period, the Company hired Huaxing Certified Public Accountants LLP to provide internal control audit
services for the Company, with a service fee of RMB400,000.
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.
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 equities
□ Applicable Not applicable
During the reporting period, there was no related party transaction relating to acquisition and sale of assets or equities.
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.
86
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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.
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 --> 2. 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.
87
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
2. Material guarantees
□ Applicable Not applicable
During the reporting period, the Company did not have material guarantees.
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
Amount overdue
Source of Incurred amount of but not recovered
Amount overdue
Specific type entrusted wealth entrusted wealth Undue balance with impairment
but not recovered
management funds management having been
accrued
Wealth
management Proceeds raised 38,000 17,000 0 0
product of bank
Wealth
management
Proceeds raised 10,000 10,000 0 0
product of
securities company
Wealth
management Self-owned fund 120,000 120,000 0 0
product of bank
Wealth
management
Self-owned fund 10,000 10,000 0 0
product of
securities company
Total 178,000 157,000 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.
88
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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
On December 1, 2022, the Company issued the Announcement on Transferring Shares of Guangzhou BIEM.L.FDLKK Ejam
Equity Investment Partnership (Limited Partnership) and Exiting the Partnership . According to the Company’s development
strategy and the future planning of Fast Fashion (Guangzhou) Co., Ltd., the Company, upon negotiations, signed the Partnership
Share Transfer Agreement with 19 transferees, including Beijing Qianchenhui Trading Co., Ltd., Liang Xiaofen, Yue Minglei, etc.
In accordance with the agreement, the Company transferred 99.01% of the equities it held in the partnership to the above
transferees at a price of RMB137.67 million. After the transfer, the Company no longer holds any equities in the partnership. For
details, please refer to the announcement issued on CNINFO (www.cninfo.com.cn).
89
BIEM.L.FDLKK GARMENT CO., LTD. 2022 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
Bonus transferred
Quantity Percentage shares Others Subtotal Quantity Percentage
shares from surplus
issued
reserve
I.
181,289,7 181,288,8
Restricted 32.94% -900 -900 31.77%
00 00
shares
1.
Shares
held by
the state
2.
Shares
held by
state-
owned
legal
person
3.
Shares
held by
181,289,7 181,288,8
other 32.94% -900 -900 31.77%
00 00
domestic
sharehold
ers
Inclu
ding:
Shares
held by
domestic
legal
persons
Shar
es held by
181,289,7 181,288,8
domestic 32.94% -900 -900 31.77%
00 00
natural
persons
4.
Shares
held by
90
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
foreign
sharehold
ers
Inclu
ding:
Shares
held by
foreign
legal
persons
Shar
es held by
foreign
natural
persons
II.
369,037,0 20,381, 20,381,27 389,418,2
Unrestrict 67.06% 68.23%
12 272 2 84.00
ed shares
1.
RMB-
denomina 369,037,0 20,381, 20,381,27 389,418,2
67.06% 68.23%
ted 12 272 2 84.00
ordinary
shares
2.
Domestic
listed
foreign
shares
3.
Overseas
listed
foreign
shares
4.
Others
III. Total
550,326,7 20,380, 20,380,37 570,707,0
number of 100.00% 100.00%
12 372 2 84
shares
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, 20,380,372 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
91
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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
2. Changes in restricted shares
Applicable □Not applicable
Unit: share
Number of
Number of
Increase in shares released Number of
restricted Reason for Date of lifting
Shareholder’s restricted from selling restricted
shares at the selling selling
name shares during restrictions shares at the
beginning of restrictions restrictions
the period during the end of the year
the period
period
Subject to
relevant
Lock-up shares
provisions on
Xie Bingzheng 162,129,000 0 900 162,128,100 of senior
lock-up shares
management
of senior
management
Subject to
relevant
Lock-up shares
provisions on
Shen Jindong 14,739,000 0 0 14,739,000 of senior
lock-up shares
management
of senior
management
Lock-up shares Subject to
Tang Xinqiao 4,421,700 0 0 4,421,700
of senior relevant
92
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
management provisions on
lock-up shares
of senior
management
Total 181,289,700 0 900 181,288,800 -- --
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, 2022, the convertible bonds had converted into a total of 46,637,3 74
shares, and the Company’s total share capital increased to 570,707,084 shares after the conversion.
3. Internal employee shares
□ Applicable Not applicable
III. Information of Shareholders and Actual Controllers
1. Total number of shareholders
Unit: share
Total number
Total number of preferred
of ordinary shareholders Total number of preferred
Total number
shareholders whose voting shareholders whose voting
of ordinary
at the end of rights were rights were resumed at the
shareholders
8,373 the month 8,769 resumed at 0 end of the month 0
at the end of
preceding the the end of the preceding the disclosure
the reporting
disclosure reporting date of the annual report
period
date of the period (if (if any) (see Note 8)
annual report any) (see
Note 8)
Shareholdings of shareholders with more than 5% or the top 10 shareholders
Shares Pledged, marked or frozen
held at Increase/decr Number
Shareholding Number of
Name of Nature of the end ease during of
percentage unrestricted Share
shareholder shareholder of the the reporting restricted Quantity
(%) shares status
reporting period shares
period
Xie Domestic 216,170, 162,128,
37.88% 0 54,042,700
Bingzheng natural 800 100
93
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
person
Domestic
Feng 19,652,0
natural 3.44% 0 0 19,652,000
Lingling 00
person
Domestic
19,652,0 14,739,0
Shen Jindong natural 3.44% 0 4,913,000
00 00
person
CCB -
Guotai
Health 14,920,7
Others 2.61% 9,752,783 0 14,920,781
Equity 81
Investment
Fund
National
Social
13,200,2
Security Others 2.31% 1,199,910 0 13,200,289
89
Fund
Portfolio 103
ICBC - GF
Steady
Growth 11,800,0
Others 2.07% 800,000 0 11,800,000
Securities 00
Investment
Fund
Taiping Life
Insurance
Company
Limited -
Traditional - 10,073,2
Others 1.77% 8,123,280 0 10,073,280
General 80
Insurance
Product -
022L-CT001
SZ
Hong Kong
Foreign
Securities 9,848,36
legal 1.73% -8,402,254 0 9,848,367
Clearing Co., 7
person
Ltd.
National
Social
9,300,00
Security Others 1.63% 7,300,000 0 9,300,000
0
Fund
Portfolio 115
ICBC - ZO
Value Hybrid
9,114,91
Securities Others 1.60% 1,221,900 0 9,114,911
1
Investment
Fund
Strategic investors or
general legal persons
becoming top ten
None
shareholders due to private
placement of new shares (if
any) (see Note 3)
Description on the related
relationship or persons Xie Bingzheng and Feng Lingling, as husband and wife, are persons acting in concert.
acting-in-concert
94
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
arrangements among the
above shareholders
Description on
entrusting/being entrusted
with voting rights and
None
waver of voting rights by
the aforementioned
shareholders
Description on special
repurchase account among
None
top 10 shareholders (if any)
(see Note 10)
Top 10 shareholders not subject to selling restrictions
Type of shares
Name of shareholder Number of unrestricted shares held at the end of reporting period Type of
Quantity
shares
RMB-
denominated 54,042,700.
Xie Bingzheng 54,042,700.00
ordinary 00
shares
RMB-
denominated 19,652,000.
Feng Lingling 19,652,000.00
ordinary 00
shares
RMB-
CCB - Guotai Health Equity denominated 14,920,781.
14,920,781.00
Investment Fund ordinary 00
shares
RMB-
National Social Security denominated 13,200,289.
13,200,289.00
Fund Portfolio 103 ordinary 00
shares
RMB-
ICBC - GF Steady Growth denominated 11,800,000.
11,800,000.00
Securities Investment Fund ordinary 00
shares
Taiping Life Insurance
RMB-
Company Limited -
denominated 10,073,280.
Traditional - General 10,073,280.00
ordinary 00
Insurance Product - 022L-
shares
CT001 SZ
RMB-
Hong Kong Securities denominated 9,848,367.0
9,848,367.00
Clearing Co., Ltd. ordinary 0
shares
RMB-
National Social Security denominated 9,300,000.0
9,300,000.00
Fund Portfolio 115 ordinary 0
shares
RMB-
ICBC - ZO Value Hybrid denominated 9,114,911.0
9,114,911.00
Securities Investment Fund ordinary 0
shares
National Social Security RMB- 8,812,199.0
8,812,199.00
Fund Portfolio 118 denominated 0
95
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
ordinary
shares
Description on the related
relationship or persons
acting-in-concert among the
top ten ordinary
Xie Bingzheng and Feng Lingling, as husband and wife, are persons acting in concert. It is unknown
shareholders without selling
to the Company whether other shareholders are related parties or persons acting in concert as
restrictions and between the
stipulated in the Administrative Measures on Acquisition of Listed Companies.
top ten ordinary
shareholders without selling
restrictions and the top ten
ordinary shareholders
Description on the top 10
ordinary shareholders’
participation in margin
None
trading and securities
lending business (if any)
(see Note 4)
Whether the top ten ordinary shareholders and the top ten shareholders without selling restrictions conducted any transactions with
agreements to repurchase during the reporting period
□ Yes No
The Company's top ten ordinary shareholders and top ten ordinary shareholders without selling restrictions did not conduct any
transactions with agreements to repurchase during the reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholder: natural person holding
Type of controlling shareholder: natural person
Whether having obtained the right of
Name of controlling shareholder Nationality
abode in other 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
None
listed 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 shareholders during the reporting period.
3. Actual controller and persons acting in concert
Nature of actual controller: domestic natural person
Type of actual controller: natural person
Whether having obtained the
Relationship with actual
Name Nationality right of abode in other
controller
countries or regions
Xie Bingzheng Self Chinese No
96
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Feng Lingling Self Chinese No
Xie Bingzheng is the Chairman of the Company; Feng Lingling is the Head of the R&D Center
Main occupation and position
of the Company.
Holding of domestic and
overseas listed companies None
over the past ten 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
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 persons 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 shareholders, actual controllers, 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 through centralized bidding
□ Applicable Not applicable
97
BIEM.L.FDLKK GARMENT CO., LTD. 2022 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. 2022 Annual Report
Section IX Particulars of Bonds
□ Applicable Not applicable
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Section X Financial Report
I. Audit Report
Type of auditor’s opinion Standard unqualified
Signing date of the Audit Report April 26, 2023
Name of auditing organization Huaxing Certified Public Accountants LLP
Reference number of the Audit Report Hua-Xing-Shen-Zi [2023] No. 22012980012
Name of certified public accountants Chen Danyan, He Ting
Text of the 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, 2022, 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 2022, 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 pos ition
as of December 31, 2022, and the consolidated and the Parent Company’s operating results and cash flows for 2022.
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 Financia l
Statements” section of this 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 financia l
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a w hole,
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 recognition of inventory impairment, please refer to “Note V (14)” for accounting policies and “Note VII (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 realizable value. When determining whether the inventories have impaired, the management needs to make judgments and
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
estimates 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 invent ories
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 V (32)” for accounting policies and “Note VII (35) 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 o f
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
changes in income;
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
(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, 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, 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 re cords, 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 2022 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 assuranc e
conclusion thereon.
In connection with our audit of the financia l 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 a re
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 ZD Automotive (Beijing) Co., Ltd. (hereinafter the “Management”) is responsible for preparing financia l
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 such that the financial statements are free from mate ria l
misstatements, 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
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.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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 materia l
misstatements, 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 the Auditing Standards will always dete ct a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if they, indiv idually
or in the aggregate, could reasonably be expected to influence the economic decisions of users made on the basis of these financia l
statements.
As part of our audit work in accordance with the Auditing Standards, we exercised professional judgment and maintained
professional skepticism throughout the audit. We also:
(I) Identified and assessed 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 obtained 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) Obtained an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances.
(III) Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
(IV) Concluded 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 t he
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our audit report to the related disclosures in these financial statements or, if such disclosures are inadequate , to issue a
qualified opinion. Our conclusions are based on the audit evidence obtained up to the date of our au ditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
(V) Evaluated 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) Obtained 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 communicated with the governance layer 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 d those charged with governance with a statement that we comply with relevant ethical requirements regard ing
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).
