Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Stock code: 301088
Rumere Co., Ltd.
Annual Report 2023
April 2023
1
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Annual Report 2023
Section I Important Notice, Contents and Definitions
The Board of Directors and the Board of Supervisors of the Company and its
director, supervisors and senior management warrant that the information
contained in this annual report is true, accurate and complete without any false
records, misleading statements or material omissions, and severally and jointly
accept legal liability thereof.
Guo Jian, the person in charge of the Company, Yu Qingtao, the person in charge
of accounting of the Company, and Wang Dongmei, the person in charge of the
accounting department of the Company, have declared that they warrant the
truthflness, accuracy and completeness of the financial ststements set out in this
annual report.
All directors of the Company attended the Board meeting on which this report
was reviewed.
The company elaborates in detail on the reasons and circumstances leading to a
decline in the company's performance in the "IV: Analysis of Main Business" of
"Section III: Discussion and Analysis of the Management" of this report. We
kindly request investors to pay attention to the relevant content.
The forward-looking statements in this annual report, including development
strategies and business plans, do not constitude substantive commitments of the
Company to investors. Investors and related personnel should remain vigilant and
understand the differences between plans, forecasts and commitments.
The Company has described potential risks it may face in the future in “Section
2
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
III Discussion and Analysis of the Management” and “Saection 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 RMB 4.39 (tax inclusive) for every 10
shares to all shaerholders based on a total share capital of 228,000,000; no bonus
shares will be issued and no capital reserve will be converted into share capital.
3
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Table of Contents
Section I Important Notice, Contents and Definitions ........................................................................................................ 2
Section II Company Profile and Key Financial Indicators ............................................................................................... 8
Section III Discussion and Analysis of the Management..................................................................................................13
Section IV Corporate Governance...........................................................................................................................................53
Section V Environmental and Social Responsibilities .......................................................................................................72
Section VI Significant Events ....................................................................................................................................................74
Section VII Changes in Shareholding and Information of Shareholders ...................................................................82
Section VIII Particulars of Preference Shares .....................................................................................................................91
Section IX Particulars of Bonds................................................................................................................................................92
Section X Financial Statements ................................................................................................................................................93
4
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Documents Available for Inspection
I. Financial statements affixed with official stamps and the signatures of the Company’s responsible
person, the person in charge of accounting and the charge of accounting department of the Company;
II. Original of the audit report affixed with the stamp of the accounting firm as well as stamps and
signatures of the certified public accountants;
III. All original copies of the Company’s documents and the original drafts of the Company’s
announcements as disclosed on websites designated by the CSRC during the reporting period;
IV. Place for document inspection: Office of the Board of Directors, Room 2902, Floor Shimao Plaza,
Minjiang Road, Changshu, Jiangsu Province, China.
5
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Terms and Definitions
refers
Term Definition
to
The Company, we, Rumere Co., Ltd. or refers
to Rumere Co., Ltd.
Rumere
refers Suzhou Meicang Fashion Co., Ltd, a wholly-
Meicang Fashion to owned subsidiary of the Company
refers Shanghai Rumere Brand Management Co., Ltd,
Shanghai Rumere to a wholly owned subsidiary of the Company
refers Suzhou Rumere International Trade Co., Ltd, a
Rumere International to wholly-owned subsidiary of the Company
Rumere High-end Ladies-wear is a taobao store
refers
Rumere High-end Ladies-wear to operated by the Company, with its domain name
of https://rumere.taobao.com/
Rumere Flagship Store is a Tmall store operated
refers
Rumere Flagship Store to by the Company, with its domain name of
https://rumere.tmall.com/
Rongmere Flagship Store is a Tmall store
refers
Rongmere Flagship Store to operated by the Company, with its domain name
of https://rongmere.tmall.com/
refers General Meeting of Shareholders of Rumere
General Meeting of Shareholders to Co., Ltd.
refers
Board of Directors to Board of Directors of Rumere Co., Ltd.
refers
Board of Supervisors to Board of Supervisors of Rumere Co., Ltd.
refers
CSRC to China Securities Regulatory Commission
refers Company Law of the People’s Republic of
Company Law to China
refers Securities Law of the People’s Republic of
Securities Law to China
refers
Articles of Association to Articles of Association of Rumere Co., Ltd.
refers Year 2023, from 1 January 2023 to 31
Reporting Period to December 2023
refers Year 2022, from 1 January 2022 to 31
Same period of previous year to December 2022
refers
Beginning of the Reporting Period to 1 January 2023
refers
End of the Reporting Period to 31 December 2023
refers
Online Retailing to Merchandising through Internet
An intermediary between the buyer and the
seller in the payment process; after the buyer
refers pays, the payment will enter the third-party
Third-party payment platform to payment platform, then the intermediary will
notify the seller to deliver the goods; when the
buyer receives the goods and clicks “confirm
6
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
receipt” on the e-commerce platform, or the
system automatically confirms receipt, the
payment will be transferred to the seller’s
account.
refers
SPU to Standard Product Unit
refers
GMV to Gross Merchandise Value
refers
BEST Inc. to Best Logistics Technology (China) Co., Ltd.
refers
SF Express to Suzhou Industrial Park SF Express Co., Ltd.
7
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Section II Company Profile and Key Financial Indicators
I. Company information
Stock abbreviation Rumere Stock code 301088
Chinese name of the Comapny 日禾戎美股份有限公司
Abbreviation of Chinese name
of the Company 戎美股份
English name of the Company
(if any) Rumere Co.,Ltd.
Abbreviation of English name
of the Company (if any) RUMERE
Legal Representativeof the
Company Guo Jian
Registered address No.86, Shenzhen Road, Changfu Street, Changshu City, Jiangsu
Province
Postal code of registered
address 215523
Date of first registration: March 13, 2012; Registed address: No.
2 Jianye Road, High-tech Industrial Park, Changshu city, Jiangsu
Historical changes of the Province
Company’s registered address Date of registration change: December 24, 2022; Registed
address: No.86, Shenzhen Road, Changfu Street, Changshu City,
Jiangsu Province
Room 2901, Shimao Plaza, Minjiang Road, Changshu, Jiangsu
Office address Province
Postal code of office address 215500
Official website http://www.rumere.com
E-mail rumerebod@rumere.com
II. Contact Persons and Contact Methods
Representative of securities
Sectary to the Board affairs
Name Yu Qingtao Yu Dongxue
Room 2901, Shimao Plaza, Room 2901, Shimao Plaza,
Address Minjiang Road, Changshu, Minjiang Road, Changshu,
Jiangsu Province Jiangsu Province
Tel. 0512-52969003 0512-52969003
Fax 0512-52969003 0512-52969003
Email rumerebod@rumere.com rumerebod@rumere.com
8
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
III. Information Disclosure and Location for Inspection of Documents
Websites on which the annual report is published
as required by the stock exchange Shenzhen Stock Exchange (http://www.szse.cn)
Securities Times, Shanghai Securities News, China
Media on which the annual report is published Securities Journal, Securities Daily, and
http://www.cninfo.com.cn
Location for inspection of the annual report Office of the Board of Directors
IV. Other Relevant Information
Accounting firm engaged by the Company
Name RSM China (Special General Partnership)
901-22 to 901-26, Block 1, Foreign Trade Building, No. 22
Office address Fuchengmenwai Street, Xicheng District, Beijing
Name of signing
accountants Ye Chun, Xu Zongqing
Sponsor engaged by the Company to fulfill continuous supervision obligation during the reporting
period.
Applicable □ Not applicable
Period of
Name of sponsor
Name of sponsor Office address of sponsor respresentative continuous
supervision
27/F and 28/F, Tower 2, China
China International October 2021 to
World Trade Center, No.1 Lai Tianxing,
Capital December 2024
Jianguomenwai Avenue, Deng Miaoqing
Corporation Chaoyang District, Beijing
Financial advisor engaged by the Company to fulfill continuous supervision obligation during the
reporting period
□ Applicable Not applicable
V. Main Accounting Data and Financial Indicators
Whether the Company needs to perform retrospective adjustment or restatement of previous years
□Yes No
Changes
2023 2022 over last 2021
year
Revenue (RMB) 767,316,817.65 948,811,767.71 -19.13% 872,310,059.47
Net profit attributable
to ordinary shareholders 84,719,397.91 167,040,817.13 -49.28% 162,674,559.03
(RMB)
Net profit attributable 48,448,846.15 125,662,452.72 -61.45% 150,289,718.68
9
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
to ordinary shareholders
after extraordinary
gains and losses (RMB)
Net cash flows from
operating activities -7,344,227.07 125,309,020.66 -105.86% 4,202,782.48
(RMB)
Basic earnings per share
(RMB/share) 0.3716 0.7326 -49.28% 0.90
Diluted earnings per
share (RMB/ share) 0.3716 0.7326 -49.28% 0.90
Weighted average return
on net assets 3.29% 6.66% -3.37% 17.74%
Changes over
End of 2023 End of 2022 end of last End of 2021
year
Total assets (RMB) 2,667,766,675.11 2,713,064,879.72 -1.67% 2,539,878,965.21
Net assets attributable
to shareholders of the 2,569,730,653.19 2,568,459,255.28 0.05% 2,442,002,438.15
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 or after deducting non-recurring profit and loss is negative
□Yes No
10
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
VI. Major Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Revenue 206,902,477.80 185,589,030.72 129,473,109.30 245,352,199.83
Net profit
attributable to 36,343,813.96 19,903,962.14 7,126,201.80 21,345,420.01
shareholders of the
listed company
Net profit
attributable to
shareholders of the
listed company after 25,821,813.45 9,290,452.46 -1,515,276.05 14,851,856.29
deducting non-
recurring profit and
loss
Net cash flow from
operating activities 42,732,269.76 13,524,208.23 -74,075,743.96 10,475,038.90
Whether the above financial indicators or their sums are materially different from the relevant financial
indicators in the disclosed quarterly and semi-annual reports of the Company
□ Yes No
VII. Difference in Accounting Data under Domestic and International Accounting Standards
1. Net profit and net asset differences under International Financial Reporting Standards (IFRS)
and Chinese Accounting Standards (CAS)
□ Applicable Not applicable
No such differences for the reporting period.
2. Net profit and net asset differences under foreign accounting standards and Chinese
Accounting Standards (CAS)
□ Applicable Not applicable
No such differences for the reporting period.
VIII. Non-recurring Items and Amounts
Applicable □ Not applicable
Unit: RMB
Amount in Amount in Amount in Descri
Item 2023 2022 2021 ption
11
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Gains or losses from disposal of
non-current assets (including the 30,655.86 - 157,707.84
write-off portion of provision for
asset impairment)
Government grants recognised in
current profit or loss (except
government grants that is closely
related to operations and determined 1,866,161.60 6,358,231.30 7,165,956.84
based on the established standard,
and have a continuous impact on the
company's profits and losses.)
Gains /(losses) arising from
changes in fair value of financial
assets, derivative financial assets,
other non-current financial assets,
financial liabilities and derivative
financial liabilities during the
holding period of non-financial 47,797,868.30 49,321,536.77 9,503,111.55
enterprises and investment income
arising from disposal of financial
assets, and derivative financial
assets except effective hedging
transactions related to the
Company's principal activities
Other non-operating
income/expenses except for items -1,046,114.40 -392,412.06 -311,331.09
mentioned above
Less: tax effect 12,378,019.60 13,908,991.60 4,130,604.79
Total 36,270,551.76 41,378,364.41 12,384,840.35 --
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable Not applicable
The Company has no other profit and loss items that qualified the definition of non-recurring profit and
loss.
Descriptions where the Company defines any non-recurring profit and loss items listed in the No. 1
Explanatory Announcement on Information Disclosure of Companies Offering Securities to the Public—
Non-recurring Profit and Loss as recurring profit and loss items during the reporting period
□ Applicable Not applicable
The Company did not define any non-recurring profit and loss items listed in the No. 1 Explanatory
Announcement on Information Disclosure of Companies Offering Securities to the Public—Non-
recurring Profit and Loss as recurring profit and loss items during the reporting period.
12
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Section III Discussion and Analysis of the Management
I. Status of the Industry in Which the Company Is Located during the Reporting Period
(I) Basic information, development stage, cyclical characteristics of the involved industry and
our position in the industry
According to the CSRC’s Guidelines for the Industry Classification of Listed Companies (2012
Revision), the Company is a member of retail industry (classification code: F52). The Company is
engaged in planning, design, supply chain management, and sales of clothing and accessories. Online
retailing refers to the activities of retailers selling products through e-commerce platforms.The
Company sells clothing, jewellery accessories and aquatic products directly to end consumers through
Alibaba’s e-commerce platforms (Taobao and Tmall).
According to data from the National Bureau of Statistics, China’s retail sales of consumables in 2023
was RMB 47.1 trillion in total, and the online retail sales was RMB 15. 4 trillion, an increase of 11.0%
from the previous year. Among them, the online retail sales of physical goods was RMB 13.0 trillion,
an increase of 8.4%, accounting for 27.6% of the total retail sales of consumer goods; among the online
retail sales of physical goods, the sales of food, clothing, and daily-use articles increased by 11.2%,
10.8%, and 7.1%, respectively. In terms of channels, the online retail sales growth is higher than overall
retail growth. The internet retail industry is burgeoning..
Within two decades of development, online retailing, driven by the continuous improvement of
residents’ consumption levels and the continuous upgrading of Internet infrastructure, has achieved
growth rates that surpass traditional offline retail channels, significantly altering the way consumers
buy. For consumers, compared to traditional stores, online retailing has lifted the limitations of time
and space limitations, providing consumers with more product information in terms of quantity and
variety, significantly reducing information costs and speeding up decision-making process. The
continuous technological upgrading of Internet infrastructure optimizes shopping experience through
textual information to images, short videos, live streaming, and even virtual reality technology for some
products; the rapid development of the logistics and express delivery industry provides necessary
logistical support for online retailing; mobile payment technology and third-party payments enable
consumers to complete transactions without worries, make payments, refunds, and returns more
convenient, achieving convenience and satisfaction for consumers. The explosive application of
Artificial Intelligence technology (AI) enables internet retail enterprises to continually benefit in areas
13
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
such as big data analysis in production and operation, marketing communication, and visual content
creation, which can help enhance market share and reduce operational cost.
For enterprises, online retailing can simplify the distribution of goods and help them reduce the costs
for intermediate circulation; additionally, it enables digitalizing and visualizing consumer behaviors
through information technology, so as to help enterprises to better meet consumer needs through
analysis of consumer behavior and big data, and to reduce excess inventory through agile supply chain
management, resulting in better ecological benefits. The structural shift of the value chain reflects the
long-term trend of efficiency, and the application of new technologies and models continuously
optimizes the integration of information flow, logistics, and capital flow. While obtaining goods in a
more convenient, swift, and cost-effective way, consumers are also forming their own shopping habits
and make it a ratchet effect. That is to say, once they shop in a faster, better, and more cost-effective
way, it is difficult for them to return to the opposite way, in which they have to spend more (including
information costs and economic expenditures). Therefore, for both enterprises and consumers, online
retailing has significantly increased the supply and demand of goods, improved overall social welfare,
and made more people feel a stronger sense of gain. This is the basic logic behind our long-term
optimism for this business model.
As a well-known Internet retailer of fashion clothing, the Company provides consumers with high-
quality and cost-effective clothing through Internet channels. With many years of efforts in talent,
technology, and supply chain management, our online store “Rumere” has advantages in terms of
creditworthiness, fan base, and customer reputation. For a long time, the Company has been committed
to providing consumers with high-value and cost-effective quality products, and its clothing and
apparel products are made from globally selected raw materials and fashionable designs, and through
data-driven marketing and lean supply chain management technology, the Company reduces inventory
redundancy, increasing inventory turnover rates and customers’ repurchase rates, exceeding the
performance of conventional competitors within the clothing sector. The advantages of the business
model and its operating efficiency are reflected in the level of profitability. In the “2022 Top 100
Profitable Enterprises in the Clothing Industry” officially released by the China National Garment
Association, the Company ranked in the top three.
As of the end of 2023, as a “Outstanding Seller” and “Must-Visit Store” and five-golden-crown store
on Taobao, “Rumere” has received more than 17 million positive comments from buyers; the store
ratings in terms of product conformity, service attitude, and logistics service were all near perfect, and
our fan base had more than 6.66 million followers, and positive comments accounted for over 99.9%
14
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
of the total. The Comopany has teamed up a professional, efficient, and experienced livestream sales
business, and our Taobao livestream account with the name of “Rumere” has been followed by over
6.66 million fans. The Company sells clothing and jewellery accessories by taking advantage of
frequent launch of new products and fragment orders based on data analysis to offer consumers a more
immersive shopping experience throughmore dressing looks and professional recommends. Gradually,
a perception of "high quality and cost-effectiveness" has been formed among both new and existing
fans of Rongme During the Reporting Period, the Company sold more than 4,000 SPUs on a yearly
basis and has served more than 2.89 million consumers.
(II) Applicable industry policies
In recent years, the government has issued a series of industry policies to promote the development of
the e-commerce industry, which plays a positive role in promoting the development of online retailers.
In the clothing industry, the promotion of brand building and the expansion of the supply of mid-to-
high-end clothing products proposed in the national industry policies play an important role in
promoting and guiding the development of the clothing industry and independent brands. See the
following for details:
1. Policies and regulations for e-commerce industry (including livestream sales)
The formulation and implementation of laws and regulations for online retailing are conducive to long-
term standardized and orderly development of the industry, as well as creating a fair competition
environment. Relevant policies and opinions have injected long-term driving force into the industry
for its long-term development. From these perspectives, as a market entity which has strict internal
control systems and complies with applicable laws and regulations with respect to financial
management and operating activities, the Company faces positive factors in market competition and
industry development.
15
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Regulations Issued by Issued on
Measures to Restore and Expand National Development and Reform July 2023
Consumption Commission
Notice on the Issuance of the Code of National Radio and Television
June 2022
Conduct for Live Streamers Administration
Opinions on Further Regulating the
Profit-seeking Behavior in Online
Cyberspace Administration of China March 2022
Live-streaming and Promoting the
Healthy Development of the Industry.
Ministry of Commerce, Cyberspace
Planning for the Development of E- Administration of China, National
October 2021
commerce in the 14th Five-Year Plan Development and Reform
Commission
Cyberspace Administration of
China, Ministry of Public Security,
Ministry of Commerce, Ministry of
Regulations on the Management of
Culture and Tourism, State Taxation April 2021
Online Live Marketing
Administration, State Administration
for Market Regulation, National
Radio and Television Administration
Regulations on the Supervision and State Administration for Market
March 2021
Management of Online Transactions Regulation
Provisional Regulations on the
State Administration for Market December
Standardization of Promotional
Regulation 2020
Activities
Notice of the National Radio and
Television Administration on
National Radio and Television November
Strengthening the Management of
Administration 2020
Online Showroom Live Streaming and
E-commerce Live Streaming
Guiding Opinions of the State
Administration for Market Regulation State Administration for Market November
on Strengthening the Supervision of Regulation 2020
Online Live Marketing Activities
Opinions on Accelerating the
Development of New Types of September
General Office of the State Council
Consumption Driven by New Business 2020
Forms and Patterns.
Regulations on Online Live Marketing
China Advertising Association June 2020
Behaviors
Regulations on the Management of November
Cyberspace Administration of China
Internet Live Streaming Services 2016
2. Policies and regulations applicable to the clothing industry
The Company focused on selling clothing products during the Reporting Period, and a series of positive
policies issued by regulatory authorities are conducive to our innovations in fashion brand building,
16
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
application of green and eco-friendly fibers, and use of technological elements to maintain its
competitiveness.
Regulations Issued by Issued on
Action for Building a Modern Textile China National Textile and Apparel August 2023
Industry system (2022-2035) Council
Implementation Plan on Promoting National Development and Reform January 2022
Green Consumption Commission
Guiding Opinions on the 14th Five-Year
Plan for the Development of China’s
China National Garment Association October 2021
Clothing Industry and Visions and
Goals for 2035
Guiding Opinions on Fashion
China National Textile and Apparel
Development during the 14th Five-Year June 2021
Council
Plan Period for the Textile Industry
3. Policies and regulations applicable to the retail industry
The Company has always abode by relevant laws and regulations on the protection of consumer rights
and interests, as well as institutional regulations of administrations for market regulation and relevant
rules of Internet platforms, to provide timely and accurate return and exchange services for customers
and maintain customer satisfaction at the industry-leading level.
Regulations Issued by Issued on
Guidance on Speeding up the Digital Empowerment 12 Departments December
of Life Services including the Ministry 2023
of Commerce
Interim Measures for the Return without Reasons of
State Administration for
Commodities Purchased Online within Seven Days October 2020
Market Regulation
(2020 Revision)
II. Main business during the Reporting Period
(I) Business and product overview and business model
1. Business and product overview
The Company with the “RUMERE” brand opeates the business of designing, merchandising, and sales
of clothing and apparel products through supply chain management. The products include women’s
wear, men’s wear and jewellery accessories in both professional and casual styles, as well as home
textiles, etc. We kept following global fashion trends with our own style. With the support of Internet
platforms and the management information system, the Company builds up a flexible supply chain
system and forms a unique model featuring fragment orders and fast reactions. Our core
competitiveness lies in quick-response designing, merchandising and supply chain management.
17
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
18
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
2. Business model
The Company focuses on clothing designing and merchandising, Internat retail operation, and supply
chain management, outsourcing warehousing, logistics and clothing production to well-known
qualified suppliers in the industry. The business models and processes of the Company are described
as follows:
1) Merchandising and designning
The annual design and merchandising is broken down into a 52-week rolling plan under the annual
development plan, and product-based elements such as design elements, style, launching time, fabrics
and auxiliary materials, costs, and prices will be confirmed and adjusted.
2) Supply chain management
Our supply chain management follows three models: (1) Partially outsourced processing model: the
Company directly purchases fabrics, auxiliary materials, and yarns and sends them to qualified
suppliers for processing and production. This model is used for the production of outerwear, pants,
dresses and skirts, and some tops; (2) Fully outsourced processing model: the supplier purchases fabrics,
auxiliary materials, and yarns and completes the processing and production. This model is used for
production of fur, some tops, and accessories; (3) Self-production model: the Company purchases
fabrics and auxiliary materials and uses its own production capacity for production. This model is used
for the production of some tops and outerwear.
3) Sales and marketing online
The Company operates online and adopts a vertical sales model without intermediate steps, greatly
reducing the distribution cost, physical rentals and staff cost of shopping stores etc, enabling cunsumers
to have the products at relatively low prices. Moreover, relying on Internet platforms and information
19
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
management systems, we can obtain instant feedback from consumers and make timely adjustments to
justify our product combinations and action plan, to improve the sales efficiency. In addition, the
Company has gradually formed a qualified live streaming team. Through the Taobao account “Rumere”,
we perform livestream sales every week and make nearly half of the GMV by this way. The livestream
account has been followed by more than 6.6 million fans for the time being.
4) Warehousing and logistics model
The Company has a raw material warehouse and uses a self-developed WMS to store and manage
fabrics, auxiliary materials and yarns. The Company has built an intelligent warehousing and
distribution base that can meet the needs for warehousing and distributing over 12 million pieces of
clothing and accessory products. We outsource the warehousing of garments to BEST Inc. The
Company has realized real-time data interchange among OMS, BEST’s WMS system and SF Express’
OMS system, thus respond to new orders by sorting out goods and delivering them to end consumers
through SF Express in a timely manner.
(II) Market position of our products and key performance drivers during the Reporting Period
1. Market position of our products
Our main products are RUMERE branded clothing and apparel, in which women’s wear accounting
for 95% of income in 2023. We deem our products as mid-to-high-end. Firstly, we procure high-end
natural raw materials across the globe, including fine contton, cashmere silk and high-end flax. Fine-
spun composite fabrics with frontier high-tech are also widely used in our products’ design and
production, while most brand retailers using similar materials in the clothing sector put themselves on
high-end and high-priced market segments, such as Erdos, Shanghai Silk in China and Loro Piana,
Maxmara globally. Secondly, we have a professional design and merchandising team with rich
experience in high-end clothing design and business knowhow, making our products hybrid RUMERE
style consistency and the fresh ideas in fashion world. In addition, we work with first tier processing
manufactories in China, which have been for long the key suppliers of some globle high-end brands.
Furthermore, the Company globally sources scarce pearls and other materials from renowned origins,
designs and produces jewellery products that rival the quality of leading international brands. Relying
on e-commerce platforms (ALIBABA) and with the support of information management systems, the
Company enjoys benefit of significant advantages in creditworthiness, fan base, and customer
reputation.
2. Key performance drivers
20
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
The revenue is the operating result comprehensively impacted by customer’s pageviews, conversion
rate, average spend per customer, return rate, repeat purchase rate and other factors, while its
profitability also depends on such factors as gross margin (pricing multiplier), expense ratio, and sell-
through rate.
Customer’s pageviews is composed of natural consumer flow (arising from customers’ spontaneous
access to product information due to public praise, repeat purchases and other factors) and paid flow.
The methods to increase natural flow include impressing customers with product quality to encourage
repeat purchases or using brand promotion through other media to attract customers to access product
information spontaneously. To obtain consumer flow, the Company relies on accumulated promotional
experience to comprehensively design and execute promotional plans based on commodity attributes,
regions, time intervals and other factors, striving to achieve optimal ROI. Our experience of online
promotion enables us to continuously acquire and increase consumer flow at a reasonable cost.
In online retailing, a conversion rate depends on various factors such as visual presentation, product
description, and customer service. Visual design and live streaming presentation are important
competitive advantages for the Company in online retailing. We always keep an eye on new
technologies, platforms, and product presentation methods to increase conversion rate, which means
turn the consumer flow into a real shopping actions as many as possible.
Average spend per customer is related to product price and the number of items purchased per order.
The Company adheres to the principle of selecting global materials for product planning, strives to
differentiate products for strengthening our pricing ability, and also increases the gross profit rate
appropriately on the premise that customers can accept. The number of items purchased per order
depends on whether customers are willing to purchase our products. We showcase more product
combination schemes through livestream demonstrations and comprehensive visual displays to
increase the number of items purchased per order and improve the shopping experience.
Return rate and repeat purchase rate are directly related to product quality. The Company has always
regarded product quality as its lifeblood from designing and merchandising, material selecting, factory
screening, and quality control, resulting in relatively low return rate and high repeat purchase rate.
Our operating costs include sales, management, and research and development expenses, with sales
expenses consisting of promotion, storage and transportation costs. The promotion expense ratio
continued to increase in the past few years, which is consistent with the industry trend and reflects the
increasing competition in online retailing, and all competitors have to face this reality and trend, so we
must gain a competitive advantage by optimizing our promotion efficiency. Generally, storage and
21
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
transportation costs are linearly related to delivering volume, but like the upward trend in labor costs
across all industries, these costs have also seen an upward trend in the long run. Unlike traditional think,
we believe that the rise in labor costs is beneficial for the long-term development of the consumer retail
industry because the increase in such cost represents improved consumers’ income level. The rise in
costs requires competitors to improve their operating efficiency, thereby contributing to the progress
and efficiency improvement of the entire industry.
Sell-through rate is a key indicator affecting the profitability of every retailer. A higher sell-through
rate means better cash flow, lower inventory redundancy costs, and stronger pricing ability. The
Company has always been committed to improving sell-through rates by combining in-stock and pre-
sale modes without affecting the customer shopping experience. We use a quick-response order
response mechanism and data-driven promotion methods to increase sell-through rate, reduce
inventory redundancy and pass on these cost savings to our customers, providing them with high-
quality and cost-effective products and achieving a virtuous cycle featuring high repeat purchase rate
and high sell-through rate.
The Company needs to comply with the disclosure requirements for “e-commerce business”
as stated in the “No. 4 Self-Discipline Supervision Guidelines of the Shenzhen Stock Exchange
for Listed Companies - GEM Industry Information Disclosure”:
Since its establishment, the Company has been deeply involved in the Taobao platform for many years
and sold the products under its self-owned women’s clothing brand “RUMERE” through three online
stores on Taobao and Tmall (“Rumere High-end Women’s Clothing - High-Quality & Cost-effective”,
“Rongmere Flagship Store”, and “Rumere Flagship Store”).
Our core operating data is recorded and kept by orders placed on Taobao, including the number of
buyers, total order amount, and the number of sub-orders; we rely on the information provided by
Internet platforms through their business insight software to obtain the data related to customers’
consumption behaviors, including pageviews, the number of visitors and new visitors. According to
the backend data provided by business insight software, our operating data for the Reporting Period
and for the same period of previous year are shown in the table below: The data shows that the
Company was under stable operation, and all core data show an overall upward trend.
Indicator Amount in 2023 Amount in 2022
Annual pageviews (in 10,000) 171,669.02 172,775.89
Annual visitors (in 10,000) 26,014.24 17,454.26
Annual new visitors (in 10,000) 16,597.74 9,593.86
22
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Annual buyers (in 10,000) 289.40 329.36
Annual total order amount (in 262,921.05 317,671.66
RMB 10,000)
Sub-orders (in 10,000) 575.92 653.61
Per capita consumption 1.99 1.98
frequency
Note 1: The above data only involves our online store “Rumere High-end Women’s Clothing”, because the sales revenue of this store
accounts for 99.6% during the Reporting Period.
Note 2: The annual visitors and annual new visitors are calculated by summing up the daily data provided by the business insight
software.
Note 3: The difference between annual gross merchandise value (GMV) and main business revenue is caused due to the following
three reasons: 1) Customers fail to complete their payment on time after placing an order on the platform, and these transactions will be
automatically closed; 2) Customers cancel the order through the platform before the product is shipped; 3) Customers apply for and
complete a return before confirming receipt of and payment for the product.
III. Analysis of core competitiveness
1. Online retailing
With the development of the Internet in China and changes in consumers’ shopping habits, China has
seen an increasing proportion of online shopping in the retail industry. The advantages of no time and
space limitations and lower channel costs allow those retailers that use e-commerce platforms as their
main sales channels to have a wider development space. The Company relies on online channels and
adopts a vertical sales model without intermediate steps, greatly reducing the commodity circulation
cost and information communication cost, and enabling customers to purchase high-quality products
at relatively low prices. Moreover, relying on Internet platforms and information management systems,
the Company can obtain complete feedback information from consumers and make timely adjustments
to its own business strategies and product combinations. Since its establishment, the Company has
based itself on online retailing, and after many years of efforts, it has set up an online retailing team
with high-level business capabilities. The team has rich experience in online store operations, customer
service, marketing and promotion, and other important aspects of online retailing, ensuring that the
Company can flexibly adapt to changing trends in the online clothing retail industry and maintain its
online channel advantage. The Company has already established an influential brand image on Taobao
and formed a stable customer base over time, attracting great attention.
2. Design and merchandising
The Company has established a professional product design and merchandising team. Based on the
brand style and concept, the team closely follows current trends and strives to innovate and create new
23
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
product styles, and makes continuous efforts in optimizing our brand image and vitality. Planning is
the starting point for product development and design, promotion, and sales. We will analyze and
investigate the high-end clothing market and fashion trend in the planning stage to ensure that our
designs reflect the brand style and keep up with market trends. Additionally, our design and
merchandising team continues to conduct market research based on the development plan to determine
the design and merchandising direction of newly developed products. In addition to obtaining market
information, our planning department also analyzes global popular styles and colors, popularity of sub-
categories, sales status, and transaction data on online retailing platforms from different perspectives
to timely and accurately obtain consumer preferences and customer feedback. This helps to fully utilize
the rapid response capability of our supply chain and make timely adjustments to consumer needs and
keep optimizing the design and merchandising of new products. The Company is used to formulating
an annual development plan for its clothing brands, comprehensively considering overall strategic
planning, brand and product style positioning, annual business goals, market feedback and other factors
in the plan.
3. Information system
The Company operates business based on Internet platforms and attaches great importance to the
establishment and upgrade of management information systems, and over the years of continuous
improvement and updating, it has accumulated practical experience and established a series of systems
that talored for our operations. The Company has launched new product arrangement, supplier
settlement management, intelligent raw material management and other systems, all of which form a
basic information management system covering all business processes to achieve full coverage from
design and merchandising to production management, as well as sales data digitization from order
management to shipping management, resulting in a closed-loop information system among the
Company, customers, and suppliers, so as to form the information infrastructure for frequent update of
online products and small orders based repeat purchases.