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
From the matters communicated with those charged with governance, we determined the matters that were of most significance in
the audit of the financial statements of the period and are therefore the key audit matters. We describe d these matters in our audit
report unless law or regulation precludes public disclosure about the matter or when, in tiny minority circumstances, we
determined 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, 2022
Unit: RMB
Item December 31, 2022 January 01, 2022
Current assets:
Monetary funds 1,144,693,949.57 1,082,712,218.58
Settlement reserve
Lending funds
Financial assets held for trading 1,378,756,798.87 634,763,818.96
Derivative financial assets
Notes receivable
Accounts receivable 252,544,886.96 279,717,057.14
Accounts receivable financing
Prepayments 28,272,902.29 67,028,355.09
Premiums receivable
Reinsurance premiums receivable
Reinsurance contract reserves
receivable
Other receivables 72,134,856.39 89,889,485.22
Including: Interests receivable
Dividends receivable
Financial assets purchased under
agreements to resell
Inventory 745,605,174.25 660,214,219.41
Contract assets
Assets held for sale 137,859,613.49
Non-current assets due within one year
Other current assets 364,286,702.97 830,640,713.41
Total current assets 4,124,154,884.79 3,644,965,867.81
Non-current assets:
Loans and advances
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments
Investment in other equity instruments 10,499,383.76 98,099,300.47
Other non-current financial assets
Investment properties
Property, plant and equipment 461,506,954.62 244,337,754.20
Construction in progress 70,114,185.76 148,165,548.36
Productive biological assets
Oil & gas assets
Right-of-use assets 332,568,088.84 407,448,654.74
Intangible assets 129,012,724.85 119,548,729.29
Development expenses
Goodwill
Long-term deferred expenses 111,489,073.31 105,243,120.55
Deferred tax assets 110,006,149.99 93,314,368.55
Other non-current assets 229,534,475.56 1,833,508.45
Total non-current assets 1,454,731,036.69 1,217,990,984.61
Total assets 5,578,885,921.48 4,862,956,852.42
Current liabilities:
Short-term loans
Borrowings from central bank
Placements from banks and other
financial institutions
Financial liabilities held for trading
Derivative financial liabilities
Notes payable 46,482,171.48 38,098,527.79
Accounts payable 184,779,174.92 126,522,502.78
Prepayments
Contract liabilities 168,876,645.17 140,669,127.30
Financial assets sold under agreements
to repurchase
Deposits from customers and
interbank
Funds from securities trading agency
Funds from securities underwriting
agency
Employee benefits payable 65,774,838.19 64,027,461.27
Taxes payable 170,728,526.54 130,969,262.60
Other payables 90,368,389.42 55,878,486.28
Including: Interests payable
Dividends payable
Service charges and commissions
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
payable
Reinsurance premiums payable
Liabilities held for sale 1,408,760.31
Non-current liabilities due within one
201,658,095.27 197,019,114.42
year
Other current liabilities 335,666,660.59 328,630,853.34
Total current liabilities 1,265,743,261.89 1,081,815,335.78
Non-current liabilities:
Insurance contract reserves
Long-term loans
Bonds payable 284,554,163.11
Including: Preference shares
Perpetual bonds
Lease liabilities 141,295,857.16 217,323,756.45
Long-term payables
Long-term employee benefits payable
Provision
Deferred income 30,000,000.00 30,000,000.00
Deferred tax liabilities 10,363,326.05 2,854,265.46
Other non-current liabilities
Total non-current liabilities 181,659,183.21 534,732,185.02
Total liabilities 1,447,402,445.10 1,616,547,520.80
Owner's equity:
Share capital 570,707,084.00 550,326,712.00
Other equity instruments 27,524,454.16
Including: Preference shares
Perpetual bonds
Capital reserve 893,544,757.34 600,470,446.15
Less: Treasury shares
Other comprehensive income 41,433,816.28 -842,173.72
Special reserves
Surplus reserves 285,353,542.00 258,110,335.93
General risk reserves
Retained earnings 2,338,994,313.31 1,809,851,821.97
Total equity attributable to owners of the
4,130,033,512.93 3,245,441,596.49
parent company
Equities of minority shareholders 1,449,963.45 967,735.13
Total owner's equity 4,131,483,476.38 3,246,409,331.62
Total liabilities and owner's equity 5,578,885,921.48 4,862,956,852.42
Legal representative: Xie Bingzheng Person in charge of accounting: Tang Xinqiao Person in charge of accounting
department: Chen Zhihui
2. Balance sheet of the Parent Company
Unit: RMB
Item December 31, 2022 January 01, 2022
Current assets:
Monetary funds 1,075,236,394.98 1,001,684,939.89
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Financial assets held for trading 1,378,756,798.87 634,763,818.96
Derivative financial assets
Notes receivable
Accounts receivable 252,544,886.96 279,717,057.14
Accounts receivable financing
Prepayments 26,602,650.22 46,156,432.50
Other receivables 71,618,317.39 93,306,779.94
Including: Interests receivable
Dividends receivable
Inventory 1,080,676,103.09 921,517,571.29
Contract assets
Assets held for sale 100,000,000.00
Non-current assets due within one year
Other current assets 394,078,391.33 861,560,189.31
Total current assets 4,379,513,542.84 3,838,706,789.03
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 11,000,000.00 111,000,000.00
Investment in other equity instruments
Other non-current financial assets
Investment properties
Property, plant and equipment 461,506,954.62 244,337,754.20
Construction in progress 70,114,185.76 148,165,548.36
Productive biological assets
Oil & gas assets
Right-of-use assets 319,277,363.83 381,889,568.21
Intangible assets 129,012,724.85 119,548,729.29
Development expenses
Goodwill
Long-term deferred expenses 110,805,073.31 99,655,978.73
Deferred tax assets 59,564,063.94 52,843,305.91
Other non-current assets 229,534,475.56 1,833,508.45
Total non-current assets 1,390,814,841.87 1,159,274,393.15
Total assets 5,770,328,384.71 4,997,981,182.18
Current liabilities:
Short-term loans
Financial liabilities held for trading
Derivative financial liabilities
Notes payable 46,482,171.48 38,098,527.79
Accounts payable 373,727,737.85 231,476,161.90
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Prepayments
Contract liabilities 168,876,645.17 140,669,127.30
Employee benefits payable 3,344,560.06 3,243,444.48
Taxes payable 122,450,173.32 93,757,929.83
Other payables 90,191,808.97 54,674,918.89
Including: Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one
188,492,930.67 183,853,949.82
year
Other current liabilities 335,666,660.59 328,630,853.34
Total current liabilities 1,329,232,688.11 1,074,404,913.35
Non-current liabilities:
Long-term loans
Bonds payable 284,554,163.11
Including: Preference shares
Perpetual bonds
Lease liabilities 140,531,323.47 204,320,772.36
Long-term payables
Long-term employee benefits payable
Provision
Deferred income 30,000,000.00 30,000,000.00
Deferred tax liabilities 3,198,694.64 2,854,265.46
Other non-current liabilities
Total non-current liabilities 173,730,018.11 521,729,200.93
Total liabilities 1,502,962,706.22 1,596,134,114.28
Owner's equity:
Share capital 570,707,084.00 550,326,712.00
Other equity instruments 27,524,454.16
Including: Preference shares
Perpetual bonds
Capital reserve 893,544,757.34 600,470,446.15
Less: Treasury shares
Other comprehensive income
Special reserves
Surplus reserves 285,353,542.00 258,110,335.93
Retained earnings 2,517,760,295.15 1,965,415,119.66
Total owner's equity 4,267,365,678.49 3,401,847,067.90
Total liabilities and owner's equity 5,770,328,384.71 4,997,981,182.18
3. Consolidated income statement
Unit: RMB
Item 2022 2021
I. Total Revenue 2,884,841,760.82 2,719,989,257.14
Including: Revenue 2,884,841,760.82 2,719,989,257.14
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Interest income
Insurance premiums earned
Service charge and
commission income
II. Costs and Expenses 2,001,816,372.02 1,960,636,804.05
Including: Cost of revenue 652,016,624.24 634,160,601.71
Interest expense
Service charge and
commission expense
Surrender value
Net benefit payments
Net insurance liability reserves
Policy dividends
Reinsurance expenses
Taxes and surcharges 25,394,739.63 23,962,477.58
Selling expenses 1,036,372,556.97 1,041,052,486.14
Administrative expenses 195,632,058.12 156,267,574.26
R&D expenses 100,182,947.69 83,388,128.67
Finance expenses -7,782,554.63 21,805,535.69
Including: Interest fees 20,263,656.64 39,729,487.13
Interest income 28,967,907.61 18,147,338.76
Plus: Other income 23,253,459.19 14,781,618.40
Return on investment ("-"
39,390,949.38 38,815,870.23
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 value
4,950,075.80 3,424,832.00
("-" indicates loss)
Credit impairment losses ("-"
2,269,925.82 314,860.76
indicates loss)
Asset impairment losses ("-"
-99,445,469.97 -78,683,952.73
indicates loss)
Gains on disposal of assets ("-"
1,862,946.66 -253,775.79
indicates loss)
III. Operating Profit ("-" indicates loss) 855,307,275.68 737,751,905.96
Plus: Non-operating revenue 3,017,693.32 531,942.90
Less: Non-operating expenses 2,681,429.95 5,613,342.65
IV. Total Profit ("-" indicates total loss) 855,643,539.05 732,670,506.21
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Less: Income tax expense 128,044,331.11 108,129,572.76
V. Net Profit ("-" indicates net loss) 727,599,207.94 624,540,933.45
i. Classified by operation sustainability
1. Net profit from continued
727,599,207.94 624,540,933.45
operation ("-" indicates net loss)
2. Net profit from discontinued
operation ("-" indicates net loss)
ii. Classified by attribution of
ownership
1. Net profit attributable to
727,597,822.61 624,541,483.00
shareholders of the parent company
2. Minority shareholders' profits and
1,385.33 -549.55
losses
VI. Net Amount of Other Comprehensive
42,756,832.99 5,462,550.69
Income after Tax
Total other comprehensive after-tax
net income attributable to owners of the 42,275,990.00 5,406,986.92
parent company
i. Other comprehensive income not
42,275,990.00 5,406,986.92
able to be reclassified into profit or loss
1. Changes of remeasurement of
defined benefit plan
2. Other comprehensive income
that cannot be transferred into the profit 42,275,990.00 5,406,986.92
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. Credit loss provision of
investment in other debt investments
5. Reserve of cash flow hedge
6. Converted difference in foreign
currency financial statements
7. Others
Total other comprehensive after-tax
net income attributable to minority 480,842.99 55,563.77
shareholders
VII. Total Comprehensive Income 770,356,040.93 630,003,484.14
Total comprehensive income
attributable to owners of the parent 769,873,812.61 629,948,469.92
company
Total comprehensive income
482,228.32 55,014.22
attributable to minority shareholders
VIII. Earnings per Share
i. Basic earnings per share 1.28 1.15
ii. Diluted earnings per share 1.28 1.15
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Legal representative: Xie Bingzheng Person in charge of accounting: Tang Xinqiao Person in charge of accounting
department: Chen Zhihui
4. Income statement of the Parent Company
Unit: RMB
Item 2022 2021
I. Revenue 2,884,275,568.81 2,719,989,257.14
Less: Cost of revenue 904,955,705.51 908,931,832.35
Taxes and surcharges 18,428,010.59 18,989,718.37
Selling expenses 849,949,549.93 832,868,004.50
Administrative expenses 105,797,517.32 81,338,858.08
R&D expenses 100,182,947.69 83,388,128.67
Finance expenses -7,741,089.97 21,048,966.28
Including: Interest fees 19,336,942.44 38,214,760.84
Interest income 27,976,020.32 17,369,687.41
Plus: Other income 2,289,109.36 3,268,741.44
Return on investment ("-"
39,390,949.38 38,815,870.23
indicates loss)
Including: Return on
investment in associates and joint
ventures
Profits from
derecognition of financial assets at
amortized cost
Gains from net exposure hedging
("-" indicates loss)
Gains from changes in fair value
4,950,075.80 3,424,832.00
("-" indicates loss)
Credit impairment losses ("-"
2,278,474.53 330,127.11
indicates loss)
Asset impairment losses ("-"
-99,445,469.97 -78,683,952.73
indicates loss)
Gains on disposal of assets ("-"
1,862,946.66 -253,775.79
indicates loss)
II. Operating Profit ("-" indicates loss) 864,029,013.50 740,325,591.15
Plus: Non-operating revenue 3,017,693.32 514,429.16
Less: Non-operating expenses 2,681,429.95 5,613,342.65
III. Total Profit ("-" indicates total loss) 864,365,276.87 735,226,677.66
Less: Income tax expense 113,564,770.11 102,403,424.54
IV. Net Profit ("-" indicates net loss) 750,800,506.76 632,823,253.12
i. Net profit from continued operation
750,800,506.76 632,823,253.12
("-" 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
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
able to be reclassified into profit or loss
1. Changes of remeasurement of
defined benefit plan
2. Other comprehensive income
that cannot be transferred into the 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. Credit loss provision of
investment in other debt investments
5. Reserve of cash flow hedge
6. Converted difference in foreign
currency financial statements
7. Others
VI. Total Comprehensive Income 750,800,506.76 632,823,253.12
VII. Earnings per Share
i. Basic earnings per share
ii. Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item 2022 2021
I. Cash Flows from Operating Activities:
Cash received from sale of goods or
2,912,700,151.82 2,753,544,575.74
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 premiums of
direct insurance contracts
Net cash from reinsurance business
Net increase in policyholder deposits
and investment funds
Cash received from interests, service
charges and commissions
Net increase in placements from banks
and other financial institutions
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Net increase in repo service fund
Net cash from agent securities trading
Tax rebates
Cash received related to other
76,294,211.63 40,540,104.87
operating activities
Subtotal of cash inflow from operating
2,988,994,363.45 2,794,084,680.61
activities
Cash paid for goods purchased and
917,778,833.13 796,569,983.10
services rendered
Net loans and advances to customers
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 interests, fees and
commissions
Cash paid for policy dividends
Cash paid to and on behalf of
442,464,522.86 409,595,105.86
employees
Tax payments 364,547,362.69 308,402,214.51
Cash paid related to other operating
321,967,610.95 381,993,739.07
activities
Subtotal of cash outflow from operating
2,046,758,329.63 1,896,561,042.54
activities
Net cash flows from operating activities 942,236,033.82 897,523,638.07
II. Cash Flows from Investing Activities:
Cash received from recovery of
investment
Cash received from return on
40,348,045.27 40,700,749.76
investments
Net cash received from the disposal of
property, plant and equipment, intangible 1,400.00 116,729.13
assets, and other long-lived assets
Net cash received from the disposal of
subsidiaries and other business entities
Cash received related to other
5,192,767,000.00 3,130,000,000.00
investing activities
Subtotal of cash inflow from investing
5,233,116,445.27 3,170,817,478.89
activities
Cash paid for the acquisition and
construction of property, plant and
499,061,940.06 215,579,606.23
equipment, intangible assets, and other
long-lived assets
Cash paid for investments
Net increase in pledged loans
Net cash paid for acquisition of
subsidiaries and other business entities
Cash paid related to other investing
5,417,017,365.00 3,139,000,000.00
activities
Subtotal of cash outflow from investing
5,916,079,305.06 3,354,579,606.23
activities
113
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Net cash flows from investing activities -682,962,859.79 -183,762,127.34
III. Cash Flows from Financing
Activities:
Cash received from capital
contribution
Including: Proceeds received by
subsidiaries from minority shareholders'
investment
Cash received from borrowings
Cash received related to other
financing activities
Subtotal of cash inflow from financing
activities
Cash paid for repayments of
borrowings
Cash paid for interest expenses and
171,212,125.20 166,432,183.18
distribution of dividends or profits
Including: Dividend and profit paid by
subsidiaries to minority shareholders
Cash paid related to other financing
46,988,239.55 58,595,168.29
activities
Subtotal of cash outflow from financing
218,200,364.75 225,027,351.47
activities
Net cash flows from financing activities -218,200,364.75 -225,027,351.47
IV. Effect of Exchange Rate Changes on
Cash and Cash Equivalents
V. Net Increase in Cash and Cash
41,072,809.28 488,734,159.26
Equivalents
Plus: Opening balance of cash and
1,058,018,706.05 569,284,546.79
cash equivalents
VI. Closing Balance of Cash and Cash
1,099,091,515.33 1,058,018,706.05
Equivalents
6. Cash flow statement of the Parent Company
Unit: RMB
Item 2022 2021
I. Cash Flows from Operating Activities:
Cash received from sale of goods or
2,912,410,027.13 2,753,005,028.87
rendering of services
Tax rebates
Cash received related to other
54,337,974.51 28,232,062.82
operating activities
Subtotal of cash inflow from operating
2,966,748,001.64 2,781,237,091.69
activities
Cash paid for goods purchased and
1,228,869,363.19 1,270,471,067.33
services rendered
Cash paid to and on behalf of
66,309,429.15 57,528,684.66
employees
Tax payments 293,328,255.65 268,948,328.65
Cash paid related to other operating
441,588,912.81 351,748,141.22
activities
Subtotal of cash outflow from operating
2,030,095,960.80 1,948,696,221.86
activities
Net cash flows from operating activities 936,652,040.84 832,540,869.83
II. Cash Flows from Investing Activities:
114
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Cash received from recovery of
investment
Cash received from return on
40,348,045.27 40,700,749.76
investments
Net cash received from the disposal of
property, plant and equipment, intangible 1,400.00 116,729.13
assets, and other long-lived assets
Net cash received from the disposal of
subsidiaries and other business entities
Cash received related to other
5,192,767,000.00 3,130,000,000.00
investing activities
Subtotal of cash inflow from investing
5,233,116,445.27 3,170,817,478.89
activities
Cash paid for the acquisition and
construction of property, plant and
499,061,940.06 209,979,606.23
equipment, intangible assets, and other
long-lived assets
Cash paid for investments
Net cash paid for acquisition of
subsidiaries and other business entities
Cash paid related to other investing
5,417,017,365.00 3,139,000,000.00
activities
Subtotal of cash outflow from investing
5,916,079,305.06 3,348,979,606.23
activities
Net cash flows from investing activities -682,962,859.79 -178,162,127.34
III. Cash Flows from Financing
Activities:
Cash received from capital
contribution
Cash received from borrowings
Cash received related to other
3,798,938.99 3,363,413.96
financing activities
Subtotal of cash inflow from financing
3,798,938.99 3,363,413.96
activities
Cash paid for repayments of
borrowings
Cash paid for interest expenses and
171,212,125.20 166,432,183.18
distribution of dividends or profits
Cash paid related to other financing
33,823,074.95 45,244,487.92
activities
Subtotal of cash outflow from financing
205,035,200.15 211,676,671.10
activities
Net cash flows from financing activities -201,236,261.16 -208,313,257.14
IV. Effect of Exchange Rate Changes on
Cash and Cash Equivalents
V. Net Increase in Cash and Cash
52,452,919.89 446,065,485.35
Equivalents
Plus: Opening balance of cash and
976,991,427.36 530,925,942.01
cash equivalents
VI. Closing Balance of Cash and Cash
1,029,444,347.25 976,991,427.36
Equivalents
7. Consolidated statement of changes in owner’s equity
Amount of the current period
Unit: RMB
115
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
2022
Equity attributable to owners of the Parent Company
Other equity Othe Equi
instruments r ty of Total
Less: Gene own
Item Shar Capi com Spec Surp Retai mino
Prefe Trea ral rity er’s
e Perp tal preh ial lus ned Othe Subt
renc sury risk share equit
capit etual Othe reser ensiv reser reser earni rs otal
e share reser hold y
al bond rs ve e ves ves ngs ers
share s ves
s inco
s me
I. Closing 550, 27,5 600, - 258, 1,80 3,24 3,24
967,
Balance of 326, 24,4 470, 842, 110, 9,85 5,44 6,40
735.