4. Supply chain management
Relying on its sales channels based on Internet platforms, the Company can analyze transaction data
on e-commerce platforms and real-time order information in its information management system to
timely and accurately obtain consumer preferences, sales progress, customer feedback and other
information, and give full play to its matrix product team mechanisms and strong design and
merchandising capabilities to make timely adjustments to its product development plans based on
consumer needs and complete the design and merchandising of new products. Through long-term
24
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
cooperation and coordination with our suppliers, the Company has established a network of high-
quality suppliers covering all clothing categories, who meet the requirements for production capacity
and technique skill. Meanwhile, our self-owned factory features small-batch rapid production capacity
to provide us with flexible product supply. The overall control over the supply chain ensures that small-
batch and high-frequency order demands can be met as soon as possible and the quality requirements
can also be satisfied. With the support of management information systems to collect and analyze
customer feedback, the design and merchandising team working efficiently on product development,
and fast-response supply chain network, the Company is able to make available online its new products
three times a week to timely meet consumer demands and help consumers to develop a habit of visiting
our online stores, further enhancing customer loyalty. Moreover, our systems are connected to ensure
that we can timely obtain the data on how many products are purchased by each consumer and whether
they are satisfied with our product and service as well as other consumer data, and feed these data back
to related departments, so that the Company can understand and satisfy consumer needs timely and
make quick adjustments accordingly, such as accepting more orders or launching similar hot-selling
products, to form a virtuous cycle for its business.
5. Customer service
The company can provide better customer experience by virtue of the new model of online retailing.
Relying on Internet platforms (ALIBABA), the Company can make available online its new products
several times a week to timely meet consumer demands. At the same time, highly developed online
payment, and express and logistics as part of online retailing infrastructure, also provide convenience
for customer payments and try-ons. By selling products online, the Company can obtain consumer
feedback more timely and completely. By obtaining real-time sales information from online platforms,
the Company ensures that consumers’ browsing frequency for each style of garments, their purchase
quantity, satisfaction level and other data can be timely fed back to the Company, enabling us to make
quick adjustments accordingly, such as accepting more orders or launching similar hot-selling products,
and to timely understand and satisfy consumer needs. Additionally, our online stores are always ready
to provide customer service on a 7×24 basis throughout the year, where any consumer can purchase
our products at any time, creating a more convenient shopping environment and fully meeting customer
demands.
6. Business expansion
We always regard innovative supply chain based on real and effective customer demands as the service
philosophy we should adhere to. As primary decision-makers for consumption, our customers may
25
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
have other shopping needs for other products than clothing and apparel when shopping online or
through live streaming. The Company makes full use of the characteristics of information release by
Internet platforms to provide customers with high-quality products and services in multiple categories.
In 2023, the Company launched products such as Song brocade (a sophisticated ancient way to make
silk brocade from Song dynasty, , which are known as materials of intangible cultural heritage),
jewellery accessories (Akoya pearl), and high-end home textiles, and all achieved the sales beyond our
expectations. Our capabilities in e-commerce operation, information system, supply chain management,
and customer service, which have been made available in the women’s wear retailing, have also been
well applied to more product categories and types. By using new products to satisfy customers’
diversified needs, we can not only improve their shopping experience, but also strengthen our brand
credibility and reputation, and our strong capability in business expansion has created a virtuous
interaction between customer base, high-quality products, and brand image.
IV. Analysis of main business
1. Overview
In 2023, confronted with the severe and complex macroeconomic situation both at home and abroad,
the garment market vitality did not exhibit a clear recovery, and the trend of shrinking operating income
and total profit continued to shrank. According to data released by the National Bureau of Statistics,
the total profit of 2023 of industrial regulated of enterprises nationwide reached 7.68583 trillion RMB,
decreasing 2.3% compared to the previous year. And the operating income of the textile, apparel, and
clothing industry amounted to 1.21047 trillion RMB, which is a year-on-year decrease of 5.4%, and
the total profit was 61.38 billion RMB that is a year-on-year decrease of 3.4%. The operating income
profit margin was 5.07%. In terms of the production volume of clothing categories, in 2023, the output
of woven clothing in regulated enterprises in the garment industry was 6.556 billion pieces, a year-on-
year decrease of 15.01%, and the output of knitted clothing was 12.833 billion pieces, which is a year-
on-year decrease of 5.08%. The decline rates increased by 9.86 and 2.84 percentage points compared
to the same period in 2022. Against this industry contex, the Company achieved operating income of
767 million RMB in 2023, a decrease of approximately 19.13% compared to last year; net profit was
85 million RMB, a decrease of approximately 49.28% year-on-year. The company's operating income
profit margin was 13.54%.
The decrease of the company's operating income and total profit is mainly due to: (1) The downturn in
the garment and apparel consumer market, and there is a year-on-year decline in the transaction volume
of clothing and apparel categories on Alibaba's platform according to the announcement analysis,
26
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
indicating an unfavorable environment for the company; (2) The temperature dropped later in the fourth
quarter, which resulting in relatively insufficient inventory of autumn and winter products and a sales
falling short of expectations; (3) Intensified competition among sellers on retail platforms negatively
impacting operating profit margins; (4) As there is an increase in the average inventory age, the loss of
inventory price calculated according to the age structure of the warehouse also increases accordingly,
based on the principle of prudence; (5) In mid-2023, Shanghai Rumere purchased an office building to
facilitate the implementation of the "Design and Research Center Construction Project" financed by
capital raising projects and for the company's daily operation, resulting in a significant increase in
depreciation expense compared to last year.
From the perspective of the domestic market, China's stabilized and improving economy has created
favorable conditions and foundations for consumption recovery. With a GDP growth target of around
5% in 2024, we anticipate the recovery trend in the apparel and fashion market. Over a longer horizon,
due to the continuous decline in total population and the proportion of the young, the long-term
development of the retail industry, including the apparel and fashion sector, increasingly relies on the
company's product innovation capability and expectation of consumer income growth. Therefore, we
believe that enhancing product innovation and customer service capability continuously will be the
fundamental direction of business competition strategy in the new normal.
We have a long-term positive outlook on China's high-quality economic development, as well as the
sustained stability and prosperity of the consumer market. The pains accompanying structural reforms
may bring headwinds to some industries and companies in the short term, but in the broader economic
landscape, adverse external condition will compel companies to make strategic and tactical choices
conducive to long-term development. Leveraging business models with technological advantages,
continuously improving operational capability, and enhancing overall competitiveness through
customer value creation will lead to sustained success over the long term.
We maintain confidence in the Company's business model and core competitiveness. While conducting
operation prudently and accumulating resources actively will lead the company to achieve long-term
high-quality development. During the reporting period, the Company invested 280 million RMB to
purchase Building 4 of Shanghai Wanyuan City, aiming to advance the construction of the "Design and
Research Center Project" and the "Exhibition Center Construction Project." The Company's first
flagship store will be established here, which will facilitate the construction of multi-level marketing
channel, bring new customer flows, broaden communication channel with consumers, and enhance fan
shopping experiences. Additionally, the company continues to optimize product planning, design, and
27
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
supply chain management, select high-end materials globally to provide consumers with a rich and
cost-effective range of clothing. In terms of materials, the company has continuously introduced
premium materials from Italy, such as high-end cashmere, Danish mink, Spanish Lagone, Turkish
denim, Japanese vinegar, etc. Especially with the rise of the "New Chinese Style," the company has
established close cooperation with a well-known supplier of "intangible cultural heritage" Song
brocade in Suzhou, developing a series of New Chinese Style clothing. And for the accessories, a new
high-end jewellery line has been developed, with the Aus White and AKOYO series achieving
satisfactory sales. Thirdly, we have continuously strengthened competitive advantages, gathering
outstanding talent, and improved operational efficiency, which made the Comapany ranke among the
top three in the "Operating Income Profit Margin" list of the Chinese Clothing Association for the past
two years. The company's modern manufacturing service base project has put intelligent manufacturing
and logistics distribution workshops into use, which further enhanced the company's delivery operation
capability and automation level. Dynamic inventory management system and customized clothing
pattern design software have been launched, in line with the continuous iteration and upgrade of the
company's own business, have further enhanced the company's digital management level. Fourthly, we
seized strategic opportunity and utilized market fluctuation actively, which made us increase the
frequency of live commerce, expande the team. Fifthly, the Company’s prudently managing financial
assets has created long-term value for investors.
2. Revenue and cost
(1) Composition of revenue
Composition of revenue
Unit: RMB
2023 2022
Proportio YoY changes
Proportion
Amount Amount n in
in revenue revenue
Total revenue 767,316,817.65 100% 948,811,767.71 100% -19.13%
By industry
Clothing 765,889,176.04 99.81% 946,278,717.99 99.73% -19.06%
Other 1,427,641.61 0.19% 2,533,049.72 0.27% -43.64%
businesses
By product
Tops 243,946,736.80 31.79% 328,029,179.28 34.57% -25.63%
Coats 155,188,755.89 20.22% 217,453,325.21 22.92% -28.63%
28
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Pants 128,129,350.33 16.70% 153,682,693.10 16.20% -16.63%
Skirts and 110,771,808.93 14.44% 113,325,747.28 11.94% -2.25%
dresses
Fur 42,407,445.65 5.53% 69,462,339.95 7.32% -38.95%
Jewel 36,559,618.62 4.76% — — —
Others 48,885,459.82 6.37% 64,325,433.17 6.78% -24.00%
Other 1,427,641.61 0.19% 2,533,049.72 0.27% -43.64%
businesses
By region
East China 375,073,498.97 48.88% 460,992,533.23 48.59% -18.64%
North China 129,646,567.04 16.90% 163,440,527.42 17.23% -20.68%
Southwest 68,750,116.02 8.96% 86,722,866.43 9.14% -20.72%
China
Southern 65,698,489.51 8.56% 73,592,409.08 7.76% -10.73%
China
Central China 62,784,048.46 8.18% 80,489,346.66 8.48% -22.00%
Northeast 34,238,605.61 4.46% 45,396,886.89 4.78% -24.58%
China
Northwest 29,671,725.40 3.87% 35,560,601.61 3.75% -16.56%
China
Others 26,125.03 0.00% 83,546.67 0.01% -68.73%
Other 1,427,641.61 0.19% 2,533,049.72 0.27% -43.64%
businesses
By sales model
Online 767,316,817.65 100.00% 948,811,767.71 100.00% -19.13%
(2) Industries, products, regions, or sales models that accounded for over 10% of the
Company’s revenue or operating profit
Applicable □ Not applicable
Unit: RMB
Gross YoY changes
Cost of YoY changes YoY changes
Revenue profit of gross profit
revenue of revenue cost of revenue
margin margin
By industry
Clothing 765,889,176.04 465,928,820.89 39.16% -19.06% -17.23% -1.35%
By product
Tops 243,946,736.80 151,442,730.18 37.92% -25.63% -25.11% -0.43%
Coats 155,188,755.89 93,181,528.92 39.96% -28.63% -27.41% -1.01%
Pants 128,129,350.33 72,666,603.55 43.29% -16.63% -12.21% -2.85%
Skirts and
110,771,808.93 66,497,040.68 39.97% -2.25% -2.37% 0.07%
dresses
29
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Fur 42,407,445.65 27,751,253.04 34.56% -38.95% -38.23% -0.76%
Jewel 36,559,618.62 24,140,594.44 33.97%
Others 48,885,459.82 30,249,070.08 38.12% -24.00% -17.20% -5.09%
By region
East
375,073,498.97 228,587,579.85 39.06% -18.64% -16.85% -1.30%
China
North
129,646,567.04 78,021,028.51 39.82% -20.68% -18.74% -1.43%
China
Southwes
68,750,116.02 42,101,519.70 38.76% -20.72% -18.94% -1.35%
t China
Southern
65,698,489.51 39,920,667.82 39.24% -22.00% -8.54% -1.45%
China
Central
62,784,048.46 38,570,160.29 38.57% -10.73% -20.29% -1.32%
China
Northeast
34,238,605.61 20,831,672.56 39.16% -24.58% -22.77% -1.42%
China
Northwes
29,671,725.40 17,882,320.29 39.73% -16.56% -14.84% -1.22%
t China
Others 26,125.03 13,871.87 46.90% -68.73% -69.61% 1.53%
By sales model
Online
765,889,176.04 465,928,820.89 39.16% -19.06% -17.23% -1.35%
sales
Where the statistical standards for the Company’s principal business data were adjusted in the reporting
period, principal business data of the Company in the recent year adjusted as per statistical standards
at the end of the reporting period
□ Applicable Not applicable
(3) Whether the Company’s goods sales income is greater than the labor service income
Yes □ No
Industry Item Unit 2023 2022 YoY changes
Sales volume (in 10,000 223.79 259.49 -13.76%
pcs)
Production (in 10,000
Clothing volume 228.98 265.75 -13.83%
pcs)
Products in (in 10,000
stock 114.03 114.10 -0.06%
pcs)
Reasons for YoY changes of relevant data over 30%
□ Applicable Not applicable
30
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(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
Product classification
Unit: RMB
2023 2022
Proportion Proportion YoY
Product Item
Amount in cost of Amount in cost of changes
revenue revenue
Operating
Tops 151,442,730.18 32.50% 202,220,530.82 35.92% -25.11%
cost
Operating
Coats 93,181,528.92 20.00% 128,369,290.11 22.80% -27.41%
cost
Operating
Pants 72,666,603.55 15.60% 82,771,023.17 14.70% -12.21%
cost
Skirts Operating
and cost 66,497,040.68 14.27% 68,111,675.60 12.10% -2.37%
dresses
Operating
Fur 27,751,253.04 5.96% 44,928,447.32 7.98% -38.23%
cost
Operating
Jewel 24,140,594.44 5.18% — — —
cost
Operating
Others 30,249,070.08 6.49% 36,533,152.38 6.49% -17.20%
cost
(6) Whether there are changes to the consolidated scope during the reporting period
□Yes No
(7) Whether there are significant changes or adjustments to the Company’s businesses,
products or services during the reporting period
□ Applicable Not applicable
(8) Major customers and suppliers
Major customers of the Company
Total sales to the top five customers (RMB) 3,429,370.74
Proportion of sales to top five customers in total annual sales 0.45%
Proportion of sales to related party among the top five
customers in total annual sales 0.00%
Information of the top five customers of the Company
31
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Proportion in total
No. Name of customer Sales amount (RMB) annual sales
1 Customer A 956,315.33 0.12%
2 Customer B 737,783.32 0.10%
3 Customer C 654,447.20 0.09%
4 Customer D 559,592.55 0.07%
5 Customer E 521,232.34 0.07%
Total -- 3,429,370.74 0.45%
Other description of major customers
□ Applicable Not applicable
Major suppliers of the Company
Total purchase amount from the top five suppliers (RMB) 44,739,799.13
Proportion of the total purchase amount from the top five
suppliers in total annual purchase amount 9.47%
Proportion of purchase amount from related parties among the
top five suppliers in total annual purchase amount 0.00%
Information of the top five suppliers of the Company
No. Name of supplier Purchase amount Proportion in total
(RMB) annual purchase
amount
1 Supplier A 11,052,956.49 2.34%
2 Supplier B 9,311,845.12 1.97%
3 Supplier C 8,218,037.49 1.74%
4 Supplier D 8,206,305.48 1.74%
5 Supplier E 7,950,654.55 1.68%
Total -- 44,739,799.13 9.47%
Other description of major suppliers
□ Applicable Not applicable
3. Expenses
Unit: RMB
YoY Description of significant
2023 2022 changes changes
Selling
and 112,694,426.94 124,929,882.78 -9.79%
distributio
n expenses
General 46,136,415.37 37,502,995.96 23.02% The main reason for the
32
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
and increase in depreciation
administra expenses is the commissioning
tive of the Shanghai office building,
expenses which is part of the Phase I of
the modern service industry
base project.
Finance
costs -8,040,892.05 -8,135,107.69 -1.16%
R&D
expenses 20,470,389.61 20,266,745.83 1.00%
4. R&D investment
Applicable □ Not applicable
33
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Name of Expected impact
key R&D Objective Progress Expected goals on our future
projects development
By continuing to
innovate in design
and merchandising,
To develop a variety of to form a model
product styles that follow featuring frequent Continuously
current trends and consumer online provision of
Clothing improve our
preferences based on the new products and
design and brand style and concept, and Ongoing brand influence
large numbers of
R&D and core product
to comprehensively improve SPUs to enhance competitiveness
our brand image and product customer loyalty and
competitiveness lay a solid
foundation for brand
image and customer
base.
To strengthen our capabilities
in the management of design, To set up an
procurement, production, Realize refined
information
warehousing, logistics, sales, management,
management system
Information and after-sales service and to help improve
that fits the full
technology improve the overall Ongoing operating
business process in
improveme management of our efficiency, and
our new retail
nt information technologies by continuously
business model to
establishing an information improve our
help improve
management system to competitiveness
operating efficiency
support our future business
development
R&D personnel
2023 2022 Change
Number of R&D
personnel 70 67 4.48%
Proportion of R&D
personnel 15.66% 15.06% 0.60%
Education background of R&D personnel
Bachelor’s degree 20 18 11.11%
Master’s degree 4 4 0.00%
Associate degree 15 13 15.38%
Others 31 32 -3.13%
Age range of R&D personnel
Under 30 years old 10 17 -41.18%
30-40 years old 35 26 34.62%
Above 40 years old 25 24 4.17%
34
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
R&D investment amount and its proportion to operating income in the past three years:
2023 2022 2021
R&D investment amount (RMB) 20,470,389.61 20,266,745.83 13,821,826.16
Proportion of R&D investment to
operating income 2.67% 2.14% 1.58%
Amount of capitalized R&D expenses
(RMB) - - -
Proportion of capitalized R&D expenses
to R&D investment - - -
Proportion of capitalized R&D expenses
to current net profit - - -
Reason for and impact of marked changes in the composition of the Company’s R&D personnel
□ Applicable Not applicable
Reason for marked changes in the proportion of R&D investment in total revenue over the last year
□ Applicable Not applicable
Reason for marked changes in the proportion of capitalized R&D investment and its reasonable
explanation
□ Applicable Not applicable
5. Cash flow
Unit: RMB
YoY
Item 2023 2022 changes
Sub-total of cash inflow from operating
activities 891,874,223.20 1,090,880,492.87 -18.24%
Sub-total of cash outflow from operating
activities 899,218,450.27 965,571,472.21 -6.87%
Net cash flows from operating activities -7,344,227.07 125,309,020.66 -105.86%
Subtotal of cash inflows from investing
activities 5,388,499,419.51 5,998,982,635.85 -10.18%
Sub-total of cash outflows from investing
activities 5,292,443,769.92 6,308,601,094.72 -16.11%
Net cash flows from investing activities 96,055,649.59 -309,618,458.87 -131.02%
Subtotal of cash outflows from financing
activities 85,402,161.72 43,796,832.37 95.00%
Net cash flows from financing activities -85,402,161.72 -43,796,832.37 95.00%
Net increase / (decrease) in cash and cash
equivalents 3,309,260.80 -228,106,270.58 -101.45%
Major influencing factors for significant YoY changes in relevant data
35
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Applicable □ Not applicable
1. The reasons for a significant decline in net cash flow from operating activities compared to the
previous include the year-on-year contraction of the company's sales gross margin, compounded by the
expansion of the new jewellery business, which has a long procurement cycle for raw material pearls.
2. The reasons for the change in net cash flow from investing activities include the Company’s cash
management of idle funds and its subscription and redemption of wealth management products during
the Reporting Period.
3. The reason for a significant increase in net cash outflow from financing activities is the distribution
of cash dividends to shareholders during the Reporting Period.
4. The reasons for a significant increase in net increase in cash and cash equivalents compared to the
same period of previous year include increased collected payments for sales, subscription and
redemption of wealth management products, cash dividends and other factors during the Reporting
Period.
Reasons for significant difference between net cash flow from operating activities during the Reporting
Period and net profit for current year
Applicable □ Not applicable
Mainly due to the increase in the proportion of spot stock in the Reporting Period, and the increase
in inventory.
V. Analysis of Non-principal Businesses
Applicable □ Not applicable
Unit: RMB
Proportion in Whether it is
Amount Description
total profit sustainable
Income of
investment 38,061,196.16 36.64% Cash management Yes
of idle fund
Gains/(losses) from
changes in fair 9,736,672.14 9.37% Cash management Yes
values of idle fund
VI. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
End of 2023 Beginning of 2023 Proporti Description of
36
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Proporti Proporti on significant
on in on in changes changes
Amount Amount
total total
assets assets
Mainly
consisting of
Cash and financial
cash 150,353,208.66 5.64% 442,675,454.71 16.32% -10.68% products
equivalents purchased with
idle self-owned
funds
Inventory 393,717,469.09 14.76% 361,661,336.69 13.33% 1.43%
Caused by
Shanghai Rumere’s
Fixed assets 431,839,182.13 16.19% 178,412,503.35 6.58% 9.61%
purchasing real
estate
Construction
53,331,524.63 2.00% 52,063,773.07 1.92% 0.08%
in progress
Right-of-use
1,029,642.86 0.04% 1,194,865.27 0.04% 0.00%
assets
Financial
assets held- 1,368,674,089.95 51.30% 1,318,197,593.83 48.59% 2.72%
for-trading
Mainly due to
the increase in
deductible
temporary
Deferred Tax
39,308,918.26 1.47% 28,995,779.03 1.07% 0.40% differences
Assets
caused by the
provision for
inventory price
decline
Due to the
Non-current maturity and
Assets redemption of
Maturing - - 151,075,205.48 5.57% -5.57% the company's
within One wealth
Year management
products
Mainly caused by
Non-current
the wealth
assets
management
maturing 132,030,082.19 4.95% 100,115,890.41 3.69% 1.26%
products with a
within one
maturity of more
year
than one year
Input tax credit
Other
amount by
current
21,135,612.09 0.79% 241,481.62 0.01% 0.78% Shanghai Rumere’s
financial
purchasing real
assets
estate
Due to the
payment of
Accounts
58,163,158.46 2.18% 93,606,271.18 3.45% -1.27% accounts
payable
payable of the
project
37
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Affected by the
decline in income,
the income tax
payable at the end
Tax payable 17,882,840.82 0.67% 28,953,139.67 1.07% -0.40% of the current
period is lower
than that at the end
of the previous
period
High proportion of overseas assets
□ Applicable Not applicable
2. Assets and liabilities measured at fair value
Applicable □ Not applicable
Unit: RMB
Accumulat
Gain or loss Provision for
ed gain or
on fair value impairment
loss on Purchase amount Sales amount in
changes recognized Other
Item Beginning balance fair value in the Reporting the Reporting Ending balance
recognized in in the changes
changes Period Period
the Reporting Reporting
recognized
Period Period
in equity
Financial assets
1. Financial
assets held-
for-trading
(excluding 1,318,197,593.83 41,500,421.09 - - 4,840,010,000.00 4,831,033,924.97 1,368,674,089.95
derivative
financial
assets)
2. Other
none-
current 251,191,095.89 12,102,102.77 - - 131,950,000.00 263,213,116.47 132,030,082.19
finantial
assets
Others 1,569,388,689.72 53,602,523.86 - - 4,971,960,000.00 5,094,247,041.44 1,500,704,172.14
Total of the
1,569,388,689.72 53,602,523.86 - - 4,971,960,000.00 5,094,247,041.44 1,500,704,172.14
above
Financial
liabilities
Other changes
No
Whether there was any significant change in the measurement attributes of our major assets during the
Reporting Period?
38
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
□Yes No
3. Restriction of asset rights at the end of the reporting period
Not applicable.
VII. Analysis of Investment
1. Overviw
Applicable □ Not applicable
Rumere Modern Manufacturing Service Base, one of our projects under construction, broke ground on
March 15, 2021. In this project, three intelligent manufacturing, logistics and distribution workshops
in Phase I were officially put into operation in the second half of 2022; the foundations of Phase II was
constructed, and this phase was expected to be put into operation in Mid-2024.
Investment amount during the Investment amount during the same Change
Reporting Period (RMB) period of previous year (RMB)
257,108,421.57 87,603,230.20 193.49%
2. Major equity investment during the reporting period
Applicable □ Not applicable
Unit: 10,000 RMB
Invest Whet
ment her
Name of
Expe profit the
the Mode of Sharehol Invest Progress as at Date of Disclosure
Main Amount Source Type of cted and lawsu
invested investm ding Partner ment balance sheet disclosure index (if
business pof of fund product inco loss in it is
compan ent ratio period date (if any) any)
me the invol
y
current ved
period or not
Jiangsu Import
Suhao and
Not Not Not Complete Novembe
Internati export Own N
others 7695 4.88% applica applica applica d the — - r 30, 2023 2023-038
onal of silk, fund o
ble ble ble purchase
Group clothin
Co., Ltd. g
Total -- -- 7695 -- -- -- -- -- -- — - -- -- --
3. Major non-equity investment during the reporting period
Applicable □ Not applicable
Unit: RMB
39
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Reasons for
Cumulative Cumulative
failure to
actual realized
Investment reach
Whether it was investment returns as of Disclosure Disclosure
Project Investment Involved amount during Source of Project Expected planned
an investment amount as of the end of date (if index (if
name method industry the Reporting funds progress returns progress
in fixed assets the end of the the any) any)
Period and
Reporting Reporting
expected
Period Period
returns
Modern
Not
Manufacturi Self- Not
Yes Clothing 33,027,259.95 211,527,912.14 Fundraising 51.01% applicabl
ng Service construction applicable.
e.
Base Project
Total -- -- -- 33,027,259.95 211,527,912.14 -- -- -- -- --
4. Financial assets investment
(1) Security Investment
Applicable □ Not applicable
Unit:10,000 RMB
40
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Accumulate
Gain or loss
d gain or
on fair value Purchase Gains or losses
Stock Initial Accounting loss on fair Sales amount in
Stock Beginning changes amount in the during the Ending book Source of
Type abbreviati investment measurement value the Reporting Accounting item
code book value recognized in Reporting Reporting value funds
on cost model changes Period
the Reporting Period Period
recognized
Period
in equity
Not Not Fair value Trading financial
Others 93,300 93,704 2,794 - 279,500 289,406 2,794 86,592 Fundraising
applicable.applicable. measurement assets
Not Not Fair value Trading financial Self-owned
Others 32,500 33,082 681 - 100,501 118,262 681 16,002
applicable.applicable. measurement assets funds
Trust Not Not Fair value Trading financial Self-owned
5,000 5,033 675 - 104,000 75,435 675 34,273
product applicable.applicable. measurement assets funds
Trust Not Not Fair value Other non-current Self-owned
25,000 25,120 1,210 - 5,500 26,322 1,210 5,508
product applicable.applicable. measurement financial assets funds
Total 155,800 -- 156,939 5,360 - 489,501 509,425 5,360 142,375 -- --
Date of the announcement of
the Board of Directors for
October 25, 2023
approval of investment in
securities
Date of the announcement of
the Board of Shareholders for
November 17, 2023
approval of investment in
securities (if any)
(2) Derivative Investment
□ Applicable Not applicable
The Company did not invest in derivatives during the reporting period.
5. Use of proceeds
Applicable □ Not applicable
(1) Overall use of proceeds
Applicable □ Not applicable
Unit: RMB 10,000
Total Cumul Proportio
amoun ative n of
t of total cumulati Purpose Amount
Total amount
Fundra Cumulative raised amoun ve total Total and of raised
Total amount Net amount of raised
Year of ising total amount funds t of amount amount of allocation funds idle
of raised of raised funds used in
fundraising metho of raised which raised of raised raised funds of raised for more
funds funds the Reporting
d funds used were funds funds unused funds than two
Period
used which which unused years
for were were
other used used for
41
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
purpos for other
es other purposes
during purpos
the es
Report
ing
Period
Some of
raised funds
unused and
temporarily
idle were
used to
Issuan purchase
ce of wealth
2021 189,012 173,268 8,818 92,387 87,568
new management
shares products
provided by
banks, and
the rest were
stored in a
special
account
Total -- 189,012 173,268 8,818 92,387 - - - 87,568 -- -
Description on overall use of proceeds
Approved by Shenzhen Stock Exchange, the Company provided initial public offering of 57 million ordinary shares (A shares) in RMB at an issue
price of RMB 33.16/share according to the CSRC’s Reply on Agreeing on the Initial Public Offering and Registration of the Shares of Rumere Co.,
Ltd. (Z.J.X.K. [2021] No. 2597), raising a total of RMB 1,890.12 million, and the actual net amount of raised funds was RMB 1,732.68 million after
deducting relevant issuance expenses. Whether the above-mentioned raised funds were put in place was audited and verified by RSM China (Special
General Partnership), which issued the Capital Verification Report on the Raised Funds of Rumere Co., Ltd. through Initial Public Offering (R.C.Y.Z
[2021] No. 201Z0044). The Company stored the raised funds in a special account, and signed a Three-Party Supervision Agreement for Raised Funds
with the sponsor institution and the bank where the special account was opened.
Based on the progress of investment projects with raised funds, the Company cumulatively invested RMB 244.60 million of raised funds, and the
permanent supplement to working capital with excess funds was RMB 679.27 million, and the net amount of returns and interest income from the
special account for raised funds management was RMB 66,480,000 when deducting the service charge. As of December 31, 2022, the balance in the
special account for raised funds totaled RMB875.68 million. The reason for the difference between the total expected balance and the actual balance
was that the issue expenses of RMB 398,300 were paid from an account other than that for raised funds.
(2) Projects committed with proceeds raised
Applicable □ Not applicable
Unit: RMB 10,000
Date
Promiss Investm Benef Cumula Whet Whethe
Whether when
ory Total Cumulativ ent its tive her r there
any the
investm amount of e progress achie benefits the was any
change Adjusted Investmen project
ent promissor investmen as of the ved achieve expec signific
was made total t amount reached
projects y t amount end of durin d as of ted ant
to the investmen during the the
and investmen as of the the g the the end benefi change
project t amount Reporting expecte
allocati t with end of the Reportin Repor of the ts in the
(including (1) Period d
on of raised Reporting g Period ting Reporti were feasibili
partial operatio
excess funds Period (2) (3) = (2) Perio ng achie ty of the
changes) nal
funds / (1) d Period ved project
status
42
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Promissory investment projects
1.
Modern
Not
Manufa Not Not
Year appl
cturing No 41,471.32 41,471.32 3,302.73 21,152.80 51.01% applic applic No
2025 icabl
Service able able.
e
Base
Project
2.
Design
and Not
Not Not
R&D Year appl
No 4,308.20 4,308.20 2,812.25 2,812.25 65.28% applic applic No
Center 2025 icabl
able able.
Constru e
ction
Project
3.
Informa
tion Not
Not Not
Technol Year appl
No 5,023.46 5,023.46 153.86 281.93 9.18% applic applic No
ogy 2025 icabl
able able.
Improv e
ement
Project
4.
Exhibiti
Not
on Not Not
Year appl
Center No 9,252.71 9,252.71 33.60 33.60 0.36% applic applic No
2025 icabl
Constru able able.
e
ction
Project
Subtota
l of
Not
promiss Not
appl
ory -- 60,055.69 60,055.69 6,328.03 24,460.03 -- -- applic -- --
icabl
investm able
e
ent
projects
Allocation of excess funds
Exces
s
funds
with
No 11,321.40 11,321.40
undeci
ded
purpos
e
Supple
mentary
working -- 101,890.80 101,890.80 2,490.00 67,927.20 66.67% -- -- -- -- --
capital
(if any)
Subtota
l of
allocate -- 113,212.20 113,212.20 2,490.00 67,927.20 -- -- -- --
d
excess
43
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
funds
Total -- 173,267.89 173,267.89 8,818.03 92,387.23 -- -- -- --
Explanati
on of
why the
planned
progress
and
The implementation of the Design and R&D Center Construction Project, the Information Technology Improvement
expected
Project, and the Exhibition Center Construction Project has been affected by objective factors such as domestic
benefits
macroeconomic environment and market conditions, resulting in a delay in investment progress compared to expectations,
were not
and failure to reach the planned usable state within the planned time frame. In light of these circumstances, the Proposal
achieved
on Re-evaluating Some Investment Projects with Raised Funds and Changing Implementation Methods, Implementers,
for each
Internal Investment Structures, and Postponement was reviewed and approved at the Fourth Meeting of the Second Board
project
of Directors, The fourth meeting of the second session of the Supervisory Board and General meeting of shareholders in
(includin
2022, and it is agreed that, taking into account the actual construction and investment progress of current projects, the
g reasons
desired usable date of the aforementioned projects will be extended to October 2025.
for
There are many uncontrollable factors in the construction process, including the long construction period, its large
selecting
workload, and the domestic macroeconomic environment during the construction process, so the Modern Manufacturing
“not
Service Industry Base Project is delayed. In light of these circumstances, the ‘Proposal on the Postponement of the Modern
applicabl
Manufacturing Service Industry Base Projec’ was reviewed and approved at the Eighth Meeting of the Second Board of
e” for
Directors and the Seventh meeting of the second session of the Supervisory Board.
“whether
the
expected
benefits
were
achieved
”)
Significa
nt
changes
in the Not applicable.
feasibilit
y of the
project
Applicable
In October 2021, the Company actually raised net funds of RMB 1,732.6789 million by public offering of stocks, including
excess funds of RMB 1,132.122 million.
1. On November 15, 2021, the 10th meeting of the 1st Board of Directors and the 10th meeting of the 1st Board of
Supervisors were held; on December 3, 2021, the 2nd extraordinary general meeting of shareholders in 2021 was held, at
which the Proposal on the Permanent Supplement to Working Capital with Part of Excess Funds was approved, agreeing
that the Company could use part of the excess funds, i.e. RMB 339.636 million, as the permanent supplement to working
capital. Please refer to the Announcement on the Permanent Supplement to Working Capital with Part of Excess Funds
(Announcement No.: 2021-004) disclosed by the Company on www.cninfo.com.cn on November 16, 2021.
Amount,
2. On October 26, 2022, the 3rd meeting of the 2nd Board of Directors and the 3rd meeting of the 2nd Board of Supervisors
purpose,
were held; on November 15, 2022, the first extraordinary general meeting of shareholders in 2022 was held, at which the
and use
Proposal on the Permanent Supplement to Working Capital with Part of Excess Funds was approved, agreeing that the
of excess
Company could use part of excess funds, i.e. RMB 339.636 million, as the permanent supplement to working capital.
funds
Please refer to the Announcement on the Permanent Supplement to Working Capital with Part of Excess Funds
(Announcement No.: 2022-034) disclosed by the Company on www.cninfo.com.cn on October 27, 2022.
3. On October 24, 2023, the 6th meeting of the 6th Board of Directors and the 3rd meeting of the 2nd Board of Supervisors
were held; on November 17, 2023, the first extraordinary general meeting of shareholders in 2023 was held, at which the
Proposal on the Permanent Supplement to Working Capital with Part of Excess Funds was approved, agreeing that the
Company could use part of excess funds, i.e. RMB 339.636 million, as the permanent supplement to working capital.
Please refer to the Announcement on the Permanent Supplement to Working Capital with Part of Excess Funds
(Announcement No.: 2023-031) disclosed by the Company on www.cninfo.com.cn on October 25, 2023.
As of December 31, 2023, the cumulative amount of excess funds used to permanently supplement working capital was
44
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
RMB 679.272 million. As of the date when the Report was disclosed, the cumulative amount of excess funds used to
permanently supplement working capital was RMB 679.272 million.
Changes
in the
impleme
ntation
location
of the
Not applicable.
investme
nt
projects
with
raised
funds
Adjustme
nts in the
impleme
ntation
method
of the Applicable. Please refer to the Announcement on the Permanent Supplement to Working Capital with Part of Excess
investme Funds (Announcement No.: 2023-012) disclosed by the Company on www.cninfo.com.cn on April 26, 2023.
nt
projects
with
raised
funds
Early
The company held its second board of directors' fifth meeting and the second supervisory board's fifth meeting on August
investme
28, 2023, where they reviewed and passed the "Proposal on Using Self-Raised Funds to Pay Part of the Investment Project
nt and
Funds and Subsequently Replace Them with an Equivalent Amount of Fundraising Funds." It was agreed that during the
replacem
implementation period of the "Design and Research and Development Center Construction Project" and the "Exhibition
ent
Center Construction Project," the company and its subsidiaries implementing the fundraising investment projects would
regarding
first use their own funds to pay for the funds required for the investment projects. This mainly includes wages for staff,
the
social insurance premiums, housing provident fund, etc., and then periodically replace them with an equivalent amount of
investme
fundraising funds.
nt
projects
During the reporting period, the company incurred a replacement amount of 2.2055 million yuan, all of which was the
with
company's own funds used to advance the wages, social insurance premiums, and housing provident fund for the research
raised
and design personnel involved in the Design and Research and Development Center Construction Project.
funds
Temporar
y
suppleme
nt to
working Not applicable.
capital
with idle
raised
funds
Amount
and
reasons
for
Not applicable.
surplus
raised
funds in
the
45
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
impleme
ntation of
the
project
Purpose
and
As of December 31, 2023, the Company had used RMB 863.9 million of idle raised funds to purchase wealth management
allocatio
products from banks. The remaining unused raised funds are stored in a special account opened by the Company for raised
n of
funds and will be used for subsequent payments for investment projects. The Company will properly use the remaining
raised
raised funds as needed.
funds
unused
Issues or
other
situations
in the use
and Not applicable.
disclosur
e of
raised
funds
(3) Change in the use of proceeds
□ Applicable Not applicable
The Company did not change the use of proceeds during the reporting period.
VIII. Major Asset and Equity Sales
1. Sale of major assets
□ Applicable Not applicable
The Company did not sell major assets during the reporting period.
2. Sale of major equities
□ Applicable Not applicable
IX. Analysis of Main Holding and Joint-stock Companies
□ Applicable Not applicable
X. Structured entities controlled by the Company
□ Applicable Not applicable
46
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
XI. Outlook of the Company’s Future Development
(I) Industry landscape and trend
1. The fashion retail industry has been reshaped by the rapid development of digital
economy, and the sustained growth of online retailing is a long-term trend
As the digital economy blooms, the retail industry has benefited from the progress and application of
online digital technologies, and has ushered in better development opportunities. In particular, the
development of 5G, Wifi and other technologies has greatly improved the speed and breadth of
information transmission in the mobile Internet era, and also brought more consumers to the online
era based on information infrastructure, and the number of mobile Internet users has exceeded 1.4
billion. Technological advancements have profoundly changed the way, speed, scope, and content
regarding information acquisition, and reshaped the supply chain of most industries, including the
clothing industry. Online retailing’s rapid growth has become a long-term trend within the sector. The
accelerated application of Artificial Intelligence (AI) technology has improved the efficiency of big
data analysis and content creation.
Relying on online retail platforms and eliminating the circulation process required for distributors
and offline stores, online retailing can offer more benefits to end consumers compared to conventional
stores, reflecting our strategic advantage in cost reduction.
At the same time, online retailing has a vertical layout, and with the help of IT system, it can obtain
real-time feedback from end consumers, forming a business model known for fragment orders, quick
response, and frequent launch of new products. In recent years, the live streaming economy has
deepened the integration of online platforms and retail industry, making online retailing featured with
higher interactivity, diversity, and fewer time and space limitations. Online retailing enables direct
communication between sellers and buyers, making more efficient interaction and fluiding the
trasactions online. As a well-known online clothing brand operator in China, the Company has
worked on Taobao-based online business for more than 10 years, and actively expand the live
broadcast business in years, becoming one of practitioners who implemented reforms in the retail
industry.
2. Design and merchandising capabilities and brand image have been the core
competitiveness in the clothing industry, and become more and more important
Consumers put greater emphasis on brand value, fashion and other factors, making the success of
online clothing retailers more dependent on their capabilities in design and merchandising and brand
47
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
operation. Online clothing retailers consider design and merchandising as the core, properly combine
avant-garde design concepts, supply of high-quality raw materials, and impressive workmanship. By
continuously enhancing their product strength, they can make consumers more willing to purchase
their products. As people chase for better lifestyle and more sofisticate products, design and
merchandising capabilities and brand image will become more important. In addition, effective
product promotion is another important way for us to expand our customer base and shape our brand.
Operating on the digital platform, the Company can fully convey product information to potential
consumers through online retail platforms by such means as impressive page design, product graphics
and text, short videos, and live streaming, so as to encourage them to buy our products.
The Company impresses our customers with product quality, increases sales by online promotion and
word-of-mouth marketing, and achieves a virtuous cycle featuring purchases by new customer and
repurchases by old customers, accumulating many loyal customers and shaping a good brand image
for Rumere. The large number of loyal customers can reflect our comprehensive competitiveness,
and is a result of continuously strengthening our brand culture through long-term fine quality and
customer service to gain recognition and build up reputation.
3. A new model of cooperation through integration has become a trend in the
clothing industry
China has seen relatively mature supply chain and supporting facilities for clothing production, and
a series of mature industrial clusters have been formed in coastal areas such as Jiangsu, Zhejiang, and
Guangdong, gathering a large number of yarn production, fabric and auxiliary material manufacturing,
and garment manufacturing factories with decades of experience, providing downstream brand
clothing retailers with qualified resources. Therefore, the Company adopts a production model that
outsources main production activities to first-tier manufacturers and is also supported by independent
production. In addition, the Company has maintained long-term partnership with major raw material
and processing suppliers, thereby improving the reliability of our outsourced production activities.
This production model based on outsourced production enables the Company to invest superior
resources in the core skill we accumulated through years.
As people can obtain more real-time information through the Internet in their daily life, the continuous
improvement of information transmission speed contributes to the globalization of fashion
information, making fashion trends more flattened, and global fashion consumption trends are
converging at an unprecedented pace. At the same time, global clothing industry chains are gradually
coordinated, leading to a trend of global cooperation in clothing design, fabric development, brand
48
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
operation, and distribution channels. In fabric selection and product design, the Company has fully
considered the latest fashion trends in other countries, and established deep cooperation with high-
quality fabric suppliers globally to provide consumers with differentiated products and form a
competitive advantage.
4. Mature third-party logistics enable e-retailers improve their storage and
distributing efficiency
As the rapid development of the e-commerce industry brings a rapid growth to the warehousing and
logistics industry, a group of highly-specialized and large-sized warehousing management and
logistics distribution companies have emerged and formed a relatively open and transparent service
and price system. Therefore, outsourcing warehousing and logistics activities to third-party
professionals has become a preferred choice for most e-retailers at a certain size. Additionally, as
related industries gradually mature, this trend of outsourcing warehousing and logistics process to
professional service providers in the e-commerce industry is expected to continue in the future.
BEST Inc. and SF Express are both our partners, responsible for warehousing and shipping our
garments, and for distributing and delivering our products, respectively. By working with these
professional warehousing management and logistics distribution companies, the Company has
improved the management of warehousing and logistics, reduced warehousing and logistics costs,
and improved overall operating efficiency.
(II) Development strategy
The Company focuses on key part of in the clothing value chain as design and merchandising, supply
chain management, and online retailing, and outsources warehousing, logistics, and most of
production activities to qualified suppliers, forming a business model featuring independent design
and merchandising, controlled supply chain management, and retailing through online stores.
The Company is committed to providing consumers with comfortable, fashionable, high-quality, and
cost-effective products. The Company will continue to expand our business by using many years of
experience in online clothing retailing to develop cross-category, multi-platform, and multi-channel
businesses through the development of modern manufacturing service bases, design and R&D centers,
exhibition shops, information system upgrades and the improvement of talent training mechanisms.
We will expand our product categories beyond women’s wear to include women’s shoes, bags,
underwear, and accessories that are favored by female consumers. At the same time, we will take
advantage of the favorable condition that female consumers are the key decision-makers for family
purchase, increase the sales of men’s and children’s wear, and gradually launch household products,
49
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
and jewellery accessories, home textiles, and other products, making our brand a life style.
People have more fragmented time and more diversified interest in the digital era, which has given
rise to many online retailing platforms such as WeChat, Tik Tok, and Xiaohongshu. As a pioneer in
online clothing retailing, the Company will cooperate with these already-established platforms and
other potential emerging platforms in the medium and long term as a gradually mature and improved
brand to realize multi-platform development, and fully utilize the characteristics of each platform to
achieve synergy of marketing materials, integration of marketing communication, and optimization
of marginal utility.
In addition, exhibition shops will be established as an important supplement and physical support to
online retailing, and the Company will take it as an opportunity to enhance interaction with consumers,
acquire experience in online and offline combined retailing, gradually develop new markets, connect
physical shops to form a new retail model covering all channels, and enhance brand influence by
improving shopping experience.
(III) Business plan
1. Strengthening live commerce and supporting team building
Recent years, the competition among various internet platforms for traffic has become increasingly
fierce, with the primary competitive means of live commerce and content marketing. Live streamers
are abundant and the internet retail vibrant. So we believe that based on current technological
conditions and market trend, the advantages of live commerce, information dissemination, and traffic
operation will continue. During the Reporting Period, the company has increased the frequency of
live commerce and enhanced the capability of the accompanying operation team. Building on this
foundation, we plan to further increase the frequency of live commerce and expand the scale of our
team, integrating it organically combine with the company's product strength. And this will enable us
better explain products and clothing combinations to consumers, which can finally expand our sales.
2. Continuously strengthening our capabilities in product design and R&D
Capabilities in product design and R&D are important measures for us to enhance our core
competitiveness. We will increase our investment in product design and R&D to improve the software
and hardware facilities in the entire design system, and attract outstanding design talents to build a
diversified design talent system. We plan to build a multi-functional innovation center that integrates
product planning, design, and research and development to comprehensively improve our competitive
advantage in product design and R&D. By providing more software and hardware facilities and
50
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
recruiting more talents for our team, we will break through the bottlenecks due to lack of design
talents and restricted design capacity, enhance our capabilities in design and R&D innovation, and
seize the market opportunities to achieve a rapid growth in business scale and brand awareness
improvement, and enhance our comprehensive competitiveness and market position.
3. Integration and upgrade of information systems
As a high-quality online clothing retailer, the Company has generally built up an MIS that covers all
business processes. With the continuous integration and innovation of traditional industries and
technologies, and the emergence of new technologies, new demands, new models, and new business
types, we will continue to upgrade and transform our information systems, strengthen our
management capabilities in design, procurement, production, warehousing, logistics, sales, and after-
sales services via the upgrade of ERP, warehousing and logistics management platforms and supplier
management systems, and the construction of data centers and intelligent warehouses, and improve
our overall quality of IT management to help to level up the operating efficiency.
4. Actively developing more distribution channels
Exhibition shops will be established as an important supplement and physical support to online
retailing, and the Company will take their establishment as an opportunity to enhance interaction with
consumers offline, accumulate experience in online and offline combined retailing, gradually develop
new markets, connect both to form a new retail model covering all channels, and enhance brand
influence by improving consumer experience. According to the Company’s current business
development and strategic planning in the future, we will push forward setting up exhibition shops as
appropriate according to the changes in objective conditions and our business progress.
(II) Probable risks ahead of us
1. Risks caused by failure to be accurately aware of the changes in fashion trends
The fashion clothing industry is featured with fast-changing trends and consumer preferences. Current
consumers also have fast-changing demands for fashion trends and styles and are putting forward
more requirements for workmanship and fabric quality of clothing products. Due to fast iteration of
products in the clothing industry and constant changes in popular culture and fashion trends, market
players need to maintain their design and merchandising capabilities and match them with popular
culture and consumer preferences. If we fail to be accurately aware of the changes in fashion trends,
fail to take the lead in or timely follow up on consumer preferences of the target group, or fail to make
timely and effective adjustments to product design and merchandising, we will not be able to update
or upgrade our design and merchandising capabilities to meet the fashion trends in the fierce
51
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
competition, and this may lead to weakened brand influence, decreased product sales, inventory
backlog, and profit decline, having an adverse impact on our business performance.
2. Risks caused by highly-centralized sales channels
During the Reporting Period, we realized our goals for sales revenue, and the sales revenue realized
through third-party platforms such as Taobao and Tmall accounted for more than 99% of our total
sales, indicating a high centralization of sales channels.
Most online branded clothing retailers sell products and provide customer service through third-party
e-commerce platforms. However, if these platforms experience significant changes in their own
operations, business models, and operating strategies, or adjust related rules to make them
unfavorable to merchants, it may have an adverse impact on our business performance. In addition,
if the stable partnership between the Company and these third-party e-commerce platforms undergoes
a significant change in the future, such change may also have an adverse impact on our business
performance.
3. Risk of a decline in performance due to macro economy and other factors
Clothing is a kind of optional consumer products, and the growth of the clothing industry is closely
related to the macro economy. In the long run, the changes in the population size and structure in
China will accelerate a structural change in the consumer goods market, and China has seen a trend
in aging of consumer groups and a decrease in the number of young consumers. Given possible long-
term slowdown in economic growth, the decrease in economic vitality will change consumers’
income expectations, thereby reducing their motivation to purchase durable consumer goods,
including clothing, which may affect our future performance.
XII. Record forms for reception for investigators, communication, interviews and other
activities during the Reporting Period
□ Applicable Not applicable
No reception for investigators, communication, interviews or other activities were conducted during
the Reporting Period.
XIII Implementation of "double improvement of quality and return"
□ Applicable Not applicable
52
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Section IV Corporate Governance
I. Basic Situation of Corporate Governance
During the reporting period, the Company has constantly improved its corporate governance structure
and optimized its internal management systems in strict compliance with requirements of the
Company Law, the Securities Law, the Code of Corporate Governance for Listed Companies, the
Rules Governing the Listing of Shares on Shenzhen Stock Exchange, and other relevant laws,
administrative regulations and normative rules promulgated by China Securities Regulatory
Commission (CSRC) and Shenzhen Stock Exchange (SZSE).
(I) Shareholders and general meeting of shareholders
The Company has formulated the Rules of Procedure for the General Meetings of Shareholders and
implements them strictly. During the reporting period, the Company convened five general meetings
of shareholders. The calling and convening procedures, notifications, authorizations and delegations,
resolutions, deliberations and announcements of the general meeting of shareholders are all compliant
with relevant laws and regulations. In addition, all the meetings conducted voting both on site and via
Internet, so that all shareholders, especially minority shareholders, can fully exercise their rights.
(II) The Company and its controlling 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. The controlling shareholder of the Company strictly regulates his behaviors in
accordance with relevant requirements on listed companies. All major business decisions of the
Company have been made in line with standardized operating procedures, and there are no
circumstances of damaging the interests of the Company and other shareholders. The 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.
(III) Directors and the Board of Directors
53
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
The Board of Directors of the Company currently comprises 5 directors, among which 2 are
independent directors. The number and composition of the Board of Directors meet requirements of
laws, regulations, and the Articles of Association. The Company organized the directors to attend
relevant training activities of regulatory authorities. Further study and familiarity with relevant laws
and regulations has effectively improved the capabilities of directors to perform their duties.
Independent directors of the Company have fulfilled their duties in a serious and responsible manner.
They are responsible for safeguarding the overall interests of the Company, with a special focus on
the protection of the legitimate interests of minority shareholders, and expressing independent
opinions on material and important matters.
(IV) Supervisors and the Board of Supervisors
The Board of Supervisors of the Company comprises 3 supervisors, among which 1 is an employee
representative supervisor. The number and composition of the Board of Supervisors meet
requirements of laws, regulations, and the Articles of Association. All supervisors earnestly perform
their duties as per requirements of the Rules of Procedure of the Board of Supervisors and other
relevant regulations, to supervise the decision-making procedures and resolutions of the Board of
Directors and the Company’s legal operations and to effectively oversee the legality and compliance
of directors, managers and other senior executives of the Company in their duty performance.
(V) 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.
(VI) 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.
54
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Whether there are significant differences between the Company’s actual status of corporate governance
and laws, administrative regulations and CSRC normative documents on the governance of listed
companies
□Yes No
There was no significant differences between Company’s actual conditions and laws, administrative
regulations and CSRC normative documents on listed company governance.
II. The Company’s Independence from Its Controlling Shareholders in terms of Business,
Personnel, Finance, Organization, Business, etc.
During the reporting period, the Company operates in strict compliance with the Company Law and
the Articles of Association. It is entirely independent from the controlling shareholder in terms of
business, personnel, assets, institution, finance, etc. and has independent and complete business
systems and independent operation capabilities.
1. In respect of assets: The Company legally owns the ownership or use rights of lands, properties,
and trademark patents, and other assets relating to its current businesses.
2. In respect of personnel: Directors, supervisors and senior management of the Company have been
elected and appointed in strict accordance with provisions of the Company Law and the Articles of
Association. Senior management of the Company including the Chairman, General Manager, Deputy
General Manager, Chief Financial Officer and Board Secretary serve full-time in the Company. They
do not hold any positions other than directors and supervisors in the controlling shareholder or actual
controller or other companies controlled by them, nor do they receive remuneration from the
controlling shareholder or actual controller or other companies controlled by them. Finance personnel
of the Company do not moonlight in the controlling shareholder or actual controller or other
companies controlled by them.
3. In respect of finance: The Company has set up an independent finance department equipped with
full-time financial personnel. It has also established an independent accounting system and a
standardized financial management system in accordance with the Accounting Law of the People’s
Republic of China and the Accounting Standards for Business Enterprises, and is able to make
decisions relating to financial matters independently. The Company opens independent bank accounts
55
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
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.
4. 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.
5. In respect of bsinesse: The Company is equipped with independent R&D design, procurement,
marketing and supply systems. It faces the market and operates independently, without any 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.
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
Session of Date of Date of
meeting Type investor convening disclosure Resolutions of the meeting
participation
Deliberated and approved
all proposals. Details can
2022 be found in the
Annual Annual Announcement of
General May 16, May 16,
general 74.96% Resolutions of 2022 Annual
Meeting of 2023 2023
meeting General Meeting
Shareholder Shareholders
s (Announcement No: 2023-
017) on CNINFO
56
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(http://www.cninfo.com.cn
)
Deliberated and approved
all proposals. Details can
Extraordin be found in the
ary Announcement on
2023 First general Resolutions of 2023 First
Extraordina 74.97% November November
meeting of Extraordinary General
ry General 17, 2023 17, 2023
the Meeting (Announcement
Meeting shareholde No: 2023-035) on
rs 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. Arrangements for differentiated voting rights of the Company
□ Applicable Not applicable
VI. Governance of red-chip firms
□ Applicable Not applicable
VII. Particulars of Directors, Supervisors and Senior Management
1. Basic information
Increas Decrea
Other
Posit Number of e of se of Number of
Ge Start date End date change Reason
Na ion shares held at shares shares shares held at
Position nd Age of term of term s for
me statu the beginning during during the end of the
er of office of office (shares change
s of the Period the the period
)
period period
Incu
Guo M May 16, May 12,
Chairman mbe 44 25,200,000.00 25,200,000.00
Jian ale 2019 2025
nt
Director
Incu Fe
Wen & May 16, May 12,
mbe ma 43 25,200,000.00 25,200,000.00
Di General 2019 2025
nt le
Manager
Director,
Deputy
Yu General Incu
M May 16, May 12,
Qing Manager, mbe 41 2,800,000.00 2,800,000.00
ale 2019 2025
tao Board nt
Secretary
& CFO
Zhu Deputy Resi M 41 September Apr 25, 200,000.00 200,000.00
57
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Zhe General gned ale 10, 2019 2023
ngju Manager
n
Fang Incu
Independe M May 16, May 12,
Junx mbe 49
nt director ale 2019 2025
iong nt
Dua
Incu Fe
n Independe September May 12,
mbe ma 41
Guo nt director 10, 2019 2025
nt le
qing
Supervisor
Zha (Employee Incu
M September May 12,
ng representat mbe 36
ale 10, 2019 2025
Ke ive nt
supervisor)
Chairman
Qian of the Incu Fe
May 13, May 12,
Xiao Board of mbe ma 40
2022 2025
lan Supervisor nt le
s
Lu Incu Fe
May 13, May 12,
Liyi Supervisor mbe ma 46
2022 2025
ng nt le
To
-- -- -- -- -- -- 53,400,000.00 53,400,000.00 --
tal
Whether there is any resignation of directors and supervisors or dismissal of senior management within
their term of office during the reporting period
Yes □ No
Name Position Type Date Reason
Zhu Dis
Vice General Unable to perform the duties of deputy
Zhengj miss Apr 25, 2023
Manager general manager due to personal reasons.
un al
2. Main working experience
Professional background, main working experience and main current responsibilities of the Company’s
in-service directors, supervisors and senior management
Mr. Guo Jian, born in 1980, is of Chinese nationality and has no permanent residency abroad. Mr.
Guo holds a master degree from Tsinghua University. He has served multi-national company like
Glencore, British Petrol and Cargill as analyst or trader before he co-founded the Company and served
as an executive director. Since May 2019, he has been the Chairman of the Company.
Ms. Wen Di, born in 1981, is of Chinese nationality and has no permanent residency abroad. Ms.
Wen holds a master degree from Tsinghua University. She started the career with China Telecom and
58
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
then operated online store with the Rumere brand. In 2012, she co-founded the Company and served
as a supervisor; since May 2019, she has been the director and the General Manager of the Company.
Mr. Yu Qingtao, born in 1982, is of Chinese nationality and has no permanent residency abroad. Mr
Yu holds a master degree from Fudan University and the charter of CPA. He has served KPMG, an
audit frim, UAVM and EBA, well known PE firms and gained experieces with corporate finance and
capital market. He joined the Company in 2017 as a deputy general manager and CFO; since May
2019, he has been the director, Deputy General Manager, CFO, and the Board Secretary in the
Company.
Mr. Fang Junxiong, born in 1974, is of Chinese nationality and has no permanent residency abroad.
Mr. Fang holds a doctor’s Degree from Fudan University. Since 2021, he has been a professor at
Zhejiang University of Finance and Economics; since March 2021, he has been the independent
director of Xinjiang Xiling Information Technology Co., Ltd.; and since May 2019 and the
independent director of Caitongzhengquan Co., Ltd. since Feb 2024, he has been the independent
director of the Company.
Ms. Duan Guoqing, born in 1982, is of Chinese nationality and has no permanent residency abroad.
Ms. Duan holds a master degree from Fudan University. Since 2004, she had served as a legal
specialist at Shenzhen Chenglin Sanitary Ware Co., Ltd., apprentice lawyer at Shanghai Nordi Law
Firm, and lawyer at Capital Equity Legal Group; since 2014, she has been a lawyer and partner at
Shanghai Shenhao Law Firm; since May 2019, she has been the independent director of the Company.
Mr. Zhang Ke, born in 1987, is of Chinese nationality and has no permanent residency abroad Mr.
Zhang holds a high school diploma. Since 2014, he has been a business manager of the Company;
since May 2019, he has been a supervisor of the Company.
Ms. Qian Xiaolan, born in 1983, is of Chinese nationality and has no permanent residency abroad.
Ms. Qian holds a bachelor degree. Since October 2014, she has been a product manager and business
manager of the Company.
Ms. Lu Liying, born in 1978, is of Chinese nationality and has no permanent residency abroad. Ms.
Lu holds a high school diploma. Since November 2011, she has been an assistant general manager of
the Company.
59
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Positions in shareholder entities
Applicable □ Not applicable
Whether
receiving
Position
Name of remuneration
held in Start date of End date of
shareholder term of office term of office or allowance
Name entity shareholder
entity from
shareholder
entity
Suzhou Executive February 27,
Rumere director
Guo Jian 2017 No
Group Co., & General
Ltd. Manager
Suzhou February 27,
Rumere
Wen Di Supervisor 2017 No
Group Co.,
Ltd.
Description
on position
held in None
shareholder
entity
Positions in other entities
Applicable □ Not applicable
Whether
Position receiving
Name of other Start date of End date of remuneration
Name held in
entity term of office term of office or allowance
other entity
from other
entity
Shanghai Rumere Executive January 6,
Guo Jian Model Agency No
director 2020
Co., Ltd.
Shanghai Rumere January 6,
Wen Di Model Agency Supervisor No
2020
Co., Ltd.
Shanghai Yinzhi
Yu Cultural October 28,
Supervisor No
Qingtao Communication 2019
Co., Ltd.
Zhejiang
Fang University of Professor August 1, 2021 Yes
Junxiong Finance and
Economics
Xinjiang Xiling
Fang Information Independent March 26, Yes
Junxiong Technology Co., director 2021
Ltd.
Fang Caitongzhengqu Independent
Junxiong an Co., Ltd director Feb 23, 2024 Yes
60
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Shanghai
Duan September 1,
Shenhao Law Partner Yes
Guoqing 2014
Firm
Penalties by regulatory authorities on the Company’s directors, supervisors and senior management
both incumbent and resigned during the reporting period in the last three years
□ Applicable Not applicable
3. Remuneration of directors, supervisors, and senior management
Procedures and basis for determining the remuneration of directors, supervisors and senior
management and actual payment
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.
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: RMB 10,000
Whether
Total
Positi receiving
Gen remuneration
Name Position Age remuneration
der on before tax
status from related
received from
the Company parties of the
Company
Guo Mal
Chairman 44 Incum 83.14 No
Jian e bent
Director & General Fem
Wen Di 43 Incum 83.14 No
Manager ale bent
Director, Deputy General
Yu Manager, Secretary of Mal 41 Incum 180.91 No
Qingtao the Board of Directors & e bent
CFO
Zhu Mal Resig
Zhengj Deputy General Manager 41 ned 14.06 No
e
61
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
un
Fang Mal
Junxion Independent director 49 Incum 15.14 No
e bent
g
Duan Fem
Guoqin Independent director 41 Incum 15.14 No
ale bent
g
Supervisor (Employee
Zhang Mal
representative 36 Incum 51.43 No
Ke e bent
supervisor)
Qian Chairman of the Board of Fem 40 Incum 71.58 No
Xiaolan Supervisors ale bent
Lu Fem 46 Incum
Liying Supervisor 42.33 No
ale bent
Total -- -- -- -- 556.87 --
VII. Performance of Duties by Directors during the Reporting Period
1. Board meetings during the reporting period
Session of
meeting Date of convening Date of disclosure Resolutions of the meeting
4th Meeting of No proposal was rejected at the
the Second meeting. For details, please refer to
April 25, 2023 April 26, 2023
Board of the announcement on CNINFO
Directors (http://www.cninfo.com.cn).
5th Meeting of No proposal was rejected at the
the Second meeting. For details, please refer to
August 28, 2023 August 29, 2022
Board of the announcement on CNINFO
Directors (http://www.cninfo.com.cn).
6th Meeting of No proposal was rejected at the
the Second meeting. For details, please refer to
October 24, 2023 October 25, 2023
Board of the announcement on CNINFO
Directors (http://www.cninfo.com.cn).
7th Meeting of No proposal was rejected at the
the Second meeting. For details, please refer to
November 24, 2023 November 25, 2023
Board of the announcement on CNINFO
Directors (http://www.cninfo.com.cn).
2. Directors’ attendance to Board meetings and general meetings of shareholders
Directors’ attendance to Board meetings and general meetings of shareholders
Number Number Any
of Board of Board failure in Number
Number Number
meetings meetings attending of general
of Board of Board Number
Name of required attended in person sharehold
director meetings meetings of
to attend via absence for two er
attended attended
during the in person communi by proxy consecuti meetings
reporting cation ve attended
period methods meetings
Guo Jian 4 4 0 0 0 No 2
62
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Wen Di 4 4 0 0 0 No 2
Yu 4 4 0 0 0 No 2
Qingtao
Fang 4 4 0 0 0 No 2
Junxiong
Duan 4 4 0 0 0 No 2
Guoqing
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.
IX. Particulars of the Special Committees under the Board of Directors during the Reporting
Period
Number
Important
of Other Specifics
Name of opinions
Member meeting Date of situations of of
committ Contents and
s s convening duty objections
ee suggestions
convene performance (if any)
raised
d
2nd Guo
Discussed and reviewed the All the
Strategy Jian, April 15,
1 Proposal on the Strategic Planning proposals were None None
Commit Wen Di, 2023
of Branches in 2022. agreed.
tee Yu
63
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Qingtao
1. Reviewed the 2022 Internal Audit
Work Report of the Company; 2.
Reviewed the Proposal on the 2023
Financial Budget Report; 3.
Reviewed the Proposal on the 2022
Internal Control Self-Evaluation
Report; 4. Reviewed the Proposal on
the 2022 Annual Report and its All the
April 15,
Summary; 5. Reviewed the Proposal proposals were None None
2023
on the Special Report on the Storage agreed.
and Actual Use of Raised Funds in
2022; 6. Reviewed the Proposal on
Fang the 2023 Q1 Report; 7. Reviewed the
Junxion Proposal on the Engagement of the
2nd
g, Guo Accounting Firm; 8. Reviewed the
Audit
Jian, 3 Proposal on the Expected Daily
Commit
and Related Party Transactions in 2023.
tee
Duan 1. Reviewed the Proposal on the
Guoqing Semi-annual Report 2023;
2. Reviewed the Proposal of using
the company’s own fund to pay part
of the fund raised for the project and All the
August 18,
subsequent replacement of the same proposals were None None
2023
amount of fund raised; agreed.
3. Reviewed the Proposal on the
Special Report on the Storage and
Actual Use of Raised Funds in the
First Half of 2023
All the
October 19, Reviewed the Third Quarter Report
proposals were None None
2023 2023
agreed.
2st
Remune Duan
1. Reviewed the 2022 General
ration Guoqing All the
April 15, Manager’s Work Report; 2.
and , Guo 1 proposals were None None
2023 Reviewed the 2022 Board of
Review Jian, Yu agreed.
Directors’ Work Report.