Previous 712. 54.1 446. 173. 335. 1,82 1,59 9,33
13
Year 00 6 15 72 93 1.97 6.49 1.62
Plus:
Changes in
accounting
policies
Correction
of
previous
period
errors
Business
combinatio
ns under
common
control
Others
II.
550, 27,5 600, - 258, 1,80 3,24 3,24
Opening 967,
326, 24,4 470, 842, 110, 9,85 5,44 6,40
Balance of 735.
712. 54.1 446. 173. 335. 1,82 1,59 9,33
Current 13
00 6 15 72 93 1.97 6.49 1.62
Year
III.
-
Changes in 20,3 293, 42,2 27,2 529, 884, 885,
27,5 482,
the Period 80,3 074, 75,9 43,2 142, 591, 074,
24,4 228.
("-" 72.0 311. 90.0 06.0 491. 916. 144.
54.1 32
Indicates 0 19 0 7 34 44 76
6
Decrease)
(I) Total 42,2 727, 769, 770,
482,
comprehen 75,9 597, 873, 356,
228.
sive 90.0 822. 812. 040.
32
income 0 61 61 93
(II) Capital -
20,3 293, 285, 285,
contribute 27,5
80,3 074, 930, 930,
d or 24,4
72.0 311. 229. 229.
reduced by 54.1
0 19 03 03
owners 6
1.
Ordinary
shares
contribute
116
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
d by
owners
2. Capital
contribute
-
d by 20,3 293, 285, 285,
27,5
owners of 80,3 074, 930, 930,
24,4
other 72.0 311. 229. 229.
54.1
equity 0 19 03 03
6
instrument
s
3. Share-
based
payments
recognized
as owner's
equity
4. Others
- - -
27,2
(III) Profit 198, 171, 171,
43,2
distributio 455, 212, 212,
06.0
n 331. 125. 125.
7
27 20 20
1. -
27,2
Appropriat 27,2
43,2
ion of 43,2
06.0
surplus 06.0
7
reserves 7
2.
Appropriat
ion of
general
risk
reserves
3.
- - -
Distributio
171, 171, 171,
n to
212, 212, 212,
owners (or
125. 125. 125.
shareholde
20 20 20
rs)
4. Others
(IV)
Internal
carry-over
of owner’s
equity
1. Capital
(or share
capital)
increased
from
capital
reserves
2. Capital
(or share
117
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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
comprehen
sive
income
6. Others
(V)
Special
reserves
1.
Appropriat
ion for the
period
2. Use for
the period
(VI)
Others
IV. 570, 893, 41,4 285, 2,33 4,13 4,13
1,44
Closing 707, 544, 33,8 353, 8,99 0,03 1,48
9,96
Balance of 084. 757. 16.2 542. 4,31 3,51 3,47
3.45
the Period 00 34 8 00 3.31 2.93 6.38
Amount of last period
Unit: RMB
2021
Equity attributable to owners of the Parent Company Equi
ty of Total
Other equity Less: Gene
Othe mino own
Item Shar instruments Capi Spec Surp Retai
Trea r ral rity er’s
e tal ial lus ned Othe Subt
Prefe Perp sury com risk share equit
capit Othe reser reser reser earni rs otal
renc etual share preh reser hold y
al rs ve ves ves ngs
e bond s ensiv ves ers
118
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
share s e
s inco
me
I. Closing 524, 63,6 226, - 194, 1,41 2,41 2,41
912,
Balance of 075, 61,1 927, 6,24 828, 3,58 6,82 7,73
720.
Previous 085. 35.5 846. 9,16 010. 2,87 5,78 8,51
91
Year 00 4 51 0.64 62 2.58 9.61 0.52
Plus:
Changes in
accounting
policies
Correction
of
previous
period
errors
Business
combinatio
ns under
common
control
Others
II.
524, 63,6 226, - 194, 1,41 2,41 2,41
Opening 912,
075, 61,1 927, 6,24 828, 3,58 6,82 7,73
Balance of 720.
085. 35.5 846. 9,16 010. 2,87 5,78 8,51
Current 91
00 4 51 0.64 62 2.58 9.61 0.52
Year
III.
-
Changes in 26,2 373, 63,2 396, 828, 828,
36,1 5,40 55,0
the Period 51,6 542, 82,3 268, 615, 670,
36,6 6,98 14.2
("-" 27.0 599. 25.3 949. 806. 821.
81.3 6.92 2
Indicates 0 64 1 39 88 10
8
Decrease)
(I) Total 624, 629, 630,
5,40 55,0
comprehen 541, 948, 003,
6,98 14.2
sive 483. 469. 484.
6.92 2
income 00 92 14
(II) Capital -
26,2 373, 363, 363,
contribute 36,1
51,6 542, 657, 657,
d or 36,6
27.0 599. 545. 545.
reduced by 81.3
0 64 26 26
owners 8
1.
Ordinary
shares
contribute
d by
owners
2. Capital
-
contribute 26,2 373, 363, 363,
36,1
d by 51,6 542, 657, 657,
36,6
owners of 27.0 599. 545. 545.
81.3
other 0 64 26 26
8
equity
119
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
instrument
s
3. Share-
based
payments
recognized
as owner's
equity
4. Others
- - -
63,2
(III) Profit 228, 164, 164,
82,3
distributio 272, 990, 990,
25.3
n 533. 208. 208.
1
61 30 30
1. -
63,2
Appropriat 63,2
82,3
ion of 82,3
25.3
surplus 25.3
1
reserves 1
2.
Appropriat
ion of
general
risk
reserves
3.
- - -
Distributio
164, 164, 164,
n to
990, 990, 990,
owners (or
208. 208. 208.
shareholde
30 30 30
rs)
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
120
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
losses
4.
Retained
earnings
carried
over from
changes in
defined
benefit
plans
5.
Retained
earnings
carried
over from
other
comprehen
sive
income
6. Others
(V)
Special
reserves
1.
Appropriat
ion for the
period
2. Use for
the period
(VI)
Others
IV. 550, 27,5 600, - 258, 1,80 3,24 3,24
967,
Closing 326, 24,4 470, 842, 110, 9,85 5,44 6,40
735.
Balance of 712. 54.1 446. 173. 335. 1,82 1,59 9,33
13
the Period 00 6 15 72 93 1.97 6.49 1.62
8. Statement of changes in owner’s equity of the Parent Company
Amount of the current period
Unit: RMB
2022
Other equity instruments Other
Less: compr Specia Surplu Retain Total
Item Share Prefere Perpet Capital Treasu ehensi l s ed owner’
Others
capital nce ual Others reserve ry ve reserve reserve earnin s
shares bonds shares incom s s gs equity
e
I. Closing
550,32 27,524 600,47 258,11 1,965, 3,401,
Balance of
6,712. ,454.1 0,446. 0,335. 415,11 847,06
Previous
00 6 15 93 9.66 7.90
Year
Plus:
121
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Changes in
accounting
policies
Correction
of previous
period errors
Others
II. Opening 550,32 27,524 600,47 258,11 1,965, 3,401,
Balance of 6,712. ,454.1 0,446. 0,335. 415,11 847,06
Current Year 00 6 15 93 9.66 7.90
III. Changes
-
in the Period 20,380 293,07 27,243 552,34 865,51
27,524
("-" ,372.0 4,311. ,206.0 5,175. 8,610.
,454.1
Indicates 0 19 7 49 59
6
Decrease)
(I) Total 750,80 750,80
comprehensi 0,506. 0,506.
ve income 76 76
(II) Capital -
20,380 293,07 285,93
contributed 27,524
,372.0 4,311. 0,229.
or reduced ,454.1
0 19 03
by owners 6
1. Ordinary
shares
contributed
by owners
2. Capital
-
contributed 20,380 293,07 285,93
27,524
by owners of ,372.0 4,311. 0,229.
,454.1
other equity 0 19 03
6
instruments
3. Share-
based
payments
recognized
as owner's
equity
4. Others
- -
27,243
(III) Profit 198,45 171,21
,206.0
distribution 5,331. 2,125.
7
27 20
1. -
27,243
Appropriatio 27,243
,206.0
n of surplus ,206.0
7
reserves 7
2.
Distribution - -
to owners 171,21 171,21
(or 2,125. 2,125.
shareholders 20 20
)
3. Others
122
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
(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
comprehensi
ve income
6. Others
(V) Special
reserves
1.
Appropriatio
n for the
period
2. Use for
the period
(VI) Others
IV. Closing 570,70 893,54 285,35 2,517, 4,267,
Balance of 7,084. 4,757. 3,542. 760,29 365,67
the Period 00 34 00 5.15 8.49
Amount of last period
Unit: RMB
FY 2021
Item Other equity instruments Less: Other Specia Surplu Retain Total
Share Capital
Treasu compr l s ed Others owner’
capital Prefere Perpet Others reserve
ry ehensi reserve reserve earnin s
123
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
nce ual shares ve s s gs equity
shares bonds incom
e
I. Closing 524,07 63,661 226,92 194,82 1,560, 2,570,
Balance of 5,085. ,135.5 7,846. 8,010. 864,40 356,47
Previous Year 00 4 51 62 0.15 7.82
Plus:
Changes in
accounting
policies
Correction of
previous
period errors
Others
II. Opening 524,07 63,661 226,92 194,82 1,560, 2,570,
Balance of 5,085. ,135.5 7,846. 8,010. 864,40 356,47
Current Year 00 4 51 62 0.15 7.82
III. Changes in -
26,251 373,54 63,282 404,55 831,49
the Period ("-" 36,136
,627.0 2,599. ,325.3 0,719. 0,590.
Indicates ,681.3
0 64 1 51 08
Decrease) 8
(I) Total 632,82 632,82
comprehensive 3,253. 3,253.
income 12 12
(II) Capital -
26,251 373,54 363,65
contributed or 36,136
,627.0 2,599. 7,545.
reduced by ,681.3
0 64 26
owners 8
1. Ordinary
shares
contributed by
owners
2. Capital
-
contributed by 26,251 373,54 363,65
36,136
owners of ,627.0 2,599. 7,545.
,681.3
other equity 0 64 26
8
instruments
3. Share-based
payments
recognized as
owner's equity
4. Others
- -
63,282
(III) Profit 228,27 164,99
,325.3
distribution 2,533. 0,208.
1
61 30
1. -
63,282
Appropriation 63,282
,325.3
of surplus ,325.3
1
reserves 1
- -
2. Distribution
164,99 164,99
to owners (or
0,208. 0,208.
124
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
shareholders) 30 30
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
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 27,524 600,47 258,11 1,965, 3,401,
Balance of the 6,712. ,454.1 0,446. 0,335. 415,11 847,06
Period 00 6 15 93 9.66 7.90
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
125
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Principal business activities: R&D and design of brand clothing, brand promotion, marketing network construction and supply
chain management
Date of approval for the issue of the financial statements: April 26, 2023
In the reporting period, the Company had 9 subsidiaries that were included in the consolidated scope, as detailed in “Note IX
Equities in Other Entities”. Compared with the previous period, three new subsidiaries were established and added, which are
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
revenue recognition, provision for inventory impairment, expected credit loss of receivables, etc. based on its production and
operation characteristics in accordance with relevant provisions of the 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.
126
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
2. Accounting period
The accounting year of the Company is from January 1 to December 31 of each calendar year.
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 lia bilities 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 t he
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 betw een 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 s um
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 dispos ing
relevant assets or liabilities of the acquiree. That is, other changes in shareholders’ equity, except for net profit a nd loss, other
127
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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.
3. Treatment of relevant expenses in business combination: Intermediary fees for auditing, legal serv ices, 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 preparation of the 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 ite m 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 beginning to the end of the reporting period when the combination occurs. Meanwhile, relevant items in the
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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 s hould
include the 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 acquisit ion
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 financia l
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 thes e
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 equ ity
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 inco me
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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 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 continuous ly
calculated from the acquisition date (or combination date) is used to adjust the capital premium or share premium under capita l
reserve in the consolidated balance sheet; if the capital premium or share premium is insufficient to offset, retained earnin gs 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 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.
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.
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1. A joint operation is the joint arrangement where the Company has the rights to the assets and the obligations for the liab ilities 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.
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 ca sh 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, (which are) 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 da te
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
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(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.
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, financia l
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 loss 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 measure d 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
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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 contr actua l
terms of the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount
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 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 through profit
or loss. Moreover, at initial recognition, to eliminate or significantly reduce accounting mismatches that would otherwise ar ise, 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 directly
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 liabilit ies 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 los ses of
change in fair value attributable to changes in the credit risk of the Company are transferred to reta ined earnings at the
derecognition of the financial liability. Other changes in fair value shall be recognized as the profit and loss of the curre nt period.
If the accounting treatment of the credit risk changes in such financial liabilities by the above methods will create or expand the
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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 liabilities
shall be classified into the financial liabilities measured at amortized cost, which are subsequently measured at amortized c ost, 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 are 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, selects the input values that are consistent with t he 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 input 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
the asset Derecognize the financial asset (recognize new
Neither transferring nor Give up control of the transferred asset/liability)
retaining substantially all the asset
risks and rewards of ownership Retain control of the transferred Continue to recognize the transferred asset and liability
of the asset 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 financia l
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
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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 classifie d 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 the
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
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 or igina l
interest 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 significantly
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 financ ia l
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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 additiona l
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 initia l
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.
(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 lifeti me
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 sign ificantly
higher than that in the expected duration recognized at the time of initial recognition, the credit risk of the financial asset has
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increased significantly. Except for special circumstances, the Company determines whether credit risk has increased significa ntly
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 ass ets with significantly
different credit risks are assessed individually, such as receivables for which there are obvious signs that the debtor is ve ry
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
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. Financial guarantee contracts that are not designated
as financial liabilities to be measured at fair value through profit or loss are subsequently measured at the higher of (i) t he expected
credit loss recognized on the balance sheet date and (ii) the amount initially recognized less cumulative amortization determined in
accordance with the 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 trea ted 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.