Commit Qingtao
tee
X. 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.
XI. Employees of the Company
1. Number, profession and education level of employees
Number of in-service employees of the Parent Company at the 328
64
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
end of the reporting period
Number of in-service employees of the major subsidiaries at the
end of the reporting period 119
Total number of in-service employees at the end of the
reporting period 447
Total number of employees receiving remuneration in the
reporting period 447
Number of retired employees whose expenses are borne by the
Parent Company and its major subsidiaries -
Composition of professions
Number of staff in the
Type of professions profession
Production personnel 89
Sales personnel 217
Technical personnel 70
Financial personnel 17
Administrative personnel 28
Other personnel 26
Total 447
Education level
Type of education level Number of persons
Postgraduates and above 7
University graduates 92
College graduates 141
Others 207
Total 447
2. Remuneration policies
Remunerations of the Company should be performance-oriented and encourage and give full play to
the initiatives and innovations of employees internally, and remain competitive externally. The
Company pays attention to both performance and position values, and adopts a flexible remuneration
structure for different sequences of positions. The remuneration base and total amount are
dynamically managed in line with business performance of the Company.
65
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
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 reasonableness and effectiveness of the curriculum.
4. Labor outsourcing
Applicable □ Not applicable
Total working hours of labor outsourcing (h) 105,826
Total remuneration payment (RMB) 2,423,037.67
XII. Profit Distribution of the Ordinary Shares and Conversion of Capital Reserve to 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
(I) Principles for planning for dividend distribution to shareholders
The Company will establish a sustainable and stable mechanism for dividend distribution to investors
to ensure the continuity and stability of the Company's profit distribution policy, and shall distribute
profits first in cash.
(II) Method of dividend distribution to shareholders
The Company may distribute profits in the form of cash or shares or both, or other methods permitted
by laws and regulations.
(III) Adjustment of the profit distribution plan and related decision-making mechanism
1. Conditions for distribution of cash dividends
The Company's Board of Directors shall propose a differentiated cash dividend policy in line with the
procedure under the Company's Articles of Association after a comprehensive analysis of factors such
66
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
as industrial condition, development stage, its own business mode, profitability, and major spending
arrangements.
When eligible for cash dividends under the Company's Articles of Association, the Company shall, in
principle, distribute profits in cash on a yearly basis.
During the Reporting Period, the Company approved the 2023 annual profit distribution plan.
Special explanation on cash dividend policy
Whether the policy complies with provisions of the Articles of Association or
requirements of the resolutions made on the shareholders’ general meeting: Yes
Whether dividend standards and ratio are definite and clear: Yes
Whether relevant decision-making procedure and mechanism are well-established: Yes
Whether independent directors have performed duties and played their roles properly: Yes
The specific reason of failing to pay cash dividends, and the measures to be taken in the Not
next step to enhance the return level of investors: applica
ble.
Whether minority shareholders have sufficient opportunities to express opinions and
requests, and whether their legitimate rights and interests were sufficiently protected: Yes
Where the cash dividend policy undergoes any adjustment or change, whether the Not
conditions and procedures are compliant and transparent: applica
ble.
The profit distribution scheme implemented this time is consistent with the scheme deliberated and
agreed by the shareholders’ meeting.
Yes □ No □ N/A
The Company’s profit distribution scheme implemented this time is consistent with the scheme
deliberated and agreed by the shareholders’ meeting.
Profit distribution and capital reserves’ conversion to share capital in the year
Number of bonus shares for every 10 shares 0
Amount of dividend for every 10 shares (tax included) (RMB) 4.39
Number of transfer of reserve to shares per 10 shares 0
Basis of the shares for distribution proposal 228,000,000.00
Amount of cash dividends (RMB) (tax included) 100,092,000.00
Cash dividend amount in other ways (such as share repurchase) (RMB) -
67
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Total amount of cash dividends (including other ways) (RMB) 100,092,000.00
Distributable profit (RMB) 430,348,609.93
Proportion of total cash dividends (including other ways) in
distributable profit 23.26%
Cash dividend of the reporting period
If the Company is in the mature period and there is no major capital expenditure arrangements,
when the profit is distributed, the proportion of cash dividends in this profit distribution should be
at least 80%.
Details of the profit distribution proposal or share conversion proposal from capital reserve
The Company plans to distribute a cash dividend of RMB 4.39 (tax included) for every 10 shares
to all shareholders based on a total share capital of 228,000,000 shares, with a total amount of RMB
100,092,000 (tax included); no bonus shares will be issued and no capital reserve will be converted
into share capital; the remaining undistributed profits will be carried forward to the next year.
The Company gained profit in the reporting period and the retained profit of the Parent Company for
holders of ordinary shares is positive, but no plan of cash dividend is proposed.
□ Applicable Not applicable
XIII. Implementation of the Stock Incentive Plan, Employee Stock Ownership Plan, and
Other Employee Incentives of the Company
□ Applicable Not applicable
XIV. Construction and Implementation of the Internal Control System during the Reporting
Period
1. Internal control construction and implementation
In accordance with the internal control system of enterprises, the board of directors of a company
holds the responsibility to establish and improve the internal control, evaluate its effectiveness and
truthfully disclose the corresponding assessment report. The board of supervisors of a company
supervises the establishment and implementation of the internal control by the board of directors. The
management team is responsible for initiating and organizing daily activities of the enterprise internal
control. The board of directors, board of supervisors and all members thereof, including directors and
supervisors, as well as the senior management of the company, confirm that the report is true, accurate
and complete, does not contain any misleading statements or material omissions and assume joint and
several legal liability arising therefrom.
68
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
2. Particulars of material internal control defects detected during the reporting period
□Yes No
XV. Management and Control of the Company for Subsidiaries during the Reporting Period
Name of Integration Integration Problems in Solutions Solution Subsequent
company plan progress integration taken progress solution plan
Not Not Not Not Not Not Not
applicable. applicable. applicable. applicable. applicable. applicable. applicable.
XVI. Self-assessment Report on Internal Control or Internal Control Audit Report
1. Self-assessment report on internal control
Disclosure date of the assessment
April 24, 2024
report on internal control
Disclosure index of the assessment
CNINFO (http://www.cninfo.com.cn)
report on internal control
Percentage of total assets of units
included in the assessment scope to
100.00%
the total assets in the Company’s
consolidated financial statements
Percentage of total revenue of units
included in the assessment scope to
100.00%
the revenue in the Company’s
consolidated financial statements
Defect identification criteria
Category Financial report Non-financial report
Material defect: (1) The internal control is invalid; (2)
Material defect: Its probability of
Directors, supervisors and senior management have
occurrence is high or the defect
committed fraud and caused serious losses and severe
severely reduces work efficiency
adverse impacts to the company; (3) Significant
or effectiveness, or severely
errors in the current financial reports were identified
increases the uncertainty of
by the certified public accountants but not by internal
effects or causes severe deviations
control; (4) The internal control and supervision
from expected objectives. Major
conducted by the company’s audit committee and
defect: Its probability of
internal auditing units are invalid; (5) There exist one
occurrence is relatively high or
or a combination of control defects that may cause
the defect significantly reduces
the company to materially deviate from the objectives
Qualitative criteria work efficiency or effectiveness,
of internal control. Major defect: (1) The company
or significantly increases the
fails to select and apply accounting policies based on
uncertainty of effects or causes
generally accepted accounting standards; (2) There
obvious deviations from expected
are no anti-fraud procedures and control measures;
objectives. General defect: Its
(3) There is no control mechanism for significant
probability of occurrence is low
non-routine or special transactions or the mechanism
or the defect reduces work
is not implemented, while there is no compensatory
efficiency or effectiveness, or
control; (4) There are one or multiple defects in the
increases the uncertainty of
control of the financial reporting process at the end of
effects or causes deviations from
the period such that the authenticity and completeness
expected objectives.
of the prepared financial reports could not be
69
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
reasonably guaranteed.
General defect: Other internal control defects than
material defects and major defects.
Material defect: (1) The misstated amount ≧ 2% of
the revenue; (2) The misstated amount ≧ 1% of the
Evaluation level Quantitative
total assets; (3) The misstated amount ≧ 5% of the
criteria
total profits.
Material defects Loss amount ≧
Major defects: (1) 0.5% of revenue ≦ misstated
5% of total profits
amount ﹤ 2% of revenue; (2) 0.2% of the total assets
Quantitative criterion Major defects 1% of total
≦ misstated amount ﹤ 1% of total assets; (3) 1% of
profits ≦ loss amount ﹤ 5% of
total profits ≦ misstated amount ﹤ 5% of total
total profits
profits.
General defects Loss amount ﹤
General defects: (1) misstated amount < 0.5% of the
1% of total profits
revenue; (2) misstated amount < 0.2% of total assets;
(3) mistated amount < 1% of total profits.
Number of material defects in
0
financial reports
Number of material defects in non-
0
financial reports
Number of major defects in
0
financial reports
Number of major defects in non-
0
financial reports
2. Internal control audit report
Internal control authentication report
Audit opinions of the internal control audit report
We believe that, the company maintained effective internal control over financial reporting in all material aspects in accordance
with the Basic Norms for Corporate Internal Control and related regulations on December 31st, 2023.
Disclosure of the internal control audit report Disclosure
Disclosure date for the full text of the internal control audit
April 24, 2024
report
2023 Annual Self-Assessment Report on Internal Control
Disclosure index for the full text of the internal control audit
disclosed on Securities Times, China Securities Journal and
report
www.cninfo.com.cn by the Company
Type of opinion of the internal control authentication report Standard without reserved opinion
Whether or not exists significant defects in non-financial
No
reports
Whether or not the accounting firm issued non-standard opinions for the audit report of internal
control
□Yes No
Whether the audit report of internal control issued by the accounting firm is in consistency with the
self-assessment report of the board of directors
Yes □ No
70
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
XVII. Rectification of Detected Problems in the Corporate Governance Special Action of
Listed Companies
Not applicable.
71
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Section V Environmental and Social Responsibilities
I. Major 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 Rectificatio
Name of Reason for production and n measures
company or Violation Penalty result
penalty operation of the of the
subsidiary listed company Company
Not Not Not Not Not applicable Not
applicable applicable applicable applicable applicable
Refer to other environmental information disclosed by key pollutant discharge units
Not applicable.
Measures taken to reduce carbon emissions during the reporting period and their effects
□ Applicable Not applicable
Reason for not disclosing other environmental information
Not applicable.
II. Corporate Social Responsibilities
As a listed company, the Company places great importance on fulfilling its social responsibilities .
We actively adhere to the core spirit of social responsibility and continuously monitor the company's
progress in protecting investor rights, environmental conservation, and social welfare undertakings.
While ensuring the steady development of the enterprise, we promote the coordinated development
of the company with stakeholders, society, and the environment. For more details, please refer to the
"2023 Annual Corporate Social Responsibility Report" published by the China Securities Regulatory
Commission's website (www.cninfo.com.cn)..
72
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
III. Efforts Regarding Poverty Alleviation and Rural Revitalization
The Company did not directly engage in any poverty alleviation and rural revitalization work during
the reporting period.
73
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Section VI Significant Events
I. Implementation of Commitments
1. Commitments completed by actual controllers, shareholders, related parties, purchasers, or
the Company within the reporting period and commitments not fulfilled by the end of the
reporting period
Applicable □ Not applicable
Fulfill
Type of Time of ment
Causes of Undertaking Term of
commit Content of commitment commit of
commitment party commitment
ment ment comm
itment
1. Within 36 months from the date of the
Company's IPO, they shall not transfer or
authorize any other to manage their shares
directly or indirectly held in the Company or
have the Company repurchase such shares. 2. If
their shares in the Company are sold within two
Controlling
years upon expiration of the lock-up period, the October 28, Ongoi
IPO-related shareholder Restricti
selling price shall not be lower than the offering July 28, 2021 to ng
commitment and actual ons on
price. If the closing price of the Company's 2020 April 27, norma
s controller Guo sales
shares is lower than the offering price for 20 2025 lly
Jian, Wen Di
consecutive trading days within 6 months after
the Company's IPO, or the closing price as of the
end of the 6-month period after the Company's
IPO is lower than the offering price, the lock-up
period for their shares in the Company will be
automatically extended for 6 months.
1. Within 12 months from the date of the
Company's IPO, they shall not transfer or
authorize any other to manage their shares
directly or indirectly held in the Company or
have the Company repurchase such shares. 2. If
their shares in the Company are sold within two
years upon expiration of the lock-up period, the October 28,
IPO-related Restricti
Yu Qingtao, selling price shall not be lower than the offering July 28, 2021 to Fulfill
commitment ons on
Zhu Zhengjun price. If the closing price of the Company's 2020 April 27, ed
s sales
shares is lower than the offering price for 20 2023
consecutive trading days within 6 months after
the Company's IPO, or the closing price as of the
end of the 6-month period after the Company's
IPO is lower than the offering price, the lock-up
period for their shares in the Company will be
automatically extended for 6 months.
The He promises that the total share reduction in the
Resticti
Company's first year upon the expiration of the lock-up April 28, Ongoi
IPO-related ons to
controlling period will not exceed 25% of the shares he held July 28, 2025 to ng
commitment share
shareholders in the issuer before the issuance; after the 2020 April 27, norma
s reductio
and actual reduction in the second year, his total number of 2027 lly
n
controllers shares will not be lower than 25% of the shares
74
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
he held in the issuer before the issuance; the
reduction price will not be lower than the
issuance price.
In the
The
proces
Company's Restricti
IPO-related s of
controlling ons on They promise not to compete with the Company July 28,
commitment Long term norma
shareholders Not-to- in the same business sector. 2020
s l
and actual compete
fulfill
controllers
ment
Whether
commitment
s are Yes
fulfilled on
time
If the
commitment
is not
fulfilled
within the
time limit,
the specific
reasons for
the failure Not applicable
to complete
the
performance
and the next
work plan
shall be
explained in
detail.
2. If there are assets or projects of the Company which have profit forecast while the
reporting period is still in the forecast period, the Company should state whether the assets or
projects have attained the profit forecast and explain reasons
□ Applicable Not applicable
II. Appropriation of Funds for Non-operating Purposes by Controlling Shareholder and Its
Related Parties
□ Applicable Not applicable
During the reporting period, the Company did not have any funds appropriated for non-operating
purposes by the controlling shareholder and its related parties.
III. External Guarantee in Violation of Prescribed Procedures
□ Applicable Not applicable
75
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
During the reporting period, there was no external guarantee in violation of prescribed procedures.
IV. Explanation by the Board of Directors of the “Non-standard Audit Report” of the Latest
Period
□ Applicable Not applicable
V. Explanation by the Board of Directors, the Board of Supervisors, and Independent
Directors (if any) of the “Non-standard Audit Report” for the Reporting Period Issued by the
Accounting Firm
□ Applicable Not applicable
VI. Explanation of Changes in Accounting Policies and Estimates or Correction of Significant
Accounting Errors Compared with the Financial Report of Last Fiscal Year
□ Applicable Not applicable
VII. Description of Changes in the Scope of Consolidated Statements Compared with the
Financial Report of Last Year
□ Applicable Not applicable
VIII. Employment and Dismissal of Accounting Firm
Accounting firm engaged
Name of the domestic accounting firm RSM China (Special General Partnership)
Remuneration for the domestic accounting firm
(RMB 10,000) 80
Consecutive years of auditing service provided
by the domestic accounting firm 5
Name of domestic certified public accountants Ye Chun, Xu Zongqing.
Consecutive years of auditing service provided
by domestic certified public accountants 1 year
Whether the accounting firm was changed in the reporting period
□Yes No
Appointment of accounting firm, financial advisor or sponsor for internal control audit
Applicable □ Not applicable
76
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
During the reporting period, the Company employed RSM China (Special General Partnership) as
the audit agency and internal control audit agency of the Company in 2023, with a total fee of RMB
800,000 (excluding VAT).
IX. The Company Facing Delisting after the Disclosure of the Annual Report
□ Applicable Not applicable
X. Matters relating to Bankruptcy and Restructuring
□ Applicable Not applicable
No bankruptcy and restructuring-related matters of the Company happened during the 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.
77
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
2. Related party transactions relating to acquisition and sale of assets or equity
□ Applicable Not applicable
During the reporting period, there was no related party transaction relating to acquisition and sale of
assets or equity.
3. Related party transactions relating to joint outbound investment
□ Applicable Not applicable
During the reporting period, there was no related party transaction relating to joint outbound
investment.
4. Related party transactions relating to credits and debts
□ Applicable Not applicable
During the reporting period, there was no related party transaction relating to credits and debts.
5. Transactions with related party financial companies
□ Applicable Not applicable
The Company did not have deposit, loan, credit or other financial business transactions with financial
companies that have related relationship and the associated related parties.
6. Transactions between financial companies controlled by the Company and related parties
□ Applicable Not applicable
Financial companies controlled by the Company did not have deposit, loan, credit or other financial
business transactions with related parties.
7. Other significant related party transactions
□ Applicable Not applicable
During the reporting period, there were no other significant related party transactions.
78
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
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 --> VII. Other Significant
Matters --> 45. Leases”.
Projects whose profits or losses brought to the Company reached more than 10% of the total profits
of the Company during the reporting period
□ Applicable Not applicable
During the reporting period, there were no leasing projects whose profits or losses brought to the
Company reached more than 10% of the total profits of the Company during the reporting period.
2. Material guarantee
□ Applicable Not applicable
During the reporting period, there was no material guarantee of the Company.
79
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
3. Entrusting others to manage cash assets
(1) Entrusted wealth management
Applicable □ Not applicable
Overview of entrusted wealth management during the reporting period
Unit: RMB 10,000
Amount
Source of Incurred overdue but
entrusted amount of Amount not recovered
Undue
Specific type wealth entrusted overdue but with
balance
management wealth not recovered impairment
funds management having been
accrued
Wealth
management Fundraising 93,300.00 86,591.72 - -
product of bank
Wealth Self-owned
management 50,000.00 16,002.59 - -
product of bank fund
Self-owned
Trusts 39,000.00 39,781.11 - -
fund
Total 182,300.00 142,375.42 - -
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
80
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
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
During the Reporting Period, the subsidiary of the company, Shanghai Rongmei, purchased the NO.
4 of the Wanyuan City A Street Commercial and Office Project property located at No. 9-10, 1st-5th
floor, Lane 585, Wanyuan Road, Minhang District, Shanghai. It is for the company's operational use.
For more details, please refer to the China Securities Regulatory Commission's website
(www.cninfo.com.cn).
81
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Section VII Changes in Shareholding and Information of
Shareholders
I. Changes in Share Capital
1. Changes in shares
Unit: Share
Before change Increase/decrease (+, -) of this change After change
Shares
New transferre
Percentag Bonus Percentag
Number shares d from Others Subtotal Number
e shares e
issued surplus
reserve
I. Restricted
172,809,408 75.79% -2,559,408 -2,559,408 170,250,000 74.67%
shares
1. Shares held
by the state
2. Shares held
by state-owned 1,809,408 0.79% -1,809,408 -1,809,408 - -
legal person
3. Shares held
by other
171,000,000 75.00% -750,000 -750,000 170,250,000 74.67%
domestic
shareholders
Including:
Shares held by
117,600,000 51.58% 117,600,000 51.58%
domestic legal
persons
Shares held by
domestic 53,400,000 23.42% -750,000 -750,000 52,650,000 23.09%
natural persons
4. Shares held
by foreign legal
shareholders
Including:
Shares held by
foreign legal
persons
Shares held by
foreign natural
persons
II. Unrestricted
55,190,592 24.21% 2,559,408 2,559,408 57,750,000 25.33%
shares
1. RMB-
denominated 55,190,592 24.21% 2,559,408 2,559,408 57,750,000 25.33%
ordinary shares
82
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
2. Domestic
listed foreign
shares
3. Overseas
listed foreign
shares
4. Others
III. Total
number of 228,000,000 100.00% 228,000,000 100.00%
shares
Explanation on changes in shares
□ Applicable Not applicable
Approval of changes in shares
□ Applicable Not applicable
Transfer of title of changed shares
□ Applicable Not applicable
Impact of share changes on basic earnings per share and diluted earnings per share, net assets per
share attributable to ordinary shareholders of the Company, and other financial indicators in last year
and the latest period
□ Applicable Not applicable
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 Number of
restricted released Date of
restricted restricted Reason for
Shareholder’s shares at the from lifting
name shares shares at the selling
beginning during the selling restrictions selling
end of the restrictions
of the period restriction year
period s during
the period
83
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Suzhou Restricted
Rumere Group 117,600,000 117,600,000 shares prior to 2025-4-27
Co., Ltd. IPO
Restricted
Guo Jian 25,200,000 25,200,000 shares prior to 2025-4-27
IPO
Restricted
Wen Di 25,200,000 25,200,000 shares prior to 2025-4-27
IPO
During the
period of
serving as
directors,
supervisors
and senior
Senior managers
Yu Qingtao 2,800,000 700,000 2,100,000 executives lock of the
in shares company,
the shares
of the
company
held shall
be locked
up at 75%.
On April
25, 2023,
Zhu
Zhengjun is
no longer
deputy
general
manager of
the
company.
All his
shares will
Senior be locked
Zhu 200,000 50,000 150,000 executives lock within half
Zhengjun in shares a year from
the date of
his
departure,
and
according
to the
relevant
regulations
, only when
the lock
expires can
be lifted.
CICC Wealth Restricted IPO
Management 1,809,408 1,809,408 - strategic 2023-10-27
Co., Ltd. placement
Total 172,809,408 - 2,559,408 170,250,000 -- --
84
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
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
3. Internal employee shares
□ Applicable Not applicable
III. Information of Shareholders and Actual Controllers
1. Total number of shareholders
Unit: Share
Total
number
Total
of Total number
number of Total
Total ordinary of preferred
preferred number of
number sharehol shareholders
sharehold sharehold
of ders at whose voting
ers whose ers
ordinary the end rights were
voting holding
sharehol of the resumed at the
22,931 22,051 rights 0 0 shares 0
ders at month end of the
were with
the end precedin month
resumed special
of the g the preceding the
at the end voting
reportin disclosu disclosure
of the rights (if
g period re date date of the
reporting any)
of the annual report
period
annual
report
Shareholdings of shareholders with more than 5% or the top 10 shareholders (not include lending shares through refinancing)
Shareho Shares held atIncrease/decre Pledged, marked or frozen
Name of Nature of
lding the end of the ase during the Number of Number of
sharehol sharehold
percenta reporting periodreporting restricted sharesunrestricted shares Share status Number
der er
ge (%) d period
Suzhou Domestic
Rumere non-state
51.58% 117,600,000 117,600,000 Not applicable 0
Group Co., legal
Ltd. person
Domestic
Guo Jian natural 11.05% 25,200,000 25,200,000 Not applicable 0
person
85
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Domestic
Wen Di natural 11.05% 25,200,000 25,200,000 Not applicable 0
person
Domestic
Yu Qingtao natural 1.23% 2,800,000 2,100,000 700,000 Not applicable 0
person
Penghua
Hongjia
Flexibly
Hybrid Others 0.49% 1,114,300 N/A - 1,114,300 Not applicable 0
Securities
Investment
Fund
Domestic
Song Yingjie natural 0.49% 1,111,800 878,200 - 1,111,800 Not applicable 0
person
Huashang
Flexibly
Hybrid
Others 0.41% 925,910 N/A - 925,910 Not applicable 0
Securities
Investment
Fund
Domestic
Shi Shengji natural 0.24% 550,400 230,300 - 550,400 Not applicable 0
person
Domestic
Xu Wei natural 0.22% 499,800 N/A - 499,800 Not applicable 0
person
Domestic
Su Na natural 0.22% 496,793 112,600 - 496,793 Not applicable 0
person
Strategic investors or
general legal persons
becoming top ten
None
shareholders due to
private placement of
new shares
Description on the
related relationship or
persons acting-in-
Guo Jian and Wen Di are husband and wife.
concert arrangements
among the above
shareholders
Description on
entrusting/being
entrusted with voting
rights and waver of None
voting rights by the
aforementioned
shareholders:
Description on special
repurchase account
None
among top 10
shareholders
Top 10 shareholders not subject to selling restrictions
86
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Type of shares
Name of shareholder Number of unrestricted shares held at the end of reporting period
Type of shares Number
Penghua Hongjia Flexibly
RMB-denominated
Hybrid Securities 1,114,300 1,114,300
ordinary shares
Investment Fund
RMB-denominated
Song Yingjie 1,111,800 1,111,800
ordinary shares
Huashang Flexibly Hybrid RMB-denominated
Securities Investment 925,910 ordinary shares 925,910
Fund
RMB-denominated
Yu Qingtao 700,000 700,000
ordinary shares
RMB-denominated
Shi Shengji 550,400 550,400
ordinary shares
RMB-denominated
Xu Wei 499,800 499,800
ordinary shares
RMB-denominated
Su Na 496,793 496,793
ordinary shares
Huashang Flexibly Mixed RMB-denominated
Securities Investment ordinary shares
434,100 434,100
Fund in advantageous
industries
RMB-denominated
Yan Yi 377,900 377,900
ordinary shares
RMB-denominated
Liu Yifan 360,000 360,000
ordinary shares
Description on the
related relationship or
persons acting-in-
concert among the top
ten ordinary
shareholders without
It is unknown to the Company whether other shareholders are related parties or persons acting in concert
selling restrictions
as stipulated in the Administrative Measures on Acquisition of Listed Companies.
and between the top
ten ordinary
shareholders without
selling restrictions
and the top ten
ordinary shareholders
Description on the top
Song Yingjie holds 1,111,800 shares of the Company in total, among which 1,100,000 shares through
10 ordinary
ordinary accounts and 1,100,000 shares through credit securities accounts.
shareholders’
Shi Shengji holds 550,400 shares of the Company in total, among which 400 shares through ordinary
participation in
accounts and 319,700 shares through credit securities accounts.
margin trading and
Yan Yi holds 377,900 shares of the Company in total, among which 0 shares through ordinary accounts
securities lending
and377,900 shares through credit securities accounts.
business (if any)
Whether the top ten shareholders participate in the refinancing business and lend shares.
□ Applicable Not applicable
Whether the top ten shareholders have changed from the previous period.
Applicable □ Not applicable
87
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Unit: Share
The Change of the Top Ten Shareholders.
The number of shares held by
The refinancing lent shares and the shareholders in general accounts, credit
quantity has not been returned of the end accounts and the number of shares that
Name of shareholder Changes of this Period have not yet been returned at the end of
this Period
Shareholding Shareholding
Number Number
percentage (%) percentage (%)
Penghua Hongjia Flexibly
Hybrid Securities New - - 1,114,300 0.49%
Investment Fund
Huashang Flexibly
Hybrid Securities New - - 925,910 0.41%
Investment Fund
Xu Wei New - - 499,800 0.22%
CICC Wealth
Exit - - N/A N/A
Management Co., Ltd.
Xibulide Quantitative
Growth Hybrid Initiated
Exit - - 33,100 0.01%
Securities Investment
Fund
Shenwanlingxin
Consumption Growth
Exit - - N/A N/A
Hybrid Securities
Investment Fund
Yin Ruibin Exit - - N/A N/A
Huataiyouxiang Dividend
Return Stock Pension Exit - - N/A N/A
Products
Please note that China International Capital Corporation Limited (CICC), Shenwan Hongyuan
Consumer Growth Mixed Securities Investment Fund, Yin Ruibin, and Huatai Enjoy Dividend Return
Stock Pension Product are not included in the company's top 200 shareholders' register.
Whether the Company has differential arrangement in voting rights
□ Applicable Not applicable
Whether the top ten ordinary shareholders and the top ten shareholders without selling restrictions
conducted the agreed repurchase transaction during the reporting period
□Yes No
The Company’s top ten ordinary shareholders and top ten ordinary shareholders without selling
restrictions did not conduct agreed repurchase transactions during the reporting period.
88
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
2. Controlling shareholder of the Company
Nature of controlling shareholder: Natural person holding
Type of controlling shareholder: Legal person
Name of controlling Legal Establishment Organization
Main business
shareholder representative date code
Exhibition and display services;
modeling agency business; textile
machinery and equipment leasing;
Suzhou Rumere February 27, 91320581MA1
Guo Jian textile technology extension
Group Co., Ltd. 2017 NFD8U3T
services; freight forwarding agent;
loading and unloading; general
cargo storage.
Equity situation for
the other domestic
listed companies
controlled or shared No
by the controlling
shareholders during
the report period
Changes in the controlling shareholder during the report period
□ Applicable Not applicable
There are no changes in the controlling shareholder during the report period.
3. Actual controller and person acting in concert
Nature of actual controller: Domestic natural person
Type of actual controller: Natural person
Whether having
Relationship with obtained the right of
Name Nationality
actual controller abode in other
countries or regions
Guo Jian, Wen Di Self Chinese No
Main occupation and For details, see Section IV Corporate Governance - VII. Directors,
position supervisors and senior management - 2. Employment
Holding of domestic
and overseas listed None
companies over the
past ten years
Change of actual controllers during the reporting period
□ Applicable Not applicable
89
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
There was no change of the Company’s actual controllers during the reporting period.
Diagram on equity and control relationship between the Company and actual controllers
Actual controller controls the Company by entrust or other asset management methods
□ Applicable Not applicable
4. Share pledge by controlling shareholder or largest shareholder and person acting in concert
reaching 80% of shareholding
□ Applicable Not applicable
5. Other legal person shareholders holding 10% or more of shares
□ Applicable Not applicable
6. Restrictions on share reductions of controlling shareholder, actual controller, restructuring
parties and other commitment subjects
□ Applicable Not applicable
IV. Implementation of Share Repurchase during the Reporting Period
Implementation progress of share repurchase
□ Applicable Not applicable
Implementation of share repurchase by centralized bidding
□ Applicable Not applicable
90
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Section VIII Particulars of Preference Shares
□ Applicable Not applicable
The Company does have preferred shares during the reporting period.
91
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Section IX Particulars of Bonds
□ Applicable Not applicable
92
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Section X Financial Statements
I. Audit report
Type of audit opinions Standard unqualified
Signing date of the audit report April 23, 2024
Name of audit agency RSM China CPA LLP
Audit report document number Audit No [2023] 200Z0041
Name of certified public accountant Ye Chun and Xu Zongqing.
Auditor’s report
To the shareholders of Rumere Co., Ltd.
I. Opinion
We have audited the financial statements of Rumere Co., Ltd. (hereafter referred to as “Rumere/the
Company”), which comprises the consolidated and the parent company’s statement of financial
position as at December 31, 2023, the consolidated and the parent company’s statement of profit or
loss and other comprehensive income, the consolidated and the parent company’s statement of cash
flows, the consolidated and the parent company’s statement of changes in equity for the year then
ended, and the notes to the financial statements.
In our opinion, the accompanying Rumere’s financial statements present fairly, in all material respects,
the consolidated and the parent company’s financial position as at December 31,2023, and of their
finaicial performance and cash flows for the year then ended in accordance with Accounting
Standards for Business Enterprices.
II. Basis for Opinion
We conducted our audit in accordance with Chinese Standards on Auditing (CSAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of Financial Statements section of our report. We are independent of Rumere in accordance
with the Code of Ethics for Professional Accountants of the Chinese Institude of Certified Public
Accountants, and we have fulfilled our other ethical responsibilities. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
93
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
III. Key audit matters
Key audit matters are those matters that, in our professional judgment, were of the most significance
in our audit of thefinancial statements of the current period. These matters were addressed in the
context of an audit of the financial statements as a whole and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Recognition of revenue
1. Description of the matter
With regard to revenue recognition, please refer to "Note V (20)" for accounting policies and "Note
VII (28) " Revenue and Cost of Sales for specific amount.
Rumere is in Internet retail industry, and mainly sells women's clothing online. The Company
recorded an operating income of RMB767.32 million in 2023. Since the amount of revenue is
significant and a key performance indicator, there is a relatively high inherent risk, so we indentify
the recognition of revenue as a key audit matter.
2. How the matter was addressed in our audit
Our audit procedures for revenue recognition mainly include:
(1) We obtained an understanding of and evaluated the key internal control design over the
recognition of revenue and tested the effectiveness of key internal control;
(2) Considering the sales model of e-commerce platform, We analyzed and evaluated the major risks
related to revenue and reward transfer point of revenue via interviewing the management, and then
evaluated whether policies for recognizing revenue of Rumere were in compliance with requirements
of accounting standards for business enterprises;
(3) We analyzed the overall sales income, gross profit of Rumere, and the monthly fluctuations of
product sales income and sales quantity, so as to judge whether there were abnormal fluctuations in
current period;
94
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(4) We adopted the sampling method to check supporting documents related to income recognition,
including customer orders, logistics orders, payment receipts, online customer signing, etc., to verify
the authenticity of sales transaction;
(5) We 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 payment receipts,
signed delivery notes, etc., to assess whether the revenue is included in the appropriate accounting
period.
(6) We sampled and conducted telephone interviews with customers. From the answers to the
telephone interviews, which including transaction amount, transaction quantity, purchase purpose,
etc., verified whether the amount, period and method of revenue recognition were accurate;
(7) We checked the goods return during and after the period to identify whether there were any
significant and abnormal return;
(8) We employeed IT experts of the firm to tested the online trading information system of Rumere,
including the general control of IT system, business data analysis, etc.
Inventory write-down
1. Description of the matter
With regard to inventory provision for impairment, please refer to "Note V (11) " for accounting
policies and "Note VII (7) " Inventories for specific amount.
Inventories of Rumere are stated at the lower of cost and net realizable value. As of December 31,
2023, the book balance of inventories amounted to RMB542.37 million, the provision for impairment
of inventories amounted to RMB148.65 million, and the carrying value of inventories amounted to
RMB393.72 million. 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 for inventory write-down mainly include:
95
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(1) We obtained an understanding of and evaluated the effectiveness of key internal control designs
related to inventory write-down, and tested the effectiveness of key internal control;
(2) We obtained an understanding of and evaluated the supporting documents and other relevant basis
for the management to determine the calculation method of provision for impairment of inventory,
and evaluate the reasonableness of the calculation method of provision for impairment of inventories.
(3) We obtained the aging list of the Company’s inventories at fiscal year-end, and selected the
samples and tracked the original warehousing lists to evaluate the rationality of the inventory age in
the aging list.
(4) We retested the provision for impairment of inventory to verify the accuracy of the inventory
write-down;
(5) We conducted inventory monitoring, and observed the actual situation of inventory to identify
sluggish, damaged or obsolete inventory, to analyse whether the write-down was sufficient.
IV. Other information
Management of Rumere is responsible for other information. The other information comprises the
information included in the Annual Report of the Company for the year of 2023, but excludes the
financial statements and our audited reports.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibility of Management and Those Charged with Governance for the Financial
Statements
96
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Management of the Company is responsible for the preparation and fair presentation of the financial
statements in accordance with Accounting Standards of Business Enterprises, and for the design,
implementation and maintenance of such internal control as management determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Company or
to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
VI. Auditor’s Responsibilities for the Audit of the Financial Statements
Our Objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with CSAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
i) Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
97
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
ii) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances,
iii) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
iv) Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
v) Evaluate the overall presentation, structure and content of the financial statements, and whether
the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
vi) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
98
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
II. Financial statements
Unit of financial statements: RMB
1. Consolidated Statement of Financial Position
Prepared by: Rumere Co., Ltd.
December 31, 2023
Unit: RMB
Item December 31, 2023 January 1, 2023
Current assets:
Cash and cash equivalents 150,353,208.66 442,675,454.71
Settlements provision
Loans to banks and other financial
institutions
Financial assets held-for-trading 1,368,674,089.95 1,318,197,593.83
Derivative financial assets
Notes receivable
Accounts receivable
Accounts receivable financing
Advances to suppliers 56,838,564.73 58,815,621.48
Premium receivable
Reinsurance accounts receivable
Reinsurance contract reserves
receivable
Other receivables 360,617.41 476,745.77
Including: Interests receivable
Dividends receivable
Financial assets held under resale
agreements
99
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Inventories 393,717,469.09 361,661,336.69
Contract assets
Assets classified as held for sale
Non-current assets maturing within
one year - 151,075,205.48
Other current assets 21,135,612.09 241,481.62
Total current assets 1,991,079,561.93 2,333,143,439.58
Non-current assets:
Loans and advances to customers
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments
Other equity instrument investment
Other non-current financial assets 132,030,082.19 100,115,890.41
Investment properties
Fixed assets 431,839,182.13 178,412,503.35
Construction in progress 53,331,524.63 52,063,773.07
Productive biological assets
Oil and gas assets
Right-of-use assets 1,029,642.86 1,194,865.27
Intangible assets 17,616,944.85 17,979,246.69
Development costs
Goodwill
Long-term deferred expenses 904,818.26 1,159,382.32
Deferred tax assets 39,308,918.26 28,995,779.03
Other non-current assets 626,000.00
Total non-current assets 676,687,113.18 379,921,440.14
Total assets 2,667,766,675.11 2,713,064,879.72
Current liabilities:
Short-term borrowings
Borrowing from the central bank
Deposits and balances from banks
and other financial institutions
Financial liabilities held-for-trading
100
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Derivative financial liabilities
Notes payable
Accounts payable 58,163,158.46 93,606,271.18
Advances from customers
Contract liabilities
Financial assets sold under
repurchase agreements
Deposits and balances from
customers and banks
Customer securities brokerage
deposits
Customer securities underwriting
deposits
Employee benefits payable 5,582,823.78 5,161,338.44
Taxes payable 17,882,840.82 28,953,139.67
Other payables 8,995,145.79 9,784,082.94
Including: Interests payables
Dividend payables
Fees and commissions payable
Reinsurance payable
Liabilities classified as held for sale
Non-current liabilities maturing
within one year 857,142.86 1,110,716.50
Other current liabilities 453,230.76 562,321.13
Total current liabilities 91,934,342.47 139,177,869.86
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preference share
Perpetual debt
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Estimated liabilities
Deferred income 1,900,000.10 1,966,666.70
Deferredtax liabilities 4,201,679.35 3,461,087.88
101
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Other non-current liabilities
Total non-current liabilities 6,101,679.45 5,427,754.58
Total liabilities 98,036,021.92 144,605,624.44
Owners' equity:
Share capital 228,000,000.00 228,000,000.00
Other equity instruments
Including: Preference shares
Perpetual debt
Capital reserves 1,782,210,407.28 1,782,210,407.28
Less: Treasury stock
Other comprehensive income
Special reserves
Surplus reserves 61,597,845.57 54,889,643.62
General risk reserves
Retained earnings 497,922,400.34 503,359,204.38
Total owner's equity attributable to 2,569,730,653.19 2,568,459,255.28
parent company
Non-controlling interests
Total owners' equity 2,569,730,653.19 2,568,459,255.28
Total liabilities and owners' equity 2,667,766,675.11 2,713,064,879.72
Legal representative: Guo Jian Chief Financial Officer: Yu Qingtao Finance Manager：: Wang
Dongmei
2. Statement of Financial Position
Unit: RMB
Item December 31, 2023 January 1, 2023
Current assets:
Cash and cash equivalents 143,783,234.12 432,719,477.03
Financial assets held-for-trading 1,353,641,570.68 1,318,197,593.83
Derivative financial assets
Notes receivable
Accounts receivable
Accounts receivable financing
Advances to suppliers 61,757,175.33 71,688,165.55
Other receivables 256,117.41 353,024.42
102
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Including: Interests receivable
Dividends receivable
Inventories 391,564,923.86 359,991,620.28
Contract assets
Assets classified as held for sale
Non-current assets maturing within
one year - 151,075,205.48
Other current assets 289,889.56 224,928.45
Total current assets 1,951,292,910.96 2,334,250,015.04
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 269,886,865.58 886,865.58
Other equity instrument investment
Other non-current financial assets 132,030,082.19 100,115,890.41
Investment properties
Fixed assets 176,143,625.50 176,902,267.12
Construction in progress 53,331,524.63 52,063,773.07
Productive biological assets
Oil and gas assets
Right-of-use assets 1,029,642.86 1,194,865.27
Intangible assets 17,616,944.85 17,979,246.69
Development costs
Goodwill
Long-term deferred expenses 904,818.26 1,159,382.32
Deferred tax assets 37,681,921.38 26,385,922.47
Other non-current assets 626,000.00
Total non-current assets 689,251,425.25 376,688,212.93
Total assets 2,640,544,336.21 2,710,938,227.97
Current liabilities:
Short-term borrowings
Financial liabilities held-for-
trading
Derivative financial liabilities
103
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Notes payable
Accounts payable 103,837,375.43 149,179,873.04
Advances from customers
Contract liabilities
Employee benefits payable 3,523,261.73 3,082,487.70
Taxes payable 15,263,333.50 23,929,875.61
Other payables 8,922,715.83 9,628,394.82
Including: Interests payables
Dividend payables
Liabilities classified as held for sale
Non-current liabilities maturing
within one year 857,142.86 1,110,716.50
Other current liabilities 453,230.76 562,321.13
Total current liabilities 132,857,060.11 187,493,668.80
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Interests payables
Devidend payables
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Estimated liabilities
Deferred income 1,900,000.10 1,966,666.70
Deferred tax liabilities 3,630,413.22 2,955,049.14
Other non-current liabilities
Total non-current liabilities 5,530,413.32 4,921,715.84
Total liabilities 138,387,473.43 192,415,384.64
Owners' equity:
Share capital 228,000,000.00 228,000,000.00
Other equity instruments
Including: Preference shares
Perpetual debt
Capital reserves 1,782,210,407.28 1,782,210,407.28
104
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Less: Treasury stock
Other comprehensive income
Special reserves
Surplus reserves 61,597,845.57 54,889,643.62
Retained earnings 430,348,609.93 453,422,792.43
Total owners' equity 2,502,156,862.78 2,518,522,843.33
Total liabilities and owners' equity 2,640,544,336.21 2,710,938,227.97
3. Consolidated Statement of Profit or Loss and Other Comprehensive Income
Unit: RMB
Item 2023 2022
1. Revenue 767,316,817.65 948,811,767.71
Including: Operating income 767,316,817.65 948,811,767.71
Interest income
Premium income
Fee and commission income
II. Costs of sales 644,524,980.64 743,897,473.51
Including: Operating cost 466,719,350.89 564,347,276.40
Interest expense
Fee and commission expenses
Cash surrender value
Net amount of insurance claims
Net provision of insurance contract reserve
Policyholder dividends resulting from participation in
profits
Reinsurance expense
Taxes and surcharges 6,545,289.88 4,985,680.23
Selling and distribution expenses 112,694,426.94 124,929,882.78
General and administrative expenses 46,136,415.37 37,502,995.96
Research and development expenses 20,470,389.61 20,266,745.83
Financial costs -8,040,892.05 -8,135,107.69
Including: Interest expense 5,232.32 50,146.33
Interest income 11,571,422.65 12,484,242.39
Add: Other income 1,949,083.97 6,404,373.44
Investment income (losses) 38,061,196.16 40,009,346.45
105
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Including: Investment income from associates and joint
ventures
Gains /(losses) from derecognition of financial assets
measured at amortised cost
Gains /(losses) from foreign exchange
Income /(losses) from net exposure hedging
Gains/(losses) from changes in fair values 9,736,672.14 9,312,190.32
Credit impairment losses 6,112.02 23,422.95
Asset impairment losses -67,568,625.27 -49,127,914.01
Gains/(losses) from disposal of assets 30,655.86
III. Profit/(loss) from operations 105,006,931.89 211,535,713.35
Add: Non-operating income 4,267.00 44,880.37
Less: Non-operating expenses 1,133,303.77 483,434.57
IV. Profit/(loss) before tax 103,877,895.12 211,097,159.15
Less: Income tax expenses 19,158,497.21 44,056,342.02
V. Net profit/(loss) for the year 84,719,397.91 167,040,817.13
(I) Net profit/(loss) by continuity
1. Net profit/(loss) from continuing operation 84,719,397.91 167,040,817.13
2. Net profit/(loss) from discontinued operation
(II) Net profit/(loss) by ownership attribution
1. Attributable to owners of the parent 84,719,397.91 167,040,817.13
2. Attributable to non-controlling interests
VI. Other comprehensive income for the year, after tax
Attributable to owners of the parent
(I) Other comprehensive income that will not be
reclassified subsequently to profit or loss
1. Remeasurement gains or losses of a defined benefit
plan
2. Other comprehensive income using the equity method
that will not be reclassified subsequently to profit and
loss
3. Changes in fair value of other equity instrument
investment
4. Changes in fair value of the Company’s own credit
risks
(II) Other comprehensive income to be reclassified
subsequently to profit or loss
1. Other comprehensive income using the equity method
which will be reclassified subsequently to profit or loss
2. Changes in fair value of other debt instrument
investment
3. Other comprehensive income arising from the
reclassification of financial assets
106
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
4. Provision for credit impairment in other debt
investments
5. Reserve for cash flow hedges
6. Exchange differences on translating foreign
operations
Attributable to non-controlling interests
VII. Total comprehensive income for the year
Attributable to owners of the parent
Attributable to non-controlling interests 84,719,397.91 167,040,817.13
VII. Earnings per share
(I) Basic earnings per share 0.37 0.73
(II) Diluted earnings per share 0.37 0.73
Legal representative: Guo Jian Chief Financial Officer: Yu Qingtao Finance Manager：: Wang
Dongmei
4. Statement of Profit or Loss and Other Comprehensive Income
Unit: RMB
Item 2023 2022
I. Revenue 766,415,438.58 947,720,334.71
Less: Cost of sales 472,105,707.49 570,947,825.37
Taxes and surcharges 5,178,209.83 4,552,274.37
Selling and distribution expenses 112,570,609.88 124,793,369.69
Administrative expenses 46,395,393.35 44,509,546.28
Research and development expenses 37,485,698.67 36,725,347.66
Financial costs -8,225,550.20 -8,398,540.05
Including: Interest expense 5,232.32 50,146.33
Interest income 11,534,097.63 12,463,526.69
Add: Other income 418,689.90 4,966,558.30
Investment income/(losses) 38,061,196.16 40,009,346.45
Including: Investment income from associates and joint
ventures
Gains /(losses) from derecognition of financial assets
measured at amortised cost
Income /(losses) from net exposure hedging
Gains/(losses) from changes in fair values 9,604,152.87 9,312,190.32
Credit impairment losses 5,100.37 13,422.95
Asset impairment losses -67,568,625.27 -49,127,914.01
Gains/(losses) from disposal of assets 32,941.76
107
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
II. Profit/(loss) from operations 81,458,825.35 179,764,115.40
Add: Non-operating income 600.00 4,734.90
Less: Non-operating expenses 1,132,999.63 483,169.12
III. Profit/(loss) before tax 80,326,425.72 179,285,681.18
Less: Income tax expense 13,244,406.27 36,191,123.71
IV. Net profit/(loss) for the year 67,082,019.45 143,094,557.47
(1) Net profit/(loss) from continuing operation 67,082,019.45 143,094,557.47
(2) Net profit/(loss) from discontinued operation
V. Other comprehensive income for the year, after tax
(I) Other comprehensive income that will not be
reclassified subsequently to profit or loss
1. Remeasurement gains
2. Other comprehensive income using the equity method
which will not be reclassified subsequently to profit and
loss
3. Changes in fair value of other equity instrument
investment
4. Changes in fair value of the Company’s own credit
risks
(II) Other comprehensive income to be reclassified
subsequently to profit or loss
1. Other comprehensive income that can be reclassified
to profit or loss in equity method
2. Changes in fair value of other debt instrument
investment
3. Other comprehensive income arising from the
reclassification of financial assets
4. Provision for credit impairment in other debt
investments
5. Reserve for cash flow hedges
6. Exchange differences on translating foreign
operations
VI. Total comprehensive income for the year 67,082,019.45 143,094,557.47
VII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated Statement of Cash Flows
Unit: RMB
Item 2023 2022
I. Cash flows generated from operating activities:
Cash received from the sale of goods and the rendering 866,901,807.91 1,071,988,258.29
of services
108
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Net increase in customer bank deposits and deposits
from banks and other financial institutions
Net increase in borrowings from the central bank
Net increase in placements from other financial
institutions
Cash received from premiums received on original
insurance contracts
Net cash received from reinsurance business
Net increase in deposit and investments from insurers
Cash received from interests, fees and commissions
Net increasein borrowings from other banks
Net increase in repurchase business funds
Net cash received from securities trading brokerage
business
Cash received from tax refund
Other cash received relating to operating activities 24,972,415.29 18,892,234.58
Subtotal of cash inflows from operating activities 891,874,223.20 1,090,880,492.87
Cash payments for goods purchased and services 639,184,418.87 697,389,028.81
received
Net increase in loans and advances to customers
Net increase of deposits in central bank and other
financial institutions
Cash payments for claims for original insurance contract
Net increase in loans to banks and other financial
institutions
Cash payments to interests, fees and commissions
Cash payments for policyholder dividends resulting
from participation in profits
Cash payments to and on behalf of employees 72,648,591.99 65,992,227.69
Payments for taxes 73,025,705.91 77,120,435.77
Other cash payments relating to operating activities 114,359,733.50 125,069,779.94
Subtotal of cash outflows from operating activities 899,218,450.27 965,571,472.21
Net cash flow from operating activities -7,344,227.07 125,309,020.66
II. Cash flow from investment activities:
Cash received from disposal and redemption of 5,339,110,000.00 5,956,550,000.00
investments
Cash received from returns on investments 49,332,385.88 42,432,635.85
Net cash received from disposals of fixed assets,
intangible assets and other long-term assets 57,033.63
Net cash received from disposals of subsidiaries and
other business units
Other cash received relating to investing activities
109
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Subtotal of cash inflows from investing activities 5,388,499,419.51 5,998,982,635.85
Cash payments to acquire fixed, intangible and other
long-term assets 320,483,769.92 68,051,094.72
Cash payments to acquire investments 4,971,960,000.00 6,240,550,000.00
Net increase in pledged loan
Net cash payments to acquire subsidiaries and other
business units
Other cash payments relating to investing activities
Subtotal of cash outflows from investing activities 5,292,443,769.92 6,308,601,094.72
Net cash flows from investing activities 96,055,649.59 -309,618,458.87
III. Cash flow from financing activities:
Cash received from capital contributions
Including: Cash receipts from capital contributions form
non-controlling interests of subsidiaries
Cash received from borrowings
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities
Cash repayments of debts
Cash payments for dividends, distribution of profit and 83,448,000.00 40,584,000.00
interest expenses
Including: Dividends, distribution of profit paid to non-
controlling shareholders of subsidiaries
Other cash payments relating to financing activities 1,954,161.72 3,212,832.37
Subtotal of cash outflows from financing activities 85,402,161.72 43,796,832.37
Net cash flows from financing activities -85,402,161.72 -43,796,832.37
IV. Effect of foreign exchange rate changes on cash and
cash equivalents
V. Net increase / (decrease) in cash and cash equivalents 3,309,260.80 -228,106,270.58
Plus: Cash and cash equivalents at the beginning of the 142,243,947.86 370,350,218.44
period
VI. Cash and cash equivalents at the end of the period 145,553,208.66 142,243,947.86
6. Statement of Cash Flows
Unit: RMB
Item 2023 2022
I. Cash flowsfrom operating activities:
Cash received from the sale of goods and the rendering 865,825,096.21 1,070,896,825.29
of services
Cash received from tax refund
Other cash received relating to operating activities 23,384,463.20 17,233,703.74
110
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Subtotal of cash inflows from operating activities 889,209,559.41 1,088,130,529.03
Cash payments for goods purchased and services 659,647,457.30 723,828,042.25
received
Cash payments to and on behalf of employees 50,988,407.71 45,702,095.32
Payments for taxes 63,547,453.33 67,276,421.41
Other cash payments relating to operating activities 146,507,841.41 123,410,687.34
Subtotal of cash outflows from operating activities 920,691,159.75 960,217,246.32
Net cash flow froms operating activities -31,481,600.34 127,913,282.71
II. Cash flow from investment activities:
Cash received from disposal and redemption of
5,338,010,000.00 5,956,550,000.00
investments
Cash received from returns on investments 49,332,385.88 42,432,635.85
Net cash received from disposals of fixed assets, 57,033.63
intangible assets and other long-term assets
Net cash received from disposals of subsidiaries and
other business units
Other cash received relating to investing activities
Subtotal of cash inflows from investing activities 5,387,399,419.51 5,998,982,635.85
Cash payments to acquire fixed, intangible and other 39,442,918.54 68,008,094.72
long-term assets
Cash payments to acquire investments 5,224,960,000.00 6,240,550,000.00
Net cash payments to acquire subsidiaries and other
business units
Other cash payments relating to investing activities
Subtotal of cash outflows from investing activities 5,264,402,918.54 6,308,558,094.72
Net cash flows from investing activities 122,996,500.97 -309,575,458.87
III. Cash flow from financing activities:
Cash received from capital contributions
Cash received from borrowings
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities
Cash repayments of debts
Cash payments for dividends, distribution of profit and 83,448,000.00 40,584,000.00
interest expenses
Other cash payments relating to financing activities 1,371,636.69 3,212,832.37
Subtotal of cash outflows from financing activities 84,819,636.69 43,796,832.37
Net cash flows from financing activities -84,819,636.69 -43,796,832.37
IV. Effect of foreign exchange rate changes on cash and
cash equivalents
V. Net increase / (decrease) in cash and cash equivalents 6,695,263.94 -225,459,008.53
111
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Plus: Cash and cash equivalents at the beginning of the 132,287,970.18 357,746,978.71
period
VI. Cash and cash equivalents at the end of the period 138,983,234.12 132,287,970.18
112
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
7. Consolidated statement of changes in owner’s equity
Amount of the current period
Unit: RMB
2023
Owners’ equity attributable to the parent company
Item Non-
Other equity instruments Less: Other General controlling Total owners' equity
Special Surplus
Share capital Preference Capital reserves Treasury comprehensive risk Retained earnings Others Subtotal interests
Perpetual reserves reserves
Others stock income reserves
shares bonds
I. Clothing balance
of the Previous 228,000,000.00 1,782,210,407.28 54,889,643.62 503,359,204.38 2,568,459,255.28 2,568,459,255.28
Year
Plus: Changes in
accounting
policies
Correction of
previous period
errors
Others
II. Opening
Balance of Current 228,000,000.00 1,782,210,407.28 54,889,643.62 503,359,204.38 2,568,459,255.28 2,568,459,255.28
Year
III. Changes in
equity during the 6,708,201.95 -5,436,804.04 1,271,397.91 1,271,397.91
reporting period
(I) Total
comprehensive 84,719,397.91 84,719,397.91 84,719,397.91
income
(II) Capital
contributions or
withdrawals by
owners
113
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
1. Ordinary shares
contributed by
2. Capital
contributed by
holders of
3. Share-based
payments
recognised in
owners’ equity
4. Others
(III) Profit
6,708,201.95 -90,156,201.95 -83,448,000.00 -83,448,000.00
distribution
1. Transfer to
6,708,201.95 -6,708,201.95
surplus reserves
2. Transfer to
general risk
reserves
3. Profit
distribution to
-83,448,000.00 -83,448,000.00 -83,448,000.00
owners (or
shareholders)
4. Others
(IV) Transfer
within owners'
equity
1. Capital reserves
converted to share
capital
2. Surplus reserves
converted to share
capital
3. Loss made up
by surplus reserves
114
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
4. Changes in the
defined benefit
plan transferred to
retained earnings
5. Other
comprehensive
income transferred
to retained
earnings
6. Others
(V) Special
reserves
1. Withdrawal
during the
reporting period
2. Usage during
the reporting
period
(VI) Others
IV. Clothing 228,000,000.00
balance of the 1,782,210,407.28 61,597,845.57 497,922,400.34 2,569,730,653.19 2,569,730,653.19
period
Amount of last period
Unit: RMB
2022
Owners’ equity attributable to the parent company
Item Non-
Other equity instruments Total owners'
Less: Other General controlling
Special Surplus Retained equity
Share capital Preference Capital reserves Treasury comprehensive risk Others Subtotal interests
Perpetual reserves reserves earnings
Others stock income reserves
shares bonds
I. Clothing balance of
228,000,000.00 1,782,210,407.28 40,580,187.87 391,211,843.00 2,442,002,438.15 2,442,002,438.15
the Previous Year
115
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Plus: Changes in
accounting policies
Correction of
previous period errors
Others
II. Opening Balance
228,000,000.00 1,782,210,407.28 40,580,187.87 391,211,843.00 2,442,002,438.15 2,442,002,438.15
of Current Year
III. Changes in equity
during the reporting 14,309,455.75 112,147,361.38 126,456,817.13 126,456,817.13
period
(I) Total
comprehensive 167,040,817.13 167,040,817.13 167,040,817.13
income
(II) Capital
contributions or
withdrawals by
owners
1. Ordinary shares
contributed by
2. Capital contributed
by holders of
3. Share-based
payments recognised
in owners’ equity
4. Others
(III) Profit
14,309,455.75 -54,893,455.75 -40,584,000.00 -40,584,000.00
distribution
1. Transfer to surplus
14,309,455.75 -14,309,455.75
reserves
2. Transfer to general
risk reserves
3. Profit distribution
-40,584,000.00 -40,584,000.00 -40,584,000.00
to owners (or
116
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
shareholders)
4. Others
(IV) Transfer within
owners' equity
1. Capital reserves
converted to share
capital
2. Surplus reserves
converted to share
capital
3. Loss made up by
surplus reserves
4. Changes in the
defined benefit plan
transferred to retained
earnings
5. Other
comprehensive
income transferred to
retained earnings
6. Others
(V) Special reserves
1. Withdrawal during
the reporting period
2. Usage during the
reporting period
(VI) Others
IV. Clothing balance
228,000,000.00 1,782,210,407.28 54,889,643.62 503,359,204.38 2,568,459,255.28 2,568,459,255.28
of the period
117
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
8. Statement of changes in owner's equity of the Parent Company
Amount of the current period
Unit: RMB
2023
Other equity instruments
Item Share capital Less: Other
Perpetual Special Retained Other Total owners'
Preference Capital reserves Treasur comprehensiv Surplus reserves earnings
capital Others reserves s equity
shares y stock e income
securities
I. Clothing balance of the Previous Year 228,000,000.00 1,782,210,407.28 54,889,643.62 453,422,792.43 2,518,522,843.33
Add：Changes in accounting policies
Correction of prior period errors
Others
II. Operating balance of the current year 228,000,000.00 1,782,210,407.28 54,889,643.62 453,422,792.43 2,518,522,843.33
III. Changes in equity during the reporting
6,708,201.95 -23,074,182.50 -16,365,980.55
period
(I) Total comprehensive income 67,082,019.45 67,082,019.45
(II) Capital contributions or withdrawals by
owners
1. Ordinary shares contributed by
shareholders
2. Capital contributed by holders of other
equity instruments
3. are-based payments recognised in owners’
equity
4. Others
(III) Profit distribution 6,708,201.95 -90,156,201.95 -83,448,000.00
1. Transfer to surplus reserves 6,708,201.95 -6,708,201.95 -
2. Profit distribution to owners (or
-83,448,000.00 -83,448,000.00
shareholders)
3. Others
118
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(IV) Transfer within owners' equity
1. Capital reserves converted to share capital
2. Surplus reserves converted to share capital
3. Loss made up by surplus reserves
4. Changes in the defined benefit plan
transferred to retained earnings
5. Other comprehensive income transferred to
retained earnings
6. Others
(V) Special reserves
1. Withdrawal during the reporting period
2. Usage during the reporting period
(VI) Others
IV. Clothing balance of the period 228,000,000.00 1,782,210,407.28 61,597,845.57 430,348,609.93 2,502,156,862.78
Amount of the previous period
Unit: RMB
2022
Other equity instruments
Item Share capital Less: Other
Perpetual Special Retained Other Total owners'
Preference Capital reserves Treasur comprehensiv Surplus reserves earnings
capital Others reserves s equity
shares y stock e income
securities
I. Clothing balance of the Previous Year 228,000,000.00 1,782,210,407.28 40,580,187.87 365,221,690.71 2,416,012,285.86
Add：Changes in accounting policies
Correction of prior period errors
Others
II. Operating balance of the current year 228,000,000.00 1,782,210,407.28 40,580,187.87 365,221,690.71 2,416,012,285.86
III. Changes in equity during the reporting
14,309,455.75 88,201,101.72 102,510,557.47
period
(I) Total comprehensive income 143,094,557.47 143,094,557.47
(II) Capital contributions or withdrawals by
119
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
owners
1. Ordinary shares contributed by
shareholders
2. Capital contributed by holders of other
equity instruments
3. are-based payments recognised in owners’
equity
4. Others
(III) Profit distribution 14,309,455.75 -54,893,455.75 -40,584,000.00
1. Transfer to surplus reserves 14,309,455.75 -14,309,455.75
2. Profit distribution to owners (or
-40,584,000.00 -40,584,000.00
shareholders)
3. Others
(IV) Transfer within owners' equity
1. Capital reserves converted to share capital
2. Surplus reserves converted to share capital
3. Loss made up by surplus reserves
4. Changes in the defined benefit plan
transferred to retained earnings
5. Other comprehensive income transferred to
retained earnings
6. Others
(V) Special reserves
1. Withdrawal during the reporting period
2. Usage during the reporting period
(VI) Others
IV. Clothing balance of the period 228,000,000.00 1,782,210,407.28 54,889,643.62 453,422,792.43 2,518,522,843.33
120
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
III. Basic Information of the Company
Rumere Co., Ltd. (hereinafter referred to as "the Company") has obtained a business license of
enterprise legal person with the registration number of 91320581591184437J issued by Suzhou
Administrative Examination and Approval Bureau. As at December 31, 2023, the Company has had
a registered capital of RMB228,000,000. The office address of the headquarters of the Company is
No. 86, Shenzhen Road, Changfu Street, Changshu City. The legal representative is Guo Jian.
The Company, formerly known as Suzhou Rumere Trading Co., Ltd., restructured into a joint-stock
limited company on June 6, 2019.
The Company has had a original registered capital of RMB 171,000,000 and a share capital of RMB
171,000,000.
Approved by the resolution of the first Interim General Meeting of shareholders of the Company in
2020 and Zheng Jian Xu Ke [2021] No.2597 issued by CSRC, in October 2021, the Company publicly
offered RMB57,000,000 ordinary shares(A-stock) with a par value of 1.00 RMB/per share in China.
After the initial public offerings, the Company has had a registered capital of RMB228,000,000.
The Company mainly engages in the following: R&D, production, and online sales of Rumere's own
clothing brand products and jewellery.
The financial statements were approved for issue by the Board of Directors of the Company on April
23, 2024.
IV. Preparation Basis for Financial Statements
1. Basis of preparation
The Company has prepared the financial statements on a going concern based on actual 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
121
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Securities to the Public - General Rules for Financial Statements (2023 Revision) issued by China
Securities Regulatory Commission.
2. Going concern
The Company has assessed its ability to continually operate for the next twelve months from the end
of the reporting period, and no any matters that may result in doubt on its ability as a going concern
were noted. Therefore, it is reasonable for the Company to prepare financial statements on the going
concern basis.
V. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates:
The following significant accounting policies and accounting estimates of the Company are
formulated in accordance with the Accounting Standards for Business Enterprises. Businesses not
mentioned are complied with relevant accounting policies of the Accounting Standards for Business
Enterprises.
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The Company prepares its financial statements in accordance with the requirements of the Accounting
Standards for Business Enterprises, truly and completely reflecting the Company’s financial position
as at 31 December 2023, and its operating results, changes in shareholders' equity, cash flows and
other related information for the year then ended.
2. Accounting period
The accounting year of the Company is from January 1 to December 31 in calendar year.
3. Operating cycle
The normal operating cycle of the Company is twelve months.
4. Functional Currency
The Company takes Renminbi Yuan (“RMB”) as the functional currency.
122
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
5. Determining method and selecting basis of audit materiality
Item Important Standard
Significant inventories for which provision for RMB2.4 million
impairment maded by item
Significant construction in progress RMB2.4 million
6. Method of Preparing the Consolidated Financial Statements
(1) Scope of consolidation
All the subsidiaries of the Company are wholly-owned subsidiaries.
(2) Method of preparing consolidated financial statements
The consolidated financial statements shall be prepared by the Company based on the financial
statements of the Company and its subsidiaries, and using other related information.
When preparing consolidated financial statements, the Company shall consider the entire group as an
accounting entity, adopt uniform accounting policies and apply the requirements of Accounting
Standard for Business Enterprises related to recognition, measurement and presentation. The
consolidated financial statements shall reflect the overall financial position, operating results and cash
flows of the group.
(i) Like items of assets, liabilities, equity, income, expenses and cash flows of the parent are combined
with those of the subsidiaries.
(ii) The carrying amount of the parent’s investment in each subsidiary is eliminated (off-set) against
the parent’s portion of equity of each subsidiary.
(iii) Eliminate the impact of intragroup transactions between the Company and the subsidiaries or
between subsidiaries, and when intragroup transactions indicate an impairment of related assets, the
losses shall be recognised in full.
(iv) Make adjustments to special transactions from the perspective of the group.