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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 account s
receivables and the ECL rate and calculates ECL with a reference to historical credit loss experience and in combination w ith
current situation and forecast of future economic conditions. For details, please refer to “Note V (10) Financial instruments --
Impairment of financial assets”.
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) Financia l
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 inventory
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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
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 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) 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
clearly 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 contr act
asset.
2. Recognition and accounting methods for ECLs of contract assets
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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 loss 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;
(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 va lue 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 f or 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 s hall
continue to be recognized.
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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, amort ization 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 external actual and
expected economic information. For recognition and accounting methods of ECLs, please refer to “Note V (10) Financia l
instruments”.
18. Long-term equity investments
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 re levant
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 financ ial 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 effec t 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) materia l
transactions between the entity and its investee; (4) designation of managerial personnel to the investee; (5) provision of e ssentia l
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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 da te
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 initia l
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 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 initia l
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
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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
accordance 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 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 value 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 losses 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, financia l
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 balanc e
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.
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19. Property, plant and equipment
(1) Recognition conditions
Property, plant and equipment 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
Annual depreciation
Category Depreciation method Depreciation life Residual value rate
rate
Properties and Straight-line
20-40 5% 2.38%- 4.75%
buildings depreciation
Straight-line
Machinery equipment 3-5 5% 19.00%- 31.67%
depreciation
Straight-line
Motor vehicles 5 5% 19.00%
depreciation
Office equipment and Straight-line
3-5 0-5% 19.00%- 31.67%
others depreciation
The Company reassesses the useful life, estimated net residual value and depreciation method of property, plant and equipment 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 property,
plant and equipment from the date when it reaches the intended use, regardless of whether the project has completed the fina l
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, incidenta l
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 property, plant and equipment, 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:
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(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 u ntil
the acquisition or production activities of the asset resume. Moreover, capitalization is ceased when the qualifying asse t 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)
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 per iod 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.
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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".
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, t he fair
value of the intangible asset is used. For intangible assets obtained through the exchange of non-monetary assets, the initia l
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 determ ined 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 combination 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 us e,
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 ye ar-end.
If the expected useful life and amortization method of an intangible asset is different from previous estimates, the amort ization
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period and method should be changed accordingly. The Company reviews the useful life of intangible assets with indefinite use ful
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;
(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 internally, 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 reliably measure 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,
property, plant and equipment, 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, t he
allocation should be based on the proportion of their respective carrying amounts in the group or groups. When performing
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impairment tests for relevant asset group or asset groups to which goodwill has been allocated, if there is an indication tha t the
asset group or asset groups may be impaired, the asset group or asset groups not containing the goodwill sh ould 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 a re 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.
25. Long-term deferred expenses
Long-term deferred 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 property, plant and equipment leased in
through operating lease. Long-term deferred expenses shall be amortized equally over the expected benefit period.
26. Contract liabilities
A contract liability is the Company’s obligation to transfer goods to a customer for which the Company has received or is due to
receive consideration from the customer. If the customer has paid contract consideration or the Company has obtained the
unconditional right of collection before the Company transfers goods to the customer, the amount received or the receivable is
recognized as contract liability at the earlier of the time when the customer actual pays the amount and when the a mount becomes
due.
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.
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(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 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 result ing 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. Remeasurements 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 Compan y
recognizes costs for a restructuring that involves the payment of termination benefits.
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(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
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 disco unt
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 interest 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.
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The Company reviews provisions on each balance sheet date. If there is conclusive evidence that the book value of the provision
can no longer truly reflect the current best estimate, the current best estimate is used to adjust the book value of the provision.
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 conditiona l
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 a ccordingly.
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 Compan y, 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, with 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 instrume nts
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 for feiture
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;
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(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
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 Com pany
accounts for the interest expense or dividend distribution of the instrument based on its classification. For financial instrument s
classified as equity instruments, interest expense or dividend distribution is recognized as profit distribution of the issue r, 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 redem ption are
included in profit or loss.
Transaction costs arising from the issuance of the financial instruments, such as service charges 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 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 fo r
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 assoc iated
with the variable consideration is subsequently resolved. If the contract contains a significant financing component, the Company
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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 contractua l
term. However, 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 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 reasonably 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 obligation
satisfied at a point in time:
(1) the customer simultaneously receives and consumes the benefits as the Company 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:
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(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;
(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 join t
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 franchisee and receives t he
confirmation receipt from the franchisee. In the event that the franchisee picks up goods by itself, the handover of t he goods by the
Company to the carrier is regarded as having been confirmed by the franchisee.
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 a sset.
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, property, plant
and equipment 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;
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(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;
(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 c arrying 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 are directly accounted as
profit or loss.
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(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
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 adjuste d;
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 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 recogn ized 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 a ccounting
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 carry-over 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
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(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.
(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 methods for operating lease
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 an identified
asset, unless it represents substantially all of the capacity of the asset and thereby provides the customer with the right to obtain
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
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If a contract contains multiple separate leases, the Company separates components of the contract and accounts for each separate
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.
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 mont hs 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 le ase is
classified as a finance lease if it transfers substantia lly all the risks and rewards incidental to ownership of an underlying asset.
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Title may or may not eventually be transferred. Other leases than the finance leases are classified as operating leases. If t he
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 rec eipts
are included in the current profit and loss when they are actually incurred.
(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 le ase
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 shall 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 in
accordance with “Note V (32) Revenue”.
(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 payments 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.
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(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 payments 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.
37. Other important accounting policies and accounting estimates
1. Operation discontinuation
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 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.
For discontinued operations presented in the current period, the Company lists the profit/loss from continuing operations and that
from discontinued operations separately in the income statement of the current period, and re-classifies the profit/loss from
continuing operations as that from discontinued operations in the income statement of the comparable period.
38. Significant changes of accounting policies and accounting estimates
(1) Significant changes of accounting policies
Applicable □ Not applicable
(1) Implementation of the Interpretation No. 15 to Accounting Standards for Business Enterprises
In December 2021, the Ministry of Finance issued the Interpretation No. 15 to Accounting Standards for Business Enterprises (Cai
Kuai [2021] No. 35) (hereinafter referred to as the “Interpretation No.”), which stipulated that contents regarding “accounting
treatment for the external sales of products or by-products before they reach intended use or produced during the research and
development process” and “judgment of loss contracts” shall be implemented from January 1, 2022.
The Company started to implement the provisions regarding “accounting treatment for the external sales of products or by-
products before they reach intended use or produced during the research and development process” and “judgment of loss
contracts” from January 1, 2022. The above changes in accounting policies have no impact on the Company’s financial statements.
(2) Implementation of the Interpretation No. 16 to Accounting Standards for Business Enterprises
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In November 2022, the Ministry of Finance issued the Interpretation No. 16 to Accounting Standards for Business Enterprises
(Cai Kuai [2022] No. 31) (hereinafter referred to as the “Interpretation No. 16”), which stipulated that contents regarding
“accounting treatment for the dividends of financial instruments classified as equity instruments by the issuer” and “account ing
treatment for the change of cash-settled share-based payment transaction to equity-settled shared-based payment transaction” shall
come into force as of the date of issuance.
The Company started to implement the provisions regarding “accounting treatment for the dividends of financial instruments
classified as equity instruments by the issuer” and “accounting treatment for the change of cash-settled share-based payment
transaction to equity-settled shared-based payment transaction” as of the date of issuance. The above changes in accounting
policies have no impact on the Company’s financial statements.
(2) Significant changes of accounting estimates
□ 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%, 8.25%, 16.5%
Education surcharge Turnover tax payable 3%
Local education surcharge Turnover tax payable 2%
Description of the situation if different entities apply different income tax rates
Name of entity Income tax rate
BIEM.L.FDLKK Garment Co., Ltd. 15%
Guangzhou BIEM.L.FDLKK Supply Chain Management Co.,
20%
Ltd.
Guangzhou BIEM.L.FDLKK Business Consulting Co., Ltd.,
Xuzhou BIEM.L.FDLKK Supply Chain Management Co.,
25%
Ltd., Ningbo BIEM.L.FDLKK Supply Chain Management Co.,
Ltd., Ningbo BIEM.L.FDLKK Smart Technology Co., Ltd.
According to relevant provisions of the Enterprise Income Tax
Law of the People's Republic of China and its implementation
regulations and the Individual Income Tax Law of the People's
Guangzhou BIEM.L.FDLKK Ejam Equity Investment
Republic of China, each partner of a partnership enterprise is
Partnership (Limited Partnership), Guangzhou Houde Zaiwu
the taxpayer. If the partner of a partnership enterprise is a
Industrial Investment Fund Partnership (Limited Partnership)
natural person, it shall pay individual income tax; if the partner
is a legal persons or other organization, it shall pay enterprise
income tax.
According to relevant provisions of the Inland Revenue
Ordinance, Hong Kong implements a Two-tiered Profits Tax
Hong Kong Carritt Limited, Hong Kong Plentiful Shiny
regime: for corporations, the first HK$2 million of profits will
Limited
be taxed at a rate of 8.25%, and the remaining profits will be
taxed at 16.5%.
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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 2022.
(2) Guangzhou BIEM.L.FDLKK Supply Chain Management Co., Ltd.
Guangzhou BIEM.L.FDLKK Supply Chain Management Co., Ltd. is a small and low-profit enterprise. According to provisions of
Cai Shui [2019] No. 013, for small and low-profit enterprises, with regard to the portion of the annual taxable income less than
RMB1 million, the taxable income is calculated at a reduced rate of 25% with a corporate income tax rate of 20%; for the port ion
of more than RMB1 million and less than RMB3 million, the taxable income is calculated at a reduced rate of 50% with a
corporate income rate of 20% from January 1, 2019 to December 31, 2021. The Ministry of Finance and the State Administration
of Taxation jointly released the Announcement on the Implementation of Preferential Income Tax Policies for Small and Low-
profit Enterprises and Individual Industrial and Commercial Households (MOF and SAT Doc [2021] No. 012), for the portion of
the annual taxable income of small and low-profit enterprises less than RMB1 million, the corporate income tax is further halved
on the basis of the preferential tax policies as stipulated in Article 2 of the Notice of the Ministry of Finance and the State
Administration of Taxation on Implementing Inclusive Tax Reduction and Exemption Policies for Small and Micro Enterprises
(Cai Shui [2019] No. 013) from January 1, 2021 to December 31, 2022. Pursuant to relevant provisions of the Announcement of
the State Administration of Taxation on the Further Implementation of Preferential Income Tax Policies for Small and Low-profit
Enterprises (MOF and SAT Doc [2022] No. 013), for the portion of annual taxable income of small and low-profit enterprises
more than RMB1 million and less than RMB3 million, the taxable income is calculated at a reduced rate of 25% with a corporate
income rate of 20% from January 1, 2022 to December 31, 2024.
VII. Notes to Consolidated Financial Statements
1. Monetary funds
Unit: RMB
Item Closing balance Opening balance
Cash on hand 41,726.00 142,548.00
Bank deposits 1,115,272,239.90 1,069,235,185.83
Other monetary funds 29,379,983.67 13,334,484.75
Total 1,144,693,949.57 1,082,712,218.58
Total amount of funds with use
restrictions due to mortgage, pledge or 28,568,760.06 13,334,484.75
freezing
Other descriptions:
162
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
— Other monetary funds at the end of the reporting period include the balance of the securities account, and the security deposits
for issuing bank acceptance bills and project performance guarantees.
— All bank deposits are in bank accounts opened in banks and other relevant financial institutions in the name of the Company o r
subsidiaries included in the consolidated scope of financial statements.
— As of December 31, 2022, except for other monetary funds whose use is restricted with a total amount of RMB28,568,760.06,
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
1,378,756,798.87 634,763,818.96
through profit or loss
Including:
Wealth management products 1,377,804,000.91 633,424,832.00
Others 952,797.96 1,338,986.96
Including:
Total 1,378,756,798.87 634,763,818.96
Other descriptions:
— The closing balance of the financial assets held for trading increased by RMB743,992,979.91 or 117.21% compared with the
opening balance in 2022, mainly owing to the increase in the undue wealth management products at the end of the reporting period.
3. Accounts receivable
(1) Accounts receivable disclosure by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Book Book
Percenta Provisio value Percenta Provisio value
Amount Amount Amount Amount
ge n ratio ge n ratio
Accounts
receivable
for which
618,282. 618,282. 618,282. 618,282.
bad debt 0.23% 100.00% 0.21% 100.00%
56 56 56 56
provision is
set aside
individually
Including:
Accounts
receivable
for which 266,504, 13,959,7 252,544, 295,013, 15,296,6 279,717,
99.77% 5.24% 99.79% 5.19%
bad debt 592.75 05.79 886.96 683.59 26.45 057.14
provision is
set aside in
163
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
portfolios
Including:
Clothing
266,504, 13,959,7 252,544, 295,013, 15,296,6 279,717,
sales 99.77% 5.24% 99.79% 5.19%
592.75 05.79 886.96 683.59 26.45 057.14
business
267,122, 14,577,9 252,544, 295,631, 15,914,9 279,717,
Total 100.00% 5.46% 100.00% 5.38%
875.31 88.35 886.96 966.15 09.01 057.14
Bad debt provision individually:
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Ratio of provision Reason for provision
Jiangmen Yihua It is expected that the
Department Store Co., 618,282.56 618,282.56 100.00% amount cannot be
Ltd. recovered.
Total 618,282.56 618,282.56
Bad debt provision by portfolio:
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Ratio of provision
Within 1 year 265,915,533.62 13,370,646.66 5.03%
1-2 years 69,370.41 69,370.41 100.00%
2-3 years 178,697.20 178,697.20 100.00%
Over 3 years 340,991.52 340,991.52 100.00%
Total 266,504,592.75 13,959,705.79
Reason for determining the portfolio:
If the bad debt provision of accounts receivable is set aside according to the general model of expected credit loss, please refer to
the disclosure method of bad debt provision for other receivables:
□ Applicable Not applicable
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 265,915,533.62
1 to 2 years 69,370.41
2 to 3 years 796,979.76
Over 3 years 340,991.52
3 to 4 years 0.00
4 to 5 years 0.00
Over 5 years 340,991.52
Total 267,122,875.31
(2) Bad debt provision set aside, recovered or transferred back in the reporting period
Bad debt provision of the reporting period:
Unit: RMB
164
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Amount of change in the reporting period
Opening
Category Recovery or Closing balance
balance Provision Write-off Others
reversal
Bad debt
provision for
15,914,909.01 1,336,920.66 14,577,988.35
accounts
receivable
Total 15,914,909.01 1,336,920.66 14,577,988.35
(3) Accounts receivable actually written off in the reporting period
There were no accounts receivables actually written off as of December 31, 2022.
(4) Top five debtors in closing balance of accounts receivable
Unit: RMB
Balance of accounts Percentage in total balance of
Balance of bad debt provision
Name of institution receivable at the end of the accounts receivable at the end
at the end of the period
period of the period
Institution 1 13,310,289.52 4.98% 665,808.17
Institution 2 6,486,000.20 2.43% 324,303.25
Institution 3 6,484,230.10 2.43% 330,568.41
Institution 4 6,098,782.00 2.28% 304,939.10
Institution 5 6,020,461.66 2.25% 301,023.08
Total 38,399,763.48 14.37%
(5) Amounts of assets or liabilities that are formed by the transfer of accounts receivable and the
Company's continuing involvement
There were no assets or liabilities formed by the transfer of accounts receivable and the Company's continuing involvement as of
December 31, 2022.