(3) Special considerations in consolidation elimination
If temporary timing difference between the book value of the assets and liabilities in the consolidated
statement of financial position and their tax basis is generated as a result of elimination of unrealized
123
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
inter-company transaction profit or loss, deferred tax assets of deferred tax liabilities shall be
recognised, and income tax expense in the consolidated statement of profit or loss shall be adjusted
simultaneously, excluding deferred taxes related to transactions or events directly recognised in
owner’s equity or business combination.
7. Cash and Cash Equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash
equivalents include short-term (generally within three months of maturity at acquisition), highly
liquid investments that are readily convertible into known amounts of cash and which are subject to
an insignificant risk of changes in value.
8. Foreign Currency Transactions
(1) Methods for translation of transactions denominated in foreign currencies
At the time of initial recognition of a foreign currency transaction, the amount in the foreign currency
shall be translated into the amount in the functional currency at the spot exchange rate of the
transaction date.
(2) Translation of monetary items denominated in foreign currency on the balance sheet date
The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet
date. The balance of exchange arising from the difference between the spot exchange rate on the
balance sheet date and the spot exchange rate at the time of initial recognition or prior to the balance
sheet date shall be recorded into the profits and losses at the current period. The foreign currency non-
monetary items measured at the historical cost shall still be translated at the spot exchange rate on the
transaction date; for the foreign currency non-monetary items restated to a fair value measurement,
shall be translated into the at the spot exchange rate at the date when the fair value was determined,
the difference between the restated functional currency amount and the original functional currency
amount shall be recorded into the profits and losses at the current period.
124
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
9. Financial instruments
Financial instrument is any contract which gives rise to both a financial asset of one entity and a
financial liability or equity instrument of another entity.
(1) Recognition and derecognition of financial instrument
A financial asset or a financial liability should be recognised in the statement of financial position
when, and only when, an entity becomes party to the contractual provisions of the instrument.
A financial asset can only be derecognised when meets one of the following conditions:
(i) The rights to the contractual cash flows from a financial asset expire
(ii) The financial asset has been transferred and meets one of the following derecognition conditions:
Financial liabilities (or part thereof) are derecognised only when the liability is extinguished—i.e.,
when the obligation specified in the contract is discharged or cancelled or expires. An exchange of
the Company (borrower) and lender of debt instruments that carry significantly different terms or a
substantial modification of the terms of an existing liability are both accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability.
Purchase or sale of financial assets in a regular-way shall be recognised and derecognised using trade
date accounting. A regular-way purchase or sale of financial assets is a transaction under a contract
whose terms require delivery of the asset within the time frame established generally by regulations
or convention in the market place concerned. Trade date is the date at which the entity commits itself
to purchase or sell an asset.
(2) Classification and measurement of financial assets
At initial recognition, the Company classified its financial asset based on both the business model for
managing the financial asset and the contractual cash flow characteristics of the financial asset:
financial asset at amortised cost, financial asset at fair value through profit or loss (FVTPL).
Reclassification of financial assets is permitted if, and only if, the objective of the entity’s business
model for managing those financial assets changes. In this circumstance, all affected financial assets
125
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
shall be reclassified on the first day of the first reporting period after the changes in business model;
otherwise the financial assets cannot be reclassified after initial recognition.
Financial assets shall be measured at initial recognition at fair value. For financial assets measured at
FVTPL, transaction costs are recognised in current profit or loss. For financial assets not measured
at FVTPL, transaction costs should be included in the initial measurement.
Subsequent measurement of financial assets will be based on their categories:
(i)Financial asset at amortised cost
The financial asset at amortised cost category of classification applies when both the following
conditions are met: the financial asset is held within the business model whose objective is to hold
financial assets in order to collect contractual cash flows, and the contractual term of the financial
asset gives rise on specified dates to cash flows that are solely payment of principal and interest on
the principal amount outstanding. These financial assets are subsequently measured at amortised cost
by adopting the effective interest rate method. Any gain or loss arising from derecognition according
to the amortization under effective interest rate method or impairment are recognised in current profit
or loss.
(ii) Financial asset at fair value through profit or loss (FVTPL)
Financial asset at fair value through profit or loss shoulds be subsequently measured at fair value. All
the changes in fair value are included in current profit or loss.
(3) Classification and measurement of financial liabilities
All the financial liabilities of the Company are financial liabilities at amortised cost. After initial
recognition, the Company measured these financial liabilities at amortised cost using the effective
interest method.
(4) Impairment of financial instruments
The Company shall recognise a loss allowance based on expected credit losses on a financial asset
that is measured at amortised cost.
126
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(i) Measurement of expected credit losses
Expected credit losses are the weighted average of credit losses of the financial instruments with the
respective risks of a default occurring as the weights. Credit loss is the difference between all
contractual cash flows that are due to the Company in accordance with the contract and all the cash
flows that the Company expects to receive (ie all cash shortfalls), discounted at the original effective
interest rate or credit- adjusted effective interest rate for purchased or originated credit-impaired
financial assets.
Lifetime expected credit losses are the expected credit losses that result from all possible default
events over the expected life of a financial instrument.
12-month expected credit losses are the portion of lifetime expected credit losses that represent the
expected credit losses that result from default events on a financial instrument that are possible within
the 12 months after the reporting date (or the expected lifetime, if the expected life of a financial
instrument is less than 12 months).
At each reporting date, the Company classifies financial instruments into three stages and makes
provisions for expected credit losses accordingly. A financial instrument of which the credit risk has
not significantly increased since initial recognition is at stage 1. The Company shall measure the loss
allowance for that financial instrument at an amount equal to 12-month expected credit losses. A
financial instrument with a significant increase in credit risk since initial recognition but is not
considered to be credit-impaired is at stage 2. The Company shall measure the loss allowance for that
financial instrument at an amount equal to the lifetime expected credit losses. A financial instrument
is considered to be credit-impaired as at the end of the reporting period is at stage 3. The Company
shall measure the loss allowance for that financial instrument at an amount equal to the lifetime
expected credit losses.
The Company may assume that the credit risk on a financial instrument has not increased significantly
since initial recognition if the financial instrument is determined to have low credit risk at the
reporting date and measure the loss allowance for that financial instrument at an amount equal to 12-
month expected credit losses.
127
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
For financial instrument at stage 1, stage 2 and those have low credit risk, the interest revenue shall
be calculated by applying the effective interest rate to the gross carrying amount of a financial asset
(ie, impairment loss not been deducted). For financial instrument at stage 3, interest revenue shall be
calculated by applying the effective interest rate to the amortised cost after deducting of impairment
loss.
For other receivables which are demonstrated to be impaired by any objective evidence, or applicable
for individual assessment, the Company shall individually assess for impairment and recognise the
loss allowance for expected credit losses. If the Company determines that no objective evidence of
impairment exists for other receivables, or the expected credit loss of a single financial asset cannot
be assessed at reasonable cost, such other receivables shall be divided into several groups with similar
credit risk characteristics and collectively calculated the expected credit loss. The determination basis
of groups is as following:
Determination basis of other receivables is as following:
Group 1 of other receivables: Deposit, guarantee receivable and imprest funds
Group 2 of other receivables: temporary payments and others
For each group, the Company calculates expected credit losses through default exposure and the 12-
months or lifetime expected credit losses rate, taking reference to historical experience for credit
losses and considering current condition and expectation for the future economic situation.
(ii) Low credit risk
If the financial instrument has a low risk of default, the borrower has a strong capacity to meet its
contractual cash flow obligations in the near term and adverse changes in economic and business
conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfill
its contractual cash flow obligations.
(iii) Significant increase in credit risk
The Company shall assess whether the credit risk on a financial instrument has increased significantly
since initial recognition, using the change in the risk of a default occurring over the expected life of
the financial instrument, through the comparison of the risk of a default occurring on the financial
128
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
instrument as at the reporting date with the risk of a default occurring on the financial instrument as
at the date of initial recognition.
To make that assessment, the Company shall consider reasonable and supportable information, that
is available without undue cost or effort, and that is indicative of significant increases in credit risk
since initial recognition, including forward-looking information. The information considered by the
Company are as following:
Significant changes in internal price indicators of credit risk as a result of a change in
credit risk since inception
Existing or forecast adverse change in the business, financial or economic conditions of
the borrower that results in a significant change in the borrower’s ability to meet its debt
obligations；
An actual or expected significant change in the operating results of the borrower; An
actual or expected significant adverse change in the regulatory, economic, or technological
environment of the borrower；
Significant changes in the value of the collateral supporting the obligation or in the
quality of third-party guarantees or credit enhancements, which are expected to reduce the
borrower’s economic incentive to make scheduled contractual payments or to otherwise
influence the probability of a default occurring;
Significant change that are expected to reduce the borrower’s economic incentive to
make scheduled contractual payments;
Expected changes in the loan documentation including an expected breach of contract
that may lead to covenant waivers or amendments, interest payment holidays, interest rate
step-ups, requiring additional collateral or guarantees, or other changes to the contractual
framework of the instrument；
Significant changes in the expected performance and behavior of the borrower；
Contractual payments are more than 30 days past due.
129
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Depending on the nature of the financial instruments, the Company shall assess whether the credit
risk has increased significantly since initial recognition on an individual financial instrument or a
group of financial instruments. When assessed based on a group of financial instruments, the
Company can group financial instruments on the basis of shared credit risk characteristics, for
example, past due information and credit risk rating.
Generally, the Company shall determine the credit risk on a financial asset has increased significantly
since initial recognition when contractual payments are more than 30 days past due. The Company
can only rebut this presumption if the Company has reasonable and supportable information that is
available without undue cost or effort, that demonstrates that the credit risk has not increased
significantly since initial recognition even though the contractual payments are more than 30 days
past due.
(iv) Credit-impaired financial asset
The Company shall assess at each reporting date whether the credit impairment has occurred for
financial asset at amortised cost. A financial asset is credit-impaired when one or more events that
have a detrimental impact on the estimated future cash flows of that financial asset have occurred.
Evidences that a financial asset is credit-impaired include observable data about the following events:
Significant financial difficulty of the issuer or the borrower；a breach of contract, such as a default
or past due event; the lender(s) of the borrower, for economic or contractual reasons relating to the
borrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s)
would not otherwise consider；it is becoming probable that the borrower will enter bankruptcy or
other financial reorganisation;the disappearance of an active market for that financial asset because
of financial difficulties；the purchase or origination of a financial asset at a deep discount that reflects
the incurred credit losses.
(v) Presentation of impairment of expected credit loss
In order to reflect the changes of credit risk of financial instrument since initial recognition, the
Company shall at each reporting date remeasure the expected credit loss and recognise in profit or
loss, as an impairment gain or loss, the amount of expected credit losses addition (or reversal). For
financial asset at amortised cost, the loss allowance shall reduce the carrying amount of the financial
asset in the statement of financial position.
130
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(vi) Write-off
The Company shall directly reduce the gross carrying amount of a financial asset when the Company
has no reasonable expectations of recovering the contractual cash flow of a financial asset in its
entirety or a portion thereof. Such write-off constitutes a derecognition of the financial asset. This
circumstance usually occurs when the Company determines that the debtor has no assets or sources
of income that could generate sufficient cash flow to repay the write-off amount.
Recovery of financial asset written off shall be recognised in profit or loss as reversal of impairment
loss.
(5) Determination of fair value of financial instruments
Determination of fair value of financial assets and financial liabilities please refer to NoteV (10).
10. Fair Value Measurement
Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.
The Company determines fair value of the related assets and liabilities based on market value in the
principal market, or in the absence of a principal market, in the most advantageous market price for
the related asset or liability. The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest.
The principal market is the market in which transactions for an asset or liability take place with the
greatest volume and frequency. The most advantageous market is the market which maximizes the
value that could be received from selling the asset and minimizes the value which is needed to be
paid in order to transfer a liability, considering the effect of transport costs and transaction costs both.
If the active market of the financial asset or financial liability exists, the Company shall measure the
fair value using the quoted price in the active market. If the active market of the financial instrument
is not available, the Company shall measure the fair value using valuation techniques.
131
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.
Valuation techniques
The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, including the market approach, the income
approach and the cost approach. The Company shall use valuation techniques consistent with one or
more of those approaches to measure fair value. If multiple valuation techniques are used to measure
fair value, the results shall be evaluated considering the reasonableness of the range of values
indicated by those results. A fair value measurement is the point within that range that is most
representative of fair value in the circumstances.
When using the valuation technique, the Company shall give the priority to relevant observable inputs.
The unobservable inputs can only be used when relevant observable inputs is not available or
practically would not be obtained. Observable inputs refer to the information which is available from
market and reflects the assumptions that market participants would use when pricing the asset or
liability. Unobservable Inputs refer to the information which is not available from market and it has
to be developed using the best information available in the circumstances from the assumptions that
market participants would use when pricing the asset or liability.
Fair value hierarchy
To Company establishes a fair value hierarchy that categorises into three levels the inputs to valuation
techniques used to measure fair value. The fair value hierarchy gives the highest priority to Level 1
inputs and second to the Level 2 inputs and the lowest priority to Level 3 inputs. Level 1 inputs are
quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access
at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are
unobservable inputs for the asset or liability.
11. Inventories
(1) Classification of inventories
132
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Inventories are finished goods or products held for sale in the ordinary course of business, in the
process of production for such sale, or in the form of materials or supplies to be consumed in the
production process, including raw materials, Inventories mainly include raw materials, materials for
consigned processing, goods in progress, commodity stocks and goods in transit.
(2) Measurement method of cost of inventories
Cost of raw materials and cost of materials for consigned processing are calculated using the weighted
average method.
The Company adopts the standard cost method for the goods in transit and commodity stocks. At the
end of the period, the difference between the standard cost and the actual cost will be shared among
the goods in transit, commodity stocks and operating costs.
(3) Inventory system
The perpetual inventory system is adopted. The inventories should be counted at least once a year,
and surplus or losses of inventory stocktaking shall be included in current profit and loss.
(4) Provision for impairment of inventory
Inventories are stated at the lower of cost and net realizable value. The excess of cost over net
realizable value of the inventories is recognised as provision for impairment of inventory, and
recognised in current profit or loss.
Net realizable value of the inventory should be determined on the basis of reliable evidence obtained,
and factors such as purpose of holding the inventory and impact of post balance sheet event shall be
considered.
The Company determines the proportion of providing impairment of commodity stocks according to
the industry characteristics, product sales strategy, sales price and other elements. The specific
proportion of providing impairment is as follows:
Aging Proportion of providing impairment (%)
Within 1 year (inclusive) -
1-2 years 30.00
2-3 years 50.00
Over 3 years 100.00
133
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
No provision for impairment loss of goods in transit needs to be calculated considering that such
goods had been deliveried to the customers.
For raw materials that are damaged, sluggish and other impairment conditions, the provisions for
inventory impairment are determined on an individual basis. For all other cases, the provisions for
raw materials impairment are determined on an aging basis. The specific proportion of providing
impairment is as follows:
Aging Proportion of providing impairment (%)
Within 1 year (inclusive) -
1-2 years 30.00
2-3 years 50.00
Over 3 years 100.00
If any factor rendering write-downs of the inventories has been eliminated at the reporting date, the
amounts written down are recovered and reversed to the extent of the inventory impairment, which
has been provided for. The reversal shall be included in profit or loss.
12. Long-term Equity Investments
The Company's long-term equity investment only includes the equity investments where an investor
has control of.
(1) Determination of initial investment cost
Long-term equity investments generated in business combinations, the investment cost shall be
determined based on the following requirements:
For a business combination involving enterprises under common control, if the Company makes
payment in cash as the consideration for the business combination, the share of carrying amount of
the owners’ equity of the acquiree in the consolidated financial statements of the ultimate controlling
party is recognised as the initial cost of the long-term equity investment on the combination date. The
difference between the initial investment cost and the carrying amount of cash paid shall be adjusted
against the capital reserve; if capital reserve is not enough to be offset, undistributed profit shall be
offset in turn.
134
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Long-term equity investments acquired not through the business combination, the investment cost
shall be determined based on the following requirements:
For long-term equity investments acquired by payments in cash, the initial cost is the actually paid
purchase cost.
(2) Subsequent measurement and recognition of profit or loss
Long-term equity investment to an entity over which the Company has ability of control shall be
accounted for at cost method.
For Long-term equity investment at cost method, cost of the long-term equity investment shall be
adjusted when additional amount is invested or a part of it is withdrawn. The Company recognises its
share of cash dividends or profits which have been declared to distribute by the investee as current
investment income.
(3) Impairment testing and provision for impairment loss
For investment in subsidiaries , provision for impairment loss please refer to Notes V (16).
13. Fixed assets
(1) Recognition criteria of fixed assets
Fixed assets will only be recognised at the actual cost paid when obtaining as all the following criteria
are satisfied:
(i) It is probable that the economic benefits relating to the fixed assets will flow into the Company;
(ii) The costs of the fixed assets can be measured reliably.
Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets, if recognition criteria
of fixed assets are satisfied, otherwise the expenditure shall be recorded in current profit or loss when
incurred.
(2) Depreciation methods of fixed assets
The Company begins to depreciate the fixed asset from the next month after it is available for intended
use using the straight-line-method. The estimated useful life and annual depreciation rates which are
135
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
determined according to the categories, estimated economic useful lives and estimated net residual
rates of fixed assets are listed as followings:
Depreciation Estimated useful
Category Residual Category
method life (year)
Buildings and Straight line 23.67-30 years 5.00 3.17-4.01
constructions depreciation
Straight line
Vehicles 6 years 5.00 15.83
depreciation
Machinery Straight line 5-10 years 5.00 9.5-19.00
equipment depreciation
Electrical Straight line 3 years 5.00 31.67
equipment depreciation
For the fixed assets with impairment provided, the impairment provision should be excluded from
the cost when calculating depreciation.
At the end of reporting period, the Company shall review the useful life, estimated net residual value
and depreciation method of the fixed assets. Estimated useful life of the fixed assets shall be adjusted
if it is changed compared to the original estimation.
14. Construction in Progress
(a) Classification of construction in progress
Construction in progress is measured on an individual project basis.
(b) Recognition criteria and timing of transfer from construction in progress to fixed assets
The initial book values of the fixed assets are stated at total expenditures incurred before they are
ready for their intended use, including construction costs, original price of machinery equipment,
other necessary expenses incurred to bring the construction in progress to get ready for its intended
use. The construction in progress shall be transferred to fixed asset when the installation or
construction is ready for the intended use. For construction in progress that has been ready for their
intended use but relevant budgets for the completion of projects have not been completed, the
estimated values of project budgets, prices, or actual costs should be included in the costs of relevant
fixed assets, and depreciation should be provided according to relevant policies of the Company when
the fixed assets are ready for intended use. After the completion of budgets needed for the completion
136
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
of projects, the estimated values should be substituted by actual costs, but depreciation already
provided is not adjusted.
15. Intangible Assets
(a) Measurement method of intangible assets
Intangible assets are recognised at actual cost at acquisition.
(b) The useful life and amortisation of intangible assets
The estimated useful lives of the intangible assets with finite useful lives are as follows:
Category Estimated useful life Basis
Land use rights 50 years Legal life
The service life is determined by reference to the
Software 10 years period that can bring economic benefits to the
Company
For intangible assets with finite useful life, the estimated useful life and amortisation method are
reviewed annually at the end of each reporting period and adjusted when necessary. No change has
incurred in current year in the estimated useful life and amortisation method upon review.
(3) Criteria of classifying expenditures on internal research and development projects into
research phase and development phase
①Preparation activities related to materials and other relevant aspects undertaken by the Company
for the purpose of further development shall be treated as research phase.
②Development activities after the research phase of the Company shall be treated as development
phase..
The Company only includes the expenditures incurred during the research phase of internal research
and development projects, which shall be recognised in profit or loss when incurred.
137
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
16. Impairment of Long-Term Assets
Impairment loss of long-term equity investment in subsidiaries, fixed assets ,constructions in progress,
intangible assets, etc.(excluding inventories, deferred tax assets, financial assets), shall be determined
according to following method:
The Company shall assess at the end of each reporting period whether there is any indication that an
asset may be impaired. If any such indication exists, the Company shall estimate the recoverable
amount of the asset and test for impairment.
The recoverable amounts of the long-term assets are the higher of their fair values less costs to dispose
and the present values of the estimated future cash flows of the long-term assets. The Company
estimate the recoverable amounts on an individual basis. If it is difficult to estimate the recoverable
amount of the individual asset, the Company estimates the recoverable amount of the groups of assets
that the individual asset belongs to. Identification of a group of asset is based on whether the cash
inflows from it are largely independent of the cash inflows from other assets or groups of assets.
If, and only if, the recoverable amount of an asset or a group of assets is less than its carrying amount,
the carrying amount of the asset shall be reduced to its recoverable amount and the provision for
impairment loss shall be recognised accordingly.
The mentioned impairment loss will not be reversed in subsequent accounting period once it had been
recognised.
17. Long-term Deferred Expenses
Long-term deferred expenses are various expenses already incurred, which shall be amortised over
current and subsequent periods with the amortisation period exceeding one year.
Long-term deferred expenses are evenly amortised over the beneficial period and the amortised period
for each expense are as following:
Item Amortisation period
Decoration costs Expected benefit period
138
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
18. Employee Benefits
(1) Short-term employee benefits
(i) Employee basic salary (salary, bonus, allowance, subsidy)
The Company recognises, in the accounting period in which an employee provides service, actually
occurred short-term employee benefits as a liability, with a corresponding charge to current profit
except for those recognised as capital expenditure based on the requirement of accounting standards.
(ii) Employee welfare
The Company shall recognise the employee welfare based on actual amount when incurred into
current profit or loss or related capital expenditure. Employee welfare shall be measured at fair value
as it is a non-monetary benefits.
(iii) Social insurance such as medical insurance, work injury insurance and maternity insurance,
housing funds, labor union fund and employee education fund
Payments made by the Company of social insurance for employees, such as medical insurance, work
injury insurance and maternity insurance, payments of housing funds, and labor union fund and
employee education fund accrued in accordance with relevant requirements, in the accounting period
in which employees provide services, is calculated according to required accrual bases and accrual
ratio in determining the amount of employee benefits and the related liabilities, which shall be
recognised in current profit or loss or the cost of relevant asset.
(2) Post-employment benefits
Defined contribution plans
The Company shall recognise, in the accounting period in which an employee provides service, the
contribution payable to a defined contribution plan as a liability, with a corresponding charge to the
current profit or loss or the cost of a relevant asset.
139
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(3) Termination benefits
The Company providing termination benefits to employees shall recognise an employee benefits
liability for termination benefits, with a corresponding charge to the profit or loss of the reporting
period, at the earlier of the following dates:
(i) When the Company cannot unilaterally withdraw the offer of termination benefits because of an
employment termination plan or a curtailment proposal.
(ii) When the Company recognises costs or expenses related to a restructuring that involves the
payment of termination benefits.
19. Estimated Liabilities
(a) Recognition criteria of estimated liabilities
The Company recognises the estimated liabilities when obligations related to contingencies satisfy
all the following conditions:
(i) That obligation is a current obligation of the Company;
(ii) It is likely to cause any economic benefit to flow out of the Company as a result of performance
of the obligation; and
(iii) The amount of the obligation can be measured reliably.
(b) Measurement method of estimated liabilities
The estimated liabilities of the Company are initially measured at the best estimate of expenses
required for the performance of relevant present obligations. The Company, when determining the
best estimate, has had a comprehensive consideration of risks with respect to contingencies,
uncertainties and the time value of money. The carrying amount of the estimated liabilities shall be
reviewed at the end of every reporting period. If conclusive evidences indicate that the carrying
amount fails to be the best estimate of the estimated liabilities, the carrying amount shall be adjusted
based on the updated best estimate.
140
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
The specific measurement method of estimated liabilities due to expected sales return: The Company
shall be measured estimated liabilities at 0.5 percent of the sales amount in the last month prior to the
balance sheet date.
20. Revenue
(1) General Principles
Revenue is defined as the gross inflow of economic benefits arising in the course of the ordinary
activities of the Company when those inflows result in the increases in shareholders’ equity, other
than increases relating to contributions from shareholders.
The Company shall recognise revenue when it satisfies a performance obligation in the contract as
the customer obtains control of a good . Control of a good refers to the ability to direct the use of,
and obtain substantially all of the remaining economic benefits from, the good or service.
The Company shall recognise revenue when it satisfies a performance obligation in the contract as
the customer obtains control of a good . Control of a good refers to the ability to direct the use of,
and obtain substantially all of the remaining economic benefits from, the good or service.
The Company shall recognise revenue at the point in which a customer obtains control of a promised
good or service if a performance obligation is satisfied at a point in time. To determine the point in
time at which a customer obtains control of a promised good or service, the Company shall consider
indicators of the transfer of control, which include, but are not limited to, the followings:
(i) The Company has a present right to payment for the good or service – a customer is presently
obliged to pay for the good or service;
(ii) The Company has transferred legal title of an asset to a customer - the customer has legal title to
the asset;
(iii) The Company has transferred physical possession of an asset to a customer - the customer has
physical possession of the asset;
(iv) The Company has transferred the significant risks and rewards of ownership of the asset to a
customer - the customer has the significant risks and rewards of ownership of the asset;
141
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(v) The customer has accepted the asset.
Sale with a right of return
For sales with a right of return, when the customer obtains the control of a product, the Company
shall recognise revenue for the transferred products in the amount of consideration to which the
Company expects to be entitled and a refund liability at the amounts receivable for which the
Company does not expect to be entitled; meanwhile, an asset shall be recognised as receivables on
the cost of return measured at the former carrying amount of the product expected to be returned less
any expected costs to recover those products (including potential decreases in the value to the entity
of returned products), and the net amount of the former carrying amount of the product when
transferred to the customer less above mentioned cost shall be recorded into the cost of sales. At the
end of each reporting period, the Company shall re-assess the expectations about the sales return and
remeasure above mentioned assets and liabilities.
(2) Specific Method
Revenue recognition methods of the Company are as follows:
According to the contract of sales of goods between the Company and the customer, the Company
satisfies a performance obligation by transferring goods to the customer, which is a performance
obligation satisfied at a point in time.
The specific method about online clothing sales recognition of the Company are as follows: Revenue
can be recognised when one of the following condition is satisfied: (1)the Company has transferred
the promised goods to the receiver's address, which filled in the order placed by the end-customers
and the end-customer has clicked "confirm receipt" button; (2)The Company has transferred the
promised goods to the receiver's address, which filled in the order placed by the end-customers, and
the system automatically confirms receipt after the given time according to the rules made by the
platform, and platform gave the money to the seller.
21. Government Grants
(a) Recognition of government grants
142
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
A government grant shall not be recgonised until there is reasonable assurance that:
(i) The Company will comply with the conditions attaching to them; and
(ii) The grants will be received.
(b) Measurement of government grants
Monetary grants from the government shall be measured at amount received or receivable.
(c) Accounting for government grants
(i) Government grants related to assets
Government grants pertinent to assets mean the government grants that are obtained by the Company
used for purchase or construction, or forming the long-term assets by other ways. Government grants
pertinent to assets shall be recognised as deferred income, and should be recognised in profit or loss
on a systematic basis over the useful lives of the relevant assets. When the relevant assets are sold,
transferred, written off or damaged before the assets are terminated, the remaining deferred income
shall be transferred into profit or loss of the period of disposing relevant assets.
(ii) Government grants related to income
Government grants other than related to assets are classified as government grants related to income.
Government grants related to income are accounted for in accordance with the following principles:
If the government grants related to income are used to compensate the enterprise’s relevant expenses
or losses in future periods, such government grants shall be recognised as deferred income and
included into profit or loss in the same period as the relevant expenses or losses are recognised;
If the government grants related to income are used to compensate the enterprise’s relevant expenses
or losses incurred, such government grants are directly recognised into current profit or loss.
For government grants comprised of part related to assets as well as part related to income, each part
is accounted for separately; if it is difficult to identify different part, the government grants are
accounted for as government grants related to income as a whole.
143
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Government grants related to daily operation activities are recognised in other income in accordance
with the nature of the activities, and government grants irrelevant to daily operation activities are
recognised in non-operating income.
22. Deferred Tax Assets and Deferred Tax Liabilities
Temporary differences are differences between the carrying amount of an asset or liability in the
statement of financial position and its tax base at the balance sheet date. The Company recognise and
measure the effect of taxable temporary differences and deductible temporary differences on income
tax as deferred tax liabilities or deferred tax assets using liability method. Deferred tax assets and
deferred tax liabilities shall not be discounted.
(a) Recognition of deferred tax assets
Deferred tax assets should be recognised for deductible temporary differences, the carryforward of
unused tax losses and the carryforward of unused tax credits to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, the carryforward
of unused tax losses and the carryforward of unused tax credits can be utilised at the tax rates that are
expected to apply to the period when the asset is realised, unless the deferred tax asset arises from the
initial recognition of an asset or liability in a transaction that:
(i) Is not a business combination; and
(ii) At the time of the transaction, affects neither accounting profit nor taxable profit (tax loss)
The Company shall recognise a deferred tax asset for all deductible temporary differences arising
from investments in subsidiaries, associates and joint ventures, only to the extent that, it is probable
that:
(i) The temporary difference will reverse in the foreseeable future; and
(ii) Taxable profit will be available against which the deductible temporary difference can be utilised.
At the end of each reporting period, if there is sufficient evidence that it is probable that taxable profit
will be available against which the deductible temporary difference can be utilized, the Company
recognises a previously unrecognised deferred tax asset.
144
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period. The
Company shall reduce the carrying amount of a deferred tax asset to the extent that it is no longer
probable that sufficient taxable profit will be available to allow the benefit of part or all of that
deferred tax asset to be utilised. Any such reduction shall be reversed to the extent that it becomes
probable that sufficient taxable profit will be available.
(b) Recognition of deferred tax liabilities
A deferred tax liability shall be recognised for all taxable temporary differences at the tax rate that
are expected to apply to the period when the liability is settled.
(c) Recognition of deferred tax liabilities or assets involved in special transactions or events
(i) Unused tax losses and unused tax credits
Unused tax losses and unused tax credits generated from daily operation of the Company itself
Deductible loss refers to the loss calculated and permitted according to the requirement of tax law
that can be offset against taxable income in future periods. The criteria for recognising deferred tax
assets arising from the carryforward of unused tax losses and tax credits are the same as the criteria
for recognising deferred tax assets arising from deductible temporary differences. The Company
recognises a deferred tax asset arising from unused tax losses or tax credits only to the extent that
there is convincing other evidence that sufficient taxable profit will be available against which the
unused tax losses or unused tax credits can be utilised by the Company. Income taxes in current profit
or loss shall be deducted as well.
(ii) Temporary difference generated in consolidation elimination
When preparing consolidated financial statements, if temporary difference between carrying value of
the assets and liabilities in the consolidated financial statements and their taxable bases is generated
from elimination of inter-company unrealized profit or loss, deferred tax assets or deferred tax
liabilities shall be recognised in the consolidated financial statements, and income taxes expense in
current profit or loss shall be adjusted as well except for deferred tax related to transactions or events
recognised directly in equity and business combination.
145
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
23. Leases
(1) Accounting treatment method for operating lease
(a) Identifying a lease
At inception of a contract, the Company shall assess 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 one or more
identified assets 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 shall
assess whether, throughout the period of use, the customer has the right to obtain substantially all of
the economic benefits from use of the identified asset and to direct the use of the identified asset.
The Company includes only leases as lessee.
(b) Identifying a separate lease component
When a contract includes more than one separate lease components, the Company shall separate
components of the contract and account for each lease component separately. The right to use an
underlying asset is a separate lease component if both conditions have been satisfied: (i) 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; (ii) the underlying asset is neither highly dependent on, nor highly
interrelated with, the other underlying assets in the contract.
(c) The Company as a lessee
At the commencement date, the Company identifies the lease that has a lease term of 12 months or
less and does not contain a purchase option as a short-term lease. A lease qualifies as a lease of a low-
value asset if the nature of the asset is such that, when new, the asset is typically of low value less
than RMB50,000. If the Company subleases an asset, or expects to sublease an asset, the head lease
does not qualify as a lease of a low-value asset.
For asset included in short-term leases or leases for which the underlying asset is of low value/ all the
short-term leases or leases for which the underlying asset is of low value, the Company shall recognise
the lease payments associated with those leases as cost of relevant asset or expenses in current profit
or loss on a straight-line basis over the lease term.
146
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Except for the election of simple treatment as short-term lease or lease of a low-value asset as
mentioned above, at the commencement date, the Company shall recognise a right-of-use asset and a
lease liability.
(i) Right-of-use asset
A right-of-use asset is an asset that represents a lessee’s right to use an underlying asset for the lease
term.