(6) Accounts receivable derecognized due to transfer of financial assets
There were no accounts receivables derecognized due to the transfer of financial assets as of December 31, 2022.
4. Prepayments
(1) Prepayments by aging
Unit: RMB
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 27,905,016.96 98.70% 66,490,875.59 99.20%
1 to 2 years 124,827.46 0.44% 426,940.68 0.64%
2 to 3 years 226,557.87 0.80% 110,538.82 0.16%
Over 3 years 16,500.00 0.06%
Total 28,272,902.29 67,028,355.09
165
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Explanation on the reason of untimely settlement of prepayments with significant amount whose age exceeds one year:
— The closing balance of prepayments decreased by RMB38,755,452.80 or 57.82% compared with the opening balance in 2022,
mainly owing to the decrease in the prepayments for production goods payments.
(2) Top five payees in closing balance of prepayments
Unit: RMB
Name of institution Closing balance Percentage in total closing balance of prepayments (%)
Institution 1 4,279,580.01 15.14
Institution 2 4,117,957.46 14.57
Institution 3 2,967,096.92 10.49
Institution 4 1,675,674.98 5.93
Institution 5 1,586,153.33 5.61
Total 14,626,462.70 51.74
5. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 72,134,856.39 89,889,485.22
Total 72,134,856.39 89,889,485.22
(1) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Book balance at the beginning of the
Nature of the receivable Book balance at the end of the period
period
Margins and deposits 70,209,600.11 88,691,812.02
Employee reserve fund 2,459,964.38 3,069,483.92
Other amounts 3,261,863.29 2,857,765.83
Total 75,931,427.78 94,619,061.77
2) Bad debt provision
Unit: RMB
Phase I Phase II Phase III
Bad debt provision Lifetime ECL (without Lifetime ECL (with Total
12-month ECL
credit impairment) credit impairment)
Balance as at January
4,729,576.55 4,729,576.55
1, 2022
Balance as at January
1, 2022 incurred in the
period
Transferred-back in the 933,005.16 933,005.16
166
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
reporting period
Balance as at
3,796,571.39 3,796,571.39
December 31, 2022
Description of significant changes to the book balance of provision in the current period
□ Applicable Not applicable
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 75,931,427.78
Total 75,931,427.78
3) Bad debt provision set aside, recovered or transferred back in the reporting period
Bad debt provision 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
provision by 4,729,576.55 933,005.16 3,796,571.39
portfolio
Total 4,729,576.55 933,005.16 3,796,571.39
4) Top five debtors in closing balance of other receivables
Unit: RMB
Percentage in total Balance of bad
Name of Nature of the balance of other debt provision at
Closing balance Aging
institution amount receivables at the the end of the
end of the period period
Margins and
Institution 1 7,051,755.00 Within 1 year 9.29% 352,587.75
deposits
Margins and
Institution 2 6,763,619.00 Within 1 year 8.91% 338,180.95
deposits
Margins and
Institution 3 6,553,074.00 Within 1 year 8.63% 327,653.70
deposits
Margins and
Institution 4 3,150,000.00 Within 1 year 4.15% 157,500.00
deposits
Margins and
Institution 5 3,133,020.00 Within 1 year 4.13% 156,651.00
deposits
Total 26,651,468.00 35.11% 1,332,573.40
5) Receivables involving government grants
There were no receivables involving government grants as of December 31, 2022.
167
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
6) Other receivables derecognized due to the transfer of financial assets
There were no other receivables derecognized due to the transfer of financial assets as of December 31, 2022.
7) Amount of assets or liabilities that are formed by the transfer of other receivables and the Company's
continuing involvement
There were no assets or liabilities formed by the transfer of other receivables and the Company's continuing involvement as of
December 31, 2022.
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 inventories or inventories or
Book balance provision for Book value Book balance provision for Book value
contract contract
performance performance
costs costs
Raw materials 17,007,872.37 17,007,872.37 18,331,168.60 18,331,168.60
Commodity
851,125,039.52 146,639,053.96 704,485,985.56 735,027,540.76 106,428,861.75 628,598,679.01
stocks
Materials for
consigned 24,111,316.32 24,111,316.32 13,284,371.80 13,284,371.80
processing
Total 892,244,228.21 146,639,053.96 745,605,174.25 766,643,081.16 106,428,861.75 660,214,219.41
(2) Provision for impairment of inventories and contract performance costs
Unit: RMB
Increase in the current period Decrease in the current period
Opening
Item Reversal or Closing balance
balance Provision Others Others
written off
Commodity
106,428,861.75 99,445,469.97 54,287,595.11 4,947,682.65 146,639,053.96
stocks
Total 106,428,861.75 99,445,469.97 54,287,595.11 4,947,682.65 146,639,053.96
7. Assets held for sale
Unit: RMB
168
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Book balance at Book value at
Impairment Estimated Estimated
Item the end of the the end of the Fair value
provision disposal fee disposal time
period period
Bank deposits 189,613.49 189,613.49 189,613.49 June 30, 2023
Investment in
other equity 137,670,000.00 137,670,000.00 137,670,000.00 June 30, 2023
instruments
Total 137,859,613.49 137,859,613.49 137,859,613.49
Other descriptions:
In November 2022, the Company signed the Partnership Share Transfer Agreement with 19 transferees including Beijing
Qianchenhui Trading Co., Ltd., Liang Xiaofen, and Yue Minglei (hereinafter referred to as "Transferees"), according to which the
Company will transfer the 99.01% equities it holds in Guangzhou BIEM.L.FDLKK Ejam Equity Investment Partnership (Limited
Partnership) to the Transferees at a price of RMB137.67 million. The Transferees shall pay the transfer price to an account
designated by the Company in three installments before June 30, 2023. After the completion of the transfer, the Company will no
longer hold any shares in the partnership.
8. Other current assets
Unit: RMB
Item Closing balance Opening balance
Return cost receivable 93,748,131.49 99,103,788.91
Structured deposit 200,421,095.89 704,879,722.24
Large-denomination Certificate of
20,117,555.56
Deposit
Input tax credits and input tax creditable
70,093,337.22 6,539,646.70
within subsequent periods
Prepaid corporate income tax 24,138.37
Total 364,286,702.97 830,640,713.41
Other descriptions:
— The closing balance of other current assets decreased by RMB466,354,010.44 or 56.14% compared with the opening balance in
2022, mainly owing to the decrease in the undue structured deposits at the end of the reporting period.
— 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.
9. Investment in other equity instruments
Unit: RMB
Item Closing balance Opening balance
Shenzhen Youanmi Technology Co., Ltd. 10,499,383.76 8,999,300.47
Fast Fashion (Guangzhou) Co., Ltd. 89,100,000.00
Total 10,499,383.76 98,099,300.47
Disclosure of investments in equity instruments not held for trading in the reporting period item by item
Unit: RMB
169
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Amount of Reason for Reason for
retained designation as transferring
Recognized earnings measured at fair from other
Cumulative Cumulative
Project dividend transferred value through comprehensive
gain loss
income from other other income to
comprehensive comprehensive retained
income income earnings
Shenzhen Long-term
Youanmi holding for
499,383.76 Not applicable
Technology strategic
Co., Ltd. purposes
Other descriptions:
— The closing balance of investments in other equity instruments decreased by RMB87,599,916.71 or 89.30% compared with the
opening balance in 2022, mainly owing to the reclassification of the investment in Fast Fashion (Guangzhou) Co., Ltd. from
investment in other equity instruments to assets held for sale.
10. Property, plant and equipment
Unit: RMB
Item Closing balance Opening balance
Property, plant and equipment 461,506,954.62 244,337,754.20
Total 461,506,954.62 244,337,754.20
(1) Information on property, plant and equipment
Unit: RMB
Properties and Machinery
Item Motor vehicles Office equipment Total
buildings equipment
I. Original Book
Value
1. Opening
247,768,643.17 5,359,322.50 5,357,788.54 40,892,792.81 299,378,547.02
balance
2. Increase in
232,666,030.17 573,605.33 9,041,759.66 242,281,395.16
the current period
(1)
573,605.33 9,041,759.66 9,615,364.99
Procurement
(2)
Transfer from
232,666,030.17 232,666,030.17
construction in
progress
(3)
Increase in
business
combination
3. Decrease in
568.00 1,497,206.19 1,497,774.19
the current period
(1)
568.00 1,497,206.19 1,497,774.19
Disposal or scrap
170
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
4. Closing
480,434,673.34 5,359,322.50 5,930,825.87 48,437,346.28 540,162,167.99
balance
II. Accumulated
depreciation
1. Opening
23,427,449.90 1,401,164.82 3,594,925.08 26,617,253.02 55,040,792.82
balance
2. Increase in
14,495,936.04 1,003,084.67 401,491.44 8,957,565.34 24,858,077.49
the current period
(1)
14,495,936.04 1,003,084.67 401,491.44 8,957,565.34 24,858,077.49
Provision
3. Decrease in
539.60 1,243,117.34 1,243,656.94
the current period
(1)
539.60 1,243,117.34 1,243,656.94
Disposal or scrap
4. Closing
37,923,385.94 2,404,249.49 3,995,876.92 34,331,701.02 78,655,213.37
balance
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 the end of the 442,511,287.40 2,955,073.01 1,934,948.95 14,105,645.26 461,506,954.62
period
2. Book value
at the beginning of 224,341,193.27 3,958,157.68 1,762,863.46 14,275,539.79 244,337,754.20
the period
(2) Property, plant and equipment that the certificate of title has not been issued
Unit: RMB
Reasons for the certificate of title having
Item Book value
not been issued
Materials for handling the title are under
Intelligent storage center 228,097,921.03
preparations.
171
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
11. Construction in process
Unit: RMB
Item Closing balance Opening balance
Construction in process 70,114,185.76 148,165,548.36
Total 70,114,185.76 148,165,548.36
(1) Information on construction in progress
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Intelligent
130,966,928.76 130,966,928.76
storage center
Supply chain
70,114,185.76 70,114,185.76 17,198,619.60 17,198,619.60
park
Total 70,114,185.76 70,114,185.76 148,165,548.36 148,165,548.36
(2) Changes of significant construction in progress in the current period
Unit: RMB
Amou
nt of
Propor Includi
propert
tion of Accum ng: Interes
y,
the ulative Amou t
Increas plant Decrea
Openi Closin cumul Constr amoun nt of capital
Budget e in and se in
ng g ative uction t of interes ization Source
Project numbe the equip the
balanc balanc constr progre interes t rate in of fund
r current ment current
e e uction ss t capital the
period transfe period
input capital ization current
rred in
in ization in the period
the
budget period
current
period
Intellig
224,12 130,96 97,130 228,09 Procee
ent 101.77 100.00
0,000. 6,928. ,992.2 7,921. ds
storage % %
00 76 7 03 raised
center
Supply 149,60 17,198 52,915 70,114 Procee
46.87 46.87
chain 7,224. ,619.6 ,566.1 ,185.7 ds
% %
park 00 0 6 6 raised
Procee
4,568, 4,568,
Others ds
109.14 109.14
raised
373,72 148,16 154,61 232,66 70,114
Total 7,224. 5,548. 4,667. 6,030. ,185.7
00 36 57 17 6
172
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
(3) Provision for the impairment of construction in progress in the current period
The Company did not have any circumstance under which it needs to make impairment provision for construction in progress as of
December 31, 2022.
12. Right-of-use assets
Unit: RMB
Item Properties and buildings Total
I. Original Book Value
1. Opening balance 594,126,412.80 594,126,412.80
2. Increase in the current period 185,049,737.10 185,049,737.10
(1) New lease 111,612,163.19 111,612,163.19
(2) Modification 73,437,573.91 73,437,573.91
3. Decrease in the current period 174,891,701.13 174,891,701.13
(1) Modification 120,551,156.45 120,551,156.45
(2) Termination 54,340,544.68 54,340,544.68
4. Closing balance 604,284,448.77 604,284,448.77
II. Accumulated depreciation
1. Opening balance 186,677,758.06 186,677,758.06
2. Increase in the current period 221,259,434.18 221,259,434.18
(1) Provision 221,259,434.18 221,259,434.18
3. Decrease in the current period 136,220,832.31 136,220,832.31
(1) Disposal 30,762,994.81 30,762,994.81
(2) Modification 105,457,837.50 105,457,837.50
4. Closing balance 271,716,359.93 271,716,359.93
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
332,568,088.84 332,568,088.84
period
2. Book value at the beginning of
407,448,654.74 407,448,654.74
the period
Other descriptions:
173
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
13. Intangible assets
(1) Information on intangible assets
Unit: RMB
Non-patented
Item Land use right Patent right Software Trademark Total
technology
I. Original
Book Value
1. Opening
120,559,562.12 33,194,690.88 436,252.84 154,190,505.84
balance
2. Increase
in the current 361,381.32 25,553,748.11 25,915,129.43
period
(1)
361,381.32 25,553,748.11 25,915,129.43
Purchase
(2)
Internal R&D
(3)
Increase in
business
combination
3.
Decrease in the
current period
(1)
Disposal
4. Closing
120,920,943.44 58,748,438.99 436,252.84 180,105,635.27
balance
II. Accumulated
Amortization
1. Opening
17,234,171.14 17,151,493.23 256,112.18 34,641,776.55
balance
2. Increase
in the current 2,700,033.62 13,718,754.97 32,345.28 16,451,133.87
period
(1)
2,700,033.62 13,718,754.97 32,345.28 16,451,133.87
Provision
3.
Decrease in the
current period
(1)
Disposal
4. Closing
19,934,204.76 30,870,248.20 288,457.46 51,092,910.42
balance
III. Impairment
174
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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 100,986,738.68 27,878,190.79 147,795.38 129,012,724.85
of the period
2. Book
value at the
103,325,390.98 16,043,197.65 180,140.66 119,548,729.29
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
14. Long-term deferred expenses
Unit: RMB
Amortized amount
Increase in the
Item Opening balance of the current Other decreases Closing balance
current period
period
Store decoration
96,169,898.18 72,932,809.26 63,241,285.65 105,861,421.79
fee
Warehouse
161,267.39 194,924.79 171,360.35 184,831.83
decoration fee
Advertising fee 6,958,837.82 5,671,118.53 1,287,719.29
Software rental fee 1,859,057.85 4,704,277.27 2,408,234.72 4,155,100.40
Others 94,059.31 94,059.31 0.00
Total 105,243,120.55 77,832,011.32 71,586,058.56 111,489,073.31
15. Deferred tax assets/deferred tax liabilities
(1) Deferred tax assets that are not offset
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
175
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Provision for asset
164,926,600.08 24,739,040.01 127,073,347.31 19,068,898.59
impairment
Deductible loss 3,819,736.80 954,934.20
Gross profits
temporarily
unrecognized due to 225,955,017.74 33,893,252.66 215,096,618.75 32,264,492.81
expected goods
exchange
Unrealized profit in
336,279,740.32 50,441,961.05 261,303,351.88 39,195,502.78
internal transaction
Tax-accounting
difference for right-of- 6,212,641.81 931,896.27 10,806,767.10 1,681,921.28
use assets
Changes in fair value
of investments in other 990,792.60 148,618.89
equity instruments
Total 733,373,999.95 110,006,149.99 619,090,614.44 93,314,368.55
(2) Deferred tax liabilities that are not offset
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
differences differences
Depreciation of
property, plant and 16,374,555.16 2,456,183.27 15,603,604.41 2,340,540.66
equipment
Valuation of financial
instruments and
derivatives measured at 4,950,075.80 742,511.37 3,424,832.00 513,724.80
fair value through
profit or loss
Changes in fair value
of investments in other 47,597,748.16 7,164,631.41
equity instruments
Total 68,922,379.12 10,363,326.05 19,028,436.41 2,854,265.46
(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
beginning of the beginning of the
the reporting period of the reporting period
reporting period reporting period
Deferred tax assets 110,006,149.99 93,314,368.55
Deferred tax liabilities 10,363,326.05 2,854,265.46
(4) Breakdown of unconfirmed deferred tax assets
Unit: RMB
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Item Closing balance Opening balance
Deductible loss 16,462,420.50
Provision for asset impairment 87,013.62
Tax-accounting difference for right-of-
29,911.12
use assets
Total 16,579,345.24
(5) Deductible losses of the unconfirmed deferred income tax assets due in the next year
Unit: RMB
Year Closing balance Opening balance Remarks
2024 3,356,199.81
2027 13,106,220.69
Total 16,462,420.50
16. 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 1,130,640.00 1,130,640.00
work
Prepayment for
acquisition of
209,392,920.00 209,392,920.00 702,868.45 702,868.45
long-lived
assets
Large-
denomination
20,141,555.56 20,141,555.56
Certificate of
Deposit
Total 229,534,475.56 229,534,475.56 1,833,508.45 1,833,508.45
Other descriptions:
— The closing balance of other non-current assets increased by RMB227,700,967.11 or 12,418.87% compared with the opening
balance in 2022, mainly owing to the fact that payment has been made for the land plot in Hualong Town, Panyu District,
Guangzhou City but title has not been obtained.