At the commencement date, the Company shall initially measure the right-of-use asset at cost. The
cost of the right-of-use asset shall comprise:
the amount of the initial measurement of the lease liability；
any lease payments made at or before the commencement date, less any lease incentives received;
any initial direct costs incurred by the lessee; and
an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset,
restoring the site on which it is located or restoring the underlying asset to the condition required by
the terms and conditions of the lease. The Company recognises and measures the cost in accordance
with the recognition criteria and measurement method for estimated liabilities, details please refer to
Notes 5.18. Those costs incurred to produce inventories shall be included in the cost of inventories.
The right-of-use asset shall be depreciated according to the categories using straight‐line method. If
it is reasonably certain that the ownership of the underlying asset shall be transferred to the lessee by
the end of the lease term, the depreciation rate shall be determined based on the classification of the
right-of- use asset and estimated residual value rate from the commencement date to the end of the
useful life of the underlying asset. Otherwise, the depreciation rate shall be determined based on the
classification of the right-of-use asset from the commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term.
The depreciation method, estimated useful life, residual rates and annual depreciation rates which are
determined according to the categories of right-of-use asset are listed as followings:
Category Depreciation method Estimated useful life (year)
Buildings and constructions Straight line method Lease term
147
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(ii) Lease liability
At the commencement date, the lease liability shall be measured at the present value of the lease
payments that are not paid at that date. The lease payments included in the measurement of the lease
liability comprise the following 5 items:
fixed payments and in-substance fixed payments, less any lease incentives receivable;
variable lease payments that depend on an index or a rate；
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option；
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an
option to terminate the lease；
amounts expected to be payable by the lessee under residual value guarantees.
In order to calculate the present value of the lease payments, interest rate implicit in the lease shall be
used as the discount rate. If that rate cannot be readily determined, the Company shall use the
incremental borrowing rate. The difference between the lease payments and its present value shall be
recognised as unrecognised financing charges, calculated bases on the discount rate of the present
value of the lease payments in each period within the lease term and recorded as interest expense in
current profit or loss. Variable lease payments not included in the measurement of lease liabilities
shall be recognised in current profit or loss when incurred.
After the commencement date, the Company shall remeasure the lease liability based on the revised
present value of the lease payments and adjust the carrying amount of the right-of-use asset if there
is a change in the in-substance fixed payments, or change in the amounts expected to be payable
under a residual value guarantee, or change in an index or a rate used to determine lease payments,
or change in the assessment or exercising of an option to purchase the underlying asset, or an option
to extend or terminate the lease.
(d) Lease modifications
(i) A lease modification accounted for as a separate lease
The Company shall account for a modification to a lease as a separate lease, if both:
148
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
the modification increases the scope of the lease by adding the right to use one or more underlying
assets; and
the consideration for the lease increases by an amount commensurate with the stand-alone price
for the increase in scope.
(ii) A lease modification not accounted for as a separate lease
The Company as a lessee
At the effective date of the lease modification, the Company shall redetermine the lease term of the
modified lease and remeasure the lease liability by discounting the revised lease payments using a
revised discount rate. The revised discount rate is determined as the interest rate implicit in the lease
for the remainder of the lease term, if that rate can be readily determined, or the incremental
borrowing rate at the effective date of the modification, if the interest rate implicit in the lease cannot
be readily determined.
The Company shall account for the remeasurement of the lease liability by:
decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination
of the lease for lease modifications that decrease the scope of the lease or shorten the lease term. The
Company shall recognise in profit or loss any gain or loss relating to the partial or full termination of
the lease.
Making a corresponding adjustment to the carrying amount of the right-of-use asset for all other
lease modifications.
24. Important accounting policies and estimates
The Company continuously assesses the significant accounting estimates and key assumptions
according to its historical experiences and other elements, including reasonable expectations on the
future events. The significant estimates and key assumptions that may result in significant adjustment
on the assets and liabilities’ carrying value in the following fiscal year are listed as below:
(i)Classification of financial assets
149
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Significant estimates and key assumptions involved in classification of financial assets include
determination of business model and contractual cash flow characteristics.
The Company’s business model is determined at a level that reflects how groups of financial assets
are managed. Evidences that the Company must consider include but not limited to:
how the performance of the business model and the financial assets held within that business
model are evaluated and reported to the entity’s key management personnel;
the risks that affect the performance of financial assets and their management methods;
how managers of the business are compensated.
In order to assess whether the contractual cash flows are consistent with a basic lending arrangement,
the Company must consider whether the financial asset contains a contractual term that could change
the timing or amount of the principal (for example, if the asset can be prepaid before maturity) and
whether the interest consists of consideration for time value of the money, credit risk, other basic
lending risk and costs, as well as profit margin. For example, the Company shall consider whether
the prepayment amount substantially represents unpaid amounts of principal and interest on the
principal amount outstanding as well as reasonable additional compensation for the early termination
of the contract.
(ii)Deferred tax assets
Deferred tax assets shall be recognised for all unused taxable losses to the extent that it is probable
that the taxable profits will be available against which unused tax losses can be utilised. It requires
management to estimate the time and amount of future taxable profits using plenty of judgment so as
to determine the amount to be recognised as deferred tax assets, taking into consideration of the tax
planning strategy.
(iii) Provision for impairment of inventory
For inventories, net realisable value is determined at the estimated selling price less the estimated
costs of completion, the estimated selling expenses and relevant taxes. Net realizable value of the
inventory should be determined on the basis of reliable evidence obtained, and factors such as purpose
of holding the inventory and impact of post balance sheet event shall be considered.
150
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
The excess of cost over net realizable value of the inventories is recognised as provision for
impairment of inventory.The difference between the actual result and the original estimate will affect
the carrying value of the inventory and the provision for the inventory.
(iv) Fair value of unlisted equity investments
The fair value of unlisted equity investments is the projected future cash flows discounted at the
current discount rate of projects with similar terms and risk characteristics. Such valuation requires
the Company to estimate expected future cash flows and discount rates and is therefore subject to
uncertainty. In limited circumstances, if the information used to determine fair value is insufficient,
or if the possible estimates of fair value are widely distributed, and the cost represents the best
estimate of fair value within that range, the cost may represent its appropriate estimate of fair value
within that range.
25. Changes in Significant Accounting Policies and Accounting Estimates
(a) Changes in accounting polices
Implementation of the Accounting Standards Interpretation for Business Enterprises No. 16
"Accounting treatment of deferred income tax related to assets and liabilities arising from single
transactions not applicable to the initial recognition exemption"
The implementation of No. 16 has no significant impact on the company's financial statements during
the reporting period.
(2) Significant changes in accounting estimates
□ Applicable Not applicable
VI. Taxes
1. Major Categories of Tax and Tax Rates Applicable to the Company
Categories of tax Basis of tax assessment Tax rate
VAT Value added during the sale of 13%、9%
goods
Urban maintenance and
construction tax Turnover tax payable 7%、5%
Enterprise income tax Income tax payable 25%、20%
151
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Educational surcharge Turnover tax payable 3%
Local educational surcharge Turnover tax payable 2%
Property taxes Property tax payable 1.2%
Description of disclosure if different income tax rates apply to different corporate taxpayers
Name of taxpayer Income tax rate
The Company 25%
Shanghai Rumere 25%
Meicang Fashion 25%
Rumere International 2.5%
2. Tax incentive
Rumere International meets the following standard of small and low-profit enterprises.
According to the Announcement on Preferential Income Tax Policies for Small and Micro Enterprises
and Individual Industrial and Commercial Households No. 6 of Finance and Taxation [2023], from
January 1, 2023 to December 31, 2024, if the annual taxable income of small and micro enterprises
does not exceed RMB1 million, the taxable income is calculated at a reduced rate of 25% with a
corporate income tax rate of 20%.
According to the Announcement on the Further Implementation of Preferential Income Tax Policies
for Small and Micro Enterprises No. 13 of Finance and Taxation [2022], from January 1, 2022 to
December 31, 2024, if the annual taxable income of small and micro enterprises exceeding RMB1
million but not exceeding RMB 3 million, the taxable income is calculated at a reduced rate of 25%
with a corporate income tax rate of 20%.
VII. Notes to consolidated financial statements
1. Cash and Cash Equivalents
Unit: RMB
Items Clothing balance Opening balance
Cash on hand 367,974.55 907,807.77
Bank deposits 145,524,991.69 432,283,197.31
Other monetary funds 4,460,242.42 9,484,449.63
152
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Total 150,353,208.66 442,675,454.71
As of December 31, 2023, the Company had no funds whose use is restricted due to mortgage, pledge
or freezing or which are deposited overseas or have the potential risk of recovery.
2. Financial assets held-for-trading
Unit: RMB
Item Clothing balance Opening balance
Financial assets at fair value
through profit or loss 1,368,674,089.95 1,318,197,593.83
Including:
Including: Bank wealth 1,025,943,095.04 1,267,862,799.31
management products
Trust wealth financial products 342,730,994.91 50,334,794.52
Total 1,368,674,089.95 1,318,197,593.83
3. Advances to Suppliers
(1) Advances to suppliers by aging
Unit: RMB
Clothing balance Opening balance
Aging of account
Amount Proportion (%) Amount Proportion (%)
Within1 year 37,903,490.93 66.69 32,472,807.37 55.21
1 to 2 years 10,865,321.40 19.12 26,082,080.23 44.35
2 to 3 years 7,839,511.39 13.79 146,079.39 0.25
Over 3 years 230,241.01 0.40 114,654.49 0.19
Total 56,838,564.73 100.00 58,815,621.48 100.00
Explanation on the reason of untimely settlement of prepayments whose age exceeds one year with
significant amount:
The reason for the untimely settlement of significant prepayments with age exceeds one year is that
the purchase contract signed between the company and Consinee Group Co., Ltd. is still in execution.
153
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(2) Top five closing balances by entity
Proportion of the balance
Balance as at December 31,
Entity name to the total advances to
2023
suppliers (%)
Consinee Group Co., Ltd. 16,136,032.96 28.39
Hebei Yuhong Cashmere Products Co.,
15,348,553.24 27.00
Ltd.
Hangzhou Ali Mama Software Service
4,711,208.32 8.29
Co., Ltd.
Zhejiang Alibaba Communication
1,434,870.00 2.52
Technology Co., Ltd.
Zhuji Aode Jewellry Co., Ltd. 1,009,400.00 1.78
Total 38,640,064.52 67.98
4. Other Receivables
Unit: RMB
Item Clothing balance Opening balance
Other receivables 360,617.41 476,745.77
Total 360,617.41 476,745.77
(1) Other Receivables
1) Other receivables by category
Unit: RMB
Book balance at the end of the Book balance at the beginning
Nature of payment period of the period
Deposits receivable, security 356,233.00 501,837.65
deposits, and imprest funds
Temporary payments and 23,364.27
others
Total 379,597.27 501,837.65
2) Other receivables by aging
Unit: RMB
Book balance at the end of the Book balance at the beginning
Aging of account period of the period
Within 1 year 249,597.27 151,541.10
1-2 years 30,000.00 10,253.85
Over 3 years 100,000.00 340,042.70
3-4 years 121,870.40
154
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
4-5 years 100,000.00 218,172.30
Total 379,597.27 501,837.65
3) Classified disclosure according to method of bad debt provision
□ Applicable Not applicable
Unit: RMB
Clothing balance Opening balance
Category Book balance Provision Book Book balance Provision Book
Amount Proportion Amount Proportion value Amount Proportion Amount Proportion value
Among：
Provision
for bad
debts on a 379,597.27 100.00% 18,979.86 5.00% 360,617.41 501,837.65 100.00% 25,091.88 5.00% 476,745.77
portfolio
basis
Among：
Deposits
receivable,
security
356,233.00 93.84% 17,811.65 5.00% 338,421.35 501,837.65 100.00% 25,091.88 5.00% 476,745.77
deposits,
and imprest
funds
Temporary
payments 23,364.27 6.16% 1,168.21 5.00% 22,196.06
and others
Total 379,597.27 100.00% 18,979.86 5.00% 360,617.41 501,837.65 100.00% 25,091.88 5.00% 476,745.77
Provision for bad debts on a portfolio basis: 18,979.86
Unit: RMB
Clothing balance
Categories Provision for
Book balance bad debts Proportion
Deposits receivable, security deposits, and
imprest funds 356,233.00 17,811.65 5.00%
Temporary payments and others 23,364.27 1,168.21 5.00%
Total 379,597.27 18,979.86
Provision for bad debts on a portfolio basis: 25,091.88
Unit: RMB
Categories Opening balance
155
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Provision for
Book balance Proportion
bad debts
Deposits receivable, security deposits, and
imprest funds 501,837.65 25,091.88 5.00%
Total 501,837.65 25,091.88
Provision for bad debts that maded by expected credit losses
Unit: RMB
Stage 1 Stage 2 Stage 3
12-month Lifetime Lifetime
Provision for loss allowance expected expected credit expected credit Total
credit losses losses (not losses (credit-
credit-impaired) impaired)
Balance as at January 1, 2023 25,091.88 25,091.88
Balance as at January 1, 2023
January 1 changes in the
reporting period
Provision 1,168.21 1,168.21
Reversal 7,280.23 7,280.23
Balance as at December 31,
20223 18,979.86 18,979.86
Description of changes in the book balance where there are significant changes in provision for the
current period
□ Applicable Not applicable
4) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Bad debt reserve of the reporting period:
Unit: RMB
Changes in current period
Opening Clothing
Category Recovery or
balance Provision Write-off Others balance
reversal
Deposits
receivable,
security 25,091.88 7,280.23 17,811.65
deposits, and
imprest funds
Temporary
payments and 1,168.21 1,168.21
others
Total 25,091.88 1,168.21 7,280.23 18,979.86
156
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
5) Top five debtors in closing balance of other receivable
Unit: RMB
Percentage in Balance of
Nature of total balance
Clothing bad debt
Entity name Aging of other
the balance reserve at
amount receivables at the end of
the end of the the period
period
Less than 1
Zhejiang Tmall Security 220,000.00 year, more 57.96% 11,000.00
Technology Co., Ltd. deposit than 3 years
Wework Information Security Less than 1
Consulting (Shanghai) 48,000.00 year 12.64% 2,400.00
deposit
Co., Ltd.
Weimeng Chuangke Security
Network Technology 30,000.00 1-2 years 7.90% 1,500.00
deposit
(China) Co., Ltd.
China Securities Tempora
Depository and ry
Clearing Co., Ltd. payment 22,105.99 Less than 1
year 5.82% 1,105.30
Shenzhen Branch s
Changshu Qinhong Security 20,000.00 Less than 1 5.27% 1,000.00
Real Estate Co., Ltd. deposit year
Total 340,105.99 89.59% 17,005.30
5. Inventory
(1) Inventories by category
Unit: RMB
Clothing balance Opening balance
Item Provision for Carrying Provision for Carrying
Book balance Book balance
impairment amount impairment amount
Raw materials 155,446,112.20 70,408,768.65 85,037,343.55 155,954,218.85 52,689,895.85 103,264,323.00
Goods in
3,172,078.98 3,172,078.98 3,284,907.35 3,284,907.35
progress
Commodity
353,181,227.61 78,242,095.72 274,939,131.89 265,265,432.56 50,531,154.37 214,734,278.19
stocks
Goods in transit 19,891,051.92 19,891,051.92 20,693,585.11 20,693,585.11
Materials for
consigned 10,677,862.75 10,677,862.75 19,684,243.04 19,684,243.04
processing,
Total 542,368,333.46 148,650,864.37 393,717,469.09 464,882,386.91 103,221,050.22 361,661,336.69
(2) Provision for impairment
Unit: RMB
Item Opening Increase during the Decrease during the reporting Clothing
157
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
balance reporting period period balance
Provision Others Provision Others
Raw materials 52,689,895.85 25,082,029.94 7,363,157.14 70,408,768.65
Commodity stocks 50,531,154.37 42,486,595.33 11,197,642.99 3,578,010.99 78,242,095.72
Total 103,221,050.22 67,568,625.27 18,560,800.13 3,578,010.99 148,650,864.37
6. Non-current Assets Maturing within One Year
Unit: RMB
Item Clothing balance Opening balance
Non-current financial assets maturing - 151,075,205.48
within one year
Total - 151,075,205.48
7. Other current assets
Unit: RMB
Item Clothing balance Opening balance
Return cost receivable 289,889.56 224,928.45
Prepaid corporate income tax 16,553.17
Input VAT to be deducted 20,845,722.53
Total 21,135,612.09 241,481.62
8. Other non-current financial assets
Unit: RMB
Item Clothing balance Opening balance
Unlisted equity investments 76,950,000.00 100,115,890.41
Trust wealth financial products 55,080,082.19 100,115,890.41
Total 132,030,082.19 100,115,890.41
In November 2023, the company obtained 48 million shares of Jiangsu SOHO International Group
Corporation held by Shanghai Zendai Investment Development Co., Ltd. through judicial auction,
corresponding to a 4.8791% equity stake, with a payment of RMB76.95 million.
9. Fixed assets
Unit: RMB
Item Clothing balance Opening balance
Fixed assets 431,839,182.13 178,412,503.35
158
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Total 431,839,182.13 178,412,503.35
(1) Fixed assets
Unit: RMB
Buildings and Machinery Electrical
Item Vehicles Total
constructions equipment equipment
I. Original Book
Value:
1. Opening balance 177,552,389.96 4,189,131.16 7,967,194.09 5,337,208.85 195,045,924.06
2. Increase in the
261,140,368.55 169,469.04 2,871,364.61 848,851.16 265,030,053.36
current period
3. Decrease in the
371,235.13 223,632.48 594,867.61
current period
4. Clothing balance 438,692,758.51 4,358,600.20 10,467,323.57 5,962,427.53 459,481,109.81
II. Accumulated
depreciation
1. Opening balance 6,276,798.51 1,502,478.64 5,541,154.44 3,312,989.12 16,633,420.71
2. Increase in the
9,116,066.75 456,092.89 1,126,097.30 878,739.87 11,576,996.81
current period
3. Decrease in the
347,143.26 221,346.58 568,489.84
current period
4. Clothing balance 15,392,865.26 1,958,571.53 6,320,108.48 3,970,382.41 27,641,927.68
III. Impairment
Provision
IV. Book Value
1. Book value at the
423,299,893.25 2,400,028.67 4,147,215.09 1,992,045.12 431,839,182.13
end of the period
2. Book value at the
beginning of the 171,275,591.45 2,686,652.52 2,426,039.65 2,024,219.73 178,412,503.35
period
Shanghai rongme, a wholly-owned subsidiary of the Company, purchased the assets located at Building
4 of the Wanyuan City No. 9 and 10, Lane 585, Wan Yuan Road, Minhang District, Shanghai, in June
2023. The property covers an area of 4,967.78 square meters and has already obtained the real estate
certificate. The book value of these target assets is RMB255,840,670.01. The main purpose is the
company's research and development base and daily operation purposes.
10. Construction in Progress
Unit: RMB
Item Clothing balance Opening balance
Construction in Progress 53,331,524.63 52,063,773.07
Total 53,331,524.63 52,063,773.07
159
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(1) General information of construction in progress
Unit: RMB
Clothing balance Opening balance
Book balance Provision Carrying Book balance Provisio Carrying
Item for n for
amount amount
impairme impairm
nt ent
Modern
Manufacturing 53,331,524.63 53,331,524.63 52,063,773.07 52,063,773.07
Service Base
Total 53,331,524.63 53,331,524.63 52,063,773.07 52,063,773.07
(2) Changes in significant projects of construction in progress
Unit: RMB
Increase during the Transfer to fixed Proportion of Rate of Cumula Including: Interest Source of
reporting period asset project input progress tive interest capitali funds
to budgets amount capitalised sation
Decrease (%) of during the rate
Projec during the Clothing interest reporting during
Budget Opening balance
t name reporting balance capitali period the
period sation reportin
g
period
(%)
Modern
Manufactu
Proceeds
ring 250,044,300.00 52,063,773.07 1,267,751.56 53,331,524.63 83.60% 83.60% - - -
raised
Service
Base
Total 250,044,300.00 52,063,773.07 1,267,751.56 53,331,524.63 - - -
11. Right-of use Assets
Unit: RMB
Item Buildings and constructions
I. Original Book Value:
1. Opening balance 3,959,129.79
2. Increase in the current period 1,944,285.72
3. Decrease in the current period 2,505,488.60
4. Clothing balance 3,397,926.91
II. Accumulated depreciation
1. Opening balance 2,764,264.52
2. Increase in the current period 1,278,053.14
3. Decrease in the current period 1,674,033.61
160
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
4. Clothing balance 2,368,284.05
III. Impairment Provision
1. Opening balance
2. Increase in the current period
3. Decrease in the current period
4. Clothing balance
IV. Book Value
1. Book value at the end of the period 1,029,642.86
2. Book value at the beginning of the period 1,194,865.27
Depreciation accrued in 2023 for the right-of-use assets was RMB1,278,053.14, among which
RMB1,278,053.14 was recorded in General and administrative expenses.
12. Intangible Assets
(1) General information of intangible assets
Unit: RMB
Item Land use rights Software Total
I. Original book value:
1. Opening balance 18,946,032.03 573,388.25 19,519,420.28
2. Increase in the current period 80,530.98 80,530.98
3. Decrease in the current period
4. Clothing balance 18,946,032.03 653,919.23 19,599,951.26
II. Accumulated Amortization
1. Opening balance 1,223,913.50 316,260.09 1,540,173.59
2. Increase in the current period 386,499.00 56,333.82 442,832.82
(1) Provision 386,499.00 56,333.82 442,832.82
3. Decrease in the current period
4. Clothing balance 1,610,412.50 372,593.91 1,983,006.41
III. Impairment Provision
1. Opening balance
2. Increase in the current period
3. Decrease in the current period
4. Clothing balance
IV. Book Value
161
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
1. Book value at the end of the period 17,335,619.53 281,325.32 17,616,944.85
2. Book value at the beginning of the
period 17,722,118.53 257,128.16 17,979,246.69
13. Long-term Deferred Expenses
Unit: RMB
Increase during Amortized
Opening Other Clothing
Item the reporting amount of the
balance decreases balance
period current period
Decoration costs 1,159,382.32 254,564.06 904,818.26
Total 1,159,382.32 254,564.06 904,818.26
14. Deferred Tax Assets and Deferred Tax Liabilities
(1) Deferred tax assets before offsetting
Unit: RMB
Clothing balance Opening balance
Item Deductible Deductible
Deferred tax
temporary temporary Deferred tax assets
assets
differences differences
Provision for 148,650,864.37 37,162,716.09 103,221,050.22 25,805,262.56
impairment loss
Deductible losses 6,502,487.51 1,625,621.88 10,432,914.62 2,608,228.65
Deferred income 453,230.76 113,307.68 562,321.13 140,580.28
Expected sales 18,979.86 4,744.97 25,091.88 6,272.97
return
Bad debt 1,900,000.10 475,000.03 1,966,666.70 491,666.68
provision
Total 157,525,562.60 39,381,390.65 116,208,044.55 29,052,011.14
(2) Deferred tax liabilities before offsetting
Unit: RMB
Clothing balance Opening balance
Item Deductible Deferred tax Deductible Deferred tax
temporary liabilities temporary liabilities
differences differences
Change in fair
value of financial 2,152,545.23 538,136.31 2,024,154.95 506,038.74
assets held-for-
trading
Unrealized
internal trading 9,854,172.14 2,463,543.04 11,388,689.72 2,847,172.43
loss
Return cost 289,889.56 72,472.39 224,928.45 56,232.11
receivable
162
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Interest income 4,800,000.00 1,200,000.00 431,506.85 107,876.71
Total 17,096,606.93 4,274,151.74 14,069,279.97 3,517,319.99
(3) Net balance of deferred tax liabilities and deferred tax assets after offsetting
Unit: RMB
Balance of the Balance of the
Offset amount of Offset amount of
deferred tax deferred tax
the deferred tax the deferred tax
assets or assets or
assets and assets and
Item liabilities after liabilities after
liabilities at the liabilities at the
offset at the end offset at the
end of the beginning of the
reporting period of the reporting reporting period beginning of the
period reporting period
Deferred tax assets 72,472.39 39,308,918.26 56,232.11 28,995,779.03
Deferred tax
liabilities 72,472.39 4,201,679.35 56,232.11 3,461,087.88
15. Other non-current assets
Clothing balance Opening balance
Item Book Book Book
Provision Provision Book value
balance value balance
Advance
payment for 626,000.00 626,000.00
equipment
Total 626,000.00 626,000.00
16. Accounts Payable
(1) Accounts payable by nature
Unit: RMB
Item Clothing balance Opening balance
Payables for constructions 34,981,069.98 63,284,891.25
Payables for materials 1,278,327.82 8,213,807.93
Payable for goods 18,927,792.39 19,021,750.09
Payable for processing 2,975,968.27 3,085,821.91
Total 58,163,158.46 93,606,271.18
(2) Significant accounts payable with aging of over one year
Unit: RMB
Item Clothing balance Reason
Shengfeng Construction & 33,753,746.46 Completion settlement not yet
163
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Installation Engineering Co., completed
Ltd.
Total 33,753,746.46
The Clothing balance of accounts payable of Shengfeng Construction & Installation Engineering Co.,
Ltd. is RMB33,753,746.46, with an age of one to two years.
17. Employee Benefits Payable
(1) Details of employee benefits payable
Unit: RMB
Increase during Decrease during
Opening
Item balance the reporting the reporting Clothing balance
period period
Short-term employee
benefits 5,107,789.54 68,631,295.79 68,206,696.88 5,532,388.45
Post-employment
benefits-defined 53,548.90 3,791,936.08 3,795,049.65 50,435.33
contribution plans
Termination benefits 637,158.00 637,158.00
Total 5,161,338.44 73,060,389.87 72,638,904.53 5,582,823.78
(2) Short-term employee benefits
Unit: RMB
Increase in the Decrease in the Clothing
Item Opening balance current period current period balance
1.Salaries, bonuses,
allowances and 4,871,513.58 57,488,132.41 57,291,592.80 5,068,053.19
subsidies
2.Employee benefits 120,828.60 7,274,925.11 7,045,533.97 350,219.74
3.Social insurance 32,973.20 1,718,652.52 1,720,569.69 31,056.03
Health insurance 32,453.90 1,480,165.67 1,482,052.70 30,566.87
Injury insurance 519.30 92,494.70 92,524.84 489.16
Birth insurance 145,992.15 145,992.15
4. Housing
accumulation fund 1,833,101.00 1,833,101.00
5. Labour union funds
and employee 82,474.16 316,484.75 315,899.42 83,059.49
education funds
Total 5,107,789.54 68,631,295.79 68,206,696.88 5,532,388.45
164
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(3) Defined contribution plans
Unit: RMB
Opening Increase in the Decrease in the Clothing
Item balance current period current period balance
1. Basic endowment insurance 51,926.20 3,677,237.53 3,680,256.74 48,906.99
2. Unemployment insurance 1,622.70 114,698.55 114,792.91 1,528.34
Total 53,548.90 3,791,936.08 3,795,049.65 50,435.33
18. Other Payables
Unit: RMB
Item Clothing balance Opening balance
Other payables 8,995,145.79 9,784,082.94
Total 8,995,145.79 9,784,082.94
(1) Other Payables
1) Other payables by nature
Unit: RMB
Item Clothing balance Opening balance
Express fees 5,318,558.24 6,876,333.70
Charges for storage and 1,055,250.79 990,763.74
preservation of the goods
Other fees 2,621,336.76 1,916,985.50
Total 8,995,145.79 9,784,082.94
There are no significant others aged over one year accured this year.
19. Taxes Payable
Unit: RMB
Item Clothing balance Opening balance
Enterprise income tax 12,246,217.29 21,585,182.85
VAT 3,766,299.71 5,502,791.86
Property taxes 950,717.23 776,679.02
Individual income tax 300,262.64 309,950.10
Urban maintenance and construction tax 237,225.33 351,808.94
Stamp tax 149,487.78 110,178.11
Education surcharge 101,667.99 152,902.74
165
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Local education surcharge 67,778.66 101,935.15
Land use tax 63,184.19 61,710.90
Total 17,882,840.82 28,953,139.67
20. Non-current Liabilities Maturing within One Year
Unit: RMB
Item Clothing balance Opening balance
Long-term lease liabilities due within one year 857,142.86 1,110,716.50
Total 857,142.86 1,110,716.50
21. Other Current Liabilities
Unit: RMB
Item Clothing balance Opening balance
Refunds payable 453,230.76 562,321.13
Total 453,230.76 562,321.13
22. Lease liabilities
Unit: RMB
Item Clothing balance Opening balance
Lease payments 857,142.86 1,114,458.77
Less: Unrealised finance expenses - 3,742.27
Subtotal 857,142.86 1,110,716.50
Less: lease liabilities due within one year 857,142.86 1,110,716.50
Total - -
23. Deferred Income
Unit: RMB
Increase Decrease
Opening during the during the Clothing
Item Reason
balance reporting reporting balance
period period
Subsidies for
Government
grants 1,966,666.70 - 66,666.60 1,900,000.10 supporting
infrastructure
Total 1,966,666.70 - 66,666.60 1,900,000.10
166
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
24. Share Capital
Unit: RMB
Increase and decrease of this change (+ and -)
Shares
Opening Bon Clothing
Issuance transferred
balance us Othe Subt balance
of new from rs otal
shares issue
s surplus
reserve
Number
of total 228,000,000.00 228,000,000.00
shares
25. Capital Reserves
Unit: RMB
Increase in the Decrease in the
Item Opening balance Clothing balance
current period current period
Share premium 1,782,210,407.28 1,782,210,407.28
Total 1,782,210,407.28 1,782,210,407.28
26. Surplus reserves
Unit: RMB
Increase in the Decrease in the
Item Opening balance Clothing balance
current period current period
Statutory surplus
reserves 54,889,643.62 6,708,201.95 61,597,845.57
Total 54,889,643.62 6,708,201.95 61,597,845.57
The increase in the Company’s surplus reserve in the reporting period is due to the appropriation of
the statutory surplus reserve at 10% of the Parent Company’s net profit in the period.