17. Notes payable
Unit: RMB
Category Closing balance Opening balance
Bank acceptance bills 46,482,171.48 38,098,527.79
Total 46,482,171.48 38,098,527.79
The total amount of the notes payable due but unpaid at the end of the reporting period was RMB0.00.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
18. Accounts payable
(1) List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Accounts payable 184,779,174.92 126,522,502.78
Total 184,779,174.92 126,522,502.78
(2) Significant accounts payable with aging over one year
Unit: RMB
Reason for unsettlement or not carry-
Item Closing balance
over
Other descriptions:
The Company had no significant accounts payable with aging over one year in the reporting period.
19. Contract liabilities
Unit: RMB
Item Closing balance Opening balance
Product sales 168,876,645.17 140,669,127.30
Total 168,876,645.17 140,669,127.30
20. Employee benefits payable
(1) List of employee benefits payable
Unit: RMB
Item Opening balance Increase in the period Decrease in the period Closing balance
I. Short-term benefits 64,027,461.27 417,211,870.95 415,464,494.03 65,774,838.19
II. Post-employment
benefits - defined 25,031,227.29 25,031,227.29
contribution plans
III. Termination
959,102.50 959,102.50
benefits
Total 64,027,461.27 443,202,200.74 441,454,823.82 65,774,838.19
(2) List of short-term benefits
Unit: RMB
Item Opening balance Increase in the period Decrease in the period Closing balance
1. Salary, bonus and
64,027,461.27 381,566,329.23 379,818,952.31 65,774,838.19
subsidy
2. Employee welfare 8,987,037.71 8,987,037.71
3. Social insurance 15,837,512.96 15,837,512.96
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
premiums
Including: Medical
14,924,096.07 14,924,096.07
insurance
Employment
531,779.75 531,779.75
injury insurance
Maternity
381,637.14 381,637.14
insurance
4. Housing provident fund 9,126,546.92 9,126,546.92
5. Labor union fee and
1,694,444.13 1,694,444.13
staff education fee
Total 64,027,461.27 417,211,870.95 415,464,494.03 65,774,838.19
(3) List of defined contribution plans
Unit: RMB
Item Opening balance Increase in the period Decrease in the period Closing balance
1. Basic endowment
24,280,166.75 24,280,166.75
insurance
2. Unemployment
751,060.54 751,060.54
insurance
Total 25,031,227.29 25,031,227.29
21. Taxes payable
Unit: RMB
Item Closing balance Opening balance
Value-added tax 76,811,192.18 36,201,763.85
Corporate income tax 90,371,162.30 91,276,509.31
City construction and maintenance tax 949,795.14 1,329,110.07
Education surcharge 678,510.59 949,697.81
Others 1,917,866.33 1,212,181.56
Total 170,728,526.54 130,969,262.60
Other descriptions:
— The closing balance of taxes payable increased by RMB39,759,263.94 or 30.36% compared with the opening balance in 2022,
mainly owing to the increase in the balance of VAT payable by the Company.
22. Other payables
Unit: RMB
Item Closing balance Opening balance
Other payables 90,368,389.42 55,878,486.28
Total 90,368,389.42 55,878,486.28
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
(1) Other payables
1) List of other payables by amount nature
Unit: RMB
Item Closing balance Opening balance
Margins and deposits 45,635,965.30 34,064,534.19
Fees payable 30,783,066.13 21,016,130.22
Others 13,949,357.99 797,821.87
Total 90,368,389.42 55,878,486.28
2) Significant other payables with aging over one year
Unit: RMB
Reason for unsettlement or not carry-
Item Closing balance
over
Other descriptions:
– The Company had no significant other payables with aging over one year in the reporting period.
23. Liabilities held for sale
Unit: RMB
Item Closing balance Opening balance
Other payables 1,408,760.31
Total 1,408,760.31
Other descriptions:
— For details on liabilities held for sale, please refer to “Note VII (7) Assets held for sale”.
24. Non-current liabilities due within one year
Unit: RMB
Item Closing balance Opening balance
Lease liabilities due within one year 201,658,095.27 197,019,114.42
Total 201,658,095.27 197,019,114.42
25. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Refunds payable 319,703,149.23 314,200,407.66
Output tax pending carryforward 15,963,511.36 14,430,445.68
Total 335,666,660.59 328,630,853.34
Other descriptions:
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
— 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.
26. Bonds payable
(1) Bonds payable
Unit: RMB
Item Closing balance Opening balance
Convertible bonds 284,554,163.11
Total 284,554,163.11
(2) Changes in bonds payable (excluding other financial instruments such as preference shares and
perpetual bonds that are classified as financial liabilities)
Unit: RMB
Amortizat
Interest Repaym Conversio Clos
Name Term Issuance ion of
Par Date of Amount Opening accrued ent in n to shares ing
of of in the premiums
value issuance issued balance at par the in the bala
bond bond period and
value period period nce
discounts
689,0 -
June 15, 6 689,000, 284,554, 231,560. 307,084. 297,560,8
BYZZ 00,00 13,082,16
2020 years 000.00 163.11 02 36 00.00
0.00 1.23
-
689,000, 284,554, 231,560. 307,084. 297,560,8
Total —— 13,082,16
000.00 163.11 02 36 00.00
1.23
(3) Conversion conditions and time of the Company’s convertible bonds
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
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 convers ion
price of the convertible bonds, the conversion price of “BYZZ” was adjusted from RMB14.90/share to RMB14.60/share.
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”
bonds 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 as of the redemption registration date at a price of bond par value plus accrued
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
interest of the current period. As at the market closing on February 22, 2022, still 3,058 “BYZZ” 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 accrued
interest in the period; 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 “BYZZ” 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 “BYZZ”
convertible bonds were delisted as they were no longer qualified for listing.
27. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Lease liabilities 141,295,857.16 217,323,756.45
Total 141,295,857.16 217,323,756.45
Other descriptions:
— The closing balance of lease liabilities decreased by RMB76,027,899.29 or 34.98% compared with the opening balance in 2022,
mainly owing to the payment of rent in accordance with agreement.
28. Deferred income
Unit: RMB
Increase in the Decrease in the
Item Opening balance Closing balance Reason
period period
Government grants 30,000,000.00 30,000,000.00 Related to asset
Total 30,000,000.00 30,000,000.00 --
Items involving government grants:
Unit: RMB
Amount
Amount
included in
included in Amount of
non- Related to
Liability Opening Increase in other offsetting Other Closing
operating asset/incom
item balance the period income in costs in the changes balance
revenue in e
the current period
the current
period
period
Support
funds for
the
constructio 30,000,000. 30,000,000. Related to
n of 00 00 asset
intelligent
storage
center
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
29. Share capital
Unit: RMB
Increase and decrease of this change (+ and -)
Opening Shares Closing
balance New shares transferred balance
Bonus shares Others Subtotal
issued from surplus
reserve
Total number 550,326,712. 20,380,372.0 20,380,372.0 570,707,084.
of shares 00 0 0 00
Other descriptions:
— The increase under “others”: As stated in Note VII (26) of this financial report, the Company issued convertible bonds. As of
December 31, 2022, a total of 46,637,374.00 shares had been converted from “BYZZ” convertible bonds, of which 20,380,372.00
shares were converted in 2022.
30. Other equity instruments
(1) Basic information on other financial instruments in issue at the end of the reporting period, such as preference shares
and perpetual bonds
For details, please refer to “Note VII (26) Bonds payable”.
(2) Changes in other financial instruments in issue at the end of the reporting period, such as preference shares and
perpetual bonds
Unit: RMB
Financial Beginning of the period Increase in the period Decrease in the period End of the period
instruments
in issue Number Book value Number Book value Number Book value Number Book value
2,978,666.0 27,524,454. 2,978,666.0 27,524,454.
BYZZ
0 16 0 16
2,978,666.0 27,524,454. 2,978,666.0 27,524,454.
Total
0 16 0 16
Description of increase/decrease of other equity instruments in the reporting period, reasons of change, and accounting basis:
— Other equity instruments decreased by RMB27,524,454.16 in the reporting period, owing to the conversion and redemption of
convertible bonds.
31. Capital reserve
Unit: RMB
Item Opening balance Increase in the period Decrease in the period Closing balance
Capital premium (share
600,470,446.15 293,074,311.19 893,544,757.34
premium)
Total 600,470,446.15 293,074,311.19 893,544,757.34
Other descriptions, including increase/decrease in the reporting period and reasons of change:
183
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
— Capital reserve increased by RMB293,074,311.19 in the reporting period, owing to the conversion of convertible bonds into
shares.
32. Other comprehensive income
Unit: RMB
Amount incurred in the current period
Less: Less:
Amount Amount
previously previously
included in included in Amount
Amount
Opening Amount in other other attributable Closing
Item Less: attributable
balance the period comprehen comprehen to the balance
Income tax to minority
before sive sive Parent
expense shareholders
income tax income and income and Company
after tax
transferred transferred after tax
to profit or to retained
loss in the earnings in
period the period
I. Other
comprehensi
ve income
that cannot - 50,070,083. 7,313,250.3 42,275,990. 41,433,81
480,842.99
be 842,173.72 29 0 00 6.28
reclassified
into profit or
loss
Changes
in fair value
of
- 50,070,083. 7,313,250.3 42,275,990. 41,433,81
investments 480,842.99
842,173.72 29 0 00 6.28
in other
equity
instruments
Total of other
- 50,070,083. 7,313,250.3 42,275,990. 41,433,81
comprehensi 480,842.99
842,173.72 29 0 00 6.28
ve income
33. Surplus reserve
Unit: RMB
Item Opening balance Increase in the period Decrease in the period Closing balance
Statutory surplus
258,110,335.93 27,243,206.07 285,353,542.00
reserve
Total 258,110,335.93 27,243,206.07 285,353,542.00
Explanation of surplus reserve, including increase/decrease in the reporting period and reasons of change:
The Articles of Association of the Company stipulates that when distributing the after-tax profits of the year, 10% of the net profit
shall be appropriated and included in the Company’s statutory surplus reserve. The appropriation may stop if the accumulated
184
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
amount of statutory surplus reserve reaches 50% of the Company’s registered capital. As of the reporting period, the accumulated
amount of the statutory surplus reserve accounted for 50% of the Company’s registered capital.
34. Retained earnings
Unit: RMB
Item Current period Prior period
Retained earnings at the end of the last
1,809,851,821.97 1,413,582,872.58
period before adjustment
Retained earnings at the beginning of the
1,809,851,821.97 1,413,582,872.58
period after adjustment
Plus: Net profit attributable to owners of
727,597,822.61 624,541,483.00
the parent company in the current period
Less: Appropriated statutory surplus
27,243,206.07 63,282,325.31
reserve
Dividends on ordinary shares
171,212,125.20 164,990,208.30
payable
Retained earnings at the end of the
2,338,994,313.31 1,809,851,821.97
period
Details on adjustments of 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 were 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 were impacted by RMBXX.
(5) Other adjustments affected retained earnings at the beginning of the period by RMBXX.
35. Revenue and cost of revenue
Unit: RMB
Amount incurred in the current period Amount incurred in the prior period
Item
Revenue Cost Revenue Cost
Principal business 2,884,781,739.39 652,016,624.24 2,719,943,987.32 634,160,601.71
Other businesses 60,021.43 45,269.82
Total 2,884,841,760.82 652,016,624.24 2,719,989,257.14 634,160,601.71
Whether lower of the audited net profits before and after deducting the non-recurring profit and loss is negative
□ Yes No
36. Taxes and surcharges
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
City construction and maintenance tax 12,740,072.20 12,273,316.92
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Education surcharge 5,592,988.09 5,319,074.54
Local education surcharge 3,728,658.77 3,546,047.89
Other taxes and fees 3,333,020.57 2,824,038.23
Total 25,394,739.63 23,962,477.58
Other descriptions:
37. Selling expenses
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Store operating expenses 287,914,059.48 359,724,699.13
Employee benefits 296,637,808.88 292,614,931.34
Depreciation of right-of-use assets 208,991,072.66 175,539,936.53
Decoration and renovation expenses 107,756,159.43 84,303,737.40
Advertising fee 73,427,178.68 78,889,887.30
Office and business travel expenses 20,388,057.96 20,281,804.02
Transportation expenses 12,078,098.60 10,068,692.80
E-commerce service fee 13,620,502.48 8,659,135.65
Others 15,559,618.80 10,969,661.97
Total 1,036,372,556.97 1,041,052,486.14
Other descriptions:
38. Administrative expenses
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Employee benefits 91,012,576.06 74,442,596.47
Depreciation and amortization 31,472,795.36 26,494,225.47
Agency fee 20,301,049.83 13,936,114.88
Depreciation of right-of-use assets 12,268,361.52 12,445,016.24
Office and business travel expenses 11,824,852.70 11,700,066.13
Office premise usage fee 11,385,132.57 9,838,670.93
Others 17,367,290.08 7,410,884.14
Total 195,632,058.12 156,267,574.26
Other descriptions:
39. R&D expenses
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Employee benefits 57,266,965.80 54,175,698.63
New product R&D 34,430,518.96 22,525,478.10
Depreciation and amortization 5,577,286.66 3,769,157.59
Office and business travel expenses 2,805,176.26 2,616,395.96
Others 103,000.01 301,398.39
Total 100,182,947.69 83,388,128.67
Other descriptions:
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
40. Finance expenses
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Interest expense of convertible bonds 1,705,282.26 18,670,744.11
Interest expense of lease liabilities 18,558,374.38 21,058,743.02
Less: Interest income 28,967,907.61 18,147,338.76
Exchange profit and loss 694,332.80
Others 227,363.54 223,387.32
Total -7,782,554.63 21,805,535.69
Other descriptions:
— Interest income in 2022 increased by RMB10,820,568.85 or 59.63% compared with 2021, owing to the increase of interests
accrued by the purchased large-denomination Certificate of Deposit.
41. Other income
Unit: RMB
Sources of other income Amount incurred in the current period Amount incurred in the prior period
Government grants 23,247,374.45 14,577,835.79
Others 6,084.74 203,782.61
Total 23,253,459.19 14,781,618.40
42. Return on investment
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Gain from debt restructuring 104,009.33
Income from wealth management
39,121,856.42 38,711,860.90
products
Others 269,092.96
Total 39,390,949.38 38,815,870.23
Other descriptions:
43. Income from changes in fair value
Unit: RMB
Source of income from changes in fair
Amount incurred in the current period Amount incurred in the prior period
value
Financial assets held for trading - wealth
4,950,075.80 3,424,832.00
management products
Total 4,950,075.80 3,424,832.00
Other descriptions:
44. Credit impairment loss
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Bad debt loss 2,269,925.82 314,860.76
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Total 2,269,925.82 314,860.76
Other descriptions:
45. Asset impairment loss
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
II. Impairment loss of inventories and
-99,445,469.97 -78,683,952.73
contract performance costs
Total -99,445,469.97 -78,683,952.73
Other descriptions:
46. Gains on disposal of assets
Unit: RMB
Source Amount incurred in the current period Amount incurred in the prior period
Gains or losses from the disposal of non-
1,862,946.66 -253,775.79
current asset
Total 1,862,946.66 -253,775.79
47. Non-operating revenue
Unit: RMB
Amount incurred in the Amount incurred in the prior Amount recognized as profit
Item
current period period or loss of the current period
Others 3,017,693.32 531,942.90 3,017,693.32
Total 3,017,693.32 531,942.90 3,017,693.32
48. Non-operating expenses
Unit: RMB
Amount incurred in the Amount incurred in the prior Amount recognized as profit
Item
current period period or loss of the current period
External donations 2,200,000.00 5,175,531.18 2,200,000.00
Loss from retirement of non-
105,044.25 157,289.86 105,044.25
current assets
Loss of deposit for early
101,400.00
termination of lease
Others 376,385.70 179,121.61 376,385.70
Total 2,681,429.95 5,613,342.65 2,681,429.95
Other descriptions:
49. Income tax expenses
(1) List of income tax expenses
Unit: RMB
188
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Item Amount incurred in the current period Amount incurred in the prior period
Current income tax expense 144,540,302.26 134,891,825.25
Deferred income tax expense -16,495,971.15 -26,762,252.49
Total 128,044,331.11 108,129,572.76
(2) Adjustment process of accounting profits and income tax expenses
Unit: RMB
Item Amount incurred in the current period
Total profit 855,643,539.05
Income tax expenses calculated at the statutory/applicable tax
128,346,530.86
rate
Impacts of different tax rates applied to subsidiaries 6,919,446.33
Impacts of adjustments to income taxes during the prior period 3,052,398.87
Impacts of non-deductible costs, expenses and losses 1,555,048.57
Impacts of deductible temporary differences or deductible
2,970,934.74
losses of deferred tax assets not confirmed in the current period
Impact of above-rate deduction of R&D expenses -14,800,028.26
Income tax expenses 128,044,331.11
Other descriptions:
50. Other comprehensive income
For details, please refer to “Note VII (32)”.
51. Items of the cash flow statement
(1) Cash received related to other operating activities
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Government grants 23,247,374.45 14,577,835.79
Interest income 23,103,647.72 6,788,310.98
Operation-related security deposits 26,919,411.40 18,438,232.59
Others 3,023,778.06 735,725.51
Total 76,294,211.63 40,540,104.87
Description of cash received related to other operating activities:
(2) Cash paid related to other operating activities
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Margins and deposits 25,865,768.38 16,301,529.53
Period expense for cash payments 290,967,567.26 356,681,090.61
Deposits for bank acceptance bills 2,934,275.31 3,835,587.75
External donations 2,200,000.00 5,175,531.18
Total 321,967,610.95 381,993,739.07
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Description of cash paid related to other operating activities:
(3) Cash received related to other investing activities
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Structured deposits and wealth
5,150,000,000.00 3,130,000,000.00
management products
Security deposits 29,000,000.00
Down payment for equity transfer 13,767,000.00
Total 5,192,767,000.00 3,130,000,000.00
Description of cash received related to other investing activities:
(4) Cash paid related to other investing activities
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Structured deposits, time deposits and
5,410,000,000.00 3,110,000,000.00
wealth management products
Security deposits 7,017,365.00 29,000,000.00
Total 5,417,017,365.00 3,139,000,000.00
Description of cash paid related to other investing activities:
(5) Cash paid related to other financing activities
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Rental fees 46,659,023.21 58,595,168.29
Others 329,216.34
Total 46,988,239.55 58,595,168.29
Description of cash paid related to other financing activities:
52. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
Unit: RMB
Supplementary information Amount of the current period Amount of the prior period
1. Reconciliation of net profit to cash
flows from operating activities
Net profit 727,599,207.94 624,540,933.45
Plus: Provisions for asset impairment 97,175,544.15 78,369,091.97
Depreciation of property, plant
and equipment, oil and gas assets and 24,858,077.49 23,446,859.64
productive biological assets
Depreciation of right-of-use
221,259,434.18 187,984,952.77
assets
Intangible asset amortization 16,451,133.87 10,178,688.43
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Amortization of long-term
71,586,058.56 71,980,366.17
deferred expenses
Losses from disposal of property,
plant and equipment, intangible assets
-1,862,946.66 253,775.79
and other long-lived assets ("-" indicates
income)
Losses from property, plant and
equipment write-off ("-" indicates 105,044.25 157,289.86
income)
Losses from changes in fair value
-4,950,075.80 -3,424,832.00
("-" indicates income)
Finance expenses ("-" indicates
20,263,656.64 39,729,487.13
income)
Investment losses ("-" indicates
-39,390,949.38 -38,815,870.23
income)
Decrease in deferred tax assets
-16,840,400.33 -27,363,238.95
("-" indicates increase)
Increase in deferred tax liabilities
344,429.18 600,986.46
("-" indicates decrease)
Decrease in inventories ("-"
-184,836,424.81 -131,218,395.92
indicates increase)
Decrease in operating receivables
3,898,472.45 -17,729,808.30
("-" indicates increase)
Increase in operating payables ("-
6,575,772.09 78,833,351.80
" indicates decrease)
Others
Net cash flows from operating
942,236,033.82 897,523,638.07
activities
2. Significant investment and financing
activities not involving cash
Conversion of debt to capital
Convertible corporate bonds due
within one year
Property, plant and equipment
acquired under finance lease
Right-of-use assets added in the period 185,049,737.10 123,036,592.73
3. Net changes in cash and cash
equivalents:
Closing balance of cash 1,099,091,515.33 1,058,018,706.05
Less: Opening balance of cash 1,058,018,706.05 569,284,546.79
Plus: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash
41,072,809.28 488,734,159.26
equivalents
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
(2) Composition of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 1,099,091,515.33 1,058,018,706.05
Including: Cash on hand 41,726.00 142,548.00
Bank deposits always available
1,098,238,565.72 1,057,876,158.05
for payment
Other monetary funds always
811,223.61
available for payment
III. Closing balance of cash and cash
1,099,091,515.33 1,058,018,706.05
equivalents
Other descriptions:
—The balance of cash and cash equivalents at the end of the period has deducted interests receivable from bank deposits at
RMB17,223,287.67, security deposits for project performance guarantees at RMB12,300,000.00, and security deposits for bank
acceptance bills at RMB16,268,760.06.
53. Assets with restricted right to use or ownership
Unit: RMB
Item Book value at the end of the period Reason for restriction
Security deposits for bank acceptance
Monetary funds 28,568,760.06
bills and project performance guarantees
Total 28,568,760.06
Other descriptions:
54. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Balance of foreign currency at Balance of converted RMB at
Item Conversion rate
the end of the period the end of the period
Monetary funds
Including: USD
EUR
HKD
Accounts payable
Including: USD 273,821.99 6.9646 1,907,060.61
Accounts receivable
Including: USD
EUR
HKD
Other receivables
Including: EUR 950,000.00 7.4229 7,051,755.00
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Long-term loans
Including: USD
EUR
HKD
Other descriptions:
(2) For overseas business entities, especially important ones, disclose their main overseas business
address, standard currency for accounting and selection basis. If there are changes in the standard
currency for accounting, reasons shall be also provided
□ Applicable Not applicable
55. Government grants
(1) Basic information on government grants
Unit: RMB
Amount recognized as profit
Category Amount Accounting subject
or loss for the current period
Financial support fund 17,480,949.00 Other income 17,480,949.00
Special fund for the
development of medium, 2,425,000.00 Other income 2,425,000.00
small and micro enterprises
Subsidies for the industrial
Internet project and the
informatization and 2,000,000.00 Other income 2,000,000.00
industrialization integration
project
Support fund appropriated by
the financial department to 820,181.00 Other income 820,181.00
the Zero Balance Account
One-off subsidy for job
381,750.00 Other income 381,750.00
retention and increase
Subsidy for job stabilization 139,494.45 Other income 139,494.45
Total 23,247,374.45 23,247,374.45
(2) Return of government grants
□ Applicable Not applicable
Other descriptions:
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
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
□ Yes No
2. Changes in the scope of consolidation due to other reasons
Description of changes in the scope of consolidation due to other reasons (establishment or liquidation of subsidiaries, etc.) and
related situations:
Newly established holding subsidiary/second-tier subsidiary
Date of Period of Nature of
Name of company Reason of change
establishment consolidation company
Guangzhou Houde Zaiwu
Industrial Investment Fund Newly established
December 07, 2022 2022 Holding subsidiary
Partnership (Limited in the period
Partnership)
Newly established Holding second-tier
Hong Kong Carritt Limited December 30, 2022 2022
in the period subsidiary
Hong Kong Plentiful Shiny Newly established Holding second-tier
December 30, 2022 2022
Limited in the period subsidiary
IX. Equities in Other Entities
1. Equities in subsidiaries
(1) Composition of the enterprise group
Name of Main business Registered Principal Shareholding percentage Obtaining
subsidiary address address business Direct Indirect method
Guangzhou
BIEM.L.FDLK Rental and
Investment and
K Supply Chain Guangzhou Guangzhou business 100.00%
establishment
Management services
Co., Ltd.
Guangzhou
BIEM.L.FDLK Rental and
Investment and
K Business Guangzhou Guangzhou business 100.00%
establishment
Consulting Co., services
Ltd.
Ningbo
Supply chain
BIEM.L.FDLK
management Investment and
K Supply Chain Ningbo Ningbo 100.00%
and business establishment
Management
services
Co., Ltd.
Xuzhou
Supply chain
BIEM.L.FDLK
management Investment and
K Supply Chain Xuzhou Xuzhou 100.00%
and business establishment
Management
services
Co., Ltd.
Ningbo
Supply chain
BIEM.L.FDLK
management Investment and
K Smart Ningbo Ningbo 100.00%
and business establishment
Technology
services
Co., Ltd.
Guangzhou Guangzhou Guangzhou Finance 99.01% Investment and
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
BIEM.L.FDLK industry establishment
K Ejam Equity
Investment
Partnership
(Limited
Partnership)
Guangzhou
Houde Zaiwu
Industrial
Investment Finance Investment and
Guangzhou Guangzhou 99.85%
Fund industry establishment
Partnership
(Limited
Partnership)
Hong Kong Finance Investment and
Hong Kong Hong Kong 99.85%
Carritt Limited industry establishment
Hong Kong
Finance Investment and
Plentiful Shiny Hong Kong Hong Kong 99.85%
industry establishment
Limited
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
Shareholding Dividends declared to Closing balance of
attributable to minority
Name of subsidiary percentage of minority minority shareholders equity of minority
shareholders in the
shareholders in the period shareholders
period
Guangzhou
BIEM.L.FDLKK Ejam
Equity Investment 0.99% 1,385.33 1,449,963.45
Partnership (Limited
Partnership)
(3) Main financial information of important non-wholly-owned subsidiaries
Unit: RMB
Closing balance Opening balance
Non-
Name of Non- Non-
Non- Current Total Curre Current curren Total
subsidiary Current Total current curren Total
current liabilitie liabilit nt liabilitie t liabilit
assets assets liabilitie t assets
assets s ies assets s liabilit ies
s assets
ies
Guangzhou
BIEM.L.FD
LKK Ejam
137,67 147,85 1,408, 98,09 98,92 1,181,
Equity 10,189, 1,408,76 822,7 1,181,10
0,000. 9,613. 760.3 9,300. 2,022. 101.0
Investment 613.49 0.31 22.25 1.00
00 49 1 47 72 0
Partnership
(Limited
Partnership)
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Unit: RMB
Amount incurred in the current period Amount incurred in the prior period
Name of Total Cash flows Total Cash flows
subsidiary comprehen from comprehen from
Revenue Net profit Revenue Net profit
sive operating sive operating
income activities income activities
Guangzhou
BIEM.L.FDLK
K Ejam Equity
48,709,931. - 5,258,421.3
Investment 139,931.46 -55,510.43 -53,510.43
46 719,033.07 7
Partnership
(Limited
Partnership)
Other descriptions:
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 are 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.
(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 provision 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 delive ring cash or
other financial assets. The Company has formulated an internal control system related to cash management, regularly prepares
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
rolling fund budgets, and monitors short-term and long-term liquidity needs in real time. The goal is to use bank loans, commercia l
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 Fair value Fair value
measurement with measurement with measurement with Total
Level 1 inputs Level 2 inputs Level 3 inputs
I. Recurring Fair Value
-- -- -- --
Measurement
(I) Financial assets
952,797.96 1,377,804,000.91 1,378,756,798.87
held for trading
1. Financial assets
measured at fair value 952,797.96 1,377,804,000.91 1,378,756,798.87
through profit or loss
(1) Wealth
management products 1,377,804,000.91 1,377,804,000.91
of banks
(2) Others 952,797.96 952,797.96
(II) Assets held for sale 137,670,000.00 137,670,000.00
(III) Investment in
other equity 10,499,383.76 10,499,383.76
instruments
Total recurring assets
952,797.96 1,377,804,000.91 148,169,383.76 1,526,926,182.63
measured at fair value
II. Non-recurring Fair
-- -- -- --
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 with level 2 inputs is
determined based on the expected rate of return of the product.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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, EBITDA multiplier, etc.
Fair values of the equity investments in Shenzhen Youanmi Technology Co., Ltd. and Fast Fashion (Guangzhou) Co., Ltd. are
measured through the latest financing price method.
5. Adjustment 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.
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 rights in the Company
related party Company (%) (%)
Xie Bingzheng Shareholder 37.88 37.88
Feng Lingling Shareholder 3.44 3.44
Xie Bingzheng and Feng Lingling, who are a couple, directly hold 41.32% of the Company’s equities; Xie Bingzheng and Feng
Lingling are the actual controllers of the Company.