27. Retained Earnings
Unit: RMB
Item Current period Last period
Balance as at the end of last period before
adjustments 503,359,204.38 391,211,843.00
Balance as at the beginning of the
reporting period after adjustments 503,359,204.38 391,211,843.00
Add: net profit attributable to owners of
the parent company for the reporting 84,719,397.91 167,040,817.13
period
Less: Transfer to statutory surplus reserves 6,708,201.95 14,309,455.75
Declaration of ordinary share dividends 83,448,000.00 40,584,000.00
167
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Balance as at the end of the reporting
period 497,922,400.34 503,359,204.38
28. Revenue and Cost of Sales
Unit: RMB
Incurred in the current period Incurred in the prior period
Item
Revenue Costs of sales Revenue Costs of sales
Principal activities 765,889,176.04 465,928,820.89 946,278,717.99 562,934,119.40
Other activities 1,427,641.61 790,530.00 2,533,049.72 1,413,157.00
Total 767,316,817.65 466,719,350.89 948,811,767.71 564,347,276.40
Whether lower of the audited net profits before and after deducting the non-recurring profit and loss
is negative
□Yes No
Decomposed information of revenue from Principal activities
1) Principal activities (by product)
2023 2022
Item
Income Income Income Costs
Tops 243,946,736.80 151,442,730.18 328,029,179.28 202,220,530.82
Coats 155,188,755.89 93,181,528.92 217,453,325.21 128,369,290.11
Pants 128,129,350.33 72,666,603.55 153,682,693.10 82,771,023.17
Skirts and
110,771,808.93 66,497,040.68 113,325,747.28 68,111,675.60
dresses
Fur 42,407,445.65 27,751,253.04 69,462,339.95 44,928,447.32
Jewel 36,559,618.62 24,140,594.44 - -
Others 48,885,459.82 30,249,070.08 64,325,433.17 36,533,152.38
Total 765,889,176.04 465,928,820.89 946,278,717.99 562,934,119.40
2) Principal activities (by region)
2023 2022
Item
Income Costs Income Costs
East China 375,073,498.97 228,587,579.85 460,992,533.23 274,926,232.68
North China 129,646,567.04 78,021,028.51 163,440,527.42 96,014,105.24
Southwest
68,750,116.02 42,101,519.70 86,722,866.43 51,941,606.03
China
168
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
2023 2022
Item
Income Costs Income Costs
Southern
65,698,489.51 39,920,667.82 73,592,409.08 43,648,606.93
China
Central China 62,784,048.46 38,570,160.29 80,489,346.66 48,385,649.88
Northeast
34,238,605.61 20,831,672.56 45,396,886.89 26,974,684.85
China
Northwest
29,671,725.40 17,882,320.29 35,560,601.61 20,997,592.76
China
Others 26,125.03 13,871.87 83,546.67 45,641.03
Total 765,889,176.04 465,928,820.89 946,278,717.99 562,934,119.40
29. Taxes and Surcharges
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Property taxes 2,542,708.76 914,271.14
Urban maintenance and
construction tax 1,900,238.76 1,913,647.08
Education surcharge 814,468.25 824,107.79
Local education surcharge 542,978.82 549,405.16
Stamp tax 468,780.73 275,794.24
Land use tax 249,289.20 246,843.60
Environmental protection tax 16,061.76 256,942.62
Others 10,763.60 4,668.60
Total 6,545,289.88 4,985,680.23
30. Selling and Distribution Expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Marketing expenses 77,247,592.73 91,935,794.45
Employee benefits 29,401,714.02 28,082,205.46
Storage fees 3,499,129.91 3,809,628.99
Depreciation and amortization
fees 1,891,200.27 1,102,253.88
Utilities 654,790.01
Total 112,694,426.94 124,929,882.78
169
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
31. General and Administrative Expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee benefits 17,413,216.15 14,582,363.17
Depreciation and amortization 9,541,215.14 4,292,798.39
fees
Office allowance 4,075,522.21 3,920,143.92
Labor dispatch expenses 2,423,037.67 2,734,195.92
Scrapping of inventories 2,552,789.57 1,115,191.58
Consulting service fees 2,000,206.04 1,386,162.70
Depreciation of right-of-use 1,278,053.14 1,576,681.40
assets
Utilities 1,138,017.76 1,445,281.77
Maintenance and decoration 1,009,817.04 340,319.83
costs
Travelling expenses 937,752.62 954,322.44
Business entertainment 801,369.99 2,986,554.00
expenses
Gains and losses on the 144,486.76 87,857.45
counting
Property fees 509,313.36 243,308.45
Rental fee 181,575.61 299,464.85
Others 2,130,042.31 1,538,350.09
Total 46,136,415.37 37,502,995.96
32. Research and development expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee benefits 16,194,973.71 14,991,401.59
Materials fees 3,955,018.08 3,994,042.69
Software development fees 320,397.82 1,281,301.55
Total 20,470,389.61 20,266,745.83
33. Finance expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Interest expense 5,232.32 50,146.33
Including: Interest expense of 5,232.32 50,146.33
lease liabilities
170
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Less: Interest income 11,571,422.65 12,484,242.39
Net interest expense -11,566,190.33 -12,434,096.06
Exchange losses 137,534.76 226,587.41
Less: Exchange gains
Net loss on exchange 137,534.76 226,587.41
Financial institution charges 3,387,763.52 4,072,400.96
Including: Alipay service 3,224,566.43 3,929,233.20
charges
Total -8,040,892.05 -8,135,107.69
34. Other Income
Unit: RMB
Incurred in the current Incurred in the prior
Item period period
1. Government grant recognised in other 1,866,161.60 6,358,231.30
imcome
Including: Government grant related to 66,666.60 33,333.30
deferred income (related to assets)
Government grant directly 1,799,495.00 6,324,898.00
recognised in current profit or loss
II. Others related to daily operation
82,922.37 46,142.14
activities and recognised in other income
Including: Charges of withholding 62,253.81 14,582.52
individual income tax
Additional tax deductions for Input tax 20,668.56 31,559.62
Total 1,949,083.97 6,404,373.44
35. Investment income
Unit: RMB
Incurred in the current Incurred in the prior
Item period period
Gains on disposal of held-for-trading
financial assets 38,061,196.16 40,009,346.45
Total 38,061,196.16 40,009,346.45
36. Gains from Changes in Fair Values
Unit: RMB
Incurred in the Incurred in the prior
Sources of income from changes in fair value current period period
Financial assets held-for-trading 9,736,672.14 9,312,190.32
Total 9,736,672.14 9,312,190.32
171
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
37. Credit Impairment Losses
Unit: RMB
Incurred in the Incurred in the prior
Item current period period
Bad debt of other receivables 6,112.02 23,422.95
Total 6,112.02 23,422.95
38. Asset Impairment Losses
Unit: RMB
Incurred in the Incurred in the prior
Item current period period
Impairment of inventories -67,568,625.27 -49,127,914.01
Total -67,568,625.27 -49,127,914.01
39. Gains from Disposal of Assets
Unit: RMB
Incurred in the Incurred in the prior
Source of asset disposal proceeds current period period
Gains from disposal of fixed assets 30,655.86 -
40. Non-operating income
Unit: RMB
Incurred in the Incurred in the Recognised in current extraordinary gains and
Item current period prior period losses
Others 4,267.00 44,880.37 4,267.00
Total 4,267.00 44,880.37 4,267.00
41. Non-operating expenses
Unit: RMB
Incurred in the Incurred in the Recognised in current extraordinary gains and
Item current period prior period losses
Donations 460,000.00 450,000.00 460,000.00
Overdue fine 613,660.63 613,660.63
Others 59,643.14 33,434.57 59,643.14
Total 1,133,303.77 483,434.57 1,133,303.77
172
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
42. Income Tax Expenses
(1) Details of income tax expenses
Unit: RMB
Incurred in the current Incurred in the prior
Item period period
Current income tax expense 26,674,555.90 49,902,317.81
Deferred income tax expense -9,572,547.76 -5,941,278.87
Income taxes during the prior period 2,056,489.07 95,303.08
Total 19,158,497.21 44,056,342.02
(2) Reconciliation of accounting profit and income tax expenses
Unit: RMB
Item Incurred in the current period
Profit before tax 103,877,895.12
Income tax expense at the statutory /applicable tax rate 25,969,473.78
Effect of different tax rate of subsidiaries -47,200.20
Effect of adjustments to income taxes during the prior period 2,056,489.07
Effect of non-deductible costs, expenses or losses 463,594.66
R&D expenses plus deduction -9,355,404.78
Expiration of unused taxable losses 71,544.68
Income tax expenses 19,158,497.21
43. Notes to the Statement of Cash Flow
(1) Other cash received relating to operating activities
Unit: RMB
Incurred in the current Incurred in the prior
Item period period
Interest income 7,202,929.50 12,052,735.54
Government grants 1,799,495.00 6,371,040.14
Return of advances 15,764,828.04
Others 205,162.75 468,458.90
Total 24,972,415.29 18,892,234.58
173
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Note: According to the fixed quantity purchase contract signed with Kangshen Group Co., Ltd., the
company has correspondingly reduced the advance payment ratio based on the remaining purchase
volume. This year, the company received an advance payment of 15,764,828.04 yuan corresponding
to the adjusted ratio.
(2) Other cash payments relating to operating activities
Unit: RMB
Incurred in the current Incurred in the prior
Item period period
Payment of Selling and Distribution Expenses 87,246,236.15 99,982,376.87
Payment of General and Administrative
Expenses 16,339,207.05 15,073,724.37
Payment of Research and Development
Expenses 6,253,223.01 5,457,843.17
Payment of finance expenses - charges 3,387,763.52 4,072,400.96
Others 1,133,303.77 483,434.57
Total 114,359,733.50 125,069,779.94
(3) Cash relating to investing activities
Other important cash received relating to investing activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Finance products redemption 5,339,110,000.00 5,956,550,000.00
Total 5,339,110,000.00 5,956,550,000.00
Other important cash payments relating to investing activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Finance products purchase 4,895,010,000.00 6,240,550,000.00
Unlisted equity investments
76,950,000.00
purchase
Total 4,971,960,000.00 6,240,550,000.00
(3) Other cash payments relating to financing activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Payment for principal and 1,954,161.72 3,212,832.37
interest of lease liabilities
Total 1,954,161.72 3,212,832.37
174
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
44. Supplementary Information to the Statement of Cash Flows
(1) Supplementary information to the statement of cash flows
Unit: RMB
Incurred in the current Incurred in the prior
Supplementary information period period
1. Adjustments of net profit to cash flows
from operating activities:
Net profit 84,719,397.91 167,040,817.13
Add: Provisions for impairment of assets 67,568,625.27 49,127,914.01
Impairment Loss of Credit -6,112.02 -23,422.95
Depreciation of fixed assets, Investment
Properties ,oil and gas asset and productive 11,576,996.81 5,207,037.51
biological assets
Depreciation of right to use assets 1,278,053.14 1,576,681.40
Amortisation of intangible assets 442,832.82 441,544.32
Amortisation of long-term deferred expenses 254,564.06 213,644.79
Losses /(gains) on disposal of fixed assets,
intangible assets and other long-term assets -30,655.86
Losses /(gains) on changes in fair value -9,736,672.14 -9,312,190.32
Finance costs /(income) 5,232.32 50,146.33
Investment losses /(income) -38,061,196.16 -40,009,346.45
Decreases /(increases) in deferred tax assets -10,313,139.23 -7,506,807.04
Increases /(decreases) in deferred tax
liabilities 740,591.47 1,565,528.17
Decreases /(increases) in inventories -77,485,946.55 -63,814,358.72
Decreases /(increases) in operating
receivables -4,326,334.96 468,458.90
Increases /(decreases) in operating payables -33,903,797.35 20,316,706.88
Others -66,666.60 -33,333.30
Net cash flows from operating activities -7,344,227.07 125,309,020.66
2. Significant investing and financing
activities not involving cash receipts and
payments:
Conversion of debt into capital
Convertible corporate bonds maturing within
one year
Assets under leases(other than leases under
simplified method)
3. Net increases in cash and cash equivalents:
Cash at the end of the reporting period 145,553,208.66 142,243,947.86
175
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Less: Cash at the beginning of the reporting
period 142,243,947.86 370,350,218.44
Add: Cash equivalents at the end of the
reporting period
Less: Cash equivalents at the beginning of the
reporting period
Net increase in cash and cash equivalents 3,309,260.80 -228,106,270.58
The difference between ending balance of Cash and Cash Equivalents which listed in the cash flow as
RMB 145,553,208.66 and the the ending balance of Cash and Cash Equivalents which listed in the
Balance Sheet as RMB 150,353,208.66. The reason of the difference is the deduction of interest
receivable (RMB 4,800,000.00) which fails to meet the standards for Cash and Cash Equivalents at the
end of the period.
(2) The components of cash and cash equivalents
Unit: RMB
Item Clothing balance Opening balance
I. Cash 145,553,208.66 142,243,947.86
Including: Cash on hand 367,974.55 907,807.77
Cash in bank available for immediate use 140,724,991.69 131,851,690.46
Other monetary funds available for immediate
use 4,460,242.42 9,484,449.63
III. Cash and cash equivalents at the end of
the reporting period 145,553,208.66 142,243,947.86
45. Leases
Applicable □ Not applicable
The Company as lessee
Item Amount
Expenses for short-term lease under simplified method 191,866.71
Interest expense on lease liabilities 5,232.32
Cash outflows related to leases 1,789,251.66
VIII. Changes in the Scope of Consolidation
1. Other explanations:
There is no change in the consolidation scope during the current period.
176
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
IX. Interests in Other Entities
1. Interests in subsidiaries
177
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
(1) Composition of corporate group
Unit: RMB
Percentage of
Principal equity interests by
Names of Registered Registered Nature of Ways of
place of the Company (%)
subsidiaries capital Address business acquisition
business
Direct Indirect
Business
combinations
Shanghai Brand
270,000,000 Shanghai Shanghai 100.00% involving entities
Rumere management
under common
control
Business
combinations
Meicang Clothing
4,000,000 Changshu Changshu 100.00% involving entities
Fashion processing
under common
control
Rumere Import of raw Acquired through
5,000,000 Changshu Changshu 100.00%
International materials establishment
X. Government Grants
1、Government grants recognized at the end of the reporting period in the amount receivable
□ Applicable Not applicable
Reasons of government grants that failed to receive at the expected time
□ Applicable Not applicable
2、Liabilities involving government subsidies
Applicable □Not applicable
Unit: RMB
Increase Decrease
Opening during the during the Clothing Related to
Item balance reporting reporting balance assets/earnings
period period
Government
grants 1,966,666.70 - 66,666.60 1,900,000.10 Related to assets
3、Government grants recognised in profit or loss for the current period
Applicable □Not applicable
Unit: RMB
178
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Incurred in the Incurred in the
Category Reporting items current period prior period
Financial support funds Other income 1,471,000.00 1,370,000.00
Subsidy for job stabilization Other income 116,495.00 122,934.00
Quality Management Excellence Award Other income 100,000.00
Modern Manufacturing Service Base Other income 66,666.60 33,333.30
Project phase I funds
Attract subsidies and talent introduction
subsidies of Human Resources and Social Other income 62,000.00
Security Bureau
Special funds for business development Other income 30,000.00 1,331,964.00
and high-quality development
Vehicle retirement subsidy Other income 20,000.00
Listing incentive Other income 3,500,000.00
Total 1,866,161.60 6,358,231.30
XI. Risks related to financial instruments
Risks related to the financial instruments of the Company arise from the recognition of various
financial assets and financial liabilities during its operation, including credit risk, liquidity risk and
market risk.
Management of the Company is responsible for determining risk management objectives and policies
related to financial instruments. Operational management is responsible for the daily risk
management through functional departments. Internal audit department is responsible for the daily
supervision of implementation of the risk management policies and procedures, and report their
findings to the audit committee in a timely manner.
Overall risk management objective of the Company is to establish risk management policies to
minimize the risks without unduly affecting the competitiveness and resilience of the Company.
1. Credit risk
Credit risk is the risk of one party of the financial instrument face to a financial loss because the other
party of the financial instrument fails to fulfill its obligation. The credit risk of the Company is related
to cash and equivalent,and other receivables,etc. Credit risk of these financial assets is derived from
the counterparty’s breach of contract. The maximum risk exposure is equal to the carrying amount of
these financial instruments.
179
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Cash and cash equivalent of the Company has lower credit risk, as they are mainly deposited in such
financial institutions as commercial bank, of which the Company thinks with higher reputation and
financial position.
For other receivables, the Company establishes related policies to control their credit risk exposure.
The Company assesses credit capability of its customers and determines their credit terms based on
their financial position, possibility of the guarantee from third party, credit record and other factors .
The Company monitors its customers’ credit record periodically, and for those customers with poor
credit record, the Company will take measures such as written call, shortening or cancelling their
credit terms so as to ensure the overall credit risk of the Company is controllable.
(1) Determination of significant increases in credit risk
The Company assesses at each reporting date as to whether the credit risk on financial instruments
has increased significantly since initial recognition. When the Company determines whether the credit
risk has increased significantly since initial recognition, it considers based on reasonable and
supportable information that is available without undue cost or effort, including quantitative and
qualitative analysis of historical information, external credit ratings and forward-looking information.
The Company determines the changes in the risk of a default occurring over the expected life of the
financial instrument through comparing the risk of a default occurring on the financial instrument as
at the reporting date with the risk of a default occurring on the financial instrument as at the date of
initial recognition based on individual financial instrument or a group of financial instruments with
the similar credit risk characteristics.
When met one or more of the following quantitative or qualitative criteria, the Company determines
that the credit risk on financial instruments has increased significantly: the quantitative criteria
applied mainly because as at the reporting date, the increase in the probability of default occurring
over the lifetime is more than a certain percentage since the initial recognition; the qualitative criteria
applied if the debtor has adverse changes in business and economic conditions, early warning list of
customer, and etc.
(2) Definition of credit-impaired financial assets
180
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
The criteria adopted by the Company for determination of credit impairment are consistent with
internal credit risk management objectives of relevant financial instruments in considering both
quantitative and qualitative indicators.
When the Company assesses whether the debtor has incurred the credit impairment, the main factors
considered are as following: Significant financial difficulty of the issuer or the borrower; a breach of
contract, e.g., default or past-due event; a lender having granted a concession to the borrower for
economic or contractual reasons relating to the borrower’s financial difficulty that the lender would
not otherwise consider; the probability that the borrower will enter bankruptcy or other financial re-
organisation; the disappearance of an active market for the financial asset because of financial
difficulties of the issuer or the borrower; the purchase or origination of a financial asset at a deep
discount that reflects the incurred credit losses.
The credit impairment of financial assets may be caused by the combination of multiple events, not
necessarily by individually identifiable events.
(3) The parameter of expected credit loss measurement
The company measures impairment provision for different assets with the expected credit loss of 12-
month or the lifetime based on whether there has been a significant increase in credit risk or credit
impairment has occurred. The key parameters for expected credit loss measurement include default
probability, default loss rate and default risk exposure. The Company sets up the model of default
probability, default loss rate and default risk exposure in considering the quantitative analysis of
historical statistics and forward-looking information.
Relevant definitions are as following:
Default probability refers to the probability of the debtor will fail to discharge the repayment
obligation over the next 12 months or the entire remaining lifetime;
Default loss rate refers to the Company's expectation of the loss degree of default risk exposure. The
default loss rate varies depending on the type of counterparty, recourse method and priority, and the
collateral. The default loss rate is the percentage of the risk exposure loss when default has occurred
and it is calculated over the next 12 months or the entire lifetime;
181
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
The default risk exposure refers to the amount that the company should be repaid when default has
occurred in the next 12 months or the entire lifetime. Both the assessment of significant increase in
credit risk of forward-looking information and the calculation of expected credit losses involve
forward-looking information. Through historical data analysis, the Company identifies key economic
indicators that have impact on the credit risk and expected credit losses for each business.
The maximum exposure to credit risk of the Company is the carrying amount of each financial asset
in the statement of financial position. The Company does not provide any other guarantees that may
expose the Company to credit risk.
For the other receivables of the Company, the amount of top 5 clients represents 89.59% of the total
(31 December 2022:100.00%)
2. Liquidity Risk
Liquidity risk is the risk of shortage of funds when fulfilling the obligation of settlement by delivering
cash or other financial assets. The Company is responsible for the capital management of all of its
subsidiaries, including short-term investment of cash surplus and dealing with forecasted cash
demand by raising loans. The Company’s policy is to monitor the demand for short-term and long-
term floating capital and whether the requirement of loan contracts is satisfied so as to ensure to
maintain adequate cash and cash equivalents.
As at 31 December 2023, the maturity profile of the Company’s financial liabilities is as follows:
December 31, 2023
项目名称
Within 1 year Within 1 year
Accounts payable 58,163,158.46
Other payments 8,995,145.79
合计 67,158,304.25
(Continued)
December 31, 2022
项目名称
Within 1 year Within 1 year
Accounts payable 82,251,827.41 11,354,443.77
Other payments 9,476,184.89 307,898.05
合计 91,728,012.30 11,662,341.82
182
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
3. Market risk
(1) Foreign currency risk
Foreign currency risk of the Company mainly arise from foreign currency assets and liabilities
denominated in currency other than the Company’s functional currency. The foreign currency risk
the Company is subject to is mainly related to the purchase raw materials denominated in EUR and
USD. Except for the operations of the Company’s subsidiaries Rumere International are denominated
and settled in USD and EUR, other main operations of the Company are settled in RMB.
(2) Interest rate risk
Interest rate risk of the Company primarily arises from bank debts. Financial liabilities with floating
interest rate make the Company subject to cash flow interest rate risk, and financial liabilities with
fixed interest rate make the Company subject to fair value interest rate risk. The Company determines
the relative proportion of the fixed interest contracts and floating interest contracts based on the
current market environment.
Finance department of the Company’s headquarter monitors interest rate of the group continuously.
Increase of the interest rate will result in the increase of the cost of new interest-bearing debts and the
interest expense of the unpaid interest-bearing debts with floating rate, and subsequently lead to
significant negative impact on the financial performance of the Company. The management makes
adjustment in accordance with the update market condition in a timely manner.
XII. Fair value disclosure
1. Closing fair values of assets and liabilities measured at fair value
Unit: RMB
Ending fair value
Fair value Fair value
Item Fair value
measurement measurement Total
measurement with
with Level 1 Level 2 inputs with Level 3
inputs inputs
I. Recurring Fair -- -- -- --
Value Measurement
1. Financial assets
held for trading 15,807,554.49 1,352,866,535.46 1,368,674,089.95
Including: Bank
15,032,519.27 1,010,910,575.77 1,025,943,095.04
wealth management
183
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
products
Trust wealth 775,035.22 341,955,959.69 342,730,994.91
financial products
2. Other non-current 55,080,082.19 76,950,000.00 132,030,082.19
financial assets
Including: Trust
wealth financial 55,080,082.19 55,080,082.19
products
Unlisted equity 76,950,000.00 76,950,000.00
investments
Total 15,807,554.49 1,407,946,617.65 76,950,000.00 1,500,704,172.14
II. Non-recurring fair -- -- -- --
value measurement
2. Basis for determining the market price of recurring and non-recurring fair value measurements
with Level 1 inputs
The Company's bank financial products amounted RMB15,032,519.27 are purchased open net worth
financial products, and the bank provides continuous product market value. The Company's Trust
wealth financial products amounted RMB775,035.22 are purchased open net worth financial products,
and the Trust provides continuous product market value.
3. Qualitative and quantitative information on important parameters and valuation techniques
used for recurring and non-recurring fair value measurements with Level 2 inputs
The fair value of the bank wealth management products of RMB1,010,910,575.77 and the fair value
of the trust wealth management products of RMB397,036,041.88 of the Company are determined
based on the expected rate of return of the product.
4. Qualitative and quantitative information on important parameters and valuation techniques
used for recurring and non-recurring fair value measurements with Level 3 inputs
Fair value as at Valuation Input values cannot Range (weighted
Item
December 31 2023 technique be observed average)
Equity
investments
EBITDA
multiplier 10-15(11.3)1.5-
Unlisted equity Revenue 2.0(1.7)5%-
76,950,000.00 Market method
investments multiplier 20%(17%)10%-
Liquidity discount 30%(20%)
control premium
184
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
5. Financial assets and financial liabilities for which not measured at fair value
The financial assets and financial liabilities of the Company measured at amortised cost mainly
include: cash and cash equivalents, accounts receivable, other receivables, accounts payable, other
payables,etc.
The difference between the carrying amount and the fair value of other financial assets and financial
liabilities not measured at fair value is very little.
XIII. Related parties and related party transactions
1. Information on the Parent Company of the Company
Percentage Voting rights
Name of the of equity in the
Registered Nature of Registered interests in Company (%)
parent address business capital
company the
Company
(%)
Suzhou
Rumere Investment
Changshu RMB56,000,000 51.58% 51.58%
Group Co., company
Ltd.
Information on the Company s Parent Company
Suzhou Rumere Group Co., Ltd., formerly known as Suzhou Rumere Ingenuity Fashion Co., Ltd.,
was established in February 2017, with Guo Jian and Wen Di respectively holding 50% of the
Company’s shares..
The ultimate controller of the Company is Guo Jian and Wen Di.
Guo Jian and Wen Di, who are a couple, directly and indirectly hold 73.68% of the Company’s shares
as of December 31,2023.
2. The Company's subsidiaries
For details of the Company's subsidiaries, please see Note IX. Interests in other entities.
3. Information of other related parties
Relationship between other related parties and
Name of other related parties the Company
Yu Qingtao Director, Deputy General Manager and
185
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
directors and participating shareholders
A company controlled by the Company s
Suzhou Rumere Furniture Co., Ltd.(Note 1) controlling shareholders
A company controlled by the Company s
Shanghai Rumere Model Agency Co., Ltd. controlling shareholders
Key executives Key executives
4. Information on related party transactions
(1) Lease
The Company as lessee:
Unit: RMB
2023
Expenses for
short-term lease Variable lease
The lessor Type of assets Lease payment Interest expense
and lease of low payments not Increase in right-
for current of lease
value asset under included in lease of-use assets
period liabilities
simplified liabilities
method
Wen Di, Guo
Buildings 857,142.86 857,142.86
Jian
(continued)
Unit: RMB
2022
Expenses for
short-term lease Variable lease
The lessor Type of assets Lease payment Interest expense
and lease of low payments not Increase in right-
for current of lease
value asset under included in lease of-use assets
period liabilities
simplified liabilities
method
Wen Di, Guo
Office floor 857,142.86 13,438.18 857,142.86
Jian
Information on related party leasing
The office floor leased by the company from Guo Jian and Wen Di is 2,316 square meters, equivalent
to RMB 1.079 per square meter per day, which is in line with the local rental market price between
RMB 1 and 1.1.
(2) Key management personnel compensation
Unit: RMB Ten Thousand Yuan
186
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Amount incurred in the current Amount incurred in the Last
Item period period
Key management personnel 556.87 625.96
compensation
XIV. Commitments and contingencies
1. Significant Commitments
The nature and amount of significant commitments existing at the balance sheet date:
(1) Capital commitments
Capital commitment with contract signed December 31, 2023 December 31, 2022
Commitment for build long-term assets 2,839,049.70 4,100,980.67
(2) Operating lease commitment
The total future minimum lease payments under non-
December 31, 2023 December 31, 2022
cancellable operating leases of the Group’s properties
Within 1 year 1,128,840.97 1,175,196.01
2. Contingencies
As at December 31 2023, the Company has no significant contingencies need to be disclosed.
XV. Events after Balance Sheet Date
1. Profit Distribution
Unit: RMB
Dividend to be distributed per 10
shares 4.39
Dividend to be distributed per 10
shares after deliberation, approval 4.39
and announcement
According to the resolution of the 8st meeting of the 2th
Board of Directors held on April 23, 2024, profit
distribution proposal of the Company in 2023: based on the
number of shares of the Company’s total share capital as at
Profit distribution plan the equity registration date of the implementation of this
profitdistribution plan, distribute a cash dividend of
RMB4.39 (tax included) for every 10 shares to all
shareholders; no bonus shares will be issued and no capital
reserve will be converted into sha re capital.
187
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
XVI. Other Significant matters
1. Others
As at December 31 2023, the Company has no other significant matters need to be disclosed.
XVII. Notes to Major Items of Financial Statements of the Parent Company
1. Other receivables by category
Unit: RMB
Item Clothing balance Opening balance
Other receivables 256,117.41 353,024.42
Total 256,117.41 353,024.42
(1) Other Receivables
1) Other receivables by category
Unit: RMB
Book balance at the end of the Book balance at the beginning
Nature of payment
period of the period
Deposits receivable, security 246,233.00 371,604.65
deposits, and imprest funds
Temporary payments and 23,364.27
others
Total 269,597.27 371,604.65
2) Other receivables by aging
Unit: RMB
Book balance at the end of the Book balance at the beginning
Aging of account period of the period
Within 1 year 189,597.27 91,541.10
1-2 years 30,000.00 10,253.85
Over 3 years 50,000.00 269,809.70
3-4 years 51,637.40
4-5 years 50,000.00 218,172.30
Total 269,597.27 371,604.65
3) Classified disclosure according to method of bad debt provision
□ Applicable Not applicable
188
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Unit: RMB
Clothing balance Opening balance
Category Book balance Provision Book Book balance Provision Book
Amount Proportion Amount Proportion value Amount Proportion Amount Proportion value
Among：
Provision
for bad
debts on a 269,597.27 100.00% 13,479.86 5.00% 256,117.41 371,604.65 100.00% 18,580.23 5.00% 353,024.42
portfolio
basis
Among：
Deposits
receivable,
security
246,233.00 91.33% 12,311.65 5.00% 233,921.35 371,604.65 100.00% 18,580.23 5.00% 353,024.42
deposits,
and imprest
funds
Temporary
payments 23,364.27 8.67% 1,168.21 5.00% 22,196.06
and others
Total 269,597.27 100.00% 13,479.86 5.00% 256,117.41 371,604.65 100.00% 18,580.23 5.00% 353,024.42
Provision for bad debts on a portfolio basis: 13,479.86
Unit: RMB
Clothing balance
Categories Provision for
Book balance Proportion
bad debts
Deposits receivable, security deposits, and
imprest funds 246,233.00 12,311.65 5.00%
Temporary payments and others 23,364.27 1,168.21 5.00%
Total 269,597.27 13,479.86
Provision for bad debts on a portfolio basis: 18,580.23
Unit: RMB
Opening balance
Categories Provision for
Book balance bad debts Proportion
Deposits receivable, security deposits, and
imprest funds 371,604.65 18,580.23 5.00%
Total 371,604.65 18,580.23
189
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Provision for bad debts that maded by expected credit losses
Unit: RMB
Stage 1 Stage 2 Stage 3
12-month Lifetime Lifetime
Provision for loss allowance expected expected credit expected credit Total
credit losses losses (not losses (credit-
credit-impaired) impaired)
Balance as at January 1, 2023 18,580.23 18,580.23
Balance as at January 1, 2023
January 1 changes in the
reporting period
Provision 1,168.21 1,168.21
Reversal 6,268.58 6,268.58
Balance as at December 31,
20223 13,479.86 13,479.86
Description of changes in the book balance where there are significant changes in provision for the
current period
□ Applicable Not applicable
4) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Bad debt reserve of the reporting period:
Unit: RMB
Changes in current period
Opening Clothing
Category balance Recovery or balance
Provision Write-off Others
reversal
Deposits
receivable,
security 18,580.23 6,268.58 12,311.65
deposits, and
imprest funds
Temporary
payments and 1,168.21 1,168.21
others
Total 18,580.23 1,168.21 6,268.58 13,479.86
5) Top five debtors in closing balance of other receivable
Unit: RMB
Percentage in Balance of
Nature of total balance bad debt
Clothing
Entity name the balance Aging of other reserve at
amount receivables at the end of
the end of the the period
190
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
period
Less than 1
Zhejiang Tmall Security 110,000.00 year, more 40.80% 5,500.00
Technology Co., Ltd. deposit than 3 years
Wework Information Security
Consulting (Shanghai) 48,000.00 Less than 1 17.80% 2,400.00
deposit year
Co., Ltd.
Weimeng Chuangke Security
Network Technology 30,000.00 1-2 years 11.13% 1,500.00
deposit
(China) Co., Ltd.
China Securities Tempora
Depository and ry 22,105.99 Less than 1 8.20% 1,105.30
Clearing Co., Ltd. payment year
Shenzhen Branch s
Changshu Qinhong Security 20,000.00 Less than 1 7.42% 1,000.00
Real Estate Co., Ltd. deposit year
Total 230,105.99 85.35% 11,505.30
2. Long-term Equity Investments
Unit: RMB
Clothing balance Opening balance
Item Provision Provision
Carrying Book Carrying
Book balance for for
amount balance amount
impairment impairment
Subsidiaries 269,886,865.58 269,886,865.58 886,865.58 886,865.58
Total 269,886,865.58 269,886,865.58 886,865.58 886,865.58
(1) Investments in subsidiaries
Unit: RMB
Increase/decrease in the period Clothing
Opening Clothing balance of
Investee balance Increase in Decrease in Impairment balance impairme
(book value) Others (book value) nt
investment investment Provision
provision
Sanghai
389,702.72 269,000,000.00 269,389,702.72
Rumere
Meicang
497,162.86 497,162.86
Fashion
Total 886,865.58 269,000,000.00 269,886,865.58
3. Revenue and Cost of Sales
Unit: RMB
Incurred in the current period Incurred in the priort period
Item
Revenue Costs of sales Revenue Costs of sales
191
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
Principal
activities 764,987,796.97 471,315,177.49 945,187,284.99 569,534,668.37
Other activities 1,427,641.61 790,530.00 2,533,049.72 1,413,157.00
Total 766,415,438.58 472,105,707.49 947,720,334.71 570,947,825.37
4. Investment income
Unit: RMB
Incurred in the Incurred in the
Item current period priort period
Gains on disposal of held-for-trading financial assets 38,061,196.16 40,009,346.45
Total 38,061,196.16 40,009,346.45
XVII. Supplementary Information
1. Extraordinary Gains or Losses
Applicable □ Not applicable
Unit: RMB
Descrip
Item Amount tion
Gain or loss on disposal of illiquid assets 30,655.86
Government grants recognised in current profit or loss (except
government grants that is closely related to operations and 1,866,161.60
determined based on a fixed scale according to the national
unified standard)
Gains /(losses) arising from changes in fair value of financial
assets held-for-trading, derivative financial assets, other non-
current financial assets, financial liabilities held-for-trading and
derivative financial liabilities during the holding period and
investment income arising from disposal of held-for-trading 47,797,868.30
financial assets, derivative financial assets, other non-current
financial assets, held-for-trading financial liabilities, derivative
financial liabilities and other debt investment except effective
hedging transactions related to the Company's principal activities
Other non-operating income/expenses except for items
mentioned above -1,046,114.40
Less: tax effect 12,378,019.60
Total 36,270,551.76 --
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable Not applicable
The Company has no other profit and loss items that qualified the definition of non-recurring profit
and loss.
192
Full Text of the 2023 Annual Report of Rumere Co., Ltd.
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 Net Assets and Earnings Per Share (‘EPS’)
Weighted average EPS
Profit for the reporting period return on net assets
(%) Basic Diluted
Net profit attributable to ordinary
shareholders 3.29% 0.37 0.37
Net profit attributable to ordinary
shareholders after extraordinary 1.88% 0.21 0.21
gains and losses
193