2. Information on subsidiaries of the Company
For detailed information on the subsidiaries of the Company, please refer to “Note IX. 1. Equities in subsidiaries”.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
3. Information on other related parties
Name of other related party Relationship between other related party 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
Other descriptions:
4. Information on related party transactions
(1) Related party transactions for procurement and sale of goods, and provision and acceptance of labor
services
Purchase of goods/acceptance of labor services
Unit: RMB
Amount incurred Whether to
Content of related Approved Amount incurred
Related party in the current outstrip the
party transaction transaction limit in the prior period
period transaction limit
Guangzhou
Procurement of
Yixiang Garment 58,305,897.15 80,000,000.00 No 34,420,367.36
goods and services
Co., Ltd.
Table of sale of goods/provision of labor services
Unit: RMB
Content of related party Amount incurred in the Amount incurred in the prior
Related party
transaction current period period
Hongzhou Xindu Trading
Garment 1,287,126.22
Co., Ltd.
Hongzhou Gejiu Xuecheng
Garment 10,055,099.65 7,258,812.08
Garment Co., Ltd.
Explanation of the related party transactions for procurement and sale of goods, and provision and acceptance of labor services
(2) Remuneration of key managers
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Remuneration of key managers 6,668,808.78 5,447,666.46
5. Receivables from and payables to related parties
(1) Receivables
Unit: RMB
Closing balance Opening balance
Item Related party
Book balance Bad debt provision Book balance Bad debt provision
Prepayments Guangzhou 13,196.25 642,690.33
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Yixiang Garment
Co., Ltd.
Hongzhou Gejiu
Accounts
Xuecheng 1,622,887.40
receivable
Garment Co., Ltd.
(2) Payables
Unit: RMB
Book balance at the end of the Book balance at the beginning
Item Related party
period of the period
Guangzhou Yixiang Garment
Accounts payable 7,262,017.61 908,712.66
Co., Ltd.
Hongzhou Gejiu Xuecheng
Contract liabilities 165,369.78 1,568,366.50
Garment Co., Ltd.
Hongzhou Gejiu Xuecheng
Other payables 925,029.40 206,668.66
Garment Co., Ltd.
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, 2022, significant capital expenditure commitments that the Company has signed but does not need to present
on the balance sheet for now are as follows:
Unit: RMB
Item December 31, 2022
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Properties and buildings 60,549,923.28
Total 60,549,923.28
2. Contingencies
(1) Significant contingent matters on the balance sheet date
There were no significant contingent matters that need to be disclosed as of December 31, 2022.
(2) Explanation also necessary if the Company has no significant contingent matters to be disclosed
The Company had no significant contingent matters that needed to be disclosed.
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
The Company convened a Board meeting on April 26, 2023,
which deliberated and approved 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 December 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
Profit distribution plan 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.
2. Explanation on events after the balance sheet date
(I) Profit distribution
The Company convened a Board meeting on April 26, 2023, which deliberated and approved the Proposal on 2022 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 December 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 capita l
201
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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) Foreign investment and acquisition of overseas assets of the Company
The Company issued the Announcement on Foreign Investment and Acquisition of Overseas Assets (Announcement No.: 2023-009)
on April 4, 2023.
According to the announcement, Guangzhou Houde Zaiwu Industrial Investment Fund Partnership (Limited Partnership) , a
partnership company in which the Company holds 99.86% of equities, invested 57 million and 38 million, respectively, to Hon g
Kong Carritt Limited (hereinafter referred to as “Carritt”) and Hong Kong Plentiful Shiny Limited (hereinafter referred to as
“Plentiful Shiny”). Afterwards, Carritt acquired the 100% equities of Cerruti Investment Pte. Ltd. (hereinafter referred to a s
“Cerruti Singapore”), a Singaporean company held by Trinity Fashions Limited (hereinafter referred to as “Trinity Fashions”), and
the 100% equities of Cerruti 1881 (hereinafter referred to as “Cerruti France”), a French company held by Toga Investments
France (hereinafter referred to as “Toga Investment”), at a total price of 57 million; P lentiful Shiny acquired all the equities of
LiFung Trinity Management (Singapore) Pte. Ltd. (hereinafter referred to as “K&C Singapore”), a Singaporean company held by
Trinity Services Holdings Limited (hereinafter referred to as “Trinity Services Holdings”), at a price of 38 million. As a r esult,
the Company indirectly acquired the global trademark ownership of the luxury brands “CERRUTI 1881” and “KENT&CURWEN”
owned by the aforementioned target companies (hereinafter referred to as the “Acquisition”).
As of the reporting date, Carritt and Plentiful Shiny have signed the equity acquisition agreements with the respective
counterparties and the parties are currently handling relevant procedures of this Acquisition.
XVI. Other Significant Matters
1. Segment information
(1) Other explanations
The Company has no distinguishable business segment or regional segment that independently assumes risks and awards different
from other segments.
2. Leases
Information disclosure on the lessees
(1) Information of the lessee
Item Amount (RMB)
Interest expense of lease liabilities 18,558,374.38
Expenses of short-term leases included in relevant asset cost or profit or loss through the simplified treatment
method
Expenses of low-value asset leases included in relevant asset cost or profit or loss through the simplified treatment
2,051,155.78
method (except for the short-term lease expenses of low-value assets)
202
BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
Item Amount (RMB)
Variable lease payments that are not included in the measurement of lease liabilities but profit or loss 206,257,916.13
Including: Proportion from leaseback transactions
Income from sublease of right-of-use assets
Total cash outflow related to leases 46,611,163.91
Gain or loss from leaseback transactions
Cash inflow from leaseback transactions
Cash outflow from leaseback transactions
Others
3. 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
Book balance Bad debt provision Book balance Bad debt provision
Category Book Book
Provision value Provisio value
Amount Percentage Amount Amount Percentage Amount
ratio n ratio
Accounts
receivable
for which
618,282 618,282. 618,282. 618,282. 100.00
bad debt 0.23% 100.00% 0.21%
.56 56 56 56 %
provision is
set aside
individually
Including:
Accounts
receivable
for which 252,5 279,7
266,504 13,959,7 295,013, 15,296,6
bad debt 99.77% 5.24% 44,88 99.79% 5.19% 17,05
,592.75 05.79 683.59 26.45
provision is 6.96 7.14
set aside in
portfolios
Including:
Clothing 252,5 279,7
266,504 13,959,7 295,013, 15,296,6
sales 99.77% 5.24% 44,88 99.79% 5.19% 17,05
,592.75 05.79 683.59 26.45
business 6.96 7.14
267,122 14,577,9 252,5 295,631, 15,914,9 279,7
Total 100.00% 5.46% 100.00% 5.38%
,875.31 88.35 44,88 966.15 09.01 17,05
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
6.96 7.14
Bad debt provision individually:
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Ratio of provision Reason for provision
Jiangmen Yihua It is expected that the
Department Store Co., 618,282.56 618,282.56 100.00% amount cannot be
Ltd. recovered.
Total 618,282.56 618,282.56
Bad debt provision by portfolio:
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Ratio of provision
Within 1 year 265,915,533.62 13,370,646.66 5.03%
1-2 years 69,370.41 69,370.41 100.00%
2-3 years 178,697.20 178,697.20 100.00%
Over 3 years 340,991.52 340,991.52 100.00%
Total 266,504,592.75 13,959,705.79
Description of reason for the portfolio:
If the bad debt provision of accounts receivables is set aside according to the general model of expected credit loss, please refer to
the disclosure method of bad debt provision for other receivables:
□ Applicable Not applicable
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 265,915,533.62
1 to 2 years 69,370.41
2 to 3 years 796,979.76
Over 3 years 340,991.52
Over 5 years 340,991.52
Total 267,122,875.31
(2) Bad debt provision set aside, recovered or transferred back in the reporting period
Bad debt provision of the reporting period:
Unit: RMB
Amount of change in the period
Opening
Category Recovery or Closing balance
balance Provision Write-off Others
reversal
Bad debt
provision for
15,914,909.01 1,336,920.66 14,577,988.35
accounts
receivable
Total 15,914,909.01 1,336,920.66 14,577,988.35
Bad debt provisions with recovered or transferred-back amount being important:
Unit: RMB
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Name of institution Recovered or transferred-back amount Method of recovery
(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
Name of Nature of accounts Write-off amount is incurred
Write-off amount Write-off reason
institution receivable procedures by related party
transaction
Description on the write-offs of accounts receivables:
There were no accounts receivables actually written off as of December 31, 2022.
(4) Top five debtors in closing balance of accounts receivable
Unit: RMB
Balance of accounts Percentage in total balance of
Balance of bad debt provision
Name of institution receivable at the end of the accounts receivable at the end
at the end of the period
period of the period
Institution 1 13,310,289.52 4.98% 665,808.17
Institution 2 6,486,000.20 2.43% 324,303.25
Institution 3 6,484,230.10 2.43% 330,568.41
Institution 4 6,098,782.00 2.28% 304,939.10
Institution 5 6,020,461.66 2.25% 301,023.08
Total 38,399,763.48 14.37%
(5) Amounts of assets or liabilities that are formed by the transfer of accounts receivable and the
Company's continuing involvement
There were no assets or liabilities formed by the transfer of accounts receivable and the Company's continuing involvement as of
December 31, 2022.
(6) Accounts receivable derecognized due to transfer of financial assets
There were no accounts receivables derecognized due to the transfer of financial assets as of December 31, 2022.
2. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 71,618,317.39 93,306,779.94
Total 71,618,317.39 93,306,779.94
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
(1) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Nature of the receivable Closing book balance Opening book balance
Margins and deposits 70,199,100.11 88,690,812.02
Related-party amount within the
1,146,219.87 4,945,158.86
consolidated scope
Employee reserve fund 2,459,964.38 3,069,483.92
Others 1,522,090.80 1,251,936.78
Total 75,327,375.16 97,957,391.58
2) Bad debt provision
Unit: RMB
Phase I Phase II Phase III
Bad debt provision Lifetime ECL (without Lifetime ECL (with Total
12-month ECL
credit impairment) credit impairment)
Balance as at January
4,650,611.64 4,650,611.64
1, 2022
Balance as at January
1, 2022 incurred in the
period
Transferred-back in the
941,553.87 941,553.87
reporting period
Balance as at
3,709,057.77 3,709,057.77
December 31, 2022
Description of significant changes to the book balance of provision in the current period
□ Applicable Not applicable
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 75,327,375.16
Total 75,327,375.16
3) Bad debt provision set aside, recovered or transferred back in the reporting period
Bad debt provision of the reporting period:
Unit: RMB
Amount of change in the period
Opening
Category Recovery or Closing balance
balance Provision Write-off Others
reversal
Bad debt
provision by 4,650,611.64 941,553.87 3,709,057.77
portfolio
Total 4,650,611.64 941,553.87 3,709,057.77
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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
Name of Nature of other Write-off amount is incurred
Write-off amount Write-off reason
institution receivables procedures by related 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 receivables
Unit: RMB
Percentage in total Balance of bad
Name of Nature of the balance of other debt provision at
Closing balance Aging
institution amount receivables at the the end of the
end of the period period
Margins and
Institution 1 7,051,755.00 Within 1 year 9.36% 352,587.75
deposits
Margins and
Institution 2 6,763,619.00 Within 1 year 8.98% 338,180.95
deposits
Margins and
Institution 3 6,553,074.00 Within 1 year 8.70% 327,653.70
deposits
Margins and
Institution 4 3,150,000.00 Within 1 year 4.18% 157,500.00
deposits
Margins and
Institution 5 3,133,020.00 Within 1 year 4.16% 156,651.00
deposits
Total 26,651,468.00 35.38% 1,332,573.40
6) Receivables involving government grants
There were no receivables involving government grants as of December 31, 2022.
7) Other receivables derecognized due to the transfer of financial assets
There were no other receivables derecognized due to the transfer of financial assets as of December 31, 2022.
8) Amount of assets or liabilities that are formed by the transfer of other receivables and the Company's continuing
involvement
There were no assets or liabilities formed by the transfer of other receivables and the Company's continuing involvement as of
December 31, 2022.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
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
11,000,000.00 11,000,000.00 111,000,000.00 111,000,000.00
subsidiaries
Total 11,000,000.00 11,000,000.00 111,000,000.00 111,000,000.00
(1) Investment in subsidiaries
Unit: RMB
Increase/decrease in the period Closing
Opening Closing
balance of
Investee balance (book Increase in Decrease in Impairment balance (book
Others impairment
value) investment investment provision value)
provision
Guangzhou
BIEM.L.FD
LKK
1,000,000.00 1,000,000.00
Business
Consulting
Co., Ltd.
Guangzhou
BIEM.L.FD
LKK Supply
5,000,000.00 5,000,000.00
Chain
Management
Co., Ltd.
Guangzhou
BIEM.L.FD
LKK Ejam
Equity
100,000,000.00 100000000.001
Investment
Partnership
(Limited
Partnership)
Xuzhou
BIEM.L.FD
LKK Supply
5,000,000.00 5,000,000.00
Chain
Management
Co., Ltd.
Total 111,000,000.00 100,000,000.00 11,000,000.00
Note 1: The closing balance of the long-term equity investments of the parent company decreased by RMB100,000,000.00 or
909.09% compared with the opening balance in 2022, mainly owing to the reclassification of the investment in Guangzhou
BIEM.L.FDLKK Ejam Equity Investment Partnership (Limited Partnership) from long-term equity investments to assets held for
sale.
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
4. Revenue and cost of revenue
Unit: RMB
Amount incurred in the current period Amount incurred in the prior period
Item
Revenue Cost Revenue Cost
Principal business 2,884,215,547.38 904,955,705.51 2,719,943,987.32 908,931,832.35
Other businesses 60,021.43 45,269.82
Total 2,884,275,568.81 904,955,705.51 2,719,989,257.14 908,931,832.35
5. Return on investment
Unit: RMB
Item Amount incurred in the current period Amount incurred in the prior period
Gain from debt restructuring 104,009.33
Income from wealth management
39,121,856.42 38,711,860.90
products
Others 269,092.96
Total 39,390,949.38 38,815,870.23
XVIII. Supplementary Information
1. Table of non-recurring profit and loss items of the reporting period
Applicable □Not applicable
Unit: RMB
Item Amount Description
Gains or losses from the disposal of non-
1,757,902.41
current asset
Governmental grants reckoned into
current profits/losses (not including
grants enjoyed in quota or ration
23,247,374.45
according to national standards, which
are closely relevant to the Company’s
normal business)
Gains or losses 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 liabilities 5,219,168.76
held for trading and available-for-sale
financial assets, excluding the effective
hedging business related to the normal
operation of the Company
Other non-operating revenue and
expenses except for the aforementioned 441,307.62
items
Other profit and loss items that qualify
39,121,856.42
the definition of non-recurring profit and
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
loss
Less: Influence of income tax 12,768,681.37
Total 57,018,928.29 --
Details of other profit and loss items that qualify the definition of non-recurring profit and loss:
Applicable □ Not applicable
During the reporting period, the Company had RMB39,121,856.42 of other profit and loss items that qualify the definition of non-
recurring profit and loss, which were the income from wealth management products.
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
2. Return on equity and earnings per share
Earnings per share
Weighted average return on
Profit in the reporting period Basic earnings per share Diluted earnings per share
equity
(RMB/share) (RMB/share)
Net profit attributable to the
ordinary shareholders of the 19.35% 1.28 1.28
Company
Net profit attributable to the
ordinary shareholders of the
17.83% 1.18 1.18
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
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BIEM.L.FDLKK GARMENT CO., LTD. 2022 Annual Report
April 26, 2023
211
